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* I’m not totally sure yet how this impacts the Rod Blagojevich case or the George Ryan conviction, but the US Supreme Court just handed down its ruling in the Skilling case. AP…
The Supreme Court has sided with former Enron CEO Jeffrey Skilling in limiting the use of a federal fraud law that has been a favorite of white-collar crime prosecutors.
The court said Thursday that the “honest services” law could not be used in convicting Skilling for his role in the collapse of Enron. But Justice Ruth Bader Ginsburg said in her majority opinion that the ruling does not necessarily require Skilling’s conviction to be overturned.
In an opinion written by Ruth Bader Ginsburg with varying support from other justices the court finds the honest services law only covers bribery and kickback schemes, and Skilling was not accused of either.
This means some of his charges could be retried or dismissed and his 24-year sentence could be further reduced.
At issue is the “honest services” law, a broad anti-fraud law that makes it a crime to “deprive another of the intangible right of honest service.” Skilling and others argued the law was too vague and was misused by prosecutors.
Former Gov. Rod Blagojevich is being tried on multiple charges of corruption, including depriving the public of honest services.
Over the past two decades, the law against “honest services” fraud has been used routinely in cases in which public officials or corporate executives were accused of secretly scheming to benefit themselves at the expense of the public or their stock holders.
The Government charged Skilling with conspiring to defraud Enron’s shareholders by misrepresenting the company’s fiscal health to his own profit, but the Government never alleged that he solicited or accepted side payments from a third party in exchange for making these misrepresentations. Because the indictment alleged three objects of the conspiracy—honest-services wire fraud, money–or-property wire fraud, and securities fraud—Skilling’s conviction is flawed. See Yates v. United States, 354 U.S. 298. This determination, however, does not necessarily require reversal of the conspiracy conviction, for errors of the Yates variety are subject to harmless-error analysis. The Court leaves the parties’ dispute about whether the error here was harmless for resolution on remand, along with the question whether reversal on the conspiracy count would touch any of Skilling’s other convictions. Pp. 49–50.
554 F. 3d 529, affirmed in part, vacated in part, and remanded.
* The Supremes also ruled that Conrad Black’s appeal was improperly denied. From the ruling…
We decided in Skilling that §1346, properly confined, criminalizes only schemes to defraud that involve bribes or kickbacks. That holding renders the honest-services instructions given in this case incorrect, and brings squarely before us the question presented by the Seventh Circuit’s forfeiture ruling: Did Defendants, by failing to acquiesce in the Government’s request for special verdicts, forfeit their objection, timely made at trial, to the honest-services instructions? […]
We hold, in short, that, by properly objecting to the honest-services jury instructions at trial, Defendants secured their right to challenge those instructions on appeal. They did not forfeit that right by declining to acquiesce in the Government-proposed special-verdict forms. Our decision in Skilling makes it plain that the honest-services instructions in this case were indeed incorrect. As in Skilling, ante, at 40–41, we express no opinion on the question whether the error was ultimately harmless, but leave that matter for consideration on remand.
For the reasons stated, we vacate the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.
*** UPDATE 1 *** From the Illinois Campaign for Political Reform…
Here in Illinois, most will ask how the ruling may affect the case against former Gov. Rod Blagojevich. We note that the indictment against the ex-governor was already revised to minimize its reliance on the Honest Services law. Even if the Honest Services law had been wiped out entirely, most of the charges against the ex-governor would survive.
Testimony in the trial to date certainly makes it appear that Rod Blagojevich saw public office as a tool for forcing payments to benefit himself. Whether the subject was the issuance of state grants, the signing of legislation, or even the filling of the US Senate seat, Rod Blagojevich approached his public duties with both eyes focused on what he could get for himself — a job, a campaign contribution, a personal benefit.
We hope the trial will continue, and that justice will be done. The people of Illinois have endured an impeachment and removal from office; we have seen our state’s reputation dragged through the mud. Politicians, like everyone else should be held accountable for their criminal actions. The trial must proceed. Justice is served by having the trial continue.
*** UPDATE 2 *** Judge Zagel won’t stop the trial…
Lawyers for Rod Blagojevich were quick to pounce on the U.S. Supreme Court decision this morning weakening the so-called honest-services law on which some of the charges against the former governor are based.
Aaron Goldstein, one of Blagojevich’s many lawyers, filed a motion to suspend the trial until at least next week so the defense team could digest the high court’s 114-page decision.
It has been known for months that the Supreme Court ruling was coming, and Blagojevich’s lawyers sought to seize on that even before the trial began to get Zagel to postpone the proceedings. He consistently said no dice.
And Zagel did so again this morning, telling Blagojevich’s lawyer that “my preliminary reading (of the Supreme Court ruling) is it may not offer a lot of hope for you.”
*** UPDATE 3 *** I was gonna do a separate Blagojevich trial post, but here’s a roundup instead…
* Harris: Obama knew of Blagojevich plot
* Blago trial a distant, unwanted headache for Obama
* ‘Prince of Darkness’ plotted with Blagojevich to sell Obama Senate seat
* $190,000 not enough for Blagojevich: “I want to make money.”
* Blagojevich on Jarrett: “How bad does she want to be U.S. Senator?”
* Blago saw Obama’s rise as an obstacle
* Blagojevich frustrated by gridlock
* Blago calls Obama ‘hen-pecked’ by Michelle
* Blagojevich ‘depressed’ on re-election night
* In a clash of styles, judge favors reserve in Blagojevich trial
* Rod Blagojevich on foundation jobs: “Salvation Army… have to wear a uniform, forget that.”
* Tape: Rod Blagojevich considers union foundation job for himself, his wife
* Blagojevich, Harris prep for job bargaining with Tom Balanoff
* Testy exchange between husband and wife
* Rod Blagojevich snaps at Patti on recording: “You’re just wasting f-ing time!”
* Judge Zagel says no gag order; Blagojevich can keep on claiming innocence
* Hinz: Blago shows true colors in court tapes
* Sneed: Grand plans on Blago’s Indian pad
* RR Star: Blago’s trial paints ugly portrait of indifference
posted by Rich Miller
Thursday, Jun 24, 10 @ 9:40 am
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So actually what does the “honest services” law mean or doesn’t mean?
Should we expect “honest services” from our elected officials?
When the regular man or woman has a job/career/profession are they expected to provide “honest services”?
Seems like a double-standard for politicians and executives.
Comment by Gallery Thursday, Jun 24, 10 @ 10:23 am
Vis a vis Conrad Black: the decision will ultimately mean nothing but more legal fees.
The Seventh Circuit will doubtlessly, in my opinion, find on remand that the error in the instructions on honest services was “harmless” and re-affirm the conviction.
Posner wrote the opinion below – and will write the opinion on remand in all probability (if there even is one). He was completely dismissive of Black’s claims
There was still more evidence of the fraud, but there is no need to go into it. The jury convicted the defendants of a second, similar fraud, on equally compelling evidence;
there is no need to extend the opinion with a discussion of that either.
Posner also upheld Black’s “obstruction of justice” conviction – for removing boxes from his Canadian office while an SEC investigation was ongoing (despite there being no evidence that any documents were actually ever withheld from the SEC – and despite the fact there was no order in place that would have prevented him from removing boxes from his office). The Supreme Court opinion didn’t address that conviction — which, by itself, is likely to keep him imprisoned.
The “good news” for him – I think he’s only got 18 – 24 months left.
Comment by Anon Thursday, Jun 24, 10 @ 10:24 am
As to Blagojevich — prosecutors will spin the opinion as a victory (the prevailing wisdom was that the whole of the statute would be thrown out). Per the Opinion of the Court, the statute outlaws “kickbacks” — defined, in part, as receiving “anything of value” in violation of the statute.
Under the same rationale that allows them to prosecute ALL of these incomplete acts, my guess is that they will construe Blagojevich’s attempt to obtain his “Change to Win” spot (or cabinet post, or ambassadorship) as an “attempted” violation of the statute
Comment by Anon Thursday, Jun 24, 10 @ 10:30 am
I do believe this is a victory for the prosecution in the Blago case. From what I’ve read this law would only pertain to bribes and kickbacks. Isn’t this what the federal prosecutors have been saying Rod was conspiring to do ?
Comment by Anonymous Thursday, Jun 24, 10 @ 10:35 am
Wow what a mess.
The panel last night on Chicago Tonight (Collins and Durkin) said any rollback would be too late to impact George Ryan’s conviction, plus he was convicted on other seperate counts.
But Jim Thompson will surely be out again soon saying this is one more reason to say George has served long enough, since honest services was a big part of that trial too. He’ll say George has served long enough on the racketeering and other independent charges.
Comment by just sayin' Thursday, Jun 24, 10 @ 10:45 am
If “Honest Services” applies to bribery and kickbacks, I’d say that Blagojevich is still on the hook.
Even shakedowns for campaign contributions — a think of value kicked back to a person (in this case, a corporate person) — in exchange for official action would qualify.
Comment by Yellow Dog Democrat Thursday, Jun 24, 10 @ 10:47 am
I just did a ctrl+F through the Blagojevich indictment, and “honest services” is only mentioned in three of the twenty-four counts: 1, 2, and 13. All three counts seem to be related to the shennanigans surrounding the Teacher’s Retirement System. There are other statutes listed in these sections (solicitation, racketeering) that have been violated.
I have no legal training whatsoever, but I get the impression that this isn’t going to hurt the case against Blagojevich as much as some are reporting.
The prosecution may fail to prove their case on some counts (beyond the ones that mention “honest services”), but I don’t see Blago avoiding jail.
Comment by Sacks Romana Thursday, Jun 24, 10 @ 10:52 am
===this isn’t going to hurt the case against Blagojevich as much as some are reporting.===
I haven’t seen much reporting that says that, have you?
Comment by Rich Miller Thursday, Jun 24, 10 @ 10:53 am
Gallery, deprivation of honest services was a theory that developed in the 19th century and was codified repeatedly in the 20th as a way to turn local corruption/bribery cases into Federal crimes. What makes it different than standard fraud is that what is lost isn’t necessarily tangible but the underlying honesty of the process. So, while Valerie Jarrett might have made a great Senator, and the fund managers picked by TRS may have done a fine job, the fact Blago conspired to get a bribe for making his decision (and used the phone to do it) makes it a Federal crime.
This case should not impact Blago at all. The Skilling conviction didn’t involve any third party offering or being solicited to offer anything of value to Skilling, but the idea that he was motivated to lie and make others keep their money in Enron because his compensation was tied to stock prices. Like the Arthur Andersen conviction, it was a case of prosecutors trying to be creative to find a crime to fit the facts, and that’s when you run the risk of losing on appeal. By comparison, this is a classic solicitation of a bribe and kickback scheme.
Comment by Berkeley Bear Thursday, Jun 24, 10 @ 11:07 am
Sometimes the Supremes write in Esperanto.
Comment by wordslinger Thursday, Jun 24, 10 @ 11:11 am
@Rich
You’re right, I haven’t read any news stories saying as much since the revised February indictment. Just some of the reports I read in the comments.
How about.. this isn’t going to hurt the case against Blagojevich as much as some belive.
Comment by Sacks Romana Thursday, Jun 24, 10 @ 11:15 am
I’m troubled that the court’s ruling appears to undermine the concept of fiduciary duties of management to shareholders, and public officials to citizens. Yes, the Honest Services charge is vague and therefore subject to misuse, but this ruling seems to make it OK to put someone else’s interests ahead of the public interest or shareholder interest. I hope that isn’t the case.
For Rod, it’s still game on. On the other hand, Robert Sorich might see his conviction vacated. It won’t get him back the time he spent in prison though, but it is clear Sorich never took a dime from anyone. His is a compelling case and this ruling seems like it applies to his situation better than Skilling’s or Black’s.
Comment by 47th Ward Thursday, Jun 24, 10 @ 11:22 am
I think it is now quite possible that Blago has beaten the rap…so far, I haven’t heard anything that supports the fact that he committed a crime, and now that the Court has struck down the honest services ruling, he and Adams must be feeling mighty good right now…I still say Blago walks away from this…
Comment by Loop Lady Thursday, Jun 24, 10 @ 11:30 am
LL, you are daft. That’s my only explanation for that goofy post.
Comment by Rich Miller Thursday, Jun 24, 10 @ 11:31 am
Now is the time for the people of Illinois to count their blessings.
While this decision means that the rest of the nation has to look forward to an up-tick of dishonesty in their corporations and public officials, we in Illinois can take comfort in the knowledge that our white-collar crooks are already operating at full capacity.
– MrJM
Comment by MrJM Thursday, Jun 24, 10 @ 11:43 am
Rich: Tell me where all the money is that he supposedly took from donors? I think he if he is convicted, it will be because the Feds find a money trail…a conviction will not come from an honest services law…a bit crabby today Rich?
Comment by Loop Lady Thursday, Jun 24, 10 @ 11:47 am
===I think he if he is convicted, it will be because the Feds find a money trail===
You don’t need a money trail for a conspiracy conviction, doofus.
Comment by Rich Miller Thursday, Jun 24, 10 @ 11:51 am
well excuse me Mr. Tactful…
Comment by Loop Lady Thursday, Jun 24, 10 @ 11:59 am
47th Ward -
Sorich’s continued employment depended on Daley’s re-election, and requiring individuals to “volunteer” their time in exchange for govt employment is a kickback scheme, only the thing being kicked back here is their labor — not their money — but it is still a thing of value.
Invaluable to the Daley Machine, if you really think about it.
Still, Sorich MAY appeal, but he’ll surely lose.
Comment by Yellow Dog Democrat Thursday, Jun 24, 10 @ 12:00 pm
Blago better hope a Loop Lady clone is sitting on the jury but there can’t be too many of those floatin around.
BTW, if the Supreme ruling exonerates Sorich and the boys how soon before Daley can get back to business.
Comment by Phineas J. Whoopee Thursday, Jun 24, 10 @ 12:06 pm
We’ll see YDD. His lawyer was on Chicago Tonight last night and said they have a writ of habeus corpus pending based on this ruling. I don’t know all of the particulars, but if the Court’s ruling tosses out honest services convictions where no bribes or extortion was alleged, then Sorich might yet be vindicated.
And I totally agree that a thing of value was derived by Sorich’s fraud. But his only benefit was continued employment. So I don’t think your confidence is well placed in this instance.
Comment by 47th Ward Thursday, Jun 24, 10 @ 12:06 pm
YDD is wrong on the law. But, of course, so was Ann Claire Williams.
U.S. v. Thompson, 484 F. 3d 877 (7th Cir 2007):
It would stretch the ordinary understanding of language, however, to call a public employee’s regular compensation, approved through above-board channels, a kind of “private gain.” . . . It is linguistically possible to understand “private gain” as whatever adds to the employee’s income or psyche — anything the employee would pay to have, rather than pay to avoid — but the Rule of Lenity counsels us not to read criminal statutes for everything they can be worth. The history of honest-services prosecutions is one in which the “private gain” comes from third parties who suborn the employee with side payments, often derived via kickbacks skimmed from a public contract. Treating § 1346 as limited to such situations is consistent with its language: recall that it defines a means to implement a “scheme or artifice,” and getting a raise through normal personnel practices does not sound like an aspect of a “scheme or artifice.”
The United States has not cited, and we have not found, any appellate decision holding that an increase in official salary, or a psychic benefit such as basking in a superior’s approbation (and thinking one’s job more secure), is the sort of “private gain” that makes an act criminal under § 1341 and § 1346. The United States does rely on a few decisions of district courts, e.g., United States v. Sorich, 427 F.Supp.2d 820, 829 (N.D.Ill.2006); United States v. Munson, 2004 WL 1672880 *1, 2004 U.S. Dist. LEXIS 14274 *3 (N.D.Ill. July 27, 2004), but we do not find them persuasive. We now hold that neither an increase in salary for doing what one’s superiors deem a good job, nor an addition to one’s peace of mind, is a “private benefit” for the purpose of § 1346.
Comment by Anon Thursday, Jun 24, 10 @ 12:16 pm
Last evening the lawyers interviewed on Chicago tonight repeatedly made the point that direct money is only one possible aspect of a “tit for tat” case. The exchange of one thing of value (a senate seat or a vote on a bill or approval of a grant) for another thing of value (a contribution, a future appointment, or a promise of employment security for a family member) also applies. They discussed whether talking about a crime was the same as actually completing the crime. Apparently the taped Blago discussions about *which* crimes to commit, not *whether* to do it is significant in the panelists minds. There is much more to the case than the senate seat sale.
Comment by Responsa Thursday, Jun 24, 10 @ 12:18 pm
Phineas: I am in NO way saying the ex-gov should walk…he is a corrupt jerk, but the case seems weak, and this strike down doesn’t help the Feds case…
Comment by Loop Lady Thursday, Jun 24, 10 @ 12:20 pm
All the “Honest Services” ruling does is now is embolden the Rod Show.
More babbling on his way to the getaway car.
Comment by Northside Bunker Thursday, Jun 24, 10 @ 12:40 pm
MrJM, Well said! Sarcasm is befitting of this Supreme Court. Now the fictional character Gordon Gekko’s “greed is good” can replace “in God we trust” as the OFFICIAL MOTTO OF THE UNITED STATES.
LoopLady, If a poll were taken, asking “why was George Ryan convicted” most people haven’t a clue. People don’t follow these things that closely. On the other hand, the jury is following this closely, along with the atmospherics provided by the characters in this in the courtroom.
It’s too soon to ‘read’ what the jurors might do. The last few weeks will give us more insight into the jurors processing of trial.
Comment by HatShopGirl Thursday, Jun 24, 10 @ 12:43 pm
This is like being trapped in an elevator with Nina Totenberg.
Comment by Way Way Down Here Thursday, Jun 24, 10 @ 12:50 pm
Why do people keep saying Blago got no money for his efforts? He had $20 million for his second campaign for governor. Every company in the state (I should say U.S.) that wanted to do work for the state knew that you had to pay into the campaing to get state work. It was a subtle (NOT) extortion that went on for 6 years. The feds are lucky enough to have several strong arm occasions on tape so we can put him away.
Comment by Stooges Thursday, Jun 24, 10 @ 1:12 pm
Loop Lady, the feds are way ahead of you. They knew the Supremes might rule this way and they amended the indictment months ago in anticipation of it.
Comment by Zora Thursday, Jun 24, 10 @ 1:21 pm
So in order for Blago’s attorneys to take advantage of this ruling, they must argue that failing to provide “honest services” can no longer be considered a crime (in certain situations, as laid out in the ruling), correct?
And if they do, are they basically conceding that Blago did not provide “honest services?”
In other words, do they have to admit or at least imply that he didn’t render honest services in order to seek shelter under the new ruling that decriminalizes this?
My question isn’t a legal one, it has more to do with his daily appeals to the court of public opinion.
At some point, his need to protect his legal interests and his need to publicly grandstand is going to collide. That moment cannot come soon enough for me.
Comment by Zora Thursday, Jun 24, 10 @ 1:37 pm
ok, once again i’m not following. reading Blagojevich on tape: Get Obama to fund-raise from Warren Buffett, Bill Gates and it occurs to me: if blagojevich wants to get out of being governor (which he suggests in an earlier tape), what’s he fund-raising for? his lawyer’s fees???
Comment by bored now Thursday, Jun 24, 10 @ 2:19 pm
LL with every recording and question, another pile of dirt is tossed on the immense pile accumulated on Blago’s coffin.
The S. Ct ruling is very interesting becuase they did not just toos the whole law as unconstituionaly vague. In fact, I wonder if they did not have an eye on the Blao trial when they deicded to leave it in place and define the limit as covering bribery/kickbacks. That surviving portion of the law seems tailored made to the prosecution here.
Comment by Ghost Thursday, Jun 24, 10 @ 2:48 pm
I’m not understanding why people on this blog keep saying the court struck down the “Honest Services” law. Please go read the opinion. This is a win for the prosecution.
It was amended to only include bribes and kickbacks. That exactly what Blago was doing.
These blogs make me crazy. People don’t read anything that came before them or even the courts opinion. They are just going to give their slanted wacked out view.
Comment by Windy City Mama Thursday, Jun 24, 10 @ 2:50 pm
Only a few are saying that, WCM, particularly Loop Lady, who is particularly clueless.
Comment by Rich Miller Thursday, Jun 24, 10 @ 2:54 pm
Does anyone think that Blago’s lawyers were also waiting on the decision about impartial jury?
Comment by Visual Manager Thursday, Jun 24, 10 @ 2:55 pm
I realize there are folks out there who continue to question Blago’s guilt but I, personally, have never seen a case where the evidence against the defendant is so completely overwhelming.
Taking this dead bang loser to trial is insanity. I’ll bet he could have gotten 5 years if he threw himself on the mercy and started singing. Didn’t they listen to the tapes? Were they not aware of the witnesses arrayed against them?
If Blago would have listened to Genson, I am certain it would not have come to this point.
Comment by Phineas J. Whoopee Thursday, Jun 24, 10 @ 3:24 pm
@Loop lady- perhaps you should re-read what Judge Zagel said jas mentioned above “And Zagel did so again this morning, telling Blagojevich’s lawyer that “my preliminary reading (of the Supreme Court ruling) is it may not offer a lot of hope for you.” I think this is an understatement.
Comment by really?? Thursday, Jun 24, 10 @ 3:27 pm
I sure appears that John Wyma was in a position to warn the President and his people to not offer Blago anything in exchange for appointing their favored candidate to the senate seat. He was cooperating with the fed’s at the time. Probably knew they were listening in on Blago’s conversations.
Comment by Leave a Light on George Thursday, Jun 24, 10 @ 3:38 pm
PJW,
=If Blago would have listened to Genson, I am certain it would not have come to this point.=
I’m still laughing at that one. Goodness, I almost soiled myself. RB listening to anybody, that’s a hoot.
Comment by dupage dan Thursday, Jun 24, 10 @ 3:48 pm
Leave a Light on George, I was thinking the same thing…
Comment by LINK Thursday, Jun 24, 10 @ 4:30 pm
I saw the Chicago Tonight piece as well last night and it colored some of my comments today…I guess Durkin and Collins must be a bit daffy as well…sticks an stones…again, I am not rooting for Blago…Adams got R Kelly off on the absence of a mole on his back in a very blurry videotape, and the evidence in that case was pretty overwhelming as well…
Comment by Loop Lady Thursday, Jun 24, 10 @ 4:35 pm
LL, that was a county courthouse. Different rules, different jury pool, different level of competition.
Comment by Rich Miller Thursday, Jun 24, 10 @ 4:38 pm
You have to wonder why Wyma would have to warn anyone around Obama. Blago was severely damaged goods by that time.
They were talking with Blago when everyone and their brother knew the Justice Dept. — which they would soon be running — was so far up this guy he could smell the Brylcream.
They were so smart they got the president-elect deposed by the FBI. And you have to be real careful what you say to those guys.
Comment by wordslinger Thursday, Jun 24, 10 @ 8:41 pm
I bet after the election, there were a few federales listening in on Blago who were crossing their fingers that no one from the president-elect’s camp would call up and say something really stupid. That would be quite a can of worms. They were dancing awfully close.
Comment by wordslinger Thursday, Jun 24, 10 @ 9:07 pm
The punditocracy remains fixated on seeing actual cash or checks in hand, when all the Prosecution has to prove is that the conspiracies were planned and attempted, not successfully completed. The pundits are blinded I think by a Hollywood notion of the rules of law and evidence. Adam the Lesser is counting on that for the jury as well, and is always trying to slant the case in that direction. Zagel’s final instructions to the jury before they deliberate will be very important in keeping them on track with the actual charges.
Comment by Gregor Friday, Jun 25, 10 @ 12:27 am
Loop Lady has company with Geraldo Rivera. He just stated on Fox and Friends that he thinks Blago will be found not guilty.
Comment by really?? Friday, Jun 25, 10 @ 7:27 am
“Geraldo Rivera… just stated on Fox and Friends that he thinks Blago will be found not guilty.”
Most likely because they’ve been promised a share of what’s in Al Capone’s vault if they vote to acquit him
Comment by Secret Square Friday, Jun 25, 10 @ 9:31 am