On Tuesday, June 29, 2010 the U.S. Supreme Court vacated the government corruption convictions against former Alabama Gov. Don Siegelman and ex-HealthSouth CEO Richard Scrushy.  The Court ordered the 11th U.S. Circuit Court of Appeals to review the matters in light of the ruling in Skilling v. United States, 561 US ___ (2010), the case of former Enron chief Jeffrey Skilling. 

In the Skilling case (reported in our blog), the Supreme Court interpreted the honest services fraud statute, 18 U.S.C. § 1346, which prohibits “a scheme or artifice to deprive another of the intangible right of honest services.”  The Supreme Court limited the scope of the honest services fraud statute so that it covers only bribes and kickback schemes.  In other words, the Supreme Court limited the scope of prosecutions under the honest service fraud statute to those cases where prosecutors put forward evidence that defendants accepted bribes or kickbacks.

In the underlying case against Scrushy and Siegelman, the prosecution argued that Siegelman appointed Scrushy to a significant regulatory board in exchange for Scrushy’s alleged orchestration of $500,000 in contributions to the governor’s campaign.  

Scrushy and Siegelman countered by arguing that the prosecution failed to prove the existence of  deal between them and that prosecutors failed to establish any explicit “quid pro quo” agreement, which is required in federal bribery cases.

Last year, the 11th Circuit upheld Siegelman’s convictions for fraud, bribery, conspiracy and obstruction of justice, and upheld all six of Scrushy’s convictions including four arising from the honest services fraud law.

 Now the 11th Circuit must review the cases against Scrushy and Siegelman in light of the limitations placed on the honest services fraud statutes by the Skilling case.

Tags: Bribery, Conspiracy, Enron, HealthSouth, honest services fraud, Skilling, White Collar