Supreme Court Decision on Honest Services Fraud Should Be Government Ethics Call to Arms

Can they convict him simply for failing to disclose information when he had no duty to disclose? No Alaska law required it, and there's no federal statute that requires it, so what did he do wrong?

— Donald Ayer, attorney for former Alaska state representative Bruce Weyhrauch (December 2009) (taken from an article on the ktuu.com website). Weyhrauch is accused of having taken a job with an oilfield service company while the company was lobbying the legislature for lower oil taxes (this was one little piece of a big scandal involving the company and multiple elected officials). See an earlier blog post about this case (a lower court motion against him was rejected by the Supreme Court last week, in light of the Skilling (as in Enron) decision)

The U.S. Supreme Court's decision in Skilling v. U.S. (June 24, 2010), rejecting the crime of honest services fraud, at least to the extent it goes beyond bribery and other tangible (that is, monetary) crimes, should be a call to arms for the good government and local government ethics communities. The war should consist of a demand for full-scale ethics and campaign finance laws, disclosure, training, advice, investigatory powers, funding, and enforcement.

What Ayer said, which is typical of lawyers and politicians alike, should be the battle cry. (Please note that I do not use martial imagery very often, except in fun or in reference to Maricopa County, AZ.)

Honest services fraud essentially involves the major sorts of unethical conduct where there is no direct quid pro quo, including the various sorts of conflict of interest. The federal crime that has allowed the FBI to clean up local and state politics when local and state ethics programs either did not exist or were incapable of action for legal, financial, or political reasons, is no longer available. And lawyers and politicians respect only laws and agencies with teeth. If there isn't a law or an agency with teeth, nobody did anything wrong. If there isn't a law or an agency with teeth, a government official has no duties. There is no such thing as a fiduciary duty to the people in one's city, county, or state. If officials do not place limits on themselves, there are no limits. That is what Donald Ayer said.

If Ayer had said something racist or sexist, the whole world would have come down on him. But when he, and so many others, question a government official's duty to act in the public interest rather than in their own interest, so what. When he, and so many others, do what they can to undermine federal, state, and local ethics laws and agencies, so what.

There is no FBI to come and save the day when ethics programs do not exist or are ineffective. The honest services fraud provision (if you don't know exactly what it is, see my blog post on it or the Wikipedia page) is bad in many ways, including its ambiguity and its criminalization of ethics. But in much of the United States, it has been the only law politicians feared, and no matter what they said, they knew exactly what it meant:  an FBI investigation of unethical conduct. Don't think that opposition to the honest services fraud provision has much to do with the law itself. It is all about the right of local and state officials (and business executives, as well) not to have the FBI looking over their shoulders.

Now, local and state government ethics agencies must be given sufficient independence and enforcement powers to do what the FBI did. Unethical conduct need not be criminalized. But if they want government ethics to be civil, government officials have to agree not be involved in it in any way, and they must be willing to waive any legislative immunity they might have.

If they want the FBI out of the game, if they want ethics matters handled locally, fine. But then they should loudly repudiate Donald Ayer and his like, not in words, but in deeds.

Robert Wechsler
Director of Research-Retired, City Ethics

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