Friday, January 23, 2009
The former Senate Majority Leader for New York, Joseph L. Bruno, was charged with mail and wire fraud in an eight count Indictment. Findlaw has the Indictment here. The Indictment includes alleged violations of mail fraud as defined under section 1346, the honest services statute. This statute was added to the fraud statutes following a Supreme Court decision in United States v. McNally, that held that "money or property" was a requirement for a mail fraud charge. The legislature immediately responded with a statute that allowed for prosecutions premised upon the "intangible right to honest services."
One interesting aspect of this Indictment is that the honest services allegation is premised in part on the New York Public Officer's Code of Ethics. It includes reference to written advisory opinions of the Legislative Ethics Committee. The alleged scheme or artifice to defraud as claimed in the Indictment was that he "would contact persons or entities who had business before the Legislature or State agencies, including union officials, exploiting his official position for personal compensation and enrichment, knowing and believing that his reasonably perceived ability to influence official action would, at last in part, motivate those he contacted to enter into financial relationships beneficial to his personal financial interest."
Several issues are likely to arise here, although some of these have rulings in prior cases. Is the honest services provision vague, should violation of a state ethics provision be sufficient to prosecute for a federal crime, and should federal courts be handling alleged state corruption charges? Again, many of these issues are not new, but prior to McNally there were many cases that allowed prosecutions based on intangible rights. One never knows when government will be found to have overstepped its boundaries in its use of the mail and wire fraud statutes.
See also Mike McIntire & Jeremy W. Peters, NYTimes, Ex-Senate Leader Bruno Is Indicted for Corruption
(esp)(w/ a thanks to Peter Henning for sending the Indictment)