Court’s rulings pose a question: When is it corruption?

Court’s rulings pose a question: When is it corruption?

28 May 2023 ( Buffalo News )

It’s said that all politics is local. Yet it often seems that all political corruption investigations are federal. To be sure, bribery and misappropriation can usually be punished under state law. For example, the New York Penal Law punishes over a dozen official corruption felonies, plus extortion, fraud and embezzlement. Yet the headline-grabbing prosecutions we hear about are almost always federal.

The general wisdom is that only federal prosecutors are sufficiently independent. State and local prosecutors are considered too beholden to party organization and are restrained from prosecuting even across party lines by mutual deterrence. Moreover, corruption can require complex investigations for which the feds, including the FBI, have better resources.

Yet recent Supreme Court decisions have so narrowed federal anti-corruption law that we should rethink this common wisdom. In New York State, these rulings forced reversal of convictions of legislative leaders Joseph Bruno, Dean Skelos and Sheldon Silver (although all were retried, and two convicted). Most recently the Supreme Court unanimously reversed the “Buffalo Billion” convictions of Buffalo developer Louis Ciminelli for bid-rigging, and former Cuomo aide Joseph Percoco for accepting bribes.

A 150-year-old law

Understanding these cases requires reviewing a little history. Federal corruption prosecutions have relied primarily on the 150-year-old mail fraud statute and its younger sibling, the wire fraud law. These were originally aimed at Ponzi schemes and other swindles using the mails to deceive crowds of gullible victims. Eventually, use of these communication media became pretexts to establish federal jurisdiction for punishing dishonesty of all kinds.

But given the basis of these laws in theft by deception, applying them to the willing purchase of official influence was always an odd fit. Prosecutors and courts bridged this gap with the legal fiction that the property stolen was citizens’ intangible right to good government. After the Supreme Court rejected this theory, Congress added a provision to these statutes punishing theft of the intangible right to “honest services,” designed to capture bribery. But in recent years the Court has increasingly seen this phrase as vague enough to invite prosecutorial abuse, and has reversed several convictions on that basis. In addition, the Court has become skeptical of other attempts to expand the property interests protected by these fraud statutes.

For example former Virginia Gov. Robert McDonnell was convicted of fraud. While in office he had taken gifts from a friend who wanted researchers at the state university to back his application for FDA approval of a product. In 2016, the Supreme Court unanimously reversed, holding that the introductions the governor provided to these researchers were not “official acts” exercising government authority. In 2020, the infamous New Jersey “Bridgegate” scandal came before the court. Two state officials were convicted of a political revenge crime. The mayor of Fort Lee (at one end of the George Washington Bridge) was an opponent of Gov. Chris Christie; the two defendants colluded to close toll lanes and cause a massive traffic jam. Since there was no bribe, the case was framed as theft of property. And certainly the city and other agencies suffered financial and logistical costs as they resolved the jam. But the Supreme Court (again, unanimously) held that, even if the defendants caused financial loss, they had not gained the property that the victims lost. So while it was dishonest, destructive and petty, it was not a scheme to obtain property.

Applied in Buffalo

The Buffalo Billion cases fit this pattern. Thus, prosecutors viewed Percoco as a de facto public official, because he had been one until shortly before the scheme, and, as the governor’s campaign manager, presumably retained influence over officials. But the Court said adjacency to and influence over public officials could characterize any lobbyist or political adviser and did not create the fiduciary duty that an actual official owes to the voters.

Since Ciminelli had never been an official, the honest services doctrine obviously could not apply. Prosecutors instead prosecuted him for theft of property, as in the Bridgegate case. But, the prosecution had to concede, while Ciminelli’s outfit did receive substantial payment from the government, they also earned it. The state was always going to distribute that profitable work to someone. But prosecutors argued that he deceived the government into steering it towards him. Thus, he had stolen not the money itself, but the state’s intangible “right to control” it. The Court responded that this “right to control” theory had no basis in the law and that even the government abandoned it in oral argument.

The unanimity of all these decisions is striking, given the sharp ideological divide on the court. It seems that the Democratic appointees are concerned about prosecutorial power, while the Republican appointees are protective of private capital.

The role of legislatures

So what are the possible takeaways? If the problem is that the statutes fail to cover the types of corruption we see in these cases, Congress could always write a different law. But that law would have to enumerate many kinds of corruption, and venal business owners and officials will still find ways around them. Or Congress could pass a very broad law saying it’s a federal crime to use the mails or wires corruptly but that would be unconstitutionally vague.

Another alternative is to give up this notion that only federal prosecutors can be trusted to monitor and state and local officials. Thus, we could shift the primary responsibility onto state prosecutors. Many state attorneys general have anti-corruption bureaus, and all should. States have more legal room to criminalize official misconduct because they don’t face federalism restrictions. Indeed, unlike Congress, state legislators have both authority and responsibility to regulate the conduct of state and local officials. Local legislators can also control their officials within these constraints. For example, some cities have adopted conflict-of-interest policies.

But while they’re at it, state and local legislators should look beyond criminal investigation and prosecution, to proactively design more open, inclusive and ethical decision-making procedures and routines. Prosecution is necessarily reactive and selective. Moreover, prosecutorial decision-making is typically opaque where transparency is most needed. Open meeting laws, citizen participation, systematic documentation and data collection and publication may do more to expose corruption to the judges that matter most: the people.