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Carolyn Kubota is a partner (and probably a real lawyer with experience) in O'Melveny & Myers' Los Angeles office. She focuses her practice on civil and criminal trials, white-collar criminal defense, internal corporate investigations, and civil fraud actions.

Kubota: The Skilling case is also before the Supreme Court and it also has an honest-services issue. So, that's actually three cases the Supreme Court has taken up. I think it's clouding up to storm. The Supreme Court clearly feels like more guidance is required, but I don't think they can just say there has to be an identifiable monetary harm. They already went down that road in McNally(McNally v. United States, 483 U.S. 350 (1987)) and Congress answered with the honest-services provision. So it's going to have to be something different than that.

Scott: The three cases in combination really reflect different issues. With Skilling and Black, it's the fundamental question of whether this statute may be used in the private context or is it only for public officials? Clearly it's been used for private conduct, but I'm not going to be surprised at all if the Supreme Court circumscribes that because it is such a vague standard. If you look at the Skilling case, they were lying about the assets of the corporation. But if the net result was to at least in the short term maintain the viability of the corporation, is that a violation of the honest-services statute? And then once you move away from private citizens as opposed to public officials, the Weyhrauch case out of Alaska is really interesting because you have a state legislator who, from all reports, did not violate any state reporting or legal requirements, but yet has now been charged in federal court with violation of honest services. If he's not violated any of his duties as a state legislator, it's going to be pretty difficult to turn around and say he's violated honest services at the federal level. If I were to hazard a guess, they are going to severely curtail this, putting it back on Congress to come up with a far more circumscribed statute to set out clear boundaries of what can be properly brought under the statute.

Moderator: Does the honest-services fraud statute give prosecutors too much leeway?

Kubota: There can't be any dispute that the terms of the statute are ambiguous. That's also evidenced by the fact that there's a circuit split on the meaning of the honest-services provision. But this is a controversy that's been going on since the beginning of the mail-fraud statute—it's a broadly worded federal statute that can be adjusted to fit almost any fact pattern.

Scott: As U.S. attorney, we brought some cases against public officials on honest services, and it serves a true purpose. In many of these circumstances you have public officials who are playing fast and loose, and you don't have a more clearly defined, articulated statute that fits the conduct. We have a right to expect that our public officials act with integrity and honor in conducting their public business. And the statute—while it probably does need to be tailored back—does provide a real tool for prosecutors in appropriate circumstances.