I'm only managed to get through the syllabus of the 114 page slip opinion at this point. It is absolutely clear, however, that the court rejects the idea that mere "undisclosed self-dealing" amounts to the crime of fraud. Here is the syllabus on Skilling's conviction:
Skilling did not violate §1346 [the honest services statute], as the Court interprets the statute. The Government charged Skilling with conspiring to de-fraud Enron’s shareholders by misrepresenting the company’s fiscal health to his own profit, but the Government never alleged that he solicited or accepted side payments from a third party in exchange for making these misrepresentations. Because the indictment alleged three objects of the conspiracy—honest-services wire fraud, money-or-property wire fraud, and securities fraud—Skilling’s conviction is flawed.The Court expresses the view, moreover, that only bribery and kickback cases count as honest services fraud, as only these cases represent the true core of the pre-McNally cases.
So then, what are the elements of honest services mail fraud which prosecutors must allege and prove? I think something including:
- Personal finacial enrichment of the defendant
- in exchange for
- doing an act within the normal scope of one's duties (as an official or employee)
- involving an intentional (material) misrepresentation
- in violation of a fiduciary duty (but what is the source of this duty?)
I think this captures the ordinary notion of "kickbacks and bribes" implicit in the pre-McNally cases and does some justice to the basic idea of "fraud," but it's been a while since I've read those cases (most of which I immediately would have tried to forget after the final White Collar exam), so better take all of this with a gigantic grain of salt. Any other ideas for constructing a necessary-and-sufficient list of elements of the crime of "honest services fraud" in light of Skilling?
More, and probably better-quality, blogging and reporting on all of this can be found here and here and here. Incidentally, I haven't seen anyone else yet discuss the implications of this decision for the Blagoevich trial, so maybe I am missing something obvious there, after all, and the prosecution has nothing to worry about at all.