By Martin Magnusson. Mr. Magnusson is an associate at Day Pitney LLP.
The Supreme Court recently issued its much-awaited opinion in Skilling v. United States, in which it addressed two hotly debated criminal-law issues:
• What is the test for whether pretrial publicity and community prejudice will prevent a criminal defendant from obtaining a fair trial?
• Is the honest-services-fraud statute, an important federal law in prosecuting public corruption, unconstitutionally vague?
The facts of Skillin
g are rooted in the 2001 collapse of Enron, which caused shareholders to lose nearly eleven billion dollars. In the wake of this scandal, the Government conducted an investigation in which it uncovered an elaborate conspiracy to prop up Enron's stock prices. The Government subsequently prosecuted several Enron employees who participated in that conspiracy, including former CEO Jeffrey Skilling.
The Government indicted Mr. Skilling for, among other things, conspiring to deprive Enron and its shareholders of the intangible right of his honest services. This charge is predicted on 18 U.S.C. § 1346, which expands the mail-fraud and wire-fraud statutes to reach "a scheme or artifice to deprive another of the intangible right of honest services."
Mr. Skilling's trial was set to take place in Houston, where Enron had been headquartered. Mr. Skilling, though, moved for a change of venue, contending that the collapse of Enron had so dramatically affected the Houston community that he could not get a fair trial there. Mr. Skilling supported his motion for a change in venue with hundreds of news reports detailing Enron's downfall and with affidavits from experts who had studied community attitudes in Houston in relation to community attitudes in other potential venues.
