Bruno Skates Away From Self-Dealing Convictions

MANHATTAN (CN) - Former New York state Sen. Joe Bruno, convicted by a jury of entering into cushy contracts to defraud taxpayers, has convinced the 2nd Circuit order a retrial.

The three-judge panel vacated two of the Republican's convictions for honest services mail fraud, ordering a new trial on those charges as well as another count that the jury could not reach.

Between March 2004 and December 2004, Bruno allegedly snagged about $200,000 in so-called "consulting fees" from two companies owned by Albany business man Jared Abbruzzese and his partner, Wayne Barr Jr.

Prosecutors say Bruno made an additional $40,000 from Abbruzzese through a payment disguised as proceeds from the sale of a horse named Christy's Night Out.

Abbruzzese admitted during testimony that the steed was not very valuable, though "not worthless," court documents say.

In December 2009, a federal jury convicted Bruno on two counts of honest services mail fraud, acquitted him of five counts and did not reach a verdict on the remaining charge.

Before the seven-day deliberations began, U.S. District Judge Gary Sharpe instructed the jury that "the indictment charges that Mr. Bruno committed honest services fraud by failing to disclose material conflicts of interest and related material information," and that a "conflict of interest exists when" the public's interest "in the proper administration of the official's office" and "the official's interest in his private economic affairs ... clash or appear to clash."

While the U.S. Supreme Court was mulling the corruption conspiracy conviction of former Enron CEO Joseph Skilling six months later, however, the justices found that standard too broad.

Justice Ruth Bader Ginsburg wrote in that case that the so-called hones-services law "covers only bribery and kickback schemes."

That holding also torpedoes Bruno's convictions, according to the 2nd Circuit, which noted that the justices "expressly rejected the government's argument that [the law] also encompasses undisclosed self-dealing by a public official."

Since the government has produced sufficient evidence, however, it can still retry Bruno.

"The government's evidence would permit a reasonable jury to find that Bruno performed virtually non-existent consulting work for substantial payments," Judge Barrington Parker wrote for the court.

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