Surgery with a meat axe: using honest services fraud to prosecute federal corruption.

AuthorEliason, Randall D.

    The scandal involving lobbyist Jack Abramoff has been the most significant public corruption investigation to hit the nation's capital in years. (1) In more than a dozen cases to date, federal public officials and lobbyists (including Abramoff himself) have pleaded guilty to charges that they gave or accepted trips, tickets for concerts and sporting events, lavish meals, and other gifts, in connection with the performance of official acts. Robert Ney, the only Member of Congress to be convicted in the scandal thus far, pleaded guilty to accepting a series of gifts from Abramoff and his associates over several years in exchange for taking official actions that would benefit Abramoff's clients. (2)

    The criminal behavior at the center of the Abramoff scandal sounds like textbook public corruption typically charged as bribery or gratuities: individuals paying off public officials either to influence them to act in a certain way or to reward them for actions already taken. It might surprise many to learn, then, that among all those convicted in the Abramoff investigation--including Congressman Ney and Jack Abramoff himself--almost no one has been charged with violating the federal bribery and gratuities law. By contrast, in each case a leading charge--and in many cases the only charge--has been honest services mail or wire fraud, or conspiracy to commit honest services fraud. (3)

    In an honest services fraud public corruption case, the defendants are charged with using the mail or wires to further a scheme to defraud citizens of their right to the fair, honest, and impartial services of their public officials. (4) Historically, honest services fraud involving public officials was primarily a vehicle for the federal prosecution of state and local corruption. The principal federal bribery and gratuities statute, 18 U.S.C. [section] 201, generally applies only to federal public officials. (5) Over the past four decades, as federal prosecutors increasingly focused on pursuing state and local corruption, they required other statutory tools. Honest services mail and wire fraud emerged as a leading theory of prosecution in such cases.

    In recent years, however, prosecutors increasingly have employed the honest services fraud theory to prosecute not only state and local corruption but also corrupt conduct by federal public officials. This move has come in the wake of court decisions--chief among them the Supreme Court's 1999 decision in the Sun-Diamond case (6)--that have narrowed the scope of the federal bribery and gratuities law and made prosecutions under that statute more difficult. Faced with these restrictive court rulings, prosecutors appear to be turning with increasing frequency to honest services fraud as an alternative to traditional bribery or gratuities charges. (7)

    In a typical federal corruption case, honest services fraud will now be easier to charge and prove than bribery or gratuities, will apply to a wider range of conduct, and will carry a greater potential penalty. From the prosecutor's standpoint, what's not to like? It is therefore hardly surprising that federal prosecutors are turning to the honest services theory as a ready substitute for the more finicky bribery and gratuities law. Honest services fraud is on a path to becoming the default statute of choice among prosecutors of federal public corruption cases--the new "darling of the modern prosecutor's nursery." (8)

    This trend towards honest services fraud has received relatively little scrutiny; most of these cases are resolved through guilty pleas, so the legal foundations of the theory are seldom tested. But this expanding use of honest services fraud may be expanding the scope of federal public corruption prosecutions beyond the proper boundaries. Prosecutors freed of the more rigorous proof requirements of the bribery and gratuities law may, as one federal judge cautioned, use the "free swinging club of mail fraud" (9) to pursue an ever-wider range of conduct under the vague banner of honest services. This threatens to upset the delicate balances that have been struck in the law concerning the behavior of federal officials and to blur further the already less-than-clear lines between corrupt misconduct and lawful behavior.

    When applied to state and local corruption, the honest services fraud theory at least had the virtue of necessity. In the absence of a federal statute directly applying to bribery or similar corrupt conduct by state and local officials, honest services mail and wire fraud stepped in to fill the void. (10) The same cannot be said of federal corruption prosecutions. In federal corruption cases, honest services fraud may be charged not because there are no other applicable corruption statutes, but because a violation of those statutes cannot be established--which may mean, in some cases, that the acts in question should not be considered criminal at all.

    Conduct that may constitute federal corruption often scrapes uncomfortably close to the edge of legitimate activities such as lobbying and fundraising. There is a great deal of behavior some might consider dishonest, unethical, or sleazy that is not actually criminal. For these reasons, criminal laws in this area must contain "precisely targeted prohibitions." (11) The sweeping and ill-defined honest services standard utterly fails in this regard. Far from being precisely targeted, it potentially criminalizes any behavior that might be deemed "dishonest" while providing scant notice concerning where the line will be drawn between criminality and lesser misconduct.

    In Sun-Diamond, the Supreme Court noted that the federal bribery and gratuities statute, with its strict proof requirements, is part of an "intricate web of regulations, both administrative and criminal, governing the acceptance of gifts and other self-enriching actions by [federal] public officials." (12) In light of this complexity, the Court concluded, "a statute in this field that can linguistically be interpreted to be either a meat axe or a scalpel should reasonably be taken to be the latter." (13) The concern now is that prosecutors are frequently discarding the scalpel of bribery and gratuities altogether and instead are performing surgery with the meat axe of honest services fraud. The consequences for the patient--the law of federal public corruption--have been predictably messy. It is time for Congress to step in and end the carnage by reforming the law governing federal corruption.



      To appreciate the issues concerning the growing use of honest services fraud, it is necessary first to review the current state of the law concerning the prosecution of federal bribery and gratuities cases. The centerpiece of federal public corruption law is 18 U.S.C. [section] 201, entitled "Bribery of Public Officials and Witnesses." (14) The statute defines two distinct offenses: bribery and gratuities. (15)

      The crime of bribery, set forth in 18 U.S.C. [section] 201(b), is committed when a public official (as defined in the statute) corruptly demands, seeks, receives, accepts, or agrees to receive and accept anything of value in exchange for: (1) being influenced in the performance of an official act; (2) being influenced to commit or aid in a fraud against the United States; or (3) being induced to do or omit to do an act in violation of his or her official duty. (16) The crime applies to both sides of a corrupt transaction: those who pay a bribe are equally as guilty as the public official who accepts it. (17) Bribery is punishable by up to fifteen years in prison, along with fines and disqualification from holding any future federal public office. (18)

      The crime of gratuities, 18 U.S.C. [section] 201(c), is committed when a public official, otherwise than as provided by law in the exercise of his or her official duties, directly or indirectly demands, seeks, receives, accepts, or agrees to receive and accept anything of value for or because of any official act performed or to be performed. (19) Again, the crime applies to both sides of the transaction, and those who pay the gratuity are equally guilty.20 An illegal gratuity is punished much less severely than a bribe; the maximum prison term is only two years.21

      The crimes of bribery and gratuities have several elements in common: Public officials: Both crimes apply only to federal public officials. "Public official" is defined in the statute to include all officers and employees of any department, agency, or branch of the United States, as well as private individuals who are acting for or on behalf of the United States.22 The statute does not criminalize private commercial bribery (such as an executive at IBM paying an employee at Dell to provide corporate secrets) or other corrupt transactions between private parties. Most significantly, 18 U.S.C. [section] 201 does not apply to state or local officials who are engaged in purely state or local activities.

      Thing of value: Bribery and gratuities both apply to agreements to give or receive "anything of value."23 This term is interpreted very broadly to include virtually anything of subjective worth to the intended recipient. The most obvious and common examples are money, property, and other tangible goods, but the term also includes more intangible items such as promises of future employment, (24) loans given on unusually favorable terms, (25) sexual favors, (26) and companionship. (27) Even if a gift is actually worthless, it will constitute a thing of value if the public official believed it to be valuable. (28)

      Official act" Gratuities are things of value given or received for or because of "any official act" performed or to be performed by the public official. (29) In addition, one of the three prohibitions in the bribery section...

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