Brian M. Stewart
This article examines the honest services statute as it came to the United States Supreme Court and reflects on how the Skilling decision causes difficulty for those concerned with promoting more ethical business conduct. Focusing largely -- but not exclusively --on the private sector, it argues that Congress needs to act and act quickly to provide a mechanism that will enable prosecutors to pursue the criminal wrongdoers who have wreaked havoc in business, especially as of late. Part I briefly reviews the origins of the mail and wire fraud statutes, as well as the efforts by the legislature to draft and the judiciary to apply those statutes in an appropriate manner. Part II sets the legal controversy over the honest services statute in the current context of the legal and ethical environment of business in the United States. Part III illustrates why the honest services statute is needed, in large part by examining the failure of civil and administrative mechanisms to effectively regulate unbridled misbehavior. The article concludes with a plea for recognizing the broad gap between improper bribes and kickbacks, and permissible self-dealing, resulting in untold millions of ill-gotten gains. An honest services fraud statute that bridges that gap is both necessary and proper in today’s business environment.