Mr. Skilling argued that a law under which he had been convicted was unconstitutionally vague and that he had not received a fair trial in Houston, the city where Enron was based and which bore the brunt of its demise.
The law Mr. Skilling challenged makes it a crime to “deprive another of the intangible right of honest services.”
Federal prosecutors have used the law to combat public corruption and fraud by corporate officials. The law does not require prosecutors to prove theft of money or property but only that defendants have been disloyal to or dishonest with their constituents or employers.
Mr. Skilling argued that the court should require that prosecutions of employees of private companies be limited to cases in which defendants had obtained some private gain at the expense of their employers.
In his brief asking the Supreme Court to hear his case, Mr. Skilling said that his conduct “even if wrongful in some way, was not the crime of honest-services fraud, because the government conceded that his acts were not intended to advance his own interests instead of Enron’s.”
Unless the law is interpreted to require proof of such a private gain by the defendant, Mr. Skilling’s brief said, it has the effect of “impermissibly criminalizing whatever wrongful or unethical corporate acts a given prosecutor decides to attack.”
In January, a three-judge panel of the United States Court of Appeals for the Fifth Circuit, in New Orleans, largely accepted Mr. Skilling’s characterization of the facts but declined to read a “private gain” limitation into the law.
The appeals court did vacate Mr. Skilling’s original sentence of 24 years in prison and $45 million in restitution, saying the trial judge’s sentencing calculations had been mistaken. Mr. Skilling has not yet been resentenced.
The Supreme Court will hear arguments in two cases concerning other asserted flaws in the honest services law in December.
One involves a former Alaska legislator, Bruce Weyhrauch, who did not disclose that he had been soliciting work from a company with business before the Legislature. Mr. Weyhrauch argued that the federal honest services law should not apply in public corruption cases where no violation of a state law was alleged.
The other pending case concerns Conrad M. Black, the newspaper executive convicted of defrauding his media company, Hollinger International. Mr. Black argued that the law should not apply to him because he had not contemplated that Hollinger would suffer “some identifiable economic injury.”
The court’s decision to accept a third case concerning the honest services law, Skilling v. United States, 08-1394, was unusual. The court’s typical practice when appeals in similar cases are already pending is to hold the later cases until the earlier ones have been decided.
Mr. Skilling’s second argument in the Supreme Court was that the publicity surrounding his case made it impossible for him to receive a fair trial in Houston.
The appeals court agreed that the pretrial publicity in Mr. Skilling’s case was “inflammatory and pervasive.” Mr. Skilling’s brief cited examples of such publicity, including a Houston Chronicle column with the headline “Your Tar and Feathers Ready? Mine Are” and a rap song titled “Drop the S Off Skilling.”
The trial judge in Mr. Skilling’s case rejected a motion for a change of venue. In a mild rebuke, the appeals court said that “it would not have been imprudent” for the judge to have granted the motion. But the appeals court added that the trial judge had conducted “proper and thorough” questioning of prospective jurors that had “more than mitigated any effect of this prejudice.”
Lower state and federal courts have disagreed about whether a change of
venue is required when pervasive pretrial prejudice is found or whether a
finding that the jury actually seated was impartial is sufficient. In 2001,
Justice
Samuel A. Alito Jr., then a judge on the federal appeals court in
Philadelphia, wrote that a pervasively hostile atmosphere is sufficient to
presume unconstitutional prejudice “without reference to an examination of
the attitudes of those who served as defendant’s jurors.”