The groaning, creaking wheels of justice

Back in January 2008 I posted this update on the dubious conviction of Enron's Jeff Skilling, in which I suggested his slim chance of getting his conviction reversed may have increased with the then-recent emergence of evidence of misconduct by the so-called Enron Task Force of prosecutors.

Things are looking up for Skilling. The Supreme Court has just taken his appeal, which is based on community bias, and, more important, his claim that the "honest services fraud" theory on which he was convicted was unconstitutionally vague. Back in Houston, his motion for a new trial based on prosecutorial misconduct is still pending, and there is some evidence that the current prosecutors down in Houston are facing the same problem faced by their DC colleagues regarding the aborted Ted Stevens prosecution: to what lengths should they go to cover up misconduct by their predecessors?

The abuse of the honest services fraud statute has gone largely unnoticed by those outside the world of white collar crime, but, as summed up nicely by Houston's Clear Thinkers, it deserves more attention:

Honest services wire-fraud under Section 1346 was intended by Congress to penalize corporate executives and governmental officials for accepting bribes and kickbacks and for engaging in self-dealing at the expense of the employer-- i.e., the private gain requirement of the crime.

The Task Force faced a big problem with prosecuting Skilling at all because he never stole a dime from Enron (that is, no private gain). In fact, the Task Force conceded at trial that, not only did Skilling not embezzle any money from Enron, the case against him was not about “greed,” that Skilling always sought to pursue Enron’s “best interests,” and that every act for which he was being prosecuted was undertaken for the purpose of protecting Enron and promoting its share price.

Despite the foregoing, the Task Force persuaded U.S. District Judge Sim Lake to allow the prosecution to proceed against Skilling on a much broader honest services theory -- that is, that Skilling simply took on too much risk for the long-term good of Enron and improperly touted the company to the markets.

You will be pleased to hear that I will let you all know if his conviction is overturned.