Some Philadelphia-area officials may benefit from honest-services ruling

A day after the U.S. Supreme Court narrowed a statute often used to go after corrupt public officials, white-collar lawyers were busy Friday looking over the long list of local officials in corruption cases and trying to figure out who might benefit.

The ruling marked the second time in 23 years that the nation's highest court had big problems with how federal prosecutors proceed with cases alleging that citizens have been defrauded of the right to the "honest services" of those who hold the public trust.

The consensus: The ruling won't do a thing to help former State Sen. Vincent J. Fumo, now serving 55 months in a federal prison. It might result in some relief for former City Treasurer Corey Kemp, serving a 10-year sentence, and former City Councilman Rick Mariano, who was sentenced to 61/2 years in prison.

And it might help get a new trial for Thomas Carbo, a Devon contractor awaiting sentencing after a 2006 mail-fraud conviction that stemmed from a sweeping investigation of municipal corruption in Norristown.

It also might have some impact on the Luzerne County "kids for cash" case against two judges who allegedly took kickbacks to keep two juvenile jails full, perhaps forcing prosecutors to file revised charges.

"Everyone down here has been waiting for this decision to come down," said Al Flora Jr., attorney for Mark A. Ciavarella Jr., the former Juvenile Court judge charged in the federal corruption indictment.

The high court's ruling is expected to trigger legal challenges across the nation, including in Pennsylvania and New Jersey, where many corruption cases have been prosecuted.

In New Jersey, attorneys for former State Sen. Wayne Bryant and his codefendant, R. Michael Gallagher, both convicted in 2008 of six counts of honest-services fraud, had been waiting for the decision, which likely will factor into their appeals.

While the ruling does narrow the grounds that allow prosecutors to file honest-services charges, one of Bryant's attorneys, Lisa Mathewson, said Friday that the law remains ambiguous.

"It's certainly not throwing open the doors of the prisons," Mathewson said, adding that defense attorneys had hoped the Supreme Court would find the statute unconstitutional. "It's not removing the confusion at all."

The high court narrowed the mail-fraud statute that makes it a crime to deprive the public of the "right of honest services." All nine justices agreed that public officials and corporate executives cannot be convicted of defrauding the public unless they took a bribe or kickback. Secret deals or conflicts of interest, the court said, are not a crime unless there is a direct payoff.

Practically, the ruling means that anyone convicted of the mail-fraud statute for having an undisclosed conflict of interest could get a new trial, white-collar legal experts said.

Kemp and Mariano were convicted under the conflict-of-interest theory, but also were found guilty of other crimes, so while they might get some limited relief on some charges, the ruling might have little or no practical impact.

"It's a big question mark," said Center City defense lawyer Michael A. Schwartz, who formerly headed the unit in the U.S. Attorney's Office in Philadelphia that prosecuted corruption cases.

L. George Parry, a Center City lawyer who represented Kemp, said he was reviewing the high court's decision to see whether it could offer any relief to Kemp. "I don't know as of now what effect, if any, it will have on Corey," he said.

Schwartz said the ruling means that the FBI and federal prosecutors will have to get more evidence to show that the criminal activity was bribery - and that, he said, could mean more undercover investigations and more wiretaps.

"I don't see the FBI getting out of the business of [investigating] public corruption," said Schwartz. "I see them having to be more creative in their investigative techniques and probably coming back with more undercover or 'sting' operations like Abscam."

Schwartz said the message might also be that state and local prosecutors, who traditionally have not pursued corruption cases as aggressively as federal prosecutors, will have to be more proactive.

"What the Supreme Court seems to be saying is that federal prosecutors' roles in policing state and local corruption will be curtailed to just traditional bribery and extortion cases," he said.

Arthur T. Donato Jr., an attorney for former Judge Michael T. Conahan, said he could not comment on the Luzerne case.

But speaking generally, he said, "it is a very interesting ruling that is not unanticipated. There has been back and forth on this for 20 years as to whether or not this statute covered undisclosed conflict of interest."

In 1987, the high court ruled that the mail-fraud statute covered only schemes that defrauded citizens of tangible property - such as money - and not the intangible right to honest government.

Congress passed a new version of the law the following year, and the Supreme Court has again narrowed it.