Earlier today, the U.S. Supreme Court agreed to review Conrad Black's fraud conviction. Legal beagles believe it is because the Supremes are keen to weigh in on the concept of “honest service” as it applies between private parties:
…“It’s one-in-a-million for the court to review a criminal case,” said a U.S. lawyer who spoke to Canwest News Service on Monday. Neither the lawyer nor his firm are involved in the case.
“And they don’t hear these cases unless they want to overturn,” the lawyer said.
George Jackson, a lawyer with the Chicago-based law firm Bryan Cave LLP, was less certain the Supreme Court will overturn the fraud conviction but said the court seems to be interested in using the Black case to clarify a legal concept — the definition and application of “honest services” in U.S. law — that appears to have differing interpretations among America’s lower courts.
“It is not surprising that the Supreme Court has agreed to hear this appeal,” Jackson said.
“The Supreme Court may not rule in Conrad Black’s favour, but I do believe they intend to resolve the debate over the application of honest services. The increased use of this statute coupled with the split among the circuit courts makes the Black case ideal for Supreme Court review.”
In their brief to the Supreme Court, Black’s lawyers noted he was found not guilty of several charges but was found guilty on three charges of mail fraud “based on an instruction that permitted the jury to find a ‘scheme to defraud’” — a hotly contested element of the offence — by determining that petitioners either stole the company’s money, or deprived the company or its shareholders of their right to (Black’s) “honest services,” according to the brief.
At trial, the prosecution successfully convinced the jury that Black and his associates deprived their victims of the “honest services” they owed to their victims, the shareholders of a New York company Black controlled, Hollinger International Inc.
The concept of “honest services” first entered the U.S. legal lexicon in the 1970s, when lawmakers wanted to to make it illegal for a politician, for example, to award jobs or contracts to cronies and, in doing so, unfairly earn a political advantage. In this kind of scheme, voters were being deprived of the “honest services” they were entitled to from the politician.
Lawyers and some jurists subsequently expanded the concept to the corporate arena, notably in the Enron case. But several U.S. courts have interpreted and applied the concept in different ways.
In agreeing to hear the review, the U.S. Supreme Court appears ready to rule on the definition and application of just what it means to provide an “honest service” in the context of a corporation or a contract between private individuals.
“The (U.S.) Courts of Appeals are hopelessly divided on the application of (honest services) to purely private conduct,” Black’s lawyers wrote in their brief. …
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Also: Let me point you at a piece by Paul Waldie, a friend and former colleague at the then-Black owned National Post, who looks at the issue of “honest service” in a little more detail.