Supreme Court of the United States

“ Congress did not address McNally’s concern that the phrase “honest-services fraud” is unworkably vague. Nothing in the new law attempted to resolve when the duty of honest services arises, what sources of law create that duty, or what amounts to a breach of it. Nor did the new law cross-reference any portion of the federal criminal code that might have lent clarity to the concept.
These problems resurfaced in Skilling. There, a majority of the Court acknowledged that a “vagueness challenge [to §1346] ha [d] force.” ”

“ Directly applying Margiotta, the trial judge told the jury that Percoco owed a duty of honest services to the public if (1) he “dominated and controlled any governmental business” and (2) “people working in the government actually relied on him because of a special relationship he had with the government.” 2 App. 511; see Margiotta, 688 F. 2d, at 122. But Margiotta’s standard is too vague. From time immemorial, there have been éminence grises, individuals who lacked any formal government position but nevertheless exercised very strong influence over government decisions. ”

“ Is it enough if an elected official almost always heeds the advice of a long-time political adviser? Is it enough if an officeholder leans very heavily on recommendations provided by a highly respected predecessor, family member, or old friend? Without further constraint, Margiotta does not (and thus, the jury instructions did not) define “the intangible right of honest services” “ ‘with sufficient definiteness that ordinary people can understand what conduct is prohibited,’ ” or “ ‘in a manner that does not encourage arbitrary and discriminatory enforcement.’ ” McDonnell v. ”

“ Wiltberger, 5 Wheat. 76, 95 (1820) (Marshall, C. J.) (“It is the legislature, not the Court, which is to define a crime, and ordain its punishment”) .
Doubtless, Congress had high and worthy intentions when it enacted §1346. But it must do more than invoke an aspirational phrase and leave it to prosecutors and judges to make things up as they go along. The Legislature must identify the conduct it wishes to prohibit. And its prohibition must be knowable in advance—not a lesson to be learned by individuals only when the prosecutor comes calling or the judge debuts a novel charging instruction. ”

“ This is illustrated by Skilling’s rejection of the Government’s argument that §1346 should be held to reach cases involving “ ‘undisclosed self-dealing by a public official or private employee—i.e., the taking of official action by the employee that furthers his own undisclosed financial interests while purporting to act in the interests of those to whom he owes a fiduciary duty.’ ” 561 U. S., at 409–410. ”

“ In a strongly worded partial dissent, Judge Winter complained that the majority’s interpretation lacked “the slightest basis in Congressional intent, statutory language or common canons of statutory interpretation” and that it erroneously treated a variety of “politically active persons” who have informal but strong influence over government as subject to the same duties as officeholders. ”

“ Rejecting this absolute rule, however, is not enough to sustain Percoco’s convictions on the wire fraud conspiracy counts. “ [T] he intangible right of honest services” codified in §1346 plainly does not extend a duty to the public to all private persons, and whether the correct test was applied in this case returns us to Margiotta.
C
Percoco challenges the Margiotta theory that underlay the jury instructions in this case, and we must therefore decide whether those instructions are correct. We hold that they are not. ”

“ While the prosecution offered evidence that Percoco intended to return to government service after the election and had made plans to do so, the jury could have found that the requirements set out in the jury instructions were satisfied without relying on that evidence. ”

“ As noted, the decision below was based squarely on the Second Circuit’s 1982 decision in Margiotta, and we therefore begin by briefly recounting the events that led up to and followed that decision. The federal wire fraud statute, §1343 (like the older federal mail fraud statute, §1341) , targets the use of certain instrumentalities to advance “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.” ”

“ Some of these individuals have been reviled; others have been respected as wise counselors. The Margiotta test could be said to apply to many who fell into both of these camps. It could also be used to charge particularly well-connected and effective lobbyists. ”

“ Must a fiduciary duty arise from positive state or federal law, or can it arise from general trust law, “a corpus juris festooned with various duties”? Id., at 417–418. All these questions, the dissenters observed, had long divided lower courts and remained unanswered. ”

“ In this Court, Percoco has agreed that individuals who are “delegated authority to act on behalf” of a public official and to perform government duties have a duty to provide honest services. Tr. of Oral Arg. ”