Spencer Hsu took a look at the impact of the recent Supreme Court case that "gutted an anti-corruption tool favored by federal prosecutors." The case, brought by Ernon executive Jeffery Skilling, cast doubt on the crime of "honest services fraud." There are major ramifications of that decision, including potentially for the Abramoff-related cases that are still pending. 

Combined with an earlier court decision, it's clear that prosecutors need stricter anti-corruption law to fight public corruption. Absent that, members of Congress have less to worry about. And, that's never good:

In their June decision, the justices directed lower courts to reconsider the honest-services fraud convictions of former Enron executive Jeffrey K. Skilling, another business leader and a former state lawmaker.

Elsewhere, attorneys for former Illinois governor Rod Blagojevich (D) moved unsuccessfully to delay his trial in Chicago, where he faces charges of honest-services fraud, racketeering, attempted extortion, bribery and conspiracy. Attorneys for former U.S. representative William J. Jefferson (D-La.) may raise the matter in the appeal of his 2009 conviction and 13-year prison sentence for crimes including soliciting bribes, money laundering and racketeering.

"We don't know how many cases may be affected, but this is one of the most-used tools in public corruption investigations," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington.

Public interest groups say Congress should tighten federal corruption laws, citing court decisions since 2007 that narrowed the types of "official actions" that public servants are barred from performing for people who give them money or gifts. Those rulings also require that prosecutors show more specifically that illegal actions were done in return for money.

"All these things are combining to really give members of Congress . . . much less to fear from watchdogs than 10 years ago," Sloan said.

Legal experts say the effect of the Skilling decision will vary case by case. Prosecutors increasingly turned to honest-services fraud charges in recent years to target patterns of self-dealing and conflicts of interest by government and corporate officials, even without a direct quid pro quo.

Yesterday, the U.S. Supreme Court issued a ruling in the case of Enron Executive Jeffrey Skilling that seriously weakened the "honest services" statute. While Skilling's case involved corporate fraud, the "honest services" statute is often used to prosecute public officials accused of corruption. And, that could create problems:

The high court's ruling "deprives prosecutors of an important tool in their efforts to fight public corruption," said Melanie Sloan of Citizens for Responsibility and Ethics in Washington.

"Previous convictions may be vacated and corrupt officials will have an easier time escaping accountability for their misdeeds."

Key leaders in Congress were fuming.

"The court has significantly narrowed the honest-services fraud statute, a key tool for prosecutors to protect American taxpayers from fraud and corruption," said Sen. Patrick Leahy (D-Vt.), who chairs the Senate Judiciary Committee.

"In doing so, the court has once again disregarded the will of Congress and undermined those efforts to protect Americans from abuses by powerful corporate and political interests."

The justices found that the only charges that can be brought under the law involve bribery and kickbacks, not the slew of other offenses such as lying and failing to disclose information that prosecutors had been pursuing under the statute.

CREW, other watchdog organizations and legal observers will be monitoring the discussion today during a hearing by the Supreme Court of the U.S. (SCOTUS). The hearing involves cases related to the federal honest services fraud statute -- a law that makes it a criminal offense for a public official to engage in "a scheme or artifice" to deprive citizens of "the intangible right of honest services."

This statute plays an indispensible role in holding public officials accountable for acts of corruption. CREW is concerned that the SCOTUS ruling could render the law toothless, removing a critical legal tool from prosecutors.

This morning on NPR's Marketplace, CREW's Melanie Sloan was one of those interviewed about the honest services fraud statute. Click here to listen to the story or read the transcript.

Today, federal prosecutors re-indicted former Illinois Gov. Rod Blagojevich. Why? Prosecutors are reportedly trying to avoid having their case against the ex-governor dismantled by an anticipated U.S. Supreme Court ruling.

In the coming weeks, many observers believe the high court may declare a law key to the original indictment to be unconstitutional. This law is often called the "honest services" fraud law. When this case was argued before the Supreme Court in December, several justices expressed concerns about the law's scope.

Last April, Blagojevich was charged with 17 counts of fraud, racketeering and other criminal activity. Reuters reports:

"The new charges ... are based on the same underlying criminal conduct," said Patrick Fitzgerald, the U.S. Attorney for the Northern District of Illinois, in a court filing accompanying the new grand jury indictment in Chicago.

The Illinois legislature impeached and removed Blagojevich, a Democrat, from office in January 2009, during his second term. He has pleaded not guilty to the charges and is scheduled to go on trial in Chicago in June.

As 2009 draws to a close, CREW is looking back at what quickly became a busy year for ethical lapses in our federal government. Today, CREW released its list of the Top Ten Ethics Scandals of 2009 – a roundup of the year’s most outrageous government scandals.

The unranked list includes:

Believe us – we had a plethora of scandals to choose from.

Melanie Sloan, CREW’s executive director, explained CREW’s hopes for the new year:

It would be nice if 2010 proved to be the year politicians put Americans’ interests above their own, but I won’t hold my breath.

Click here (PDF) to read CREW’s Top Ten Ethics Scandals of 2009.

A lot is riding on an upcoming U.S. Supreme Court case that centers on a federal law banning “honest services fraud.” If the SCOTUS were to weaken or nullify the "honest services" provision — as a number of groups want it to — it would seriously undermine efforts to prosecute officials for corruption.

How big is the SCOTUS case? So big that a judge has delayed a retrial for Kevin Ring, a former congressional staffer who worked for lobbyist Jack Abramoff, until the Supreme Court issues its decision.

Melanie Sloan, CREW's executive director, tells the Los Angeles Times what a negative ruling would mean:

"It would undercut public corruption cases across the board."

As the L.A. Times article points out:

Bribing a public official is also a crime, but it's hard to prove. Prosecutors must show an explicit deal between the official and the person offering the bribe.

Most politicians who break the law are smart enough to make bribes or other corrupt deals in ways that leave no paper trail or other clear evidence of a quid pro quo. That’s why having the honest services fraud law is so important.

CREW will monitor arguments in this critical SCOTUS case and continue to speak out about it in the weeks and months ahead.