Justices Limit Use of ‘Honest Services’ Law Against Fraud

The Supreme Court on Thursday significantly narrowed the scope of a law often used by federal prosecutors in corruption cases and called into question the fraud convictions of Jeffrey K. Skilling, a former chief executive of Enron, and Conrad M. Black, a newspaper executive convicted of defrauding his media company.

The justices were unanimous in calling a broad interpretation of the law, which makes it a crime “to deprive another of the intangible right of honest services,” unconstitutionally vague.

Justice Ruth Bader Ginsburg, who wrote the majority decisions in both the Skilling and Black cases, said the law must be limited to the offenses of bribes and kickbacks. She was joined by Chief Justice John G. Roberts Jr. and Justices John Paul Stevens, Stephen G. Breyer, Samuel A. Alito Jr. and Sonia Sotomayor.

Prosecutors had charged Mr. Skilling with manipulating the financial results of Enron, the collapsed energy company, and misleading investors about them. That may be a crime, Justice Ginsburg wrote, but it is not a violation of the honest-services law.

“The government did not, at any time, allege that Skilling solicited or accepted side payments from a third party for making these misrepresentations,” she wrote. “It is therefore clear that, as we read” the law, “Skilling did not commit honest-services fraud.”