DOJ: FRAUD, CORRUPTION PROSECUTIONS THWARTED BY SKILLING RULING

The head of the Department of Justice's Criminal Division testified today before the Senate Judiciary Committee that a recent U.S. Supreme Court ruling is hampering the federal government's efforts to prosecute fraud and corruption in the public and private sectors, Dow Jones Newswires reported. The court's June decision in the appeal of former Enron Chief Executive Jeffrey Skilling to limit prosecutions for honest-services fraud has had an impact, Assistant Attorney General Lanny A. Breuer. "There is conduct that would have been prosecuted under the honest services fraud statute before Skilling that can no longer be prosecuted under the federal criminal law," Breuer said. In June, the Supreme Court ruled that it only applies to bribery and kickback schemes, and cannot be used in cases involving "undisclosed self-dealing" by a public official or private employee. Breuer urged lawmakers to move quickly to pass legislation to fill what Justice Department officials regard as a legal hole. Sen. Patrick Leahy (D-Vt.) criticized the Supreme Court decision, saying that federal circuit courts upheld the honest services statute for 21 years after Congress passed it in 1988.