‘Honest services fraud’ law: too wide a net

In three cases argued this year, members of the Supreme Court have expressed qualms about a law used to convict politicians and corporate executives of fraud. The law, which makes it a crime to “deprive another of the intangible right of honest services,” is so vague and open-ended that the court should strike it down.

As is often the case with challenges to over-broad statutes, the attacks on the “honest services fraud” law come from unsympathetic defendants. This week, the law was challenged by Jeffrey K. Skilling, the former Enron chief executive who was convicted not just of insider trading and securities fraud but of a conspiracy count that included honest services fraud. (Skilling also contends the trial judge didn’t do enough to screen out jurors prejudiced by public anger over Enron’s collapse, which cost shareholders and employees billions of dollars.)

Earlier in the term, the court considered challenges to the statute from an Alaska politician indicted for seeking a job with an oil-services company with an interest in legislation, and from Conrad Black, the media magnate who was convicted of fraud and obstruction of justice in connection with a scheme to mischaracterize a management fee he received.

The defendants made various arguments about why their conduct shouldn’t be described as honest services fraud. For example, the legislator, Bruce Weyhrauch, argued that he didn’t violate Alaska law when he failed to disclose that he was seeking employment with the oil company. Whatever the validity of these claims, the law is so broadly worded that any employee who deceives his company or his constituents about anything might be snared in its net. As Skilling’s lawyer pointed out, the law could be used against an employee who conducted personal business on a company computer during working hours.

As Justice Stephen G. Breyer observed in the argument in the Weyhrauch case: “A citizen is supposed to be able to understand the criminal law.” Yet “honest services” means what a given judge or prosecutor says it means.

Responding to suggestions from a government lawyer that the court could limit application of the law to kickbacks and bribery, Justice Anthony M. Kennedy rightly responded that “the courts shouldn’t rewrite the statute; that’s for the Congress to do.” The court should invalidate it so Congress can decide whether a more specific substitute is necessary -- although it’s likely that other laws against bribery, extortion and securities fraud already capture most of the behavior that should be criminalized.

Patrick Fitzgerald, the U.S. attorney in Chicago, recently revised the indictment of former Illinois Gov. Rod R. Blagojevich to add new charges that wouldn’t be affected if the honest services fraud law were declared unconstitutional. The new charges, Fitzgerald said, “are based on the same underlying criminal conduct,” including Blagojevich’s alleged attempt to put President Obama’s former Senate seat up for sale. If Fitzgerald can do his job without this law, it probably isn’t necessary.