For the Defense - Vol. 7, Issue 4 - 10

The Fine Line Between Legitimate
Action and Honest Services Fraud
Patrick J. Egan
and Saverio S. Romeo
P
ublic officials owe a duty of honest services to the constituents
they serve. When a public official accepts a thing of value in
exchange for performing an official act, that duty is clearly
violated. But what about a private citizen who has influence over
a public official? If that private citizen accepts a thing of value in
exchange for attempting to influence an official act, can he or she
be charged with honest services fraud?1
What makes that conduct
bribery, as opposed to First Amendment-protected lobbying?
The U.S. Supreme Court will soon be weighing in. In Percoco v.
United States,2
prosecutors charged Joseph Percoco, a longtime
friend of former New York Gov. Andrew Cuomo, with honest
services fraud after he accepted $35,000 from a real estate
developer who sought Percoco's help with labor issues before
a state agency. Percoco previously served as executive deputy
secretary in the governor's office, but at the time he accepted the
alleged bribe, Percoco was a private citizen with no legal control
or authority over any government matters. Indeed, Percoco viewed
himself as a lobbyist, and even sought an ethics opinion regarding
what type of work he could undertake as a former employee of
the governor's office. Prosecutors, and ultimately a jury, disagreed
with Percoco's belief that he was no longer a government actor.
Percoco was convicted based on a theory that he owed the public a
fiduciary duty even though he was not a public official because he
had " de facto " influence over government decisionmaking.
The theoretical underpinning for Percoco's conviction finds
its roots in a decades-old Second Circuit Court of Appeals case,
10 For The Defense l Vol. 7, Issue 4
The Percoco case gets to the heart of the honest services fraud
statute. On the one hand, holding private citizens accountable
for exercising undue influence on public officials could be seen
as furthering the goal of the honest services fraud statute, i.e.,
ensuring that public officials act in the public good as opposed to
out of one person's self-interest. But where does one draw the line?
How much influence is too much influence? What if the private
citizen's influence emanates from a familial relationship with the
public official? When is it fair to say that a private citizen is, in
essence, standing in the shoes of a public official? Percoco's lack
of a bright line when it comes to answering these questions raises
serious concerns about not only about its administrability, but also
its constitutionality. Crimes must be sufficiently defined by statute,
not by the prosecutors who are assigned to a case.5
Percoco's reasoning is also hard to square with the most recent
Supreme Court cases to address the scope of the honest services
United States v. Margiotta.3
In Margiotta, the Second Circuit took
an expansive view of the honest services fraud statute and held
that a citizen " who holds no official government office " but who
nonetheless " participates substantially " in government decisions
can be guilty of honest services fraud because that citizen owes
a fiduciary duty to the public just like the public official that he
or she intends to influence. The Margiotta court thus upheld the
conviction of an influential political party leader, indisputably
a private citizen, who accepted things of value in exchange for
exerting pressure on local elected officials.4
For the Defense - Vol. 7, Issue 4

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