Conrad Black's Revenge

[Valin]

WSJ:

6/25/10

Vague laws beget injustice, and in a trio of decisions yesterday the Supreme Court dispensed with major parts of a murky statute that has long been used as a catch-all tool to criminalize business. These are the Court's biggest white-collar crime cases in years and are a long overdue victory for the rule of law.

In a unanimous decision in Skilling v. United States, Justice Ruth Bader Ginsburg wrote that the so-called "honest services" fraud law could not be used to convict former Enron CEO Jeffrey Skilling for his role in the company's accounting scandal. His case will be sent back to the Fifth Circuit Court of Appeals for further consideration, and the High Court's pruning of the statute will reduce opportunities for future prosecutorial abuse.

The 1988 law, which made it a crime to "deprive another of the intangible right of honest services," has become a favorite of prosecutors in white-collar cases precisely because of its ambiguity. Prosecutors use it as the kitchen-sink charge against politicians and executives when they're worried that they can't make more specific allegations stick.

As Justice Antonin Scalia wrote last year, the 28-word provision has been "invoked to impose criminal penalties on a staggeringly broad swath of behavior" by those who "engage in any manner of unappealing or ethically questionable conduct." Different appellate courts have interpreted the law in different ways, leading to wide variation in what "crime" is prosecuted where, and crying out for Supreme Court clarification.

The Court went far to provide that clarification yesterday, with Justice Ginsburg writing that the statute is "properly confined to include only bribery and kickback schemes." Her opinion specifically rejected the Justice Department's request to allow a broader interpretation that included "undisclosed self-dealing by a public official or private employee" who claimed "to act in the interests of those to whom he owes a fiduciary duty." Justice Ginsburg rightly described this as overbroad, and she cited Court precedent that "ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity."....(Snip)