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Supreme Court Suggests It Will Limit Corruption Prosecutions (2)

Nov. 28, 2022, 7:01 PM

US Supreme Court justices signaled they will put new limits on public-corruption prosecutions as they considered overturning the conviction of a onetime top aide to former New York Governor Andrew Cuomo.

Hearing arguments in Washington Monday, the justices questioned whether Joseph Percoco could be convicted of so-called honest-services fraud given that he was working for Cuomo’s re-election campaign -- and not the government -- during a key eight-month period in 2014. The Biden administration is defending the conviction.

Justices from across the court’s ideological spectrum said they worried the administration’s position would put influential lobbyists -- and those who hire them -- at risk of prosecution. Chief Justice John Roberts described the government’s arguments as “an effort to break down the concept of political power.”

The court has narrowed the reach of federal corruption laws in recent years, tossing out the convictions of former Virginia Governor Bob McDonnell in 2016 and two allies of former New Jersey Governor Chris Christie for the George Washington Bridge lane-closing scandal in 2020.

In a second New York fraud case heard Monday, the justices also expressed skepticism about the conviction of Louis Ciminelli, whose Buffalo firm won a $750 million development contract after he took part in what prosecutors said was an effort to rig the bidding criteria.

Bribery Accusations

Percoco was accused of accepting bribes in exchange for helping one company obtain a state power contract and another get a construction contract without having to first negotiate a labor peace agreement. A federal jury in Manhattan convicted him under a statute that bars schemes that deprive the public of “the intangible right of honest services.” He was sentenced to 6 years in prison.

Percoco says his prosecution ignored a crucial distinction between government officials and private lobbyists. He contends that private citizens aren’t bound by any duty to act in the public interest.

The Biden administration is defending Percoco’s conviction, arguing that he was functionally still serving in his role as Cuomo’s executive deputy secretary, working out of his government offices and issuing instructions to the governor’s staff. Percoco formally returned to the job a month after Cuomo was re-elected.

Justice Elena Kagan said the “strongest part” of the administration’s case was the fact that Percoco was on a “little hiatus” from his position in the governor’s office. But she questioned the Justice Department’s assertion that a hypothetical person could be prosecuted for honest-services fraud without being either a past or future government employee.

“What kind of person would that be?” Kagan asked Justice Department lawyer Nicole Reaves. “I’ll give the point of the question away: I don’t think you can give me that test without making it look like the guy’s just a really, really good lobbyist.”

Thomas Skepticism

In upholding Percoco’s conviction, the New York-based 2nd US Circuit Court of Appeals relied on a 1982 ruling in which the appeals court said a private citizen who “participates substantially” in government decisions has a duty to the public.

The Biden administration isn’t defending the 1982 reasoning, a stance that prompted Roberts to ask whether federal prosecutors should stop invoking the case as a precedent.

Another apparent skeptic of Percoco’s conviction, Justice Clarence Thomas pointed to the absence of any state prosecution of the former Cuomo aide.

“It seems as though we are using a federal law to impose ethical standards on state activity,” Thomas said.

The case is Percoco v. United States, 21-1158.

(Updates to reflect completion of second argument in fifth paragraph.)

--With assistance from Kimberly Robinson.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Steve Stroth

© 2022 Bloomberg L.P. All rights reserved. Used with permission.