In a highly anticipated decision, on June 27, 2016, the Supreme Court narrowed the definition of “official acts,” making it substantially more difficult for the Justice Department to prosecute bribery and other public corruption by narrowing the definition of “official acts” that can be the predicates for such prosecutions. The Court unanimously vacated the conviction of former Virginia Governor Robert McDonnell on charges that he conspired to take bribes in exchange for helping to promote the business interests of Virginia businessman Jonnie Williams.
In September 2014, a jury convicted McDonnell and his wife for honest services fraud (by engaging in a scheme to deprive the people of Virginia of the "intangible right" to the honest service of their Governor) and violating the Hobbs Act (by committing extortion "under color of official right"). The parties had agreed that the court should define honest services fraud by reference to the bribery statute, 18 U.S.C. § 201. The prosecution contended that the couple received $175,000 in loans and luxurious gifts—including a Rolex and $20,000 worth of designer clothing—from Williams, who sought favors that would benefit his company. The Fourth Circuit affirmed Robert McDonnell’s conviction and he appealed to the Supreme Court, challenging the definition of an “official act” as provided in the District Court’s jury instructions.
The Supreme Court agreed with McDonnell. The Court found that acts such as setting up meetings, organizing events and talking to officials were insufficient as a matter of law to sustain a bribery conviction. The Court held that, to constitute a decision or action on a “question, matter, cause, suit, proceeding or controversy,” as set forth under 18 U.S.C. § 201(a)(3), an “official act” must involve a formal exercise of government power involving a specific, focused item that can be brought before a public official. While the Court found that the facts of this case were “distasteful” and even “tawdry,” the Court held they did not meet this standard.
Maureen McDonnell’s appeal was held in abeyance pending the outcome of the Supreme Court’s decision in this case. Her conviction likely will now be overturned by the Fourth Circuit. It remains to be seen whether federal prosecutors will seek to retry the McDonnells after the Court’s ruling.
This decision is a significant blow to the Justice Department and one that will surely make corruption prosecutions more difficult. In fact, Chief Justice Roberts expressly criticized the government’s “boundless interpretation of the federal bribery statute” in rendering the judgment of the Court.
Furthermore, the McDonnell case is just the latest setback in the government’s use of honest services fraud to prosecute corruption and fraud offenses. Prior to 2010, the legal equivalent of mission creep resulted in increasing honest services fraud prosecutions tethered neither to direct economic harm nor to third party bribes or kickbacks. In 2010, however, the Court ruled in Skilling v. United States that “honest services” fraud applied only to cases involving traditional exchange of money for property, such as bribes and kickbacks, and not the traditional right to faithful service perhaps unaffected by pecuniary gain. The alleged misconduct in that case, which did not include the solicitation or acceptance of payments from third parties, were not deemed bribes or kickbacks as defined by the Court. The McDonnell decision takes this retrenchment significantly further. There was no doubt that the prosecution proved significant pecuniary gains to the McDonnell family, showing (to a "tawdry" degree) the kind of tangible economic benefit not present in the Skilling case. But under this new decision, that no longer suffices. Taken together, Skilling and McDonnell substantially limit the power of the federal government to use an “honest services” fraud theory to prosecute public officials.