Percoco v. United States
Overview
Overview
The Supreme Court held unanimously, in an opinion by Justice Barrett, that a private citizen who exercises significant influence over government decisions does not owe a fiduciary duty to the public sufficient to support a conviction for honest services fraud, unless the individual has actually assumed a formal or de facto public position.
The Facts
Facts
Joseph Percoco was a close aide and campaign manager to New York Governor Andrew Cuomo. While on a leave of absence from the state government to run Cuomo's 2014 reelection campaign, Percoco allegedly accepted approximately $35,000 from a real estate developer in exchange for using his political connections to influence a state official to drop a labor condition from a development project. He was convicted under 18 U.S.C. Section 1346 (honest services fraud) even though he held no formal government position at the time of the payments.
The Issue
Issue
Whether a private citizen who lacks a formal government position but exercises significant influence over government officials can owe a fiduciary duty to the public sufficient to sustain a conviction for honest services fraud.
The Rules
Rule
18 U.S.C. Section 1346 defines 'scheme or artifice to defraud' to include a scheme to deprive another of the intangible right of honest services. McDonnell v. United States, 579 U.S. 550 (2016), narrowed the statute's reach in public corruption cases by requiring a specific 'official act.' Skilling v. United States, 561 U.S. 358 (2010), limited honest services fraud to bribery and kickback schemes.
The Application
Analysis
Although Percoco accepted payments in exchange for leveraging his political influence over government officials, the Court found he held no formal government position at the time, having taken a leave of absence to manage the governor's campaign, and therefore owed no fiduciary duty to the public. Informal political influence, no matter how substantial or transactional in nature, cannot support an honest services fraud conviction without the requisite public position. The ruling thus requires not merely the exercise of government influence, but the assumption of actual responsibilities analogous to those of a government official to create the fiduciary duty necessary for conviction.
The Conclusion
Conclusion
Private citizens may be convicted of honest services fraud only if they have actually assumed a public position with responsibilities analogous to those of a government official, creating a genuine fiduciary duty to the public. Informal political influence, even if substantial, is insufficient. The ruling vacated Percoco's conviction and tightened the boundaries of honest services fraud in the public corruption context.
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