Duhaime's Law Dictionary


Honest Services Doctrine Definition:

(USA) A judicially developed criminal offence of bribes or kickbacks which seek or in fact deprive another a right to honest services.
"The honest services fraud theory as applied to public officials holds that a public official stands in a fiduciary relationship with the public, and can commit honest services fraud by breaching fiduciary duties in the course of that relationship, such as by theft, accepting a bribe, or concealing a financial conflict of interest."

This, from Justice Scirica of the United States Court of Appeals in US v McGeehan, 2009.

Also in 2009, the United States Supreme Court (Skilling v USA) established that the offence based upon the honest services doctrine "criminalizes only schemes to defraud that involve bribes or kickbacks".


The honest service doctrine has had a storied past in the legal history of the United States.

In US v Ribicki, Justice Sack described the historical context of the honest services doctrine in the United States as follows:

"Until 1987, federal courts read both statutes to criminalize not only schemes for obtaining money or property, but also schemes to deprive another of the intangible right of honest services.

"Over time, the honest services doctrine became applicable to four general categories of defendants: [1] government officials who defraud the public of their own honest services; [2] elected officials and campaign workers who falsify votes and thereby defraud the electorate of the right to an honest election; [3] private actors who abuse fiduciary duties by, for example, taking bribes; and [4] private actors who defraud others of certain intangible rights, such as privacy."

The doctrine essentially created a crime with no statutory basis, a recipe for arbitrariness. Indeed, in  US v Brumley, Justice Higgginbotham described the pre-1987 case law on the honest services doctrine as "not a unified set of rules" and "the meaning of honest services was uneven".

The description was rejected by the United States Supreme Court in McNally. The court did not say that such an offence was inexistent; but it did criticize upon the vague, judicially-dependent characteristic of the honest services doctrine.

So, a year later, the United States government took up the suggestion and, in statute (United States Code, Title 18, Crimes & Criminal Procedure, Chapter 63 "Mail Fraud and other Fraud Offences", §1341 and §1346), articulated the offence of scheme or artifice to defraud and defined it exactly as the honest services doctrine had been pre-1987:

"Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both....

"[S]cheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."

The doctrine has been under constitutional attack ever since, typically based on the allegation that the wording is too vague; that a citizen would not be able to determine what conduct is prohibited, the standard watershed test in criminal law.

The United States Court of Appeals, in Brumley:

"... services must be owed ... and that the government must prove in a federal prosecution that they were in fact not delivered.

"[H]onest services contemplates that in rendering some particular service or services, the defendant was conscious of the fact that his actions were something less than in the best interests of the employer — or that he consciously contemplated or intended such actions."

But the minority in Brumley:

"The phrase the intangible right of honest services is, therefore, inherently undefined and ambiguous. There is no listing in the United States Code of all intangible rights. Therefore, there is nothing which could be identified as the intangible right of honest services.

To some extent, the caveat in the 1997 Brumley minority decision was recognized in Skilling when Justice Ginsberg wrote:

"Congress intended at least to reach schemes to defraud involving bribes and kickbacks. Construing the honest-services statute to extend beyond that core meaning, we conclude, would encounter a vagueness shoal."

REFERENCES:

  • McNally v. United States, 483 U.S. 350 (1987)
  • Skilling v US, 130 S. Ct. 2896 (2010)
  • Slater, D., Wall Street Journal, Feb. 5, 2009, "From Coaches to Church Officials, An Honesty Law Gets a Workout", online.wsj.com/article/SB123379864724350423-search.html>
  • US v. Brumley, 116 F. 3d 728 (1997)
  • US v. McGeehan, 584 F. 3d 560 (2009; click here for PDF as of Sept. 2010)
  • US v. Rybicki, 354 F. 3d 124 (United States Court of Appeals, 2003)

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