What Skilling Did (And Didn't) Do - Honest Services after Skilling v. U.S. - PART II (us)
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 I of Honest Services after Skilling 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 Honest Services after Killing v. U.S.: Less Is Still More
A. The Offense Is Limited To Offenses Involving Bribery And Kickbacks.
In Skilling, the government based its case against former Enron executive Jeffrey Skilling on allegations that Skilling engaged in a scheme to deceive investors about Enron’s true financial performance by manipulating its publicly reported financial results and making false and misleading statements. Count 1 of the indictment charged Skilling with, among other things, conspiracy to commit “honest-services” wire fraud, by depriving Enron and its shareholders of the intangible right to his honest services. After the Fifth Circuit affirmed his conviction on the “honest services” charges and several others, Skilling urged the Supreme Court to hold § 1346 void as unconstitutionally vague, because it fails to adequately define barred conduct, and facilitates “opportunistic and arbitrary” prosecutions.
The Court, in an opinion authored by Justice Ginsburg and joined by five other justices, rejected that position. Looking to the early development of the “honest services” doctrine before the enactment of § 1346, the Court found that the courts of appeals “dominantly and consistently applied the fraud statute to bribery and kickback schemes,” though there was “considerable disarray” of its application outside that core category. As previously discussed, the McNally decision halted a wider development of the “honest services” doctrine and held that “[t]he mail fraud statute clearly protects property rights, . . . [it] does not refer to the intangible right of the citizenry to good government.” The Court considered Congress’s “swift” enactment of § 1346 to be a direct response to McNally. With such speedy action, the Court concluded, Congress “meant to reinstate the body of pre-McNally honest-services law.”
Though the courts of appeals were divided on how to interpret § 1346, none had held that the statute was unconstitutionally vague. Likewise, the Court agreed that § 1346 “should be construed rather than invalidated,” and that Congress’s intent to reverse McNally and reinstate the prior cases meant the statute “can and should be salvaged by confining its scope to the core pre-McNally applications.” Opting for a “limiting construction” of the statute, the Court’s majority confined its scope to pre-McNally cases that “involved fraudulent schemes to deprive another of “honest services” through bribes or kickbacks supplied by a third party who has not been deceived.” Thus, after Skilling, § 1346 “criminalizes only the bribe-and-kickback core of the pre-McNally case law.”
The government argued that the statute also encompassed “undisclosed self-dealing by a public official or private employee—i.e., the taking of an official action by the employee that furthers his own undisclosed financial interests while purporting to act in the interests of those to whom he owes a fiduciary duty.” But the Court rejected that view, finding that while some pre-McNally cases had upheld “honest services” convictions for non-disclosure or concealment of information, the courts of appeals “reached no consensus” on the applicable standards, and a construction of §1346 “must exclude this amorphous category of cases.” Because the government did not allege that Skilling was part of a scheme involving bribery or kickbacks from a third party in exchange for misrepresentation, he could not be convicted of “honest services” fraud. Thus, the Court vacated the Fifth Circuit’s opinion, and remanded for a determination of whether the conspiracy indictment constituted harmless error, and whether a reversal on the conspiracy count, if any, would affect Skilling’s other convictions.
The Skilling majority found no reason to be concerned about any lingering ambiguity in § 1346 because it was “as plain as a pikestaff” that bribes and kickbacks constituted honest-services fraud under pre-McNally case law. Further, the court concluded, the statute’s mens rea requirement “blunts any notice concern.” The majority stated its expectation that the statute would “draw content,” from pre-McNally case law and other federal statutes that define similar crimes. Here, the Court made an important distinction: the use of federal criminal statutes, such as the bribery statute, will not render “honest services” crimes superfluous. Because the federal criminal statutes generally apply to federal public officials, § 1346 serves the additional purpose of ensuring that state and local corruption and private-sector fraud will not go unpunished.
B. Road Not Taken: The Statute Is Not Wholly Void For Vagueness.
While six justices found that pre-McNally case law yielded principles coherent enough to pass constitutional muster, three others disagreed. Though concurring in the judgment, Justice Scalia, joined by Justices Thomas and Kennedy, found the “honest services” statute to be unconstitutionally vague, and would have reversed Skilling’s conviction on the basis that § 1346 provided no “ascertainable standard of guilt.” Among their grievances with the statute’s vague language, the concurring justices noted that pre-McNally case law had failed to determine whether fiduciary obligations derived only from state law, or from federal law as well. Further, they argued that even if “honest services” obligations were based on federal common law, they were “hopelessly underdefined.”52 The concurrence observed that courts had also inconsistently required further elements, such as actual harm to the state, or loss by a victim, beyond a violation of duties.53 Moreover, the concurrence noted that while pre-McNally law indicated the duties for public officials were greater than those for private employees, the statute offered no clear standard for distinguishing those duties. In short, the concurring justices argued, by reviving the pre-McNally honest-services doctrine, the Court took “a step out of the frying pan and into the fire,” leaving unacceptable ambiguity in the scope and standards of a criminal statute, including whether the statute applies to both public and private officials, or what is the indefinite source of the fiduciary obligations underlying the statute.
Further, the concurrence found unconvincing the majority’s view that the statute could be pared down to a “core” in bribery and kickbacks. “To say that bribery and kickbacks represented ‘the core’ of the doctrine, or that most cases applying the doctrine involved those offenses, is not to say that they are the doctrine. All it proves is that the multifarious versions of the doctrine overlap with regard to those offenses.” Noting that of the “smorgasbord-offerings” of pre-McNally, not even one was actually limited to bribery and kickbacks, the concurrence concluded that the Skilling majority’s limitation of the statute to those cases is “a dish the Court has cooked up all on its own.” The Court’s “limiting construction” of the statute had not actually been adopted by any lower court; therefore, the Court had not chosen a positions, but rather decided to “rewrite” the statute.59 In short, the concurrence took issue with the Court’s “prescription of criminal law,” a decidedly legislative deviation from the Court’s traditional judicial function.
Notes et références
- See Skilling, 130 S. Ct. at 2907.
- See 18 U.S.C. §§ 371, 1343, 1346.
- See Skilling, 130 S. Ct. at 2908. Skilling was also charged with over 25 substantive counts of securities fraud, wire fraud, making false representations to Enron’s auditors, and insider trading.
- See id. at 2928.
- See id. at 2929.
- See McNally, 483 U.S. 350, 356 (1987).
- See McNally, 483 U.S. 350, 356 (1987).
- Id. at 2931.
- Id. at 2928.
- Id. at 2931.
- Id. at 2932.
- Id. at 2933.
- Id. at 2933.
- Id. at 2933 (citing 18 U.S.C. §201(b), 666(a)(2), 41 U.S.C. §52(2)).
- Id. at 2934 & n.46.
- Id. at 2936 (Scalia, J., concurring).
- Id.at 2938.
- Id. at 2939 (emphasis in original)
- Id. at 2940.
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