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The Senate Judiciary Committee held a hearing Tuesday examining the June U.S. Supreme Court decision that vacated the conviction of former Enron executive Jeffrey Skilling.
Panel Chairman Sen. Patrick Leahy, D-Vt., charged that the decision left gaps in a key anti-fraud and anti-corruption law.
"Today, the Judiciary Committee considers another in a series of recent cases in which the Supreme Court appears to have undermined congressional efforts to protect hardworking Americans from powerful interests," Leahy said in a prepared statement. "In Skilling vs. United States, the court sided with an Enron executive who had been convicted of fraud, and gutted a statute vital to combating public corruption, corporate fraud, and self-dealing."
The point of the hearing was to explore "the kinds of problematic conduct that may now go unchecked in the wake of the Skilling decision" and consider what Congress should do to fill those gaps and restore strong enforcement against fraudulent conduct, Leahy added.
Lanny Breuer, assistant attorney general for the Justice Department's criminal division, spoke before the panel, saying that the "honest services" enforcement tool that the department has relied on for more than two decades was significantly eroded as a result of the Supreme Court's decision.
"In Skilling, the Supreme Court held that the honest services fraud statute, 18 U.S.C. ? 1346, applies only to bribery and kickback schemes, and not in situations involving undisclosed self-dealing by a public official or private employee," Breuer asserted in a statement.
"In short, the Skilling decision removed a category of deceptive, fraudulent, and corrupt conduct from the scope of the honest services fraud statute and placed that conduct beyond the reach of federal criminal law. The department believes that the court's decision has created a gap in our ability to address the full range of fraudulent and corrupt conduct by public officials and corporate executives, and we urge Congress to pass legislation to fill the void," Breuer said.
Also speaking before the Judiciary Committee were Duke University Law School Professor Samuel Buell, University of Florida Research Foundation Professor of Law Michael Siegel, and former U.S. Deputy Attorney General George Terwilliger. To listen to a webcast of the hearing or read panelists' testimony, go to the Senate Judiciary Committee's website.
Read an article about Enron and the Sarbanes-Oxley ruling in 2002 from the archives of AdvisorOne.com.