Weyhrauch Case Going Back to Court — U-S Supreme Court Finds Fault With Government Charges

By Libby Casey

The federal government’s case against former state legislator Bruce Weyhrauch took a major hit today from a Supreme Court decision that vacated a lower court ruling allowing Weyhrauch to be tried for “honest services fraud” —  sending the case back to the Court of Appeals. 

The Honest Services Law says elected officials and the heads of big companies should serve the public honestly.  But the Supreme Court ruled that it has been used in a way that’s too broad and far reaching.  It says the law should only apply to people in positions of public trust who take or offer bribes and kickbacks.

The federal government has used the law to prosecute a wide range of white-collar crimes.

Bruce Weyhrauch was accused of breaking the Honest Services Law for not disclosing that he’d asked oil field services company Veco for a job — at the same time he was representing Juneau in the State House, and voting on legislation affecting Veco.  That doesn’t violate state law, but the federal government wants to try Weyhrauch for “mail fraud,” since he used the U-S mail to solicit Veco for employment.  The feds say he should have disclosed that he had asked for the job.

But the Supreme Court’s ruling today that it only covers bribery and kickbacks now puts the government’s case into question.

Weyhrauch’s attorney, Doug Pope, says he talked to his client first thing this morning.

I would just say that we’re all pleased that the court ruled the way it did, it wasn’t a surprise.  But other than that we’re just trying to process it all ourselves.

Pope says today’s ruling does strike a big blow to the government’s case.

It certainly eliminates their theory: that the government can charge someone with a federal crime merely because they failed to disclose information that the government thinks they should’ve disclosed.  It certainly cuts out that theory.  But whether it cuts out the count itself I don’t know.  Just have to wait and see.

Pope says he suspects the Court of Appeals will throw the case back to the court in Alaska, but says there’s no way to know yet how it will proceed.

Court-watcher and attorney Cliff Groh in Anchorage writes the blog “Alaska Political Corruption,” and has been following the case.  Groh agrees that it’s too early to say that Weyhrauch is totally “off the hook,” but says the government has a much steeper climb.

The short answer is although  I think it’s unlikely this case can proceed, the government, DOJ has the ultimate decision authority whether to keep going.  Remember they have other counts in this case and they can try to prove their case on other theories.  Like traditional bribery theories.  The big problem they’ve always had in this case is that Bruce Weyhrauch didn’t get money.

Groh says instead the government alleged the promise of future benefit.  But today’s Supreme Court ruling says that’s not a crime.

Melanie Sloan, the executive director of CREW, Citizens for Responsibility and Ethics in Washington, says Weyhrauch hugely benefits from today’s decision.  But she says in her opinion, that’s not good.

The public should have confidence that public officials acting in public interest and not in their own private interest.  Mr. Weyhrauch, by soliciting a job from somebody he was making decisions impacted, there was definitely a conflict of interest there.  And we expect and have a right to expect officials not to act in own private interest when they’re on the public payroll.

The high court ruled today on three cases related to the “Honest Services Law.”  Justice Ruth Bader Ginsberg had the opinion in all of them.

The first and main one involved former Enron chief executive Jeffrey Skilling, who was charged with violating the public trust when he schemed to hide Enron’s poor finances.  The Court today found Skilling did not conspire to commit honest services fraud because he didn’t take bribes.

The other case involved media mogul Conrad Black, who is accused of bilking people out of millions of dollars through bogus legal agreements and fees.  Both Skilling and Black’s cases will go back to the lower courts.

The Supreme Court could have completely tossed out the Honest Services Law, and while the court agreed it’s too vague, it did keep it intact.

Melanie Sloan with CREW says still, this dramatically changes the job of prosecuting public officials.  She says the law was the single most-used tool in corruption cases.

This has been a huge setback to prosecutors who are now going to be forced to charge bribery instead, and bribery has a much higher standard of proof.  You can’t just show that an official benefited in some way, you need that direct quid pro quo.  And that will be much harder for prosecutors, and I think it’s imperative that congress moves very quickly to change the law so that honest services fraud is once again prohibited.

While CREW lobbies Congress to tighten up the law, the justice department has to figure out what to do in the trio of cases dealt with by the Supreme Court today.  Tracy Schmaler with the Justice Department in Washington says they’ll continue to hold corrupt officials accountable.  She says they’re studying whether the court’s interpretation leaves them with the tools they need to ferret out corruption.


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