Case o' The Week: "Honest Services" in the Eye of the (AUSA) Beholder, Weyhrauch

A slow week for criminal cases lets us stretch back a bit to a very interesting -- albeit disappointing -- decision on public corruption. United States v. Bruce Weyhrauch, No. 07-30339, 2008 WL 5003366 (9th Cir. Nov. 26, 2008), decision available here. In Weyhrauch, Judge Fisher, joined by Judges D.W. Nelson and Tashima, creates a new rule in the Ninth Circuit: the federal government can now prosecute under an "honest services" theory of mail fraud, even if the public official did not actually violate any state law. Bad news for former Alaska State Representative Weyhrauch, above in the red.

Players: Decision by Judge Fisher, joined by Judges D.W. Nelson and Tashima.

Facts: Bruce Weyhrauch was a lawyer and member of the Alaska House of Representatives. Id. at *1. He was charged federally with “honest services” mail fraud, on the theory that he gave favorable legislative treatment to an oil-drilling company with the understanding that the company would hire him in the future to provide legal services. Id.

The district court granted a defense motion to exclude evidence relating to this “honest services” fraud, because Alaska state law did not prohibit Weyhrauch from negotiating future employment with a company affected by pending legislation. Id. at *2. The government took an interlocutory appeal of this exclusion order. Id.

Issue(s): “This is an interlocutory appeal by the government of the district court’s pretrial order excluding evidence from a mail fraud prosecution. It presents a matter of first impression in this circuit – whether a federal honest services mail fraud prosecution under 18 U.S.C. §§ 1341 and 1346 requires proof that the conduct at issue also violated an applicable state law.” Id. at *1.

Held: “[W]e disagree with the district court that a state law violation is required, and thus reverse the court’s order excluding certain evidence from trial.” Id. at *1.

Of Note: How many bites of the apple does the government get to properly certify an interlocutory appeal? Four, in this case! Id. at *2. Must be a big apple.

Sure would be nice to get four Mulligans in defense appeals, or four habeas petitions in the post-AEDPA world. The government better shape up, though: the Ninth “shall not be so forgiving in the future.” Id. at *4. The feds may only get three chances to make it right, next time . . . .

How to Use: Weyhrauch creates a new Ninth Circuit rule and deepens a circuit split. Judge Fisher starts by tracing the history of the “intangible rights” theory of honest services fraud. Id. at *5. The Third and Fifth Circuits have adopted rules that require a showing that the public official violated an independent state (or, in the Third, federal) law for an “honest services” conviction. Id. at *5. The First, Fourth, Seventh and Eleventh Circuits, however, have all held that there’s a uniform federal standard for “honest services” (although they haven’t agreed with what that standard is). Id. at *6. In these circuits, there’s no need for an independent state law violation. Although Judge Fisher concedes the policy considerations supporting the Fifth Circuit’s rule, he ultimately rejects the “state law limiting principal.” Id. at *7-*8.

While a disappointing holding, this is a well-written and balanced decision: it seems like an issue the Supremes should take up again, given the controversy over this important new rule. This is particularly true because the Ninth doesn't actually articulate what the "uniform" federal definition of honest services is. Maybe it's like obscenity: you know it when you see it?

This is an important new Ninth Circuit rule – and a dangerous one at that. The Court assures us that here, Weyhrauch’s alleged conduct falls within the two “core” categories of honest services fraud. Id. at *8. After adopting its new rule, however, the panel fails to give us the “uniform” definition federal “honest services” fraud. Because there’s now no state-law limitation on the theory of prosecution, and because there is in fact no clear “uniform” federal definition, the upshot is that federal prosecutors will be defining and testing the outer boundaries of this “intangible right to honest services.” In other words, “honest services” are now what P.I.S. AUSAs say they are.

Even honest state officials should be spooked.

For Further Reading: The Anchorage Daily News has an interesting collection of stories on the ongoing saga of the Weyhrauch litigation (and links to summaries of the corruption trials of other Alaska politicians, including Senator Ted Stevens), here. Mr. Weyhrauch has had a bad year or two: he had to be rescued by the Coast Guard in April 2007 after a boating trip in Auke Bay. See newspaper article here.


Image of former Representative Bruce Weyhrauch from http://alaskalegislature.com/images/050607/8204_500.jpg

Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org



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