This past year, the U.S. Supreme Court struck down much of the “Honest Services Fraud” law that federal prosecutors were using as the catch-all for targeting whomever they wanted to have thrown into prison. As I wrote two years ago, this law was the ultimate prosecutorial weapon for people who already have an arsenal of injustice.
Well, just when you thought it was safe to go back into the courtroom, the Obama administration and the U.S. Senate want to tag team in order to give federal prosecutors the power to send anyone they choose to prison, no matter if the accused has committed a crime or not. For readers who think I am exaggerating, think again. As I wrote in 2009:
You might not have robbed a bank or stolen anything, or engaged in any of the 10,000 “crimes” that federal prosecutors have in their buffet line, but I can guarantee that you are “guilty” of “honest services fraud.” Have you ever taken a longer lunch break than what you are supposed to do? Have you ever made a personal phone call at work or done personal business on your employer’s computer? Have you ever had a contract dispute with an employer or a client? All of those things can be criminalized by an enterprising federal prosecutor.
If you are an attorney and have signed forms even though you have not read every word in them (for example, the standard closing documents for real estate), then you have committed “honest services fraud.” The list goes on and on, but most likely by now you have the picture: you are guilty even if you never are placed in the dock in federal criminal court.
One would think that with the USA housing a fourth of the world’s prisoners and the building of prisons being a boom industry, that someone in Washington might be ashamed of this state of affairs. But, as the Wall Street Journal has noted, Obama and members of Congress apparently believe that the prison jobs/slavery process must go on:
Since the Supreme Court limited the definition of “honest services” fraud in last year’s landmark Skilling v. U.S., the Obama Administration has been looking for a way to restore essentially unlimited prosecutorial discretion to bring white-collar cases. Last fall Assistant Attorney General Lanny Breuer told a Senate committee that Congress should act to “remedy” the Court’s decision. Three bills moving through the House and Senate would try to do so, expanding the reach of prosecutors to go after unpopular politicians or businesses whom they can’t pin with a real crime.
In Skilling, the Supreme Court ruled that the honest services statute was “unconstitutionally vague” and restricted its application to clear cases of bribery or kickbacks. The new legal template of Senate bills sponsored by Judiciary Chairman Patrick Leahy, the liberal Democrat, and Illinois Republican Mark Kirk would end run that change, transforming many state or local ethics violations into federal felonies any time there is an allegation of undisclosed “self-dealing.” A related House bill would expand the reach of mail- and wire-fraud statutes and loosen the requirements for proving federal bribery.
In other words, Obama and his Waco-covering henchman, Eric Holder, along with a number of members of Congress from both parties, have decided that the law that SCOTUS struck down was not vague enough and now are pushing through a measure that literally will leave no part of American life – and especially business life – that cannot be criminalized. If the president and Congress want to help destroy any hope of economic recovery, here it is.
I had the following in my previous article, but it is worth including again, for it refers to federal prosecutors 25 years ago, even before they had the “tools” at their disposal that they have now:
At the federal prosecutor’s office in the Southern District of New York, the staff, over beer and pretzels, used to play a darkly humorous game. Junior and senior prosecutors would sit around, and someone would name a random celebrity – say, Mother Theresa or John Lennon.
It would then be up to the junior prosecutors to figure out a plausible crime for which to indict him or her. The crimes were not usually rape, murder, or other crimes you’d see on Law & Order but rather the incredibly broad yet obscure crimes that populate the U.S. Code like a kind of jurisprudential minefield: Crimes like “false statements” (a felony, up to five years), “obstructing the mails” (five years), or “false pretenses on the high seas” (also five years). The trick and the skill lay in finding the more obscure offenses that fit the character of the celebrity and carried the toughest sentences. The result, however, was inevitable: “prison time.”
When one thinks of people with this kind of mentality having the ability to charge whomever they want with whatever charge they want, then one can imagine a totalitarian society. Even now, it is possible for prosecutors, both state and federal, to trump up any charge they imagine, and with the economy in the tank one can bet that wealthy people who are unpopular are going to be in the prosecutorial crosshairs. Once Congress vastly expands “honest services fraud” – and I predict that this Congress, with its lethal combination of “law-and-order” Republicans and “the productive rich are evil” Democrats, will pass such legislation – there will be absolutely no prohibitions on prosecutorial misconduct.
Liberty is being besieged at every turn in the USA, as I have come to believe that no one – no one – despises liberty more than the very Americans who have benefitted most from it. Unfortunately, there will be no constituency to argue against the expansion of the “honest services fraud” statutes because, after all, no one wishes to defend dishonesty. So, Congress will act, President Obama will sign, Holder and his thousands of prosecutors will prosecute, innocent people will go to prison, families, individuals, and businesses will be destroyed, and most Americans will be clueless as to why fewer and fewer people want to invest in anything tied to the Land of the Free.
August 17, 2011
William L. Anderson, Ph.D. [send him mail], teaches economics at Frostburg State University in Maryland, and is an adjunct scholar of the Ludwig von Mises Institute. He also is a consultant with American Economic Services. Visit his blog.