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Why The "Honest Services" Statute Was (And Still Is) A Problem - Honest Services after Skilling v. U.S. - PART I (us)

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Etats-Unis > Criminal Law  > Corruption
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Auteurs : Richard C. Smith, Kimberly Walker, Mark Emery, Tracy DeMarco
Avocats au barreau du District de Columbia, D.C. Bar
Publié le 15/05/2011 dans Journal of the Bar Association of the District of Columbia (B.A.D.C.)

Voir aussi PART II of Honest Services after Killing v. U.S.: Less Is Still More, PART III of Honest Services after Skilling v. U.S. : Less Is Still More et Final PART of of Honest Services after Skilling v. U.S. : Less Is Still More


It has been observed that in both love and architecture, “less is more.”[1] For quite some time, that observation has proven true in criminal prosecutions under the federal “honest services” statute, as codified in 18 U.S.C. § 1346.[2] Consisting of only twenty-eight words,[3] the statute’s vague language has been “invoked [by federal prosecutors] to impose criminal penalties upon a staggeringly broad swath of behavior, including misconduct not only by public officials and employees, but also by private employees and corporate fiduciaries.”[4] Long criticized by many for alleged unconstitutionally vague language, the “honest services” statute, until recently, has provided the basis for a wide range of criminal prosecutions. But in its 2009 term, the United States Supreme Court surprised many by setting three “honest services” cases for oral argument: Black v. United States;[5] Weyhrauch v. United States;[6] and Skilling v. United States.[7]

In the third of those cases, Skilling v. United States, the Court limited the statute’s scope to conduct involving “bribery” and “kickbacks,” and held the statute unconstitutionally vague outside those contexts.[8]

Skilling was a shrewd decision. The Court declined the invitation to throw out the entire “honest services” statute for unconstitutional vagueness. Instead, Skilling subtly confirmed that § 1346 of the statute has a purpose in punishing state and local corruption as well as private conduct, without actually taking a hard line on whether that conduct is prohibited. The Court’s opinion made overtures to judicial deference to Congress as it tethered the “honest services” statute’s content to a pre-1987 body of law that Congress intended to incorporate, as well as other federal statutes defining related crimes. But Skilling papered over—for the time being—sharp disagreements about whether those sources can provide rules that are constitutionally sufficient to prescribe criminal conduct.[9] Unresolved are the source and scope of the fiduciary duties that underlie “honest services” charges and whether duties are drawn from state law alone, or from federal common law. Skilling offers little guidance on why and how there are differences in its application to public officials and private individuals. And, even though the statute is now limited to bribery and kickbacks, important questions are still unanswered regarding the standards for those crimes within the “honest services” context.

On the same day it issued Skilling, the Court vacated and remanded Black and Weyhrauch. Days later, the Court granted, vacated, and remanded (“GVRed”) petitions pending in several other § 1346 cases in light of Skilling, leaving a great deal of lawmaking to the courts of appeals in the near future. This Article attempts to shed some light on the “honest services” statute’s murky beginnings as well as its uncertain future. Part I of this Article provides a background on the statute’s origins, discussing both the conduct the statute intended to proscribe and the problems that arose from its enactment. Part II addresses the Skilling decision, focusing on parts of the statute that were clarified by the Court’s decision and discussing the ambiguities that remain. Part III surveys some implications and shortcomings of Skilling, by tracking early developments in the cases GVRed by the Court. Part IV takes a brief look at early legislative responses to Skilling. Ultimately, while Skilling somewhat curtails the “honest services” statute’s expansive reach, it falls short of eliminating the “chaos,” that preceded it.[10] Although the uncertainty has temporarily returned to a low tide, it is likely to rise again in light of federal prosecutors’ creativity, and the continued potential for varying interpretations by the courts of appeals. In the absence of clear and decisive Congressional action to articulate precisely what conduct the statute criminalizes, indeed less is still more.

I. Why The “Honest Services” Statute Was (And Still Is) A Problem - PART I

For all of its controversial reach, it is noteworthy that the “honest services” statute does not even create its own offense. Nevertheless, an imputed cause of action for failure to provide “honest services” existed long before the current “honest services” statute was enacted. It evolved as a common law doctrine (“the intangible right to honest services”), from an 1872 recodification of the federal postal laws that proscribed the use of mail services to further “any scheme or artifice to defraud.”[11] Through the years and multiple statutory revisions, courts of appeals addressing the issue invariably interpreted the statute to proscribe any scheme intended to “deprive individuals, the people, or the government of intangible rights, such as the right to have public officials perform their duties honestly.”[12] That position went unchallenged until the Supreme Court granted certiorari in McNally v. United States, a case involving the conviction of public officials who skimmed money from the award of state insurance contracts. On the grounds that the lower courts’ expansive interpretation rendered the outer boundaries of the statute ambiguous, the Supreme Court reversed the conviction and held that the statute applied only to the protection of property rights and not to any “intangible right of the citizenry to good government.”[13]

Congress reacted immediately to the McNally decision. Recognizing the circumscribing impact of the decision on any future “honest services” cause of action, Congress promptly considered three different bills to address the statute’s ambiguities as highlighted by McNally.[14] After rejecting the first two proposals, Congress passed an amendment to the current federal mail and wire fraud statutes defining the phrase “scheme or artifice to defraud” as “a scheme or artifice to deprive another of the intangible right of honest services.”[15]

Despite Congress’ purported efforts to better define the mail and wire fraud offenses, much in the statute was left undefined and, as a result, to the discretion of the courts. For example, the statute provided no instruction as to what conduct should fall within the meaning of “honest services.” Further, the “another” to whom the “honest services” are owed was also left unidentified. Thus, without expressing any intent to do so, for over 22 years, Congress has left the legislative duty of defining the elements of an “honest services” crime to the courts—a role not relished or accepted by all judges.[16]

The legislative history of the current “honest services” statute is brief. Enacted as part of an omnibus drug bill, the statute was not the subject of a committee report or debate.[17] The brief comments provided by a few members of Congress noted that § 1346 was intended to overturn the Supreme Court’s decision in McNally, which had limited the reach of the statute only to “honest services” involving money or property. That version did not make clear that the statute was intended to reach the conduct of state and local public officials. Indeed, the legislators’ comments notably did not contain any reference to terms such as “state,” “citizens of a state,” “state official,” “public official,” or even “state employee.”[18]

In contrast, the two other bills Congress considered—and rejected—would have made the legislature’s intent to reach the conduct of state and local public officials much clearer, but would have also cast some doubt on the statute’s applicability to private actors.[19] The first, H.R. 3050, would have provided for the addition of a new section in Chapter 63 of Title 18 of the U.S. Code, entitled “Section 1346. Definition of Defraud for Certain Sections.”[20] It provided, as used in 18 U.S.C. §§ 1341 and 1343, that the term “defraud” includes the defrauding of the citizens of a body politic: (1) of their right to the conscientious, loyal, faithful, disinterested and unbiased performance of official duties by a public official thereof; or (2) of their right to have the public business conducted honestly, impartially, free from bribery, corruption, bias, dishonesty, deceit, official misconduct, and fraud.[21] This bill was referred to the House Committee on the Judiciary where it died. Had that bill become law, Congress would have declared in clear and unmistakable language that the “citizens of a body politic” are protected by federal law from dishonest public servants.

The second bill, S. 2793, was entitled the “Anti-Corruption Act of 1988.”[22] Section 2 of that bill would have created a new Section 225, entitled “Public Corruption.” This new section would have made it a crime to: (a) deprive or defraud the inhabitants of a state or a political subdivision of a state of the “honest services” of an official or employee of such state or subdivision and (b) deprive or defraud the inhabitants of a state or political subdivision of a state of a fair and impartially conducted election process in any primary, runoff, special or general election. If Section 2 had been adopted by the House, then it would have made express that the word “another” in the statute meant a “state or a political subdivision of a state.” But like the prior legislation, it was rejected by the House, in an apparent rejection of the effort to comprehensively criminalize state and local “public corruption” on such terms.[23] Only Section 3 survived as part of the omnibus drug bill, and eventually became § 1346 as a last minute, “bobtailed” compromise which had never been the subject of hearings in either house.[24]

The minimalist “honest services” text that ended up as § 1346 has permitted the government to define “honest services” by reference to duties from a multitude of sources, including statutory provisions and federal common law[25] And the undefined term “another” has invited the government to find deprivations of “honest services” purportedly owed to a wide range of entities, such as the general public, employers, or corporate shareholders, even at state and local levels.[26]

Though the courts of appeals have spent “two decades attempting to cabin the breadth of § 1346 through a variety of limiting principles,” no consensus has emerged, rendering a vast range of public and private conduct potentially subject to the statute.[27] While the more obvious sense of “honest services” might appear to be those of public servants, the statute has been used “for any kind of corporate skullduggery” as well.[28] Such breadth imposes a unique risk that the deprivation of the intangible right to honest services “invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators, and corporate CEOs who engaged in any manner of unappealing or ethically questionable conduct.”[29] Some have suggested that the statute came to provide “a technique used to go after the infamous as opposed to the criminal.”[30] Thus, the Congressional failure to either define key terms, or otherwise limit the scope of § 1346 provided federal prosecutors license to extend it nearly everywhere, even to college basketball coaches who violate NCAA rules.[31]

Notes et références

  1. ROBERT BROWNING, Andrea del Sarto (Called ”The Faultless Painter”), in MEN & WOMEN 72 (BiblioBazaar 2009). The phrase is also attributed to architect Ludwig Mies van der Rohe (1886–1969), speaking about restraint in design. NEW YORK HERALD TRIBUNE (June 28, 1959).
  2. 18 U.S.C. § 1346 (2010).
  3. “For the purposes of this chapter, the term “scheme or artifice to defraud” includes a scheme or artifice to deprive another of the intangible right of honest services.” 18 U.S.C. § 1346 (2010).
  4. See Sorich v. United States, 129 S. Ct. 1308, 1309 (2009) (Scalia, J., dissenting from denial of certiorari) (Feb. 23, 2009).
  5. No. 08–876 (May 18, 2009) (granting certiorari), 130 S. Ct. 2963 (2010).
  6. No. 08–1196 (June 29, 2009) (granting certiorari), 135 S. Ct. 2971 (2010).
  7. No. 08–1394 (Oct. 13, 2009) (granting certiorari), 130 S. Ct.2896 (2010).
  8. No. 08-1394 (Oct. 13, 2009) (granting certiori), 130 S. Ct. 2896 (2010).
  9. See infra Part II.A. Justices Scalia, Thomas, and Kennedy concurred in the Skilling judgment but disagreed with the majority’s conclusion that a limiting construction of § 1346 corrected the statute’s constitutional defects. See Skilling v. United States, 130 S. Ct. 2896, 2936–40 (Scalia, J., concurring).
  10. See Sorich v. United States, 129 S. Ct. 1308, 1311 (2009).
  11. Act of June 8, 1872, ch. 335 §§ 149, 301, 17 Stat. 302, 303 (1872).
  12. See McNally v. United States, 483 U.S. 350, 359 (1987).
  13. Id. at 360.
  14. Id at 350.
  15. 18 U.S.C. § 1346 (2006). Section 1346 can be charged as mail fraud. See 18 U.S.C. § 1341 (2006) (“Whoever, having devised or intending to devise any scheme or artifice to defraud . . .places in any post office or authorized depository for mail matter . . . shall be fined under this title or imprisoned not more than 20 years, or both”). Section 1346 can also be charged as wire fraud. See 18 U.S.C. § 1343 (2006) (“Whoever, having devised or intending to devise any scheme or artifice to defraud . . . transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.”).
  16. See United States v. Brumley, 116 F.3d 728, 736 (5th Cir. 1997) (Jolly, J. & DeMoss, J., dissenting) (“the majority assumes a role somewhere between a philosopher king and a legislator to create its own definitions of the terms of a criminal statute”).
  17. See Pub. L. No. 100–690, § 7603(a), 102 Stat. 4508 (1988); Brumley, 116 F.3d at 739, 742.
  18. 134 CONG. REC. H11, 108–01 (daily ed. Oct. 21, 1988) (statement of Rep. Conyers); see also 134 CONG. REC. S17360–02 (daily ed. Nov. 10, 1988) (statement of Sen. Biden).
  19. See generally Brumley, 116 F.3d at 743–44.
  20. H.R. 3050, 100th Cong. (as filed July 29, 1987).
  21. See Brumley, 116 F.3d at 743.
  22. Anti-Corruption Act of 1988, S. 2793, 100th Cong. (1988). This bill was introduced in the Senate on September 7, 1988, referred to the Judiciary Committee, reported favorably by that committee without a report, and passed later by the Senate on October 14, 1988. This bill was then sent to the House of Representatives, where it was referred to the House Judiciary Committee on October 19, 1988. See Brumley, 116 F.3d at 744. Concurrently with its passage by the Senate, S. 2793 was designated by a unanimous consent agreement of the Senate as one of a large number of amendments to “comprise the joint leadership package” which would be attached as amendments to H.R. 5210, the Drug Initiative Act of 1988, Omnibus, which was then before the Senate, having earlier been passed by the House. H.R. 5210 (with S. 2793 included) was then passed by the Senate and sent back to the House. Id. On October 22, 1988, the House of Representatives reconsidered H.R. 5210 with the leadership package of amendments attached in the Senate and made various amendments thereto, and then passed the revised bill. Id. One of the amendments made by the House of Representatives was to delete the text of S. 2793 and substitute in its place the language that now appears codified as 18 U.S.C. § 1346. H.R. 5210 as then amended was sent back to the Senate, which concurred in those amendments later on October 22, 1988. Id. There is no report in the legislative history explaining why the House of Representatives declined to accept the full text of S. 2793 as part of the omnibus Anti-Drug Act of 1988 (H.R. 5210).
  23. See Brumley, 116 F.3d at 744.
  24. Id.
  25. See, e.g., United States v. Bohonus, 628 F.2d 1167, 1171 (9th Cir. 1980) (any scheme “contrary to public policy” was also condemned by the statute); United States v. Mandel, 591 F.2d 1347, 1361 (4th Cir. 1979) (any scheme that is “contrary to public policy and conflicts with accepted standards of moral uprightness, fundamental honesty, fair play and right dealing”); Blachly v. United States, 380 F.2d 665, 671 (5th Cir. 1967) (“[l]aw puts its imprimatur on the accepted moral standards and condemns conduct which fails to match the ‘reflection of moral uprightness, of fundamental honesty, fair play and right dealing in the general and business life of members of society.’”) (quoting Gregory v. United States, 253 F.2d 104, 109 (5th Cir. 1958).
  26. See, e.g., United States v. Hasner, 340 F.3d 1261, 1271 (11th Cir. 2003) (per curiam) (affirming conviction of a housing official who failed to disclose a conflict of interest); see also United States v. Sorich, 523 F.3d 702, 705 (7th Cir. 2008) (affirming convictions of Chicago employees who engage in political patronage hiring for local civil-service jobs); United States. v. Potter, 463 F.3d 9, 18 (1st Cir. 2006) (affirming the conviction of a businessman who attempted to pay a state legislator to exercise “informal and behind-the-scenes influence on legislation”); United States v. Rybicki, 354 F.3d 124, 142 (2d Cir. 2003) (en banc) (affirming convictions of lawyers who made side-payments to insurance adjusters in exchange for expediting of their clients’ claims); United States v. Frost, 125 F.3d 346, 369 (6th Cir. 1997) (affirming convictions of students who schemed with their professors to turn in plagiarized work).
  27. As Justice Scalia argued, “[i]f the ‘honest services’ theory . . . is taken seriously and carried to its logical conclusion, presumably the statute also renders criminal a state legislator’s decision to vote for a bill because he expects it will curry favor with a small minority essential to his reelection; a mayor’s attempt to use the prestige of his office to obtain a restaurant table without a reservation; a public employee’s recommendation of his incompetent friend for a public contract; and any self-dealing by a corporate officer. Indeed, it would seemingly cover a salaried employee’s phoning in sick to go to a ball game.” Sorich v. United States, 129 S. Ct. 1308, 1309 (2009).
  28. Michael Rothfeld, Enron Ruling Dims Prosecution Picture, WALL ST. J. (June 24, 2010) (quoting Columbia University law professor John Coffee), available at 43428 (last visited Nov. 19, 2010).
  29. See Sorich, 129 S. Ct. at 1310.
  30. See Rothfeld, supra note 29 (quoting attorney James Wareham).
  31. See United States v. Gray, 96 F.3d 769 (5th Cir. 1996).

Voir aussi

« <strong class="error">Erreur d’expression : opérateur / inattendu.</strong> » n’est pas un nombre.
- Skilling v. U.S.