Ex Enron CEO Jeffrey K. Skilling’s quest to have his 2006 fraud conviction overturned got a boost today, when the U.S. Supreme Court agreed to consider his case. Skilling cited two reasons why he deserves a new trial – that he couldn’t receive a fair trial in Enron’s hometown of Houston; and that one charge on which he was convicted, “honest services” fraud, is unconstitutionally vague. One or both arguments may have piqued the Justices’ interest – they don’t say.

When I spoke to criminal-defense attorneys in January, just after the U.S. Court of Appeals for the Fifth Circuit upheld Skilling’s conviction, few seemed surprised by that result. That surprised me, because I thought the government’s use of the honest services statute was pretty controversial. Added to the federal criminal code in 1988, the law makes it a crime to “deprive another of the intangible right of honest services” for private gain. The government commonly levies it against executives who allegedly put their own interest ahead of their company’s. Alan Vinegrad, a former U.S. Attorney in New York who is now at the law firm Covington & Burling told me in January that, at one time, the honest services charge “was almost unlimited in its potential application and prosecutors were using it in a wide variety of cases.” But, he noted, a series of court rulings have pared back its use.

Perhaps not enough for the Supreme Court, though. In October Adam Liptak of the New York Times wrote that Justice Antonin Scalia, for one, felt that “federal prosecutors had developed an unseemly crush on a particularly vague law.” Skilling’s case now joins two others in which the High Court has agreed to review the law, including one involving the conviction of newspaper executive Conrad M. Black. Executives everywhere might be rooting for Skilling and Black to succeed.

Author: BusinessWeek – Management IQ