Supreme Court ruling boosts Enron executive Jeffrey Skilling
The US Supreme Court narrowed the definition of 'honest services' fraud, throwing out a portion of Enron CEO Jeffrey Skilling’s conviction. It’s a blow to the Justice Department.
Former Enron CEO Jeffrey Skilling returns to the federal court house in Houston during the Enron trial in 2006. Mr. Skilling is serving 24 years in prison for his role in the energy giant's 2001 bankruptcy, one of the biggest corporate scandals in US history.
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Washington
The US Supreme Court on Thursday undercut a key portion of the conviction of former Enron executive Jeffrey Skilling, ruling that the “honest services” fraud statute used to convict him had been interpreted too broadly by the lower courts.
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The high court said it was reinterpreting the law more narrowly to criminalize only honest services conspiracies involving bribery and kickbacks. The justices thus avoided having to strike down the statute as unconstitutionally vague.
The 9 to 0 ruling is a major loss to the US Justice Department and federal prosecutors nationwide who have increasingly relied on the broadly-worded statute as a catch-all to beef up corruption indictments and white collar fraud cases.
In addition to vacating a portion of Mr. Skilling’s conviction, the high court also vacated the convictions of former newspaper magnate Conrad Black and a former Alaska state representative, Bruce Weyhrauch. Both men, like Skilling, were charged with failing to provide their honest services.
The government had urged the high court to embrace an expansive view of the honest services law that would criminalize “undisclosed self-dealing by a public official or private employee.”
The court refused. “We resist the government’s less constrained construction absent Congress’ clear instruction otherwise,” wrote Justice Ruth Bader Ginsburg in the court’s main opinion. Instead, the justices adopted a significantly narrower reading of the law.
Bribes and kickbacks covered
“There is no doubt that Congress intended [for the honest services statute] to reach at least bribes and kickbacks,” Ginsburg said. “Reading the statute to proscribe a wider range of offensive conduct, we acknowledge, would raise the due process concerns underlying the vagueness doctrine.”
The honest services statute makes it illegal for an employee to engage in a scheme to deprive his or her employer of the “intangible right of honest services.” Appeals court judges have reached different conclusions about precisely when such dishonesty crosses the threshold to qualify as a federal crime.
Supreme Court Justice Antonin Scalia once observed that the statute was so ill-defined that it might criminalize a mayor using the prestige of his office to secure a table without a reservation at a popular restaurant, or a worker calling in sick to go to a baseball game.
Although the high court’s decision acknowledges these problems with the statute, Scalia objected to the court’s chosen remedy. He said the majority justices were rewriting the statute.
