Here is Larry Ribstein on the honest services cases: “Notably, all of the justices agreed that the statute should be struck down, at least in part. Justices Scalia and Thomas thought that the Court should have gone further and not attempted, as did the majority, to preserve the validity of the statute as to bribery and kickback allegations. These justices concluded that the statute was simply unconstitutionally unclear as to what it prohibited, and the Court should not have attempted to judicially construct a suitably clear statute. This gets back to the basic problem noted above of trying to identify which part of agency costs should be criminalized. Whether you call it bribery or serious loafing, it’s all agency costs.”
Which is to say: If an employee truly defrauds a company of money, it can call the cops. But if an employee checks his email on company time, or accepts a lunch from a salesman, the company has managerial ways of dealing with those situations. We do not need governments to declare that such “fraudulent” behavior violates the employer’s rights and needs to be curbed by long prison sentences..
For the scholarly, here is the Supreme Court decision in the “honest services case of Jeff Skilling”. And here is Justice Antonin Scalia’s dissent, which argues that the Court should have struck down the entire law for vagueness, rather than claiming to discern a non-vague essence that was intended by Congress (even though it failed to mention that non-vague essence).
The Gulf Spill
In other news: The Gulf Spill is still out there, and though the legal issues it raises are not yet central to the concerns of BRC, they doubtless will become so. Meanwhile, the theoretical issues are very much central to BRC's mission.
The ubiquitous Larry Ribstein has an excellent column on the subject (“Blaming BP”). It is, by the way, his first column in his new and not-to-be-missed role as the author of Forbes’s “Creative Destroyer” columnist. Best sentence: “This isn't a case where the organization pursued the interests of greedy individuals.”
Then there is Glenn Garvin of the McClatchy Newspapers, who proves that if you can keep your head when all about you are losing theirs, you may get a scoop out of it. Garvin had the courage to do a little countercyclical thinking and ask: How did the previous massive Gulf spill turn out?