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New York Political Corruption Scandal Suggests Federal “Honest Services” Law Survives

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by Publius
Posted April 04, 2013, 8:08 AM

The New York Times reports:

A federal law used to prosecute corrupt politicians lost some of its teeth when the Supreme Court significantly narrowed its scope in 2010. 

But in New York, the law governing theft of “honest services” seems to be alive and well, if recent cases are any clue.

In the broad charges announced this week against State Senator Malcolm A. Smith, a Democrat from Queens, and five other political figures, that law is at the center of a number of counts alleging schemes that deprived various groups of the defendants’ honest services.

Among those groups, prosecutors said, were the citizens of New York City (in the case of Daniel J. Halloran III, a Republican city councilman charged in the case); the citizens of Spring Valley, N.Y. (the village’s mayor and deputy mayor were charged); and county committees of the Republican Party (two Republican leaders from Queens and the Bronx were charged).

The charges come more than a year after the honest-services fraud convictions of Joseph L. Bruno, the former Senate Republican majority leader, were overturned in the wake of the Supreme Court’s 2010 ruling in a case that involved Jeffrey K. Skilling, the former Enron chief executive.

“After Skilling,” said Albert W. Alschuler, emeritus professor of law at the University of Chicago Law School, “the Justice Department complained that it had been deprived of an important tool, but in fact it remains a very powerful instrument.” Professor Alschuler said the charges announced this week in New York showed that the law was useful “for charging large conspiracies to bribe various people in various places.”

Within the last two years, Carl Kruger, the once-powerful Democratic state senator from Brooklyn, and Sandy Annabi, a former Yonkers councilwoman, were each convicted and sentenced to prison in federal cases in Manhattan that involved conspiring to commit honest-services fraud, among other counts.

In Federal District Court in Brooklyn, State Assemblyman William F. Boyland Jr. faces trial on charges of honest services fraud, among others; he has pleaded not guilty. In narrowing the use of the law, the Supreme Court limited it to bribes and kickbacks and not, as had been used in cases like Senator Bruno’s, to prosecute defendants for undisclosed conflicts of interest.

Before the Skilling ruling, said Daniel C. Richman, a law professor at Columbia University, the law’s flexibility “allowed prosecutors to pursue corruption without nailing down who was bribed and when.”

The more recent charges, including those announced this week, take care to make the bribery allegations explicit, which can only help the government’s case, Professor Richman added.

“The further you can let the defendant play out his scheme and take bribes and perhaps do things in return, the more solid the case would be, both legally and in front of a jury.”

In the complaint unsealed on Tuesday, for example, prosecutors allege various schemes in which defendants took bribes in return for official actions. . . .

In November 2011, Engage: The Journal of the Federalist Society's Practice Groups, published an article titled "Honest Services Fraud After Skilling vs. United States" by Steven Wisotsky,  professor of law at Nova Southeastern University Law Center. You can read it here.

 

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