Supreme Court ruling on Enron CEO could help local defendants
NWI Times
Jul 11, 2010
nwitimes.com/news/local/supreme-court-ruling-on-enron-ceo-could-help-local-defendants/article_1261d4fb-e120-59a7-b1cf-503d19b8d10e.html
When the U.S. Supreme Court last month ruled the federal "honest services" law could be applied only to cases of bribery and kickbacks, local defense lawyers celebrated the high court's narrow interpretation of the statute in hopes it would help their clients.
But U.S. Attorney David Capp said the ruling might not have as much of an influence on local cases as defense lawyers anticipate.
Jeffrey Skilling, Enron's former CEO, was charged with more than two dozen counts of fraud, insider trading and other charges after the company went bankrupt in early 2000. Skilling was accused of "depriving Enron and its shareholders of the intangible right of honest services." But the Supreme Court's finding that the statue covered only bribery and kickback schemes was a partial victory for Skilling. Supreme Court Justice Ruth Bader Ginsburg wrote that "because Skilling's alleged misconduct entailed no bribe or kickback, it does not fall within" the court's limiting definition of the law.
Local attorney Kevin Milner, who has represented clients such as region political figure Robert J. Cantrell, said he got the e-mail of the news while driving on the interstate. He pulled over to the shoulder and read the ruling immediately.
"My phones have been ringing off the hook because so many people are looking to challenge this," Milner said. "I'm basically reviewing every case I've had involving honest services."
Tempering this robust view, U.S. Attorney Capp said, "As a general position, I don't believe it's going to impact our ongoing public corruption effort. We've not historically relied solely on honest services-type theories in the district." Capp was referring to the Northern Indiana federal district, from which cases are appealed to the 7th Circuit Court of Appeals in Chicago.
However, Capp indicated former Calumet Township Trustee Dozier T. Allen Jr. and Cantrell, the former North Township supervisor, are some of the high-profile defendants whose lawyers likely will raise the issue.
Cantrell was charged with honest services fraud, insurance fraud, filing false tax returns and other charges in 2007. He helped a counseling business get a contract with North Township and received money from the business in return, without revealing the arrangement with other township officials. Cantrell also arranged for two people to get health insurance coverage through the business by creating false employment records.
Sentenced to 78 months in prison in March 2009, Cantrell is appealing his case to the 7th Circuit Court of Appeals. Attorney Bryan Truitt, who argued the appeal in court last March, was not available for comment.
Milner said he thought the outlook for Cantrell was good.
"I want him in trial," Milner said. "I want everything tossed out because the probability is that the prejudice from the honest services evidence spilled over into the other charges. So I think he's probably going to get a new trial, and whether or not the government wants to go is up to them."
Anticipating a response after the Skilling ruling, federal prosecutors on Tuesday filed a letter with the 7th Circuit Court of Appeals supporting Cantrell's convictions.
"The indictment alleged, and the evidence established, a kickback scheme involving Cantrell," according to the document. "Skilling does not invalidate the honest service fraud convictions in" the Cantrell case, the letter read.
In Allen's case, defense attorney Scott King filed a Skilling-based supplement to a motion in federal district court to release Allen from prison pending his appeal.
Allen was sentenced to 18 months in prison in April for receiving thousands of dollars from a contract through Ivy Tech Community College.
"The way the indictment was worded, it wove together the allegations of receiving money and a lack of honest services to such an extent, that my response with the court of appeals will be, Skilling does apply -- and the conviction must be reversed," King said.
An appeal in Allen's case was filed in March. U.S. Attorney Capp said he would not comment on the Allen case until a filing was made in the federal appeals court.
"Then of course we'll respond fully," Capp said.
In Illinois, speculation has been bubbling as to whether the ruling will affect the case of former Gov. Rod Blagojevich. But local attorneys told The Times that federal prosecutors prepared by adjusting the indictment against Blagojevich in case the Supreme Court erased or limited the honest-services law.
Milner lauded the Supreme Court's Skilling ruling as a good decision, though he would have liked the statute to have been abolished.
"I wanted the whole statute to be thrown out," he said. "But what has been done is, it's modified to the point so that it's not nearly as dangerous of a weapon as it was."
-- The Associated Press contributed to this report.
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