The investigation surrounding superlobbyist Jack Abramoff has been Washington’s biggest public corruption scandal in years. In case after case, public officials and lobbyists have pleaded guilty to giving or accepting lavish gifts in connection with official acts.
The crimes in the Abramoff scandal sound like textbook bribery or gratuities: paying off public officials to influence their actions or to reward them for actions already taken. But of the more than a dozen defendants convicted — including Abramoff himself and Congressman Robert Ney, the only member of Congress charged thus far — almost no one has been charged with violating the bribery or gratuities statute.
What was a leading charge — and in many cases the only charge — against each defendant? Honest services mail or wire fraud, or conspiracy to commit honest services fraud.
Honest services fraud, a sweeping charge with ill-defined boundaries, is rapidly becoming the corruption statute of choice for federal prosecutors.
This trend should make everyone — not just corrupt public officials — uneasy.
In an honest services public corruption case, defendants are charged with using the mail or wires to further a scheme to defraud citizens of their intangible right to the fair, honest and impartial services of their public officials.
Honest services fraud is also used — although less frequently — to prosecute breaches of duties in private-sector relationships, such as those between employers and employees or corporate officers and shareholders.
TARGETING STATE CORRUPTION
The theory became popular in the 1970s, primarily as a way to fight state and local corruption. The federal bribery and gratuities statute generally does not apply to state or local officials. By charging such officials with honest services fraud, federal prosecutors were able to pursue corrupt state governors, legislators, judges and many others.
The U.S. Supreme Court rejected the theory in the 1987 McNally case, but Congress revived it the following year by enacting 18 U.S.C. 1346. Section 1346 specifies that the mail and wire fraud statutes do criminalize schemes to deprive another of the intangible right to honest services.
Section 1346 does not, however, define “honest services,” and in the 20-plus years since it was passed, chaos has reigned. Perhaps no area of federal criminal law has generated greater confusion and controversy.
Lacking guidance from Congress, judges have struggled to limit the scope of a statute that potentially criminalizes any conduct that may be deemed “dishonest.” Lower courts have splintered over the proper definition of “honest services,” and judicially crafted rules and limitations vary across the country.
Now use of the theory appears to be on the rise. In recent years, the Department of Justice increasingly has used honest services fraud not only for state and local corruption but also to prosecute corruption involving federal officials, such as in the Abramoff investigation.
This move has come as court decisions during the past decade made prosecutions under the federal bribery and gratuities law more difficult. Courts have required the prosecution to link a particular gratuity to a particular “official act” and have narrowly interpreted the term “official act” in the statute.
By charging honest services fraud in federal corruption cases, prosecutors are able to avoid these holdings. Even in cases in which bribery or gratuities could be established, it will often be easier simply to charge the same conduct as an honest services violation and not worry about the more finicky bribery statute.
This development is troubling for several reasons. Conduct that may constitute corruption often scrapes uncomfortably close to the edge of legitimate fundraising, patronage and other political activities. There are many things some might consider dishonest or sleazy that are not actually criminal.
For these reasons, public corruption crimes must have clear and precisely targeted parameters. Honest services fraud utterly fails on this score. Outside of core corruption such as bribery, the standard provides scant notice to politicians or the public concerning what conduct a prosecutor may decide crosses the line.
Another concern is the criminal penalties involved. Gratuities is a relatively minor felony, punishable by only two years in prison. State conflict of interest or financial disclosure laws, often the subject of honest services charges, also may carry relatively modest penalties.
Honest services fraud, however, is punishable by up to 20 years. An honest services charge can be a gratuities or conflict-of-interest case on steroids, with potential punishment grossly out of proportion to the underlying crime.
The Supreme Court is finally poised to re-enter the fray. The Court has just granted certiorari in two honest services cases, one involving a state legislator and one involving corporate officers. But the cases do not challenge the constitutionality of § 1346 and they seem destined only to add to the judge-made law in this area.
Legislation pending in Congress, the “Public Corruption Prosecution Improvements Act,” seeks to address some of these issues by amending the gratuities statute to broaden its application. A detailed definition of honest services fraud limiting it to cases of true corrupt misconduct akin to bribery would be a welcome addition to such a bill.
The vague honest services standard leaves courts and prosecutors to make up the criminal law as they go along. Congress should step in and end the confusion.
Let’s be honest — 20 years of chaos is enough.
Randall D. Eliason is the former chief of the public corruption/government fraud section at the U.S. Attorney’s Office for the District of Columbia, and teaches a course on white-collar crime at George Washington University Law School. His article, “Surgery with a Meat Axe: Using Honest Services Fraud to Prosecute Federal Corruption,” will appear this winter in the Journal of Criminal Law and Criminology.