Impeached ex-Illinois governor Blagojevich faces new charges

An expanded set of indictments in Rod Blagojevich’s corruption case involves 'honest services fraud' under a controversial federal law. It makes it easier for prosecutors, but the US Supreme Court may strike it down.

Impeached Illinois Gov. Rod Blagojevich received a redrafted and expanded set of indictments Thursday as federal prosecutors sought to eliminate wording that has to do with a judicial statute prosecutors hoped would help their case but that the US Supreme Court may soon strike down.

Mr. Blagojevich was first indicted in April 2009; he was charged with 16 counts of corruption including racketeering conspiracy, wire fraud, extortion conspiracy, attempted extortion, and making false statements to federal agents. His trial is scheduled to start in June.

The new indictment contains new language pertaining to honest services fraud, a federal statute passed by Congress in 1988 and meant to help prosecutors in creating an image of impropriety without needing to prove the tangible benefits.

Honest services fraud has long been a friend to prosecutors working in cases involving white-collar criminals or politicians because its language casts a wide net as to what constitutes gratuity.

Could vague language lead to prosecutorial mischief?

Some complain its vague language allows for a range of prosecutorial mischief. Earlier this year the high court suggested it would consider overturning the statute – Justice Antonin Scalia said it was so vague it could be used for prosecuting “a mayor for using the prestige of his office to get a table at a restaurant without a reservation.”

The Supreme Court is expected to review the case sometime in the next three months.

“If a politician takes a $200 pair of [Chicago] Cubs tickets from someone who might have business with the state – that might fall under honest services fraud,” says Chicago securities attorney Andrew Stoltmann. “That’s why prosecutors love it because it casts such a wide net over so much conduct. It’s a real effective tool to go after corrupt politicians.”

Honest services fraud was used to successfully send to prison former Illinois Gov. George Ryan, Washington lobbyist Jack Abramhoff, and Canadian newspaper publisher Conrad Black.

The redrafted Blagojevich indictment now has 24 counts; the additional indictments – racketeering, attempted extortion, bribery, conspiracy to commit bribery and conspiracy to commit extortion – do not rely on honest services fraud.

Legal experts say the high court’s actions to strike down the statute are a certainty and that, when overturned, criminals sitting in prisons because of its successful use may be released.

“It will certainly lead to the releases of convicted politicians in the next three to 12 months. There are a lot of bad guys really waiting for this decision to come down,” says Mr. Stoltmann. White-collar criminals like Black may also benefit. He would not warrant immediate release because he was also convicted of obstruction of justice; however his legal team may convince the court that his time served is sufficient punishment.

Proving public-sector fraud could become harder

Attorneys like Bill Mateja, who worked on the Enron and Martha Stewart cases as a senior counsel to two US deputy attorneys general, say the elimination of honest services fraud would “make it tougher to prove public-sector fraud cases.” Mr. Mateja says the statute needs to go in private cases but should be retained “just in the public setting along the lines of gratuity or bribery type cases,” because they are more difficult to prove and do not need to prove the accused received a tangible benefit like money.

“It’s taking away a key tool,” he says.

Criminal defense attorneys have long campaigned for a review of the statute and say prosecutors need to work harder to win their cases rather than just settle for creating the appearance of impropriety.

Joseph DiBenedetto, a criminal defense attorney in New York City, says that depending on the prosecutor, the statute can become “fuel for a political witch hunt.”

“It is something that, in my opinion, never should have been drafted in the first place,” says Mr. DiBenedetto, who once defended Peter Gotti, brother of John Gotti, the former New York crime family boss. “The statute was intended to addresses cases of intangible rights. So the intent behind it was good, but the way it’s been applied is undoubtedly vague, and criminal statutes cannot be vague.” [Editor's note: The original version gave an incorrect first name for Mr. Gotti.]

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