WASHINGTON (CN) — The Supreme Court ruled in favor of a former top aide to ex-New York Governor Andrew Cuomo on Thursday, finding his conviction on bribery charges wrongfully criminalized political lobbying work.
Joseph Percoco held influence within New York’s most powerful political dynasties for more than two decades, working for the administrations of father-and-son New York Governors Mario and Andrew Cuomo. During his time in government, Percoco not only earned a government salary but also raked in over $300,000 from companies doing business with the state. Percoco’s earnings were not all above board and in 2018 he was sentenced to six years in prison for honest services wire fraud and soliciting bribes and gratuities.
“Percoco was convicted of this offense based on instructions that required the jury to determine whether he had a ‘special relationship’ with the government and had ‘dominated and controlled’ government business,” Justice Samuel Alito wrote for the court. “We conclude that this is not the proper test for determining whether a private person may be convicted of honest-services fraud, and we therefore reverse and remand for further proceedings.”
The convictions center on two bribery schemes. While serving as Andrew Cuomo’s deputy secretary in 2012, Percoco got his wife a job with a state lobbyist who headed up an energy company seeking a contract with the state. Percoco’s wife earned a large salary for part-time work and the company got its contract.
The second bribery scheme is at the center of the case before the court because of the murky timeline under which it occurred. When Cuomo was running for reelection in 2014, Percoco temporarily left his government position to manage the campaign. It was during this time that Percoco assisted a real estate developer in avoiding a costly labor agreement in exchange for $35,000.
Percoco claims that his work with the real estate developer was the result of lobbying — not bribery. The government argued the timeline of Percoco’s offenses was not important because regardless of his official title he still held immense influence.
Alito said the Second Circuit’s ruling appeared to reinstate prior case law that was made moot by the high court’s 2010 ruling in Skilling v. United States. In Skilling, the court rejected broad arguments concerning the definition of this type of fraud and adopted the view that honest services fraud schemes are those that deprive honest services through bribes or kickbacks from a third party who has not been deceived.
“Skilling’s teaching is clear. '[T]he intangible right of honest services’ must be defined with the clarity typical of criminal statutes and should not be held to reach an ill-defined category of circumstances simply because of a smattering of pre-McNally decisions," Alito wrote, referring to another decision from 1987.
The court rejected Percoco’s arguments that someone outside of government can never have a fiduciary duty to the public.
“Rejecting this absolute rule, however, is not enough to sustain Percoco’s convictions on the wire fraud conspiracy counts,” Alito wrote.
The court agreed with Percoco that the jury instructions given in his case contradicted the court’s precedents. Alito said the so-called Margiotta standard paints too broad of a brush for those who can be considered connected to the government.
“From time immemorial, there have been éminence grises, individuals who lacked any formal government position but nevertheless exercised very strong influence over government decisions,” Alito wrote. “Some of these individuals have been reviled; others have been respected as wise counselors. The Margiotta test could be said to apply to many who fell into both of these camps. It could also be used to charge particularly well-connected and effective lobbyists.”
Alito noted that the government does not defend the jury instructions in this case and instead offered new theories to support Percoco’s convictions. For this reason, the court reversed.
“In short, the jury instructions are substantially different from either of the government’s new theories, and the Second Circuit — which treated even the language the government now disclaims in Margiotta as good law — did not affirm on either of these theories,” Alito wrote. “We decline to do so here.”
Justices Neil Gorsuch and Clarence Thomas declined to join the majority, instead concurring in judgment. Explaining that decision, Gorsuch — joined by Thomas — said the problems in Percoco’s conviction ran deeper than the jury instructions.
“To this day, no one knows what ‘honest-services fraud’ encompasses,” the Trump appointee wrote. “And the Constitution’s promise of due process does not tolerate that kind of uncertainty in our laws — especially when criminal sanctions loom.”
Gorsuch said this leaves prosecutors and lower courts in a bind.
“They must continue guessing what kind of fiduciary relationships this court will find sufficient to give rise to a duty of honest services,” Gorsuch wrote. “For them, it is back to the drawing board in their indictments and their jury instructions.”
The Department of Justice declined to comment on the justices’ ruling. Jacob Roth, an attorney with Jones Day representing Percoco, did not respond to requests for comment.Follow @KelseyReichmann
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