Burying the lede

Enron’s Jeffrey Skilling has an appeal scheduled before the Supreme Court Monday and, although the WSJ devotes most of its coverage to whether Skilling was denied a fair trial because of local antipathy for Enron in Houston, I think this will be the more interesting question:

The Supreme Court also is reviewing whether one of the laws Mr. Skilling was convicted of breaking is unconstitutionally vague. The jury found that Mr. Skilling violated a federal law that required him to provide the company and its shareholders with the “intangible right of honest services.”

The government’s use of the honest-services fraud statute has been a matter of increasing debate in legal circles. The Supreme Court seems eager to weigh in on the debate. The justices accepted three cases, including Mr. Skilling’s, for review this term that involved disputes over the use of the honest-services statute.

No one would ever accuse me of being a legal scholar but I think Skilling’s best chance of leaving prison before Bernie lies here: a pretty good argument can be made that the “honest services” statute is unconstitutionally vague in that it fails to give fair warning to an individual that his activity is illegal. Or that’s what I think, anyway. We’ll learn this summer what the Supremes make of it.

8 Comments

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8 responses to “Burying the lede

  1. Greenwich Ex-Pat

    “the “honest services” statute is unconstitutionally vague in that it fails to give fair warning to an individual that his activity is illegal.”

    OK, I’m brain dead when it comes to legalese. But someone needs to be warned that what he’s doing is illegal? Seriously? Whatever happened to “ignorance of the law is no excuse”?

    I’m sure I’m misinterpreting this entirely and maybe should keep my fingers off the keyboard right now.

    • christopherfountain

      Here’s the deal: yes, you have the right to know whether what you’re doing is illegal. Suppose you go down to the beach and fly a kite with your kid. The Taliban shows up, announces that they’ve banned kite flying, and they toss you onto the sand and saw off your head. Bummer, right? Deliberate ignorance of the law is indeed no excuse, but the due process guarantees in our Constitution should protect you from arbitrary and unexpected penalties for acts that a normal, rational citizen would assume are legal. The “honest services” law was drafted to catch a particular corrupt post master (? Hell, I don’t remember now, but close enough) in the 1800’s and resurrected / dredged up in the past decade by ambitious prosecutors to nail people they otherwise couldn’t reach. That’s not fair, I don’t think, and maybe the Supreme Court will see it as I do, and maybe not. But there’s an argument to be made that fair warning is required.

  2. Greenwich Ex-Pat

    Looks like something that merits clarification by the Supremes, the way you explain it.

    Nice Taliban analogy.

    Right or wrong, (or I should say, legal or not) I’m pretty sure Skilling and the wonderful folks at Enron knew what they were doing, though.

    • christopherfountain

      I’m not particularly sympathetic towards Skilling, but I do remember Ayn Rand’s warning in Atlas Shrugged: the feds make everything illegal, and can then prosecute at will. So sometimes, you have to let the Skillings of the world off so that the rest of us can live free.

  3. Anonymous

    re the ayn rand warning: there are already so many laws on the books that anyone, and i mean ANYONE, is at risk of going to jail forever if a particular prosecutor gets it in his/her mind to prosecute. the law and order cop who gets the bartender to cooperate by threatening to close down the bar is only the most publicized example. there is no company and no family in full compliance with the laws, most of which have criminal penalties for violations.

  4. Greenwich Ex-Pat

    “So sometimes, you have to let the Skillings of the world off so that the rest of us can live free.”

    Yep, those Enron employees who couldn’t sell their holdings while the brass dumped faster than a T-Rex with diarrhea really took one for America. Boo-yah!

    Not a dig at you, I get your point, especially after my gaffe about the Supremes and free speech. But I just can’t help thinking about those dang Enron trader phone tapes that NBC News played snippets of while all this was going down.

  5. Daniel

    It is also vague, but shouldn’t our elected officials be charged?