Vagueness is a common problem in white-collar criminal cases. In many instances the line between legal and illegal conduct is blurry at best. This means that someone could face prosecution, a damaged reputation, loss of livelihood and prison time for conduct he or she did not know, and could not reasonably have known, was criminal.
In 2010 the Supreme Court addressed one vagueness problem when it narrowed the scope of the honest services fraud statute – one of the most sweeping federal criminal laws. But the issue is still very much with us, as illustrated by the recent unsuccessful prosecution of Timothy Cahill, the former Massachusetts State Treasurer and gubernatorial candidate. Before discussing the Cahill case, some background is in order.
The Constitution protects people from prosecution if they cannot reasonably know that their actions are criminal. Under principles of due process, criminal laws must give people fair notice of conduct the law prohibits so that they can avoid stepping over the line. Notice has been considered as “fair” when it is given “with sufficient definiteness that ordinary people can understand what conduct is prohibited.”
In Skilling v. United States (2010), the Supreme Court narrowed the law that criminalizes schemes to deprive someone of “the intangible right of honest services.” Previously, courts had read the law to prohibit not only bribery and kickback schemes but also “undisclosed self-dealing” by public officials or private employees, a vague concept generally seen as “the taking of official action by the employee that furthers his own undisclosed financial interests while purporting to act in the interests of those to whom he owes a fiduciary duty.”
In Skilling, the Supreme Court said that the “undisclosed self-dealing” theory was too vague to give fair notice about what actions were criminal or not. By narrowing the “honest services fraud” law, Skilling set a limit on government power.
State prosecutors in Massachusetts did not heed the lesson of Skilling in the Cahill case. Timothy Cahill ran for governor of Massachusetts in 2010. As the State Treasurer, Cahill was in charge of the state’s lottery program. When his gubernatorial campaign struggled, Cahill tried to use state lottery funds to pay for $1.5 million in ads to promote the lottery as “the most successful state lottery in America.” Although the ads did not mention Cahill, some evidence showed that Cahill’s campaign staff coordinated the advertising to boost his run for governor.
Cahill was charged with conspiracy to violate a criminal ethics statute, M.G.L. 268A § 23(b). The law bars a public official from using his “official position to secure . . . unwarranted privileges or exemptions which are of substantial value and which are not properly available to similarly situated individuals (emphasis added). The Massachusetts Attorney General alleged that Cahill “gained an unwarranted and unlawful privilege by his ability to launch a television ad campaign, ostensibly on behalf of the Massachusetts State Lottery, but one that was actually carefully coordinated primarily to promote his own campaign for governor.”
Cahill’s prosecution raised serious vagueness difficulties. In addition to the statute lacking definiteness—for example, it does not explain when an official’s use of office is “unwarranted”—it is unclear that Cahill’s use of state lottery advertising funds to promote the state lottery was “unwarranted.” As critics of the Cahill prosecution have pointed out, incumbent politicians routinely use their offices and public funds to tout their accomplishments and engage in strategic self-promotion.
Cahill’s case ultimately ended with a hung jury, followed by a civil settlement in which he admitted violating the state ethics law and agreed to pay a $100,000 fine. In the end, we do not know whether the jury could not agree that Cahill conspired to use the lottery funds to promote his gubernatorial campaign or could not agree that, even if Cahill did just that, his conduct was “unwarranted”—whatever that means. Possibly one or more jurors thought the prosecution was just unfair and misguided.
But the case is instructive to white-collar practitioners. While Skilling was an important instance of judicial resistance to vagueness in the criminal law, the books are filled with laws, like the one in Cahill, that leave doubt as to what conduct amounts to a crime. Until such laws are rewritten, narrowed by courts or struck down, we will have to rely on the wisdom and self-restraint of prosecutors when they consider charging people for actions at the farthest reaches of vague laws, and on the good sense of jurors when prosecutors go too far.