Tuesday, March 2, 2010 4:54 PM
SCOTUS Continues Fraud Review
The Supreme Court on Monday heard oral arguments in the case of Skilling v. US, the final in a trio of cases the Court reviewed this session challenging the honest services fraud statute.
The case, which involved former Enron president Jeff Skilling, directly addressed whether the honest services fraud statute is too legally hazy, as many critics have contended for years. Dark hat former lobbyist Jack Abramoff was also charged under the law.
"We think the statute is unconstitutionally vague," Skilling attorney Sri Srinivasan said. "We think it's particularly vague as it applies to anything beyond the narrow category of bribes and kickbacks."
In December, the Court heard two other cases involving honest services fraud, and legal experts have predicted that the Court will make a significant ruling on the statute. It could limit the statute's application or strike it down as completely unconstitutional -- based on the number of related cases the Court has heard this session. But the cases heard in December, Black v. U.S. and Weyhrauch v. U.S., did not directly address the vagueness factor, though the justices expressed their eagerness at that time to get at the overarching constitutional questions surrounding the law.
And even though those constitutional questions were addressed at the Court Monday, the unconstitutional vagueness of the statute was not the focus of the defense's argument, as the New York Times reported that Skilling's attorney spent just 10 minutes of his allotted 30 minutes to address the statute's vagueness. Rather, the prosecution focused on questions of whether the jury was fairly selected and if Skilling could receive a fair trial at all in Houston, where Enron's collapse greatly impacted the local population.
Still, justices indicated again Monday that they are open to striking down the statute, just as they seemed to be in December. "Well, a concession that a bribe or a kickback scheme statute would not be vague is hardly a concession that this statute as written is not vague," Justice Anthony Kennedy said. "In fact, I thought that was the point. The point is that the courts shouldn't rewrite the statute, that's for the Congress to do."
Justice Antonin Scalia, who has been an outspoken critic of the statute, characterized jury instructions for honest services fraud in the Skilling case as "circular" and questioned the broad reach of the statute. "Well, suppose you have a statute that makes it criminal to do any bad thing, okay? Now it's clear that murder would be covered," Scalia said. "Does that make the statute non-vague? ... Just because you can pick something that everybody would agree comes within a denial of honest services, doesn't mean that when you say nothing but honest services, you are saying something that has sufficient content to support a criminal prosecution."
The Court's decision in this case could impact how the government prosecutes corruption cases in the future, as well as how the final players in the Abramoff lobbying scandal are prosecuted and sentenced.
Former Abramoff lobbying associate Kevin Ring's trial on eight counts of honest services fraud, illegal gratuities and conspiracy to commit both crimes ended in October in a mistrial after a jury hung on all counts. His re-trial was originally scheduled for June, but it has now been pushed back to July over concerns that the Supreme Court will alter or strike down honest services fraud. In that case, the government could be forced to either revamp or drop its case against him.
Sentencing dates and hearings for other Abramoff players who pleaded guilty to honest services fraud-related charges, including Abramoff partner Michael Scanlon and former Rep. Ernest Istook, R-Okla., chief of staff John Albaugh, have also been postponed due to the Court's review of the statute.
The Court will hand down a decision on the cases by the end of its term in June.
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