28-word federal law, a key tool against corruption here, faces high court scrutiny

OVER THE last five years, federal prosecutors here have relied upon a law of just 28 words to send a slew of big names to prison for corruption.

Former City Councilman Rick Mariano, ex-city treasurer Corey Kemp (See Page 5) and onetime chief of staff to Councilman Jack Kelly, Christopher Wright, have all been convicted of what's known as "honest-services fraud." So, too, has former New Jersey state Sen. Wayne Bryant.

The law makes it illegal for public officials or private individuals to be disloyal to or dishonest with their constituents or employers.

The law, as interpreted by many courts, also makes it a crime for executives of private companies to put their personal interests ahead of those of their shareholders.

But the law - which has also been used to convict such notables as Washington lobbyist Jack Abramoff and indict former Illinois Gov. Rod Blagojevich - is now under attack by those who consider it either unconstitutionally vague or so expansive that it invites abuse by prosecutors.

There are three cases challenging the scope of the law pending before the U.S. Supreme Court. Two of them - one involving a former Alaska state legislator and the other former newspaper magnate Conrad Black - are to be argued before the high court tomorrow, while the third will be argued next year.

Congress passed the law in 1988 after the Supreme Court held in a 1987 case that prosecutors could not assume that someone was guilty of honest-services fraud if they were cleared of mail or wire fraud.

In the years since, federal prosecutors have relied heavily on the honest-services fraud law to bring public corruption charges.

The honest-services fraud charge is almost impossible to beat. According to the U.S. Attorneys' Office here, of the 30 defendants charged with honest-services fraud since July 2004, only two have been acquitted and one defendant's case is pending.

Stephanos Bibas, a professor at the University of Pennsylvania Law School, said the law does not give defendants "fair mention or warning" about what constitutes a violation.

Bibas said the law does not say what honest services are owed, or by whom, and how they are breached.

The issue for the high court, he said, is to determine "whether or not there should be limits" to rein in a sprawling statute.

In addition to being poorly defined, other observers say the law can be used to convert virtually any kind of unethical behavior into a federal crime.

U.S. Supreme Court Justice Antonin Scalia said the law has been "invoked to impose criminal penalties upon a staggeringly broad swath of behavior" and has suggested that the feds could prosecute a "mayor's attempt to use the prestige of his office to obtain a restaurant table without a reservation" under the honest services statute.

Scalia made the comments in a dissenting opinion earlier this year in a case in which the high court declined to hear an appeal from three Chicago city officials whose honest-services convictions stemmed not from personal gain but from doling out patronage jobs.

Defense attorney Lisa A. Mathewson, who is appealing convictions for honest-services fraud for Wright and Bryant, said the law unconstitutionally intrudes on state matters.

"It allows the federal government to be a roving enforcer of honesty and morality" at the state and local level, she said, adding that that is not the job of the feds.

The U.S. Attorney's Office in Philadelphia maintains that it has used the honest-services law judiciously and wisely.

The Third Circuit has held that a person cannot be convicted of honest-services fraud without an underlying state law violation, such as bribery or not disclosing a conflict of interest.

"We have not pushed the envelope beyond what the Third Circuit has decided," said Zauzmer.

But Mathewson said she hopes the Supreme Court throws out the law.

"There ought to be some showing of tangible harm to the public because we're talking about the expenditure of taxpayer money to put people in prison," she said.

It is likely that the high court will either put limits on the present law or strike it down as unconstitutional, legal experts say.

Either way, the decision(s) could portend some interesting developments.

For one, it could put the brakes on some federal corruption prosecutions.

It's also possible that those previously convicted of honest-services fraud could have their convictions overturned and their sentences vacated.

"It's a very difficult legal issue and [the outcome] will depend on just what the Supreme Court says," Zauzmer said, adding that a decision concluding there must be limits such as a state-law violation or private gain would probably not affect most convictions here.

"We're already on the conservative line of that argument," he said.

Bibas doubts that the high court will overturn the law in its entirety.

"But I would expect in all or some of the cases, the court will find ways to narrow the law and put limits on it so that it is not a catchall tool for prosecutors to criminalize bad or unethical behavior," he said.

If, however, the high court's ruling is more expansive, Bibas suspects Congress would draft a new law that proscribes specific behavior - such as taking kickbacks or bribes - before honest-services fraud charges could be brought.

That is something critics say Congress should have done back in 1988.

Among those now challenging the law before the high court is a former Alaska state representative, Bruce Weyhrauch. Prosecutors say he failed to disclose that he was in job negotiations with an oil company at the same time the legislature was debating an oil-tax bill backed by the company.

The case hasn't gone to trial as the high court considers whether the charges should be dropped because Weyhrauch wasn't required by state law to disclose the job talks.

U.S. Solicitor General Elena Kagan says the honest-services law is not ambiguous or vague. She says in her brief in Weyhrauch that the government must prove that a defendant breached a duty of loyalty and intended to deceive the public.

Kagan also said prosecutions of the honest-services law "safeguard the integrity of state and local government, thereby fulfilling an otherwise unmet need."

Ron Levine, a former federal prosecutor here who's now in private practice, said state and local prosecutors, who are elected, are often constrained in bringing corruption charges because of politics or most of their resources are dedicated to fighting street crime.

Some appellate courts - including the Third and Fifth Circuits - have tried to impose limiting principles on the honest services law, such as an underlying violation of state law.

However, the First, Fourth, Ninth and 11th Circuits have held that the federal law does not limit the meaning of "honest services" to violations of state law.

That absence of consensus about what constitutes a violation of the honest services law by the appellate courts has now brought the issue before the high court.