USA v. Conrad Black Will Be a Landmark Supreme Court Ruling

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By: Mark Fitzgerald

(Commentary) From the moment the scandal at Hollinger International began, Conrad M. Black set his ordeal in grand historical terms. His critics were Jacobins. They lacked the vision of Franklin Roosevelt or the misunderstood courage of Richard Nixon, both of whose lives he chronicled in doorstop-thick biographies. While accusations of fraud swirled around him, he found time to fight with a prime minister, renouncing his Canadian citizenship to take his place as a peer in the House of Lords. When the U.S. Seventh Circuit Court of Appeals refused to overturn his conviction on fraud and obstruction of justice, his wife, the writer Barbara Amiel Black, compared the miscarriage of justice to the Dreyfus case. “Where is the Zola this needs? ” she said.

Conrad Black went her one better: He referred to the four assistant U.S. attorneys on the prosecution team — all of whom were Jewish — as “Nazis.”

It’s fitting, then, that Conrad Black will at some point in 2010 become a name in an historic U.S. Supreme Court case. Not as big, perhaps, as Marbury v. Madison or Plessy v. Ferguson. But make no mistake about it, very big indeed.

“It will be a landmark one way or the other,” says George Jackson, a former U.S. assistant attorney general in Chicago, where Black’s federal trial was held, and now an attorney with the international law firm Bryan Cave. The high court agreed to hear Black?s appeal during its next term, beginning in October.

At issue in Black’s case is a concept called “honest services” fraud, the idea that public officials owe citizens — and corporate executives owe stockholders — their best efforts on behalf of those constituencies, and that when they withhold those honest services, they’ve committed a crime.

It’s a controversial concept that is not accepted in all judicial districts around the nation — especially when applied to private citizens.

If the Supreme Court accepts the concept, it will give prosecutors a powerful weapon in prosecuting alleged fraud. If the court rejects “honest services” fraud, Conrad Black won’t be the only convicted white collar criminal winning back his freedom — and many people who will never be accused of any crime are likely to cheer a limitation on what’s become almost standard federal prosecutorial overreaching.

At his trial, the judge instructed jurors that they could find Black and is co-defendants guilty if they accepted prosecution arguments that they stole money from the parent company of the Chicago Sun-Times through alleged improper fees, disguised bonuses and fraudulent contracts. But the judge also said the jury could find the defendants guilty if they believed Black and the rest withheld their “honest services” from Hollinger International and its shareholders.

Lawyers for Black and the other defendants said that was an error. And since it’s impossible to tell whether the jury, which threw out many of the complaints of monetary fraud, convicted because they believed the defendants stole money or because of withheld “honest services,” the fraud convictions likely would be overturned if the court rejects the concept of “honest services.”

“Honest services” fraud is a made-in-Chicago legal concept, first used to prosecute corrupt public officials — the pool of which in the city and state of Illinois is as large as Lake Michigan.

In a great irony, it was famously used by Big Jim Thompson when he was U.S. attorney to take down former Illinois Gov. Otto Kerner Jr. in a race track scandal. More than three decades later, Thompson and his law firm would be the pro bono attorneys defending Illinois Gov. George Ryan unsuccessfully against “honest services” charges. Ryan, like Black, is currently in federal prison.

“The ‘honest services’ concept is used with greater frequency here in Chicago than any other any other district in the United States,” says Jackson. And its use is actually increasing now that Patrick Fitzgerald is the U.S. attorney for northern Illinois. In addition to Black, Fitzgerald has used the ‘honest services’ accusation to prosecute successfully a legion of public officials, many of them tied to City Hall.

On this concept, the Seventh Circuit appeals court has got Fitzgerald’s back. “The Seventh Circuit has really embraced it,” Jackson said.

Indeed, one of the complaints of Barbara Amiel Black about the unanimous appellate court decision, written by the prolific Richard Posner, was that it dwelt less on the facts or, as she saw it, weakness of the federal case — but much more about the “honest services” fraud concept.

Unlike some legal observers, Jackson, who was not involved in the trial, was not at all surprised the Supreme Court decided to hear Black’s case. Other legal observers noted that the high court at the beginning of its term had refused to hear an appeal on an “honest services” fraud conviction of Robert Sorich, a former patronage chief for Chicago Mayor Richard M. Daley.

Conrad Black’s conviction will allow the Supreme Court to give a final and, presumably, unambiguous judgment on “honest services” fraud. USA v. Black, et al will be cited in legal documents for decades to come, long after it is forgotten how Black built a worldwide newspaper empire only to reduce it to its present shrunken bankrupt group of Chicago-area papers by overseeing what a Hollinger special committee called a “corporate kleptocracy.”


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