Skilling: More Blind Monks Examining the Elephant

Most academics and practitioners with whom the author has discussed the result in Skilling v. United States believe that it is a sensible decision. That is, the Supreme Court did the best it could to limit the reach of 18 U.S.C. § 1346, which all nine justices apparently believed—correctly—was, on its face, unconstitutionally vague. Congress responded quickly and with little consideration with the supremely under-defined § 1346. In the over twenty years since the statute\u27s enactment, the Courts of Appeals have been unable to come up with any unified limiting principles to contain its reach. The Skilling Court, evidently reluctant to again throw the matter back to Congress given that institution\u27s previous default, and not satisfied with the Courts of Appeals\u27 efforts, was determined to come up with its own narrowing interpretation. Thus, the majority deemed it appropriate to rewrite the statute to cover what it concluded was the core of the criminality the prosecutors had addressed in bringing § 1346 cases-bribery and kickbacks. The Court comes up with narrowing constructions to avoid constitutional difficulties in many statutory interpretation cases, the argument goes, and this construction is one that many in the academic and practice communities believe is reasonable. The author’s quibble with this consensus lies in her conviction that what the Court did in Skilling is as patently unconstitutional as § 1346—and that its foray into legislation is not of only academic concern. It clearly accepted Congress\u27 delegation of law-making authority and essentially promulgated a new statute out of the dog\u27s breakfast that was pre-Skilling § 1346. Some would argue that this is a good thing from a practical, if not an orthodox separation-of-powers, point of view. The author focuses on Professor Dan M. Kahan\u27s long-standing arguments in this regard. Kahan favors administrative specification of the content of arguably vague criminal prohibitions, but he believes that if one has to choose between judicial gap-filling and congressional action, the former is preferable to the latter. Kahan has argued that the Court ought to come clean and simply acknowledge that it has long been engaged in interstitial lawmaking because Congress has declined to legislate with any specificity and [a] criminal code at least partially specified by courts is both less costly and more effective than is a code fully specified by Congress. The author disagrees with Kahan’s conclusion about the viability and attractiveness of this delegation of authority to federal courts to fill in the blanks in otherwise underspecified statutory schemes. The honest-services fraud theory, which culminated in Skilling, presents a wonderful example of how criminal law ought not be made, whether viewed from an institutional, societal, or individual standpoint

The Federal Common Law Crime of Corruption

This contribution to the North Carolina Law Review’s 2010 symposium, Adaptation and Resiliency in Legal Systems, considers the compatibility between the common law nature of honest services fraud and the dynamic quality of public integrity offenses. Corruption enforcement became a focal point of recent debates about over- criminalization because it typifies expansive legislative mandates for prosecutors and implicit delegations to courts. Federal prosecutions of political corruption have relied primarily on an open-textured provision: 18 U.S.C. § 1346, the honest services extension of the mail fraud statute. Section 1346 raises notice concerns because it contains few self-limiting terms, but it has also acquired some principled contours through common law rulemaking. Those boundaries are consistent with an animating principle of public corruption prosecutions: ensuring detached decisionmaking in the public interest. The distortive potential of significant personal financial gain may best distinguish actionable corruption from ordinary political dealings. Although the Supreme Court granted certiorari in the Skilling, Black, and Weyhrauch trio of cases in part to consider the link between harm and liability for honest services fraud, the Court did not address the issue, instead simply limiting the statute to bribes and kickbacks. Recent public corruption prosecutions illustrate some shortcomings of that decision and indicate that the courts could better confine honest services fraud by building on the harm constraint that had begun to emerge through the common law. The concluding sections here explore both the way in which a purposive interpretation might limit honest services prosecutions and the extent to which unanswered questions in the Skilling decision still allow for development of the harm concept

Health Care Fraud

Provides an overview of trends in fraud and abuse involving private insurance, Medicaid, and Medicare; types of schemes; risk factors; and consequences. Examines federal and state laws aimed at healthcare fraud, reported cases, and enforcement efforts

The Federal Common Law Crime of Corruption

This contribution to the North Carolina Law Review’s 2010 symposium, Adaptation and Resiliency in Legal Systems, considers the compatibility between the common law nature of honest services fraud and the dynamic quality of public integrity offenses. Corruption enforcement became a focal point of recent debates about over- criminalization because it typifies expansive legislative mandates for prosecutors and implicit delegations to courts. Federal prosecutions of political corruption have relied primarily on an open-textured provision: 18 U.S.C. § 1346, the honest services extension of the mail fraud statute. Section 1346 raises notice concerns because it contains few self-limiting terms, but it has also acquired some principled contours through common law rulemaking. Those boundaries are consistent with an animating principle of public corruption prosecutions: ensuring detached decisionmaking in the public interest. The distortive potential of significant personal financial gain may best distinguish actionable corruption from ordinary political dealings. Although the Supreme Court granted certiorari in the Skilling, Black, and Weyhrauch trio of cases in part to consider the link between harm and liability for honest services fraud, the Court did not address the issue, instead simply limiting the statute to bribes and kickbacks. Recent public corruption prosecutions illustrate some shortcomings of that decision and indicate that the courts could better confine honest services fraud by building on the harm constraint that had begun to emerge through the common law. The concluding sections here explore both the way in which a purposive interpretation might limit honest services prosecutions and the extent to which unanswered questions in the Skilling decision still allow for development of the harm concept

Far From Home: Do Foreign Investors Import Higher Standards of Governance in Transition Economies?

Based on the Business Environment and Enterprise Performance Survey (BEEPS) of firms in transition countries, which unbundles corruption to measure different types of corrupt transactions and provide detailed information on the characteristics and performance of firms, we find that: i) corruption reduces FDI inflows and attracts lower quality investment in terms of governance standards; ii) in misgoverned settings, FDI firms may magnify the problems of state capture and procurement kickbacks, while paying a lower overall bribe burden than domestic firms; iii) FDI firms undertake those forms of corruption that suit their comparative advantages, generating substantial gains for them and challenging the premise that they are coerced, which makes it difficult to develop effective constraints on such behavior; and, iv) transnational legal restrictions to prevent bribery had not led to higher standards of corporate conduct among foreign investors by the year 2000. Rather than being construed as a case against foreign investment; we argue that state capture is created and maintained through restrictions on competition and entry in strategic sectors. Thus, enhancing competition by attracting a wider, more diverse set of FDI firms is critical to the broader strategic framework of fighting state capture and corruption.foreign direct investment, FDI, kickbacks, state capture, bribery, corporate governance, corruption, governance, transition economies

Primer

Discussion and history of public corruption statutes and the prosecution of public officials through McDonnell v. United States, 136 S. Ct. 2355 (2016)

Determining Conformity to Islamic Ethical Principles in Economic Practices: A Case of Pakistan

The paper discuses sources of income permitted and prohibited in the faith of Islam. Under ethical constraints i.e. the allowed framework in which an individual or group of individuals can undertake economic pursuits, the Islamic teachings relating to the right conduct in economic pursuits are provided. Then, when the person in his/her economic pursuits becomes an earning individual, the Islamic teachings to an earning individual are provided in the light of Quran and Hadith. The paper also compares secular and Islamic ethics briefly. The paper also analyzes conformity of economic practices with Islamic principles and identifies specific ethical issues and deviations in specific sectors of economy at the sector and industry level.Islamic Ethics, Islamic Morality, Secular Ethics, Moral Relativism, Ethical Relativism.

Corruption in Cities: Graft and Politics in American Cities at the Turn of the Twentieth Century

The essay is an exploration of corruption as practiced by city politicians in the United States at the turn of the twentieth century. Corruption is generally considered to be bad for the performance of governments and for the growth and development of economies, but American cities grew rapidly and were, as far as tangible evidence suggests, relatively well governed. I propose the answer to this conundrum lies in the exact types of graft which were possible. Skimming from city contracts and manipulating local real estate markets encouraged politicians to pursue growth enhancing policies. Many of the most damaging forms of government interference - closing borders and pursuing input-substituting policies - are not possible in cities. Patronage politics made corruption more likely by insulating politicians from (some) voter wrath, but the ability of the tax base to depart the city provided some constraints on rent-extraction. The city Boss did not want to kill the goose that laid the golden eggs. The analysis of urban graft is based on contemporary reports, especially the very detailed reports in Shame of the Cities' by Lincoln Steffens. The analysis also answers other important questions raised by the experience of Progressive Era cities: Why did businessmen back reform? And why did machine politics rise, and fall, between 1890 and 1930?