Former Alabama Gov. Don Siegelman’s appeal of his corruption conviction will be reviewed by the 11th Circuit Court of Appeals based on last week’s decision by the U.S. Supreme Court narrowing the focus of the “honest services fraud” criminal statute.
The high court vacated the appellate ruling upholding Siegelman’s convictions and ordered a new review of the appeal on Tuesday. Similar action was ordered in a related case involving former HealthSouth chief executive officer Richard Scrushy.
The two men were prosecuted together in a case that centered around donations Scrushy made to Siegelman’s failed 1999 campaign to institute a state lottery, and the governor’s appointment of Scrushy to a state board that approved the construction of medical facilities. Their lawyers argued that prosecutors mistook legal campaign contributions for bribes.
Siegelman was convicted of seven charges, including bribery, conspiracy, obstruction of justice, and mail fraud — some of which were based on the honest services statute. He was sentenced to seven years in prison and ordered to pay restitution and fines totaling $231,325.
Last year, the appellate court threw out two charges against Siegelman but upheld charges of bribery, conspiracy, and obstruction of justice. Scrushy was convicted on six similar charges, some based on the honest services statute. He was sentenced to six years in prison and ordered to pay $417,000. The appellate court upheld all of his convictions.
Last week, the Supreme Court ruled that honest-services fraud — a criminal statute that has been used to prosecute wrongdoing in the muni market — is limited to bribery and kickback schemes.
The ruling was handed down in Skilling v. United States, which vacated the honest-services wire fraud charges against former Enron Corp. chief executive officer Jeffrey Skilling because he was not accused of making bribes or taking kickbacks.
The ruling raised questions about the legality of many convictions, including that of former Palm Beach County, Fla., commissioner Mary McCarty, who pleaded guilty to conspiring to deprive constituents of her honest services after using her influence to steer bond business to her husband while he worked at Bear Stearns and Raymond James & Associates Inc.
