What’s The Future Of The Federal ‘Honest Services’ Law?

Several months ago, in Skilling v. United States, the U.S. Supreme Court held that the honest services fraud statute, 18 U.S.C. § 1346, applied only to bribery and kickback schemes, and not in situations involving undisclosed self-dealing by a public official or private employee. The Court’s Skilling decision removed a large category of conduct from the scope of the honest services fraud statute and placed that conduct beyond the reach of federal criminal law. 

Yesterday, the Senate Judiciary Committee held a hearing on honest services fraud. Among other things, Assistant Attorney General Lanny A. Breuer testified that one of the tools that the Department of Justice has relied on “for more than two decades” had been “significantly eroded” as a result of Skilling. He stated that the department believed that the Court’s decision had “created a gap in our ability to address the full range of fraudulent and corrupt conduct by public officials and corporate executives,” and he urged Congress to pass legislation to fill the void.
 
Congress very well may have that chance. That’s because Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) yesterday introduced legislation “to close the gap created by" Skilling.  According to Leahy, the legislation, called the Honest Services Restoration Act, “will restore critical tools used by investigators and prosecutors to combat public corruption and corporate fraud, which the Court eliminated in the Skilling decision.”
 
Given the current political climate, it is not clear what the future of the bill might be. It may be worth noting that the bill is cosponsored only by Senators Sheldon Whitehouse and Ted Kaufman, both Democrats.