United States v. Weyhrauch ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 07-30339
Plaintiff-Appellant,
v.  D.C. No.
CR-07-00056-JWS
BRUCE WEYHRAUCH,
OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the District of Alaska
John W. Sedwick, District Judge, Presiding
Argued and Submitted
August 4, 2008—Anchorage, Alaska
Filed November 26, 2008
Before: Dorothy W. Nelson, A. Wallace Tashima and
Raymond C. Fisher, Circuit Judges.
Opinion by Judge Fisher
15785
15788 UNITED STATES v. WEYHRAUCH
COUNSEL
Nicholas A. Marsh, Trial Attorney, United States Department
of Justice, Criminal Division, Public Integrity Section, Wash-
ington, D.C., for the plaintiff-appellant.
Douglas Pope, Pope & Katcher, Anchorage, Alaska, for the
defendant-appellee.
OPINION
FISHER, Circuit Judge:
This is an interlocutory appeal by the government of the
district court’s pretrial order excluding evidence from a mail
fraud prosecution. It presents a matter of first impression in
this circuit — whether a federal honest services mail fraud
prosecution under 18 U.S.C. §§ 1341 and 1346 requires proof
that the conduct at issue also violated an applicable state law.
Preliminarily, we must also address the government’s
repeated failures to certify this appeal properly according to
the jurisdictional requirements of 18 U.S.C. § 3731. We
accept the government’s fourth attempt to certify, and thus
have jurisdiction under § 3731. On the merits, we disagree
with district court that a state law violation is required, and
thus reverse the court’s order excluding certain evidence from
trial.
UNITED STATES v. WEYHRAUCH 15789
I. BACKGROUND
Defendant Bruce Weyhrauch, a lawyer, was a member of
the Alaska House of Representatives in 2006 while Alaska’s
legislature was considering legislation that would alter how
the state taxed oil production. According to the criminal
indictment against him, VECO Corp., an oil field services
company, took an active interest in the legislature’s reconsid-
eration of the oil tax, and two of its executives had a series
of contacts with Weyhrauch regarding the pending legislation.1
The indictment alleges that Weyhrauch solicited, by mail,
telephone and personal contact, future legal work from VECO
in exchange for voting on the oil tax legislation as VECO
instructed and taking other actions favorable to VECO in
Weyhrauch’s capacity as state legislator, such as maneuvering
the legislation and reporting information about proposed
changes to the legislation to the VECO executives. The indict-
ment does not allege that Weyhrauch received any compensa-
tion or benefits from VECO or its executives during this
period, but alleges facts suggesting that Weyhrauch took the
actions favorable to VECO on the understanding that VECO
would hire him in the future to provide legal services to the
company.
Count VII of the indictment charges Weyhrauch with
devising “a scheme and artifice to defraud and deprive the
State of Alaska of its intangible right to [his] honest services
. . . performed free from deceit, self-dealing, bias, and con-
cealment” and attempting to execute the scheme by mailing
his resume to VECO (“the honest services charge”). Before
1
The government prosecuted Weyhrauch and Peter Kott, another state
legislator, together. On September 5, 2007, after the government informed
the parties and district court that it intended to appeal the district court’s
decision excluding evidence as to Weyhrauch only, the district court
granted Weyhrauch’s severance motion. Kott was then tried on four of the
counts in the indictment and convicted of three. Kott has appealed his con-
viction and sentence. See United States v. Kott, No. 07-30496. This appeal
does not concern Kott’s conviction.
15790 UNITED STATES v. WEYHRAUCH
trial, the parties filed cross-motions regarding the admission
or exclusion of evidence related to the honest services charge.
Specifically, the government proposed to introduce: (1) legis-
lative ethics publications containing excerpts of various
Alaska state statutes addressing conflicts of interest and dis-
closure requirements; (2) evidence that members of the
Alaska State Legislature customarily acknowledge the exis-
tence of conflicts of interests on the floor of the Legislature,
and that Weyhrauch never disclosed he was negotiating for
employment with VECO; (3) a description of the ethics train-
ing Weyhrauch had received; and (4) evidence that Wey-
hrauch served on the Legislature’s Select Committee on
Ethics.
The district court found that the proffered evidence related
only to duties to disclose a conflict of interest that might be
imposed by state law, and that state law did not require Wey-
hrauch to disclose the conflict of interest he faced in discharg-
ing his duties while negotiating for future employment with
a company affected by pending legislation.2 The government
argued that the evidence should nonetheless be admitted
because proof that a legislator knowingly concealed a conflict
of interest may be used to support an honest services fraud
conviction even if state law does not require disclosure of the
conflict of interest. Recognizing an absence of Ninth Circuit
precedent and a split among the other circuits on this issue,
the district court adopted the approach outlined by the Fifth
Circuit in United States v. Brumley, 116 F.3d 728 (5th Cir.
1997) (en banc), and concluded that “any duty to disclose suf-
ficient to support the mail and wire fraud charges here must
be a duty imposed by state law.” Accordingly, on September
4, 2007, the district court granted Weyhrauch’s motion,
denied the government’s motion and excluded the proffered
evidence. The next day, September 5, the government initi-
ated this interlocutory appeal of the district court’s ruling.
2
The government has not appealed these aspects of the district court’s
ruling.
UNITED STATES v. WEYHRAUCH 15791
II. STANDARD OF REVIEW
We review a district court’s ruling excluding evidence for
abuse of discretion. See United States v. Alvarez, 358 F.3d
1194, 1205 (9th Cir. 2004). “The district court abuses its dis-
cretion when its evidentiary rulings are based on an erroneous
view of the law or a clearly erroneous assessment of the
facts.” United States v. Nguyen, 465 F.3d 1128, 1130 (9th Cir.
2006) (internal quotation marks omitted).
III. CERTIFICATION OF THIS APPEAL UNDER
§ 3731
[1] Under 18 U.S.C. § 3731, the government may bring an
interlocutory appeal “if the United States attorney certifies to
the district court that the appeal is not taken for purpose of
delay and that the evidence is a substantial proof of a fact
material in the proceeding.” See United States v. W.R. Grace,
526 F.3d 499, 504-05 (9th Cir. 2008) (en banc). We recently
recounted in detail the procedural history of this interlocutory
appeal in a published order, see United States v. Weyhrauch,
___ F.3d ___, 2008 WL 4277587 (9th Cir. Sept. 8, 2008)
(order to show cause), so we summarize only the pertinent
details here.
Nicholas Marsh, lead trial counsel from the Department of
Justice, Criminal Division, Public Integrity Section (PIS),
orally advised the district court at a September 5 pre-trial con-
ference that the government intended immediately to appeal
the ruling, that the excluded evidence was substantial proof of
a material fact and that the appeal was not being taken for the
purpose of delay. Based on this oral certification, the district
court stayed the trial pending the interlocutory appeal. How-
ever, because the purported certification to the district court
was not made by the United States Attorney as required by
§ 3731, before oral argument we issued an order to show
cause (OSC) why the appeal should not be dismissed as
improperly certified.
15792 UNITED STATES v. WEYHRAUCH
In its response, the government argued that Marsh’s certifi-
cation was sufficient under § 3731 because it was made in
consultation with and at the direction of William M. Welch II,
Chief of PIS, who was overseeing the prosecution, and sub-
mitted a document signed by Chief Welch, dated July 25,
2008, certifying the appeal pursuant to § 3731. The govern-
ment failed to explain how Chief Welch, who is not a United
States Attorney, could properly certify an appeal under
§ 3731, so after oral argument we issued a second OSC to
address this issue.
In response, the government submitted a formal recusal
notice, dated November 7, 2005, from the Executive Office
for United States Attorneys stating that the United States
Attorney’s Office for the District of Alaska was recused from
the investigation that led to the prosecution of Weyhrauch and
that PIS had agreed to handle the matter in its entirety. The
government also continued to argue that trial attorney Marsh’s
September 5, 2007 certification was sufficient, but on a new
theory that he was himself authorized to certify the appeal
because he had been specially appointed under 28 C.F.R.
§ 0.13(a) by the Deputy Assistant Attorney General and there-
fore was authorized to conduct “any legal proceeding, civil or
criminal, including grand jury proceedings and proceedings
before committing magistrates, which United States attorneys
are authorized by law to conduct.” 28 C.F.R. § 0.13(a). In a
published OSC, we held that the recusal notice failed to
explain Chief Welch’s authority to certify the appeal and
rejected the government’s argument that any attorney spe-
cially appointed under § 0.13(a) can certify an interlocutory
appeal under 18 U.S.C. § 3731. Weyhrauch, 2008 WL
4277587 at *3, *6. We gave the government a final opportu-
nity to demonstrate that this appeal was properly certified.
[2] On September 22, 2008, the government submitted two
documents signed by Attorney General Michael Mukasey.3 In
3
Remarkably, the government also continued to argue that the recusal
notice was sufficient to demonstrate that Chief Welch possessed authority
UNITED STATES v. WEYHRAUCH 15793
the first, the Attorney General averred that the appeal was not
taken for the purposes of delay and that the evidence at issue
is substantial proof of facts material to the proceeding; in the
second, he ratified Chief Welch’s written certification of July
25, 2008 and confirmed that Chief Welch had been delegated
authority to make that certification. We accept that the Attor-
ney General can himself certify an appeal. Plainly, Congress’
designation of the United States Attorney as the one autho-
rized to make the requisite § 3731 certification was not
intended to preclude certification by an equivalent or higher
authority should there be no United States Attorney or acting
United States Attorney overseeing a prosecution.4 Because the
ultimate authority to appoint an acting United States Attorney
rests with the Attorney General under 28 U.S.C. § 515(a), see
Weyhrauch, 2008 WL 4277587, at *4, the Attorney General
can certify an appeal under § 3731 if no one else has been
properly designated to do so. Because we conclude that the
to certify the appeal. Setting aside for the moment that the government’s
filing was made in response to an order in which we squarely held that the
recusal notice was insufficient, the government’s continued insistence that
the recusal notice is sufficient ignores the rationale for our holding: when
an investigation or prosecution is being overseen by someone outside of
a United States Attorney’s office, that person can certify an appeal only
if properly appointed pursuant to 28 U.S.C. § 515(a) as the acting United
States Attorney for the purposes of that investigation or prosecution.
Although a document demonstrating that an entire United States Attor-
ney’s office was recused from a case does suggest that someone else is
running that case, it does not demonstrate that the Attorney General appro-
priately appointed that person as acting United States Attorney or to cer-
tify an appeal under 18 U.S.C. § 3731.
4
As the government noted in its most recent filing, some investigations
originate and are conducted within the Department of Justice, without any
involvement of the local United States Attorney’s office. The Department
would do well to adopt procedures to ensure that someone has been
expressly delegated authority to certify interlocutory appeals under § 3731
in such cases. See Weyhrauch, 2008 WL 4277587, at *4-5 (holding that
someone outside of a United States Attorney’s office can certify an appeal
under § 3731 only if specifically appointed to do so under 28 U.S.C.
§ 515(a)).
15794 UNITED STATES v. WEYHRAUCH
Attorney General’s own certification is sufficient, we do not
decide whether ratification alone would suffice. See
Weyhrauch, 2008 WL 4277587, at *4 (noting that the govern-
ment “has not submitted any documentation that the Attorney
General or his delegee in the EOUSA explicitly appointed
Chief Welch as a special attorney or special assistant under 28
U.S.C. § 515(a) to be the acting United States Attorney for the
Weyhrauch investigation and prosecution” (emphasis added)).
Although the Attorney General’s certification is a proper
substitute for that of the United States Attorney for Alaska,
we must still decide whether to exercise our discretion to
accept the certification at this late date. See W.R. Grace, 526
F.3d at 507 n.4. Weyhrauch offers two reasons why we
should decline to do so. First, he contends that he has been
prejudiced by the government’s failure to certify this appeal
properly at the outset, thereby delaying the appeal and his
opportunity to address the charges against him and causing
him to incur additional legal expenses defending against it.
Any criminal defendant would suffer those consequences
under § 3731, however, yet Congress nonetheless has autho-
rized the government to pursue interlocutory appeals despite
such hardships. Thus, Weyhrauch has been prejudiced largely
by the interlocutory appeal itself, not by the government’s
deficient certification. Although we are sympathetic to Wey-
hrauch because the certification dispute, which arose only
because the government failed to comply with § 3731, may
have aggravated his cost of defending against the appeal, we
decline to dismiss the appeal on that basis alone.
Second, Weyhrauch suggests that the government’s con-
duct demonstrates that it did not take the § 3731 certification
requirement seriously. See W.R. Grace, 526 F.3d at 507(“Congress plainly intended that the decision to take an inter-
locutory appeal be a serious, considered judgment . . . .”). The
government’s belief that the oral certification by the line pros-
ecutor and the subsequent written certification by Chief
Welch without accompanying documentation of his delegated
UNITED STATES v. WEYHRAUCH 15795
authority were sufficient is certainly difficult to fathom in
light of our previous holdings. See Weyhrauch, 2008 WL
4277587, at *3 (“[O]ur prior decisions make clear that a
§ 3731 certification must be made personally by the United
States Attorney or by someone acting with legitimate, dele-
gated authority that is sufficiently documented.” (internal cita-
tions omitted)). Nonetheless, we are satisfied that the
government did not take the decision to appeal lightly. The
government has represented that the trial attorney consulted
with the attorney supervising the prosecution and the Solicitor
General before initiating the appeal. The legal issue on the
merits presents a question of first impression in this circuit
and therefore is not frivolous. Even though the government
was careless about the certification process, we conclude that
the government did not willfully disregard the certification
requirement itself.
Moreover, because this case presents a factual scenario
(recusal of the entire United States Attorney’s office) not
addressed in any of our prior opinions (or by any other cir-
cuit) and the Attorney General has now given this issue his
personal attention, we will excuse the government’s confusion
and allow it to supplement the record with the Attorney Gen-
eral’s certification. In doing so, however, we point out that we
have previously invited the government to submit documenta-
tion of properly delegated authority when the certification is
made by someone other than the United States Attorney, see
United States v. Wallace, 213 F.3d 1216, 1219 (9th Cir.
2000), and more recently held that a trial attorney lacks
authority to certify an appeal, see W.R. Grace, 526 F.3d at
506. Apparently, our hortatory language and square holdings
have not convinced the government that the statutory require-
ments for § 3731 certification are requirements rather than
suggestions. We shall not be so forgiving in the future. See
United States v. Eccles, 850 F.2d 1357, 1359 (9th Cir. 1988)
(“We recognize . . . that a general rule excusing the govern-
ment from filing a certificate until after oral argument would
eviscerate the statutory requirement that the United States
15796 UNITED STATES v. WEYHRAUCH
attorney certify that the appeal has not been taken to delay
trial.”).
IV. HONEST SERVICES MAIL FRAUD
Accepting our jurisdiction under 18 U.S.C. § 3731, we
address whether the district court properly excluded the gov-
ernment’s proffered evidence. Weyhrauch was indicted under
18 U.S.C. § 1341, which criminalizes the use of the postal
services in carrying out a “scheme or artifice to defraud, or for
obtaining money or property by means of false or fraudulent
pretenses, representations, or promises.” Before 1987, we and
other courts interpreted § 1341 as covering schemes to
defraud another not just of money and property, but also of
“intangible rights,” including the right of citizens to have pub-
lic officials perform their duties honestly. See United States
v. Williams, 441 F.3d 716, 721-22 (9th Cir. 2006); see also
United States v. Sorich, 523 F.3d 702, 707 (7th Cir. 2008). In
1987, the Supreme Court rejected the intangible rights theory
of mail fraud, holding:
Rather than construe [§ 1341] in a manner that
leaves its outer boundaries ambiguous and involves
the Federal Government in setting standards of dis-
closure and good government for local and state offi-
cials, we read § 1341 as limited in scope to the
protection of property rights. If Congress desires to
go further it must speak more clearly than it has.
McNally v. United States, 483 U.S. 350, 360 (1987).
[3] Shortly thereafter, Congress in 1988 chose to “speak
more clearly” by enacting 18 U.S.C. § 1346, specifying that
for the purposes of the mail, wire and bank fraud statutes, “the
term ‘scheme or artifice to defraud’ includes a scheme or arti-
fice to deprive another of the intangible right of honest ser-
vices.” See Williams, 441 F.3d at 721-22 (holding that
Congress restored the pre-McNally landscape by passing
UNITED STATES v. WEYHRAUCH 15797
§ 1346). Unfortunately, Congress did not define the concept
of “honest services” in § 1346, thereby creating some confu-
sion over the reach of the mail fraud statute. See United States
v. Urciuoli, 513 F.3d 290, 294 (1st Cir. 2008) (“The central
problem is that the concept of ‘honest services’ is vague and
undefined by the statute. So, as one moves beyond core mis-
conduct covered by the statute (e.g., taking a bribe for a legis-
lative vote), difficult questions arise giving coherent content
to the phrase through judicial glosses.”). Because the statute’s
plain language is inconclusive, we turn for guidance in con-
struing the statute to our pre-McNally case law and any rele-
vant post-McNally decisions, and then consider pre- and post-
McNally decisions from our sister circuits. See Williams, 441
F.3d at 722.
[4] The district court accurately observed that we have not
considered what § 1346 requires of public officials and that
our sister circuits have expressed divergent views on the
proper meaning of “honest services” for public officials. The
Fifth Circuit has adopted the so-called “state law limiting
principle,” which requires the government to prove that a pub-
lic official violated an independent state law to support an
honest services mail fraud conviction. See Brumley, 116 F.3d
at 734-35. The Third Circuit has adopted a similar rule requir-
ing the government to prove the public official violated a
fiduciary duty specifically established by state or federal law.
See United States v. Murphy, 323 F.3d 102, 116-17 (3d Cir.
2003).
The majority of circuits, however, have held that the mean-
ing of “honest services” is governed by a uniform federal
standard inherent in § 1346, although they have not uniformly
defined the contours of that standard. See Sorich, 523 F.3d at
712 (holding that sources other than state law can establish a
duty to provide honest services); Urciuoli, 513 F.3d at 298-99(declining to read honest services fraud statute to require vio-
lation of state law); United States v. Walker, 490 F.3d 1282,
1299 (11th Cir. 2007) (holding that an honest services fraud
15798 UNITED STATES v. WEYHRAUCH
conviction “does not require proof of a state law violation”);
United States v. Bryan, 58 F.3d 933, 942 (4th Cir. 1994)
(holding that the duty of honesty is defined irrespective of the
existence of state law). The Seventh Circuit has read § 1346
to require public officials to breach a fiduciary duty with an
intent to reap private gain to support an honest services mail
fraud conviction, see Sorich, 523 F.3d at 708, and the First
Circuit has suggested that the official’s misconduct must
involve more than a mere conflict of interest to support a con-
viction, see Urciuoli, 513 F.3d at 298-99. Finally, several cir-
cuits have read into § 1346 the requirement that a public
official’s breach of duty must be material and accompanied
by fraudulent intent. See United States v. Cochran, 109 F.3d
660, 667 (10th Cir. 1997); United States v. Jain, 93 F.3d 436,
442 (8th Cir. 1996). In essence, our sister circuits have con-
strued the meaning of “honest services” in ways that limit, to
differing degrees, the reach of § 1346 into state and local pub-
lic affairs.
One concern is that a literal reading of § 1346 might give
federal prosecutors unwarranted influence over state and local
public ethics standards. See Brumley, 116 F.3d at 734(expressing concern that reading § 1346 to create a uniform
standard of conduct would erode federalist structure). This is
particularly relevant in light of the Supreme Court’s admoni-
tion that “unless Congress conveys its purpose clearly, it will
not be deemed to have significantly changed the federal-state
balance in the prosecution of crimes,” Cleveland v. United
States, 531 U.S. 12, 25 (2000) (internal quotation marks omit-
ted). Other valid considerations are (1) the need to give public
officials fair notice of the conduct that would subject them to
the federal fraud statutes’ serious criminal penalties, see Urci-
uoli, 513 F.3d at 294 (noting the need to assure “fair notice
to those governed by the statute”); see also Williams, 441
F.3d at 724 (“In examining a statute for vagueness, we must
determine whether a person of average intelligence would rea-
sonably understand that the charged conduct is proscribed.”);
(2) a desire to establish firm boundaries lest every dishonest
UNITED STATES v. WEYHRAUCH 15799
act by public officials lead to federal criminal liability, see
Sorich, 523 F.3d at 707-08 (noting the need for a limiting
principle that “cabins zealous prosecutors by insuring that not
every violation of a fiduciary duty becomes a federal crime”);
Urciuoli, 513 F.3d at 294 (expressing concern that the statute
might “embrace every kind of legal or ethical abuse remotely
connected to the holding of a governmental position”); and
(3) the potential for selective enforcement against public offi-
cials, many of whom engage in partisan political activity.
The Fifth Circuit’s state law limiting principle, which the
district court adopted, addresses all of these concerns. It limits
how much control federal prosecutors have over state public
affairs by restricting federal criminal liability to conduct pro-
hibited by the states themselves and sets a clear outer limit to
the reach of the federal statute by tying liability to violations
of specific state statutes, thereby allaying concerns over fair
notice. Moreover, to the extent the honest services doctrine is
intended to ensure public officials act ethically, elected state
officials are accountable to their constituencies, who can pun-
ish dishonest or unethical conduct directly at the ballot box,
and nonelected state officials may be subject to state ethics
laws, which can be strengthened through the democratic pro-
cess. Thus, because the federal criminal statutes are not the
only remedy for dishonest conduct not proscribed by state
law, there is some degree of logic in reserving to the states
exclusive control over the ethical standards for their own pub-
lic officials.
[5] Nonetheless, we decline to adopt the state law limiting
principle.5 As an initial matter, our pre-McNally decisions do
5
Although we reject the state law limiting principle in the context of
honest services prosecutions of public officials, we express no opinion on
the role of state law in honest services fraud prosecutions in the private
context. See Sorich, 523 F.3d at 708 (noting that courts have “crafted spe-
cial requirements in the limited context of honest services fraud in the pri-
vate sector”). Similarly, we express no opinion on what effect, if any, state
law that expressly condones or excuses certain conduct would have
because Alaska law did not excuse Weyhrauch’s conduct here. See Urci-
uoli, 513 F.3d at 298 (observing that state law might be relevant if it “im-
munize[s]” certain conduct).
15800 UNITED STATES v. WEYHRAUCH
not support the conclusion that the federal fraud statutes
derive their content solely from state law. In United States v.
Bohonus, 628 F.2d 1167, 1171 (9th Cir. 1980), we explained
that the basis for prosecuting public officials for honest ser-
vices fraud rests on “the deprivation of the public’s right to
honest and faithful government.” This broad characterization
of the duty, without reference to any underlying state law
duty, suggests that public officials’ duty of honesty is uniform
rather than variable by state. We were less equivocal in
United States v. Louderman, 576 F.2d 1383, 1387 (9th Cir.
1978), holding that “state law is irrelevant in determining
whether a certain course of conduct is violative of the wire
fraud statute.” Although Louderman is not directly on point
because it involved a traditional wire fraud prosecution rather
than an honest services mail fraud prosecution, our refusal to
define the federal fraud statutes based on the contours of state
law informs our decision here. In short, we have never limited
the reach of the federal fraud statutes only to conduct that vio-
lates state law.6
[6] We also cannot find any basis in the text or legislative
history of § 1346 revealing that Congress intended to condi-
6
We recently affirmed the conviction of a private individual for honest
services fraud because he breached his fiduciary duty of loyalty. See Wil-
liams, 441 F.3d at 722-24. We explained that the defendant stood in a
fiduciary relationship to his victim, citing an Oregon statute about powers
of attorney, id. at 723, but later observed that the defendant “undertook the
high duties of honesty and loyalty” without reference to the state statute,
id. at 724. Arguably, our citation to the state law suggests we relied on
state law as the source of the fiduciary relationship. On the other hand, we
affirmed the conviction because the defendant violated duties of honesty
and loyalty, which are mentioned nowhere in the text of the state statute,
so our decision may have turned on uniform duties of honesty and loyalty
that exist in all relationships of trust. See Sorich, 523 F.3d at 712 (citing
Williams for the proposition that a source other than state law can create
a fiduciary obligation). In any event, we were not required in Williams to
decide if § 1346 requires a violation of state law, so we do not find our
passing reference to a state statute conclusive on how we might have ruled
had that issue been squarely presented.
UNITED STATES v. WEYHRAUCH 15801
tion the meaning of “honest services” on state law. Because
laws governing official conduct differ from state to state, con-
ditioning mail fraud convictions on state law means that con-
duct in one state might violate the mail fraud statute, whereas
identical conduct in a neighboring state would not. Congress
has given no indication it intended the criminality of official
conduct under federal law to depend on geography. Moreover,
although the Supreme Court has warned against interpreting
the mail fraud statute to allow federal prosecutors to intrude
into areas traditionally governed by state law absent a clear
showing that Congress intended to do so, see Cleveland, 531
U.S. at 24 (expressing reluctance over subjecting “to federal
mail fraud prosecution a wide range of conduct traditionally
regulated by state and local authorities”); McNally, 483 U.S.
at 360 (declining to read the mail fraud statute “in a manner
that . . . involves the Federal Government in setting standards
of disclosure and good government for local and state offi-
cials”), Congress demonstrated a clear intent to reinstate the
line of pre-McNally honest services cases when it enacted
§ 1346, see Williams, 441 F.3d at 721-22. Because pre-
McNally honest services fraud cases generally did not require
state law to create the duty of honesty that public officials
owe the public and the plain language of the statute does not
refer to state law, we cannot infer that Congress intended to
import a state law limitation into § 1346.
[7] Finally, federal action based on a valid constitutional
grant of authority is not improper simply because it intrudes
on state interests. See U.S. Const. art. VI, cl. 2 (“[T]he Laws
of the United States . . . shall be the supreme Law of the
land.”). Congress has a legitimate constitutional basis for pre-
venting public officials from using the mails to perpetrate
fraud, see Badders v. United States, 240 U.S. 391, 393 (1916)
(holding that Congress may forbid putting letters in the mail
“in furtherance of a scheme it regards as contrary to public
policy, whether it can forbid the scheme or not”), so the fed-
eral interest in establishing a uniform standard of conduct for
public officials merits equal consideration. That interest is not
15802 UNITED STATES v. WEYHRAUCH
limited to preventing individuals from using the mails as a
tool in a fraudulent scheme. States often regulate industries
that are national and international in scope and that the federal
government also regulates under concurrent constitutional
authority, including the financial services, transportation,
communications, oil, gas and timber industries. State regula-
tions of these industries can have national or international
implications, so the federal government may wish to prevent
state action in these areas from being improperly influenced.
Similarly, state laws that affect economic development within
a state can influence the federal budget, reduce federal tax
receipts and broadly affect the national economy. In short,
Congress has a legitimate interest in ensuring that state action
affecting federal priorities is not improperly influenced by
personal motivations of state policymakers and regulators,
and the happenstance of whether state law prohibits particular
conduct should not control Congress’ ability to protect federal
interests through the federal fraud statutes, which are predi-
cated on valid federal constitutional authority to regulate the
mails.7
[8] Having rejected the state law limiting principle, we next
consider the appropriate contours of honest services fraud.
Our pre-McNally cases recognized two core categories of con-
duct by public officials that other courts have found sufficient
to support an honest services conviction: (1) taking a bribe or
otherwise being paid for a decision while purporting to be
exercising independent discretion and (2) nondisclosure of
material information. See Bohonus, 628 F.2d at 1171 (citing
7
This prosecution illustrates how national policies are implicated by
alleged fraud against the people of a state. Alaska’s oil tax legislation
could influence how companies across the nation develop and exploit
petroleum resources (particularly which geographic area would be a prior-
ity for investment), with consequences for the national economy and
national energy policy. Under the state law limiting principle, however,
the federal government would be deprived of its ability to protect these
federal interests against allegedly corrupt influences simply because a
state law did not expressly forbid the conduct.
UNITED STATES v. WEYHRAUCH 15803
cases). Post-McNally public honest services fraud cases from
other circuits have generally fallen into one of those two cate-
gories. See Urciuoli, 513 F.3d at 295 n.3 (“Typical [post
McNally] cases involve votes paid for by bribes or based on
private undisclosed financial interests of the legislator, award-
ing of contracts based on bribes, and the filing of false finan-
cial disclosure forms or other non-disclosures in relation to
official duties.” (internal citations omitted)). The post-
McNally decisions from our sister circuits confirm our view
in Bohonus that conduct on par with bribery and nondisclo-
sure of material information lies at the heart of public honest
services fraud. Notably, both categories of misconduct under-
mine transparency in the legislative process and other govern-
mental functions. Because public officials may legitimately
disagree over which of the many competing interests in soci-
ety deserve support from the state, without transparency the
public cannot evaluate the motivations of public officials who
are purporting to act for the common good to determine
whether they are in fact acting for their own benefit. Thus, the
two core categories of misconduct supporting public honest
services fraud ensure transparency, without which the public
cannot determine whether public officials are living up to
their duty of honesty. See John C. Coffee, Jr., Modern Mail
Fraud: The Restoration of the Public/Private Distinction, 35
AM. CRIM. L. REV. 427, 444 (1998) (noting that courts agree
that Ҥ 1346 may constitutionally be applied to schemes by
state or local governmental officials to deprive citizens of
their honest services as public fiduciaries”). We are persuaded
that Congress’ intent in reinstating the honest services doc-
trine after McNally was to bring at least the two core catego-
ries of official misconduct within the reach of § 1346.
[9] Here, Weyhrauch allegedly voted and took other offi-
cial actions on legislation at the direction of VECO while
engaged in undisclosed negotiations for future legal work
from VECO. These allegations describe an undisclosed con-
flict of interest and could also support an inference of a quid
pro quo arrangement to vote for the oil tax legislation in
15804 UNITED STATES v. WEYHRAUCH
exchange for future remuneration in the form of legal work.
Because Weyhrauch’s alleged conduct falls comfortably
within the two categories long recognized as the core of hon-
est services fraud, we need not define the outer limits of pub-
lic honest services fraud in this case. Accordingly, the
government may proceed on its theory that Weyhrauch com-
mitted honest services fraud by failing to disclose a conflict
of interest or by taking official actions with the expectation
that he would receive future legal work for doing so.8
V. CONCLUSION
[10] We hold that 18 U.S.C. § 1346 establishes a uniform
standard for “honest services” that governs every public offi-
cial and that the government does not need to prove an inde-
pendent violation of state law to sustain an honest services
fraud conviction. Because the district court excluded the evi-
dence based, in part, on its conclusion that the government
had to prove that state law imposed an affirmative duty on
Weyhrauch to disclose a conflict of interest, we reverse. The
government did not appeal the district court’s ruling that the
proffered evidence relates only to state law, and we express
no opinion whether the proffered evidence is relevant to prov-
ing the government’s case under the standard we have
announced and leave that determination to the district court’s
8
The honest services doctrine exists within the broader context of the
mail and wire fraud statutes, however, so the government must still prove
fraudulent intent, see Cochran, 109 F.3d at 667 (holding that Ҥ 1346 must
be read against a backdrop of the mail and wire fraud statutes, thereby
requiring fraudulent intent”); Bohonus, 628 F.2d at 1172 (“Neither breach
of a fiduciary duty, nor the receipt of secret profits . . . would suffice,
standing alone, to show a [mail fraud] violation; there must be a recogniz-
able scheme formed with intent to defraud.”), and materiality, see Neder
v. United States, 527 U.S. 1, 25 (1999) (holding “materiality of falsehood
is an element of the federal mail fraud, wire fraud, and bank fraud stat-
utes”).
UNITED STATES v. WEYHRAUCH 15805
sound judgment.
REVERSED and REMANDED.