Congress enacted the honest services statute, 18 U.S.C. In the private sector, a notable case involves the conviction of Jeffrey Skilling, a former Enron executive. Honest Services Statute

The honest services statute, 18 U.S.C. The following year, in response to the McNally decision, Congress amended the statutory definition of "scheme or artifice to defraud" for purposes of mail and wire fraud to encompass any "scheme or artifice to deprive another of the intangible right of honest services." They may have influenced the Supreme Court's decision in Weyhrauch , in which the Court granted certiorari to resolve the question "[w]hether, to convict a state official for depriving the public of its right to the defendant's honest services through the disclosure of material information, in violation of the mail-fraud statute ... the government must prove that the defendant violated a disclosure duty imposed by state law." As discussed below, the three most prominent requirements include the "private gain," a "state law violation," and a "foreseeable harm" requirement. Six members of the Court joined in Justice Ginsburg's majority opinion which limited honest services mail and wire fraud to those cases that involve either bribery or kickbacks; the other three members of the Court would have found the honest services definition unconstitutionally vague. Construing the honest-services statute to extend beyond that core meaning ... would encounter a vagueness shoal." Concerned about the "ambiguous" nature of the doctrine and its implications for federal-state relations, the Court in McNally confined the mail and wire fraud statutes to the prosecution of schemes designed to deprive victims of money or other property, not merely honest services. "Congress responded swiftly" with the honest services statute which provides that, "For purposes of th[e] chapter [of the United State Code that prohibits, inter alia , mail fraud, §1341, and wire fraud §1343], the term 'scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services." This, the Court rejected in light of splits among the pre- McNally lower federal courts and in the interests of lenity (i.e., when a criminal statute admits to two interpretations, the more lenient should prevail). [If Congress were to take up the enterprise of criminalizing undisclosed self-dealing by a public official or private employee, it would have to employ standards of sufficient definiteness and specificity to overcome due process concerns. As for Skilling himself, it was clear to the Court that the conduct with which he was charged and for which he was convicted did not constitute honest services fraud as construed by the Court. United States v. Black

The Court's Skilling construction of the honest services statute doomed the jury instructions in Black's honest services case as well. The Court left for the lower courts the determination of whether the error was harmless or warranted overturning the convictions of the Black defendants and ordering a new trial. Skilling holds that an honest services fraud prosecution must involve bribery or a kickback.
The United States Supreme Court in Skilling v. United States construed the honest services branch of the federal mail and wire fraud statutes to reach no more than cases involving bribery or kickbacks. The mail and wire fraud statutes, 18 U.S.C. Sections 1341 and 1343, impose criminal penalties for the use of mail or interstate wire communications to deprive another of money or property through a "scheme or artifice to defraud." In its 1987 McNally decision, the Court had held that while the fraud statutes reached schemes to deprive another of property rights, they did not cover "the intangible right of the citizenry to good government." Congress responded almost immediately by enacting the "honest services" statute, 18 U.S.C. Section 1346, which declares that the phrase "scheme or artifice to defraud" in the mail and wire statutes also encompasses depriving "another of the intangible right of honest services."
In its 2009 term, the Court was presented with three honest services cases—Skilling, Black, and Weyhrauch. Each offered the Court a slightly different prerequisite for an honest services conviction—for Weyhrauch, a public official, it was an underlying state law violation; for Black, in the private sector, it was foreseeable harm; for Skilling, an Enron executive, it was private gain. The Court instead returned to the pre-McNally case law which it felt Congress intended the honest services statute to revive. In the pre-McNally world, most of the honest services cases, the core cases, involved bribery or kickbacks. This, the Court said, is what Congress meant when it spoke of honest services: the deprivation of honest services, public or private, by bribery or kickbacks.
To construe the statute otherwise, the Court felt, would ground the statute on "a vagueness shoal." In fact, three members of the Court refused to endorse the majority opinion in full because they thought the honest services statute unconstitutionally vague on due process grounds. Should Congress desire a more inclusive definition of honest services fraud, the Court urged that it "employ standards of sufficient definiteness and specificity to overcome due process concerns."
The Court sent each of the three cases back to the lower courts—Black and Skilling, for a determination of whether erroneous jury instructions on honest services fraud had so tainted their convictions as to require a new trial or whether the instructions simply constituted harmless error; Weyhrauch, for the reconsideration in light of the Court's Skilling decision.
Related CRS Reports include CRS Report R41930, Mail and Wire Fraud: A Brief Overview of Federal Criminal Law, by [author name scrubbed], and CRS Report R42016, Prosecution of Public Corruption: An Overview of Amendments Under H.R. 2572 and S. 401, by [author name scrubbed].