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July 26, 2011

Muddying the Waters

By Jeremy Miller

Today, the House Judiciary Subcommittee on Crime held a hearing on legislation that would, among other things, provide critically needed amendments to the federal criminal statutes in response to Skilling v. United States, last year’s Supreme Court decision that eviscerated an entire category of deceptive, fraudulent and corrupt conduct from the scope of what was known as the honest services fraud statute (18 U.S.C. § 1346).  For decades prosecutors have used § 1346 to go after public officials who engage in malfeasance, such as undisclosed self-dealing, that isn’t as simple as a direct quid pro quo or a freezer full of money.  Unfortunately, the Skilling decision effectively struck down as unconstitutionally vague the honest services language and consequently, there remains a gaping hole in the Department of Justice’s (DOJ) ability to address a vast swath of public corruption.  

For example, while a public official could be charged with bribery for soliciting thousands of dollars in bribes in return for dishing out city contracts, in a post-Skilling world the same city official could enrich him or herself by secretly creating a company and using the authority of their office to funnel lucrative contracts to that company.  Until Congress passes legislation to deal with this hole in prosecutorial authority, such undisclosed self-dealing can and will go unpunished despite being plainly corrupt and undermining of public confidence in the integrity of their government.  “The Clean Up Government Act,” bipartisan legislation recently introduced by Reps. Sensenbrenner (R-WI) and Quigley (D-IL), restores the honest services provision so that such conduct can again be prosecuted.

What was supposed to be an informative and productive hearing, however, rapidly devolved into head scratching and calls to go back to the drawing board.  Several lawmakers reiterated the tired refrain of yesteryears, fearing overcriminalization and prosecutorial abuse because of supposed vagueness and lack of clarity.  This same hysteria could be found in an op/ed yesterday in Roll Call warning the legislation “might criminalize a vote by a state legislator in favor of financial aid for higher education if that person has a toddler who might use that financial aid program to some day pay for college.”  While such fears may have had more weight with the prior version of the honest services statute, rather than truly examining the legislation at the center of today’s hearing, some lawmakers seem unwilling to believe there can in fact be a constitutionally sound response to Skilling.  They are wrong.

Heeding the Supreme Court’s call for more clarity, “The Clean Up Government Act” addresses this gaping hole with specificity by borrowing existing language from 18 U.S.C. § 208, a well-established federal conflict-of-interest statute that already applies to the Executive Branch and, more importantly, has already been upheld as constitutionally sound in an earlier Supreme Court decision.  Further, as DOJ correctly testified, under the proposed statute no public official could be prosecuted unless he or she knowingly conceals, covers up, or fails to disclose material information -- that he or she is already required by law or regulation to disclose -- with the specific intent to defraud, thus removing the risk that a public official can be convicted for unwitting conflicts of interest or mistakes.

Once again CREW applauds Chairman Sensenbrenner and Rep. Quigley for their leadership on this issue.  We hope that whatever resolution is needed to report the bill out of committee leaves intact this critically needed legislative fix to Skilling, only then can we hold accountable public officials who secretly act in their own financial self-interest rather than in the interest of the public.

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