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Supreme Court sides with the big dogs against everyone else

Hold on to your wallet.

In a galling decision Thursday, the Supreme Court has made it abundantly clear: American government exists to protect unprincipled corporations and corrupt public officials from citizens, not the other way around. In their evisceration of the federal honest-services law, which states that American citizens have an “intangible right” to expect “honest services” from corporate executives and public servants, the nine justices have essentially deemed it more important to save the top dogs of business and government from prosecution than to protect Americans from getting fleeced.

Justice Scalia has been eager to attack the honest-services law for some time. The law, he wrote last year, is

invoked to impose criminal penalties upon a staggeringly broad swath of behavior, including misconduct not only by public officials and employees but also by private employees and corporate fiduciaries… Without some coherent limiting principle to define what ‘the intangible right of honest services’ is, whence it derives, and how it is violated, this expansive phrase invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators, and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct.

But if you have any doubt as to whether the court’s ruling is a good idea or not, just look at the first two beneficiaries of the decision: Enron’s Jeffrey Skilling and Hollinger’s Conrad Black.

Because their convictions were based on violations of a law now determined to be too vague to count, Skilling and Black -- two of the twenty-first century’s most rapacious CEOs, and, respectively, federal inmates 29296-179 and 18330-424 -- get a mulligan in their legal efforts to spring themselves from jail.

Now, the court did include some nuance in its decision: bribes and kickbacks will continue to be illegal under the law. But unless the law is rewritten (which Justice Ginsburg, a New York Times editorial states, “practically invited” Congress to do), other dishonest behavior will be tolerated because it isn’t explicitly outlawed. “If you can argue in ongoing cases that there is no evidence of a fraud or kickback,” attorney Robert Plotkin, head of McGuireWood’s SEC enforcement group, told The Wall Street Journal, “the opinion could be a basis to dismiss that aspect of the case.”

Though the majority opinion states that the “solid core” of the honest-services law remains intact, Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, disagrees. Bribery, she says, which must entail a specific quid-pro-quo, is extremely hard to prove in both corporate and governmental realms. And in the Enron and Hollinger scandals, kickbacks weren’t even part of the prosecutors’ cases. In the public sector, lobbyist Jack Abramoff (inmate 27593-112) created a climate of corruption that included free dinners, tickets to sporting events and overseas trips, but he did not specifically engage in tit-for-tat bribery with government officials. Still, Sloan says, after being showered with such largesse (but not bribed, per se), “Public servants were willing to do things that were not in the public interest.”

But if a CEO can come up with a new, creative way to loot his company, says Sloan, there is little the law can do to stop him from robbing shareholders blind. Because the honest-services law is the single most-used statute in the prosecution of corrupt public officials, the court’s decision robs prosecutors of a vital weapon in the pursuit of private and public integrity.

By Katrina vanden Heuvel  | June 25, 2010; 5:08 PM ET
Categories:  vanden Heuvel  | Tags:  Katrina vanden Heuvel  
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Comments

Please tell me you're kidding right, you are upset because the SCOTUS took an elastic criminal statue out of the hands of headline grabbing Federal prosecutors as big business getting a carte blanc to loot companies? Do you realize that under the Honest-Services Law if I called into work sick and I wasn't really sick, I have violated federal law, heck you could throw in wire fraud because I used my telephone to perpetrate the fraud. I believe in due process, I feel the court was right in saying that allowing federal prosecutors to drag business leaders into federal criminal court and have a jury do an opinion poll on crappy decisions that cost the a company lots of money should go to jail is unfair. In America, you dont go to jail because people believe you did a crappy job.

Posted by: Markspqr | June 25, 2010 6:30 PM | Report abuse

I normally like Ms. vH's comments, but this one really makes me question her judgment. According to Ms. vH, the law is good because it was applied to 2 bad guys who are probably guilty. If the only way to reign in abusive corporate behavior is with all powerful prosecutors, I'd rather not have corporations at all. We would be more prosperous with small and medium size business anyway.

Posted by: independent123 | June 25, 2010 8:16 PM | Report abuse

@Markspqr

It depends on who your heroes are. The best legal policy is not to have any heroes.

Shareholders can only fire you. And if you call in sick, etc. your Boss can only fire you.

Of course she could also turn you in to the FBI and testify against you. But, she did not put you in jail, you put yourself there.

Shareholders do not put the CEO in jail, they put themselves there.

Posted by: gannon_dick | June 25, 2010 9:06 PM | Report abuse

This reminds me of the case against Enron's accounting firm. Tens of thousands of honest hardworking people, with a lifetime investment in their company partnership share, wiped out , worthless, all of them out of work and the company completely destroyed. Oh yeah, the company won their case and were found not guilty in the courts. Sure did all those innocent people a lot of good to be found innocent on the way to the poor house. What was that rule by the Justice department? If your company gave you a lawyer, you and the company were automatically guilty of whatever they charged you with. And that jerk never went to jail for trampling on the constitution, because the public didn't like the people he charged. The former NY governor did the same thing. Big headlines and charges, then no case that would stand up in court. Katrina, the bigger problem is government abuse of power. Wake up.

Posted by: hdc77494 | June 26, 2010 1:32 AM | Report abuse

This reminds me of the case against Enron's accounting firm. Tens of thousands of honest hardworking people, with a lifetime investment in their company partnership share, wiped out , worthless, all of them out of work and the company completely destroyed. Oh yeah, the company won their case and were found not guilty in the courts. Sure did all those innocent people a lot of good to be found innocent on the way to the poor house. What was that rule by the Justice department? If your company gave you a lawyer, you and the company were automatically guilty of whatever they charged you with. And that jerk never went to jail for trampling on the constitution, because the public didn't like the people he charged. The former NY governor did the same thing. Big headlines and charges, then no case that would stand up in court. Katrina, the bigger problem is government abuse of power. Wake up.

Posted by: hdc77494 | June 26, 2010 1:33 AM | Report abuse

The incredible anti-business attitude consistently exhibited by this screeching wretch is mind-boggling. If a vague all-encompassing law ensnared innocent poor people, she would up in arms and screaming (as usual) like a banshee.

Posted by: RufusTWashington | June 26, 2010 7:34 AM | Report abuse

There are times when a blog just proves that someone needs to leave the media's island. This is one of them.

I find it sad that this blogger (won't insult others by calling her a journalist) would have you believe by her writing style that the vote was something like 5-3 in the way she attacks the more conservative justices. In fact it was 8-0!
Two written decisions - three felt the whole thing was unconstitutional while five felt there was room for salvation but it had to be limited, but both the conservative AND liberal judges felt this was a bad law and needed to be tossed.

Partial 'story', half-truths and deliberately misleading information have no parts in the media world, whether in the mainstream mode, via a mainstream blog or even from a new blog site. It's these folks who are tearing down the media world and only drive misleading extreme partisianship. We need to 'out' them and get them off the island - or at least marginalize them to the fringe where the choose to reside anyways.

Posted by: MadiganT | June 26, 2010 8:07 AM | Report abuse

This was a unanimous decision, which is rare for the court. The reason is that the law is overly broad and impossible to interpret fairly and consistently.

If you want to find fault with the process, blame the legislature. They are the ones passing all the vague and ambiguous legislation that eventually must be challenged up the the Supreme Court.

The biggest reason for this in my view is that the laws are no longer being written by the people we elect to do this job, but rather by their young staffers. The congress is too busy fund-raising to be involved directly in the process or lawmaking. This is why we need campaign finance reform. Even John McCain realizes this.

Posted by: capmbillie | June 26, 2010 9:05 AM | Report abuse

The Court ruled unanimously that the statute used to prosecute Mr. Skilling was flawed and sent the case back. It's called due process or does she think it only applies to foreign terrorists at Guantanamo Bay and not American citizens at home?

Posted by: bbface21 | June 26, 2010 11:57 AM | Report abuse

I make a point of reading people like Vanden Heuvel: it suppresses my occasional inclinations toward embracing more liberal political philosophy. It must be torture for Katrina that the majority was so lopsided, and that Ginsburg wrote for that majority.

Her position is that of the typical liberal: the end justifies the means, if the liberal deems the end "good": the Constitution be damned.

Posted by: stratman1 | June 26, 2010 12:06 PM | Report abuse

A 9-0 judgement to send back a vague law. Must be Bush's fault somehow.

Posted by: NoWeCant | June 26, 2010 1:16 PM | Report abuse

Can we at least get a warning requirement on all correspondence, including ads and mailings, that says "Warning, no person connected with this company or its contractors is under any obligation to deal honestly with you. They may loot your account at will and you have no legal recourse. Honesty is not a requirement of their doing business and should not be expected. All transactions are strictly buyer beware and leave the buyer with no legal recourse.

Have a nice day"

Posted by: ceflynline | June 26, 2010 5:58 PM | Report abuse

This is the most ridiculous column I have ever read. The decision was 8-0. Didn't that make you do any thinking?

Posted by: claire10 | June 26, 2010 6:15 PM | Report abuse

typo, I meant 9-0

Posted by: claire10 | June 26, 2010 6:18 PM | Report abuse

Why the Post employs a 'light-weight' such as Ms. VH is a mystery. But of course, one could ask a more general question as to why anyone would care about the opinions and thoughts of Frank Rich, Maureen Dowd, Bob Herbert, Eugene Robinson. Weird -- isn't it -- that we read and give credence -- to these people when we know nothing of their intellectual credentials, background or expertise. Case in point: Frank Rich former theatre critic now war expert!

Posted by: sar8303 | June 27, 2010 9:25 AM | Report abuse

K, dear, all nine justices voted for this, including Justice Stevens' law clerk. The last time I checked, justices swore to do EQUAL justice to rich and poor, that doesn't mean putting a heavy thumb on the scales against a person who has a few bucks.

Posted by: Nemo24601 | June 28, 2010 6:34 AM | Report abuse

i am not an attorney, nor do i pretend to be a legal scholar on the details of most decisions rendered by the supreme court. however, one has to be alarmed at the aggregate decisions made by the court that seem to be both anti-consumer and pro-business in the long run. the new bankrupcy guidelines make it more difficult for the average person to go bankrupt; the court's decision on the credit card industry, which at one time appeared to be in the citizens' favor, allows credit card companies to be even more capricious about fees and interest rates; and more insulting and outrageous is the court granting corporations honorary human status as a "person" with "free speech" privileges.

kagan can't be any worse than the current justices on the court who are looking out solely for corporate interests. it seems like the court is essentially giving us the activist finger in its unabashed support for the ruling elite in this country. there was a time when we were making progress to right the old wrongs in society and now the court, along with some of our political leaders, are trying to turn the clock back to a time when questions were not allowed and the boss was always right.

i have lost a lot of respect for the decisions of the court, particularly those decisions supported by the more conservative justices on the bench. i fear that there is more to come from this "activist" court that relishes the erosion of personal dignity, freedom and the fair play for it's citizens.

Posted by: glenknowles | June 28, 2010 8:31 AM | Report abuse

The purpose of the law is a good one, but Congress did some shoddy work drafting it, and it got thrown back by the SCOTUS. In the mean time, two guys who probably shouldn't get away with it are able to take advantage of these facts.

Don't blame the SCOTUS, they were doing their job. They can't let a bad law stand for the momentary pleasure of watching those two fry. Blame should go to Congress for doing a poor job the first time around.

They are being invited by the court to do it over. If they can't get it right in two tries, vote em out.

Posted by: LampietheClown | June 28, 2010 12:22 PM | Report abuse

Gee!
A refreshing exhibition of common sense from a federal branch of government? Wow! How nice for a change. This attack on EVERY free enterprise endeavor has to stop. Perhaps the use of nebulous, non-meaningful laws to attack and destroy business in America will now cease, or at least slow a bit. It's a given fact that there are rotten apples in big business. No one will deny that. Unfortunately, for our country, there are many more rotten apples in politics, especially in this chaotic and subversive White House.

Posted by: desertbells | June 28, 2010 12:56 PM | Report abuse

Gee!
A refreshing exhibition of common sense from a federal branch of government? Wow! How nice for a change. This attack on EVERY free enterprise endeavor has to stop. Perhaps the use of nebulous, non-meaningful laws to attack and destroy business in America will now cease, or at least slow a bit. It's a given fact that there are rotten apples in big business. No one will deny that. Unfortunately, for our country, there are many more rotten apples in politics, especially in this chaotic and subversive White House.

Posted by: desertbells | June 28, 2010 12:57 PM | Report abuse

The comments to this entry are closed.

 
 
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