The U.S. Supreme Court handed former Enron Corp. CEO Jeffrey Skilling a partial win today when it ruled that the so-called honest-services fraud statute used to convict him did not apply to his case. In 2006, a federal jury in Houston found Skilling guilty of 19 criminal counts, including the honest-services fraud conspiracy charge, and not guilty of nine insider-trading counts. Skilling appealed to the 5th U.S. Circuit Court of Appeals, alleging his conviction was flawed because the honest-services fraud statute conviction was improper and because he was not allowed a change of venue. The 5th Circuit affirmed Skilling’s conviction. But a majority on the Supreme Court ruled in Skilling v. United Statesthat the honest-services statute, 18 U.S.C. §1346, should be confined to bribes and kickbacks given to criminal defendants by third parties. “Skilling did not violate §1346, as the court interprets the statute. The government charged Skilling with conspiring to defraud Enron’s shareholders by misrepresenting the company’s fiscal health to his own profit, but the government never alleged that he solicited or accepted side payments from a third party in exchange for making these misrepresentations,” wrote Justice Ruth Bader Ginsburg, adding that the ruling “does not necessarily require reversal of the conspiracy conviction.” “The Court leaves the parties’ dispute about whether the error here was harmless for resolution on remand, along with the question whether reversal on the conspiracy count would touch any of Skilling’s other convictions.” The high court denied Skilling relief on his claim that he did not receive a fair trial because it was held in his hometown of Houston where Enron is based. Neither Sri Srinivasan, a partner in the Washington, D.C. office of O'Melveny & Myers who represents Skilling before the Supreme Court, nor Michael Dreeben, a deputy U.S. solicitor general who represents the government before the Supreme Court in Skilling’s case, immediately returned a call for comment.
-- John Council