honest services

Black v. United States

Issues

Whether honest services fraud requires a showing of economic harm, and whether a preservation requirement enables an honest services fraud conviction to be upheld without analyzing jury instructions for error.

 

The United States convicted Petitioners Conrad Black, John Boultbee, and Mark Kipnis of mail and wire fraud under 18 U.S.C. § 1341. The Seventh Circuit affirmed the convictions, rejecting arguments that the trial judge erred in failing to instruct the jury that a violation of 18 U.S.C. § 1346 requires contemplation of economic harm to the party to whom one owes “honest services.” The Seventh Circuit further held that objection to the prosecution’s request for a special verdict constituted waiver of the right to challenge the trial judge’s instruction in light of the fact that a special verdict would have clarified whether the trial judge’s instruction regarding honest services fraud was the basis for the convictions. The Supreme Court’s decision will determine the limits of the honest services provision and the means by which to preserve instructional error.

Questions as Framed for the Court by the Parties

1. Whether 18 U.S.C. § 1346 applies to the conduct of a private individual whose alleged "scheme to defraud" did not contemplate economic or other property harm to the private party to whom honest services were owed.

2. Whether a court of appeals may avoid review of prejudicial instructional error by retroactively imposing an onerous preservation requirement not found in the federal rules.

Hollinger International, Inc. (“Hollinger”), owner of the Chicago Sun-Times, came under governmental suspicion in 1998 when it began executing non-competition agreements in connection with the sale of most of its smaller newspapers. See United States v. Black, 530 F.3d 596, 599 (7th Cir.

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Additional Resources

• New York Times, Adam Liptak: A Question of When Dishonesty Becomes Criminal (Oct. 12, 2009)

• Wall Street Journal Law Blog: Conrad Black, the Supreme Court, and Honest Services Fraud (May 23, 2009)

• Wall Street Journal Law Blog: It’s Not Just the Skilling Case: High Court Tackles Honest Services Fraud (Oct. 13, 2009)

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Weyhrauch v. United States

Issues

Whether the government must first prove that a defendant violated a disclosure duty under state law before it can convict that state official of non-disclosure of material information in violation of the federal mail-fraud statute under 18 U.S.C. §§ 1341 and 1346.

 

Petitioner, Bruce Weyhrauch ("Weyhrauch"), a member of the Alaska House of Representatives, was charged with honest services mail fraud for intending to devise a scheme to deprive the State of Alaska of its intangible right to his honest services in violation of 18 U.S.C. § 1346. Respondent, the United States of America ("United States"), asserts that Weyhrauch should have disclosed his attempts to procure future employment from VECO, an oil company, before voting for legislation that would benefit the company. Weyhrauch claims that he cannot be convicted of honest services fraud because Alaska only requires the disclosure of actual conflicts of interest, not possible ones. The United States believes a violation of § 1346 does not require a concurrent violation of state law in order to convict Weyhrauch of honest services fraud. The Supreme Court’s decision in this case will determine whether § 1346 mandates the creation of a federal common law extending the federal government’s authority over criminal matters usually handled by the states. The Court’s decision will also settle a circuit split and decide what type of conduct constitutes honest services fraud.

Questions as Framed for the Court by the Parties

Whether, to convict a state official for depriving the public of its right to the defendant's honest services through the non-disclosure of material information, in violation of the mail-fraud statute (18 U.S.C. §§ 1341 and 1346), the government must prove that the defendant violated a disclosure duty imposed by state law.

Petitioner Bruce Weyhrauch (“Weyhrauch”) is a former member of the Alaska House of Representatives. See United States v. Weyhrauch, 548 F.3d 1237, 1239 (9th Cir. 2008).

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Additional Resources

· The New York Times – A Question of When Dishonesty Becomes Criminal

· Washington Legal Foundation - Honest Services Statute: When Federal Righteousness Goes Off The Rails

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