9 Replies to “Chicago Clout welcomes Charles Walker on Mayor Daley's Pension Troubles”

  1. So Mr. Walker a couple of questions:

    1. what is the difference between a defined benefit and a defined contibution pension?

    2.So a goverment agency or a private company can contibute to an individual retirement account? Or you sure? Perhaps you meant a 401K? If so how does that differ than a pension plan?

    3. Do you know what ERISA is? If so what?

    4. Can a goverment agency contibute to an employees 401K. If not what is the correct term for a public employee’s 401K?

    If you can’t answer all of these why dont you stick to your trade which is nowa days what? It is not retirement planning.

  2. June 8, 2009

    Mayor Daley’s nephew Robert Vanecko and Vanecko’s business partner Allison S. Davis have been making news lately.

    Their real estate investment business, DV Urban Realty Partners, manages $68 million for five city pension funds — representing Chicago police officers, teachers, CTA employees and other city workers.

    » Click to enlarge image Authorities are looking into how DV Urban Realty Partners, owned by Mayor Daley’s nephew Robert Vanecko (left) and Vanecko’s business partner Allison S. Davis, got city pension business.
    (Richard A. Chapman/Keith Hale/Sun-Times)

    RELATED STORIESAnother way to make money on pension funds Daley nephew’s bad deal for pensions More city money for mayor’s nephew

    A federal grand jury and the city of Chicago’s inspector general are looking into how DV Urban Realty got the city pension business.

    Since 2006, the pension funds have paid Davis and Vanecko more than $2.7 million of $8 million in management fees the pair are guaranteed by the time their deal ends, on Dec. 31, 2014. Any profits they make on real estate deals with the pension money are to be shared among the pension funds, Vanecko and Davis.

    So far, the two men have invested pension money in eight real estate projects — which have fallen in value, in part because of the recession.

    Here’s a look at the real estate deals Vanecko and Davis have done using the city pension money, according to documents they’ve filed with the pension funds:

    1. 1212 S. Michigan Ave.
    A 344-unit apartment building

    Using $9.9 million in city pension money, Vanecko and Davis paid $65.2 million for the high-rise building on Sept. 29, 2006. It’s managed by DV Property Management LLC, also owned by Davis and Vanecko.

    2. 2400 S. Michigan Ave.
    A boarded-up building formerly home to the Chicago Defender newspaper

    Vanecko and Davis lent $1 million in city pension money to the developers — Brian O’Connell and politically connected restaurateur Matthew A. O’Malley — who paid $4.1 million for the historic building June 8, 2007. O’Malley and O’Connell also have a $3.3 million mortgage, guaranteed by themselves and DV Urban Realty. O’Malley operates several popular restaurants. Among them: the Chicago Firehouse, near Mayor Daley’s South Loop home, and Millennium Park’s Park Grill, which became a source of controversy when the Sun-Times reported in 2005 that the Chicago Park District negotiated the 20-year contract with O’Malley’s group while he had a romantic relationship with a high-ranking park official.

    3. 217 S. Jefferson St.
    An office building and stores

    Vanecko and Davis invested $2.65 million in pension money in the building, which Terrapin Group bought for $11.7 million on July 13, 2007. Terrapin’s owners include developer James “Jake” Geleerd. DV Property Management operates the building.

    4. 7100 S. South Shore Dr.
    A 162-unit apartment building

    Vanecko and Davis bought the building for $11.5 million on July 31, 2007, using $6.5 million in city pension money. DV Property Management runs the building.

    5. 3508 S. State St.
    Stores and offices

    Using $3.5 million in pension money, Vanecko and Davis paid $4.2 million for the stores and offices, which are part of a new housing development the Chicago Housing Authority is building to replace Stateway Gardens. The CHA project is being built by a joint venture of four companies, including Walsh Construction and Davis Associate Managers, which is owned by Allison Davis.

    6. 3030 N. Broadway
    Vacant land slated for a Dominick’s store and condos

    Vanecko and Davis lent $7.9 million in pension money on March 3, 2008, to 3012 N. Broadway LLC — owned by developers Michael O’Connor and Jonathan Zitzman. They also hold a $10 million mortgage on the property. The developers defaulted on the loans and filed for bankruptcy protection Thursday.

    7. 3013-27 N. Waterloo Ct.
    Vacant land slated for apartments, behind the proposed Dominick’s

    Using $3 million in pension money, Vanecko and Davis paid $6.9 million to buy the property on March 3, 2008, from O’Connor and Zitzman.

    8. 3348 S. Pulaski Rd.
    A 15.6-acre industrial site that was 66 percent vacant

    Vanecko and Davis invested $4.2 million in pension money on this property, which was purchased by Sydney Partners LLC for $10.5 million on Nov. 27, 2007. Vanecko and Davis own 90 percent of the property, according to Jeff Josephs of Sydney Partners. Vanecko and Davis are leasing part of the space to the city of Chicago, on a month-to-month lease that so far has cost taxpayers more than $480,000.

  3. 06/05/2009
    Most Americans living outside the Chicago area identify the city with Oprah, Obama, or Michael Jordan. When the subject of who really runs Chicago comes up, most people would say Mayor Daley. Chicago’s lack of term limits and persistent political machine have kept Mayor Daley in office for over 20 years.

    Those who know Chicago politics know there’s one man who’s more powerful than Mayor Daley, Alderman Ed Burke. Mayor Daley may be the identifiable public face of Chicago’s political system and act as a lightning rod for criticism, but the lower profile Alderman Burke wields the real power.

    Chicago’s City Council recently celebrated Alderman Burke’s record-breaking 40 years in office. No Chicago Alderman has served so long or accumulated so much power. No man represents Chicago’s political system better and all that is wrong with it. Only in a city that is hostile to checks and balances could a politician achieve what Alderman Burke has done. Since joining City Council in 1969, Alderman Burke has amassed a portfolio of positions to be the Machine’s top boss. Alderman Burke not only represents the 14th Ward but also serves as Chairman of the Finance Committee. The city of Chicago’s own website is quite honest about exactly who’s in charge:

    As Chairman of the City Council’s powerful Committee on Finance, Alderman Burke holds the city’s purse strings and is responsible for all legislative matters pertaining to the city’s finances, including municipal bonds, taxes and revenue matters. Alderman Burke became Chairman for the second time in 1989. He previously served from 1983 to 1987. He also serves as a member of the Chicago Plan Commission.

    One of the Finance Committee’s responsibilities is dealing with workers compensation claims. A few years ago, the Chicago Sun-Times explained Chicago’s system: “When city workers get hurt on the job, they usually turn to a handful of lawyers tied to City Hall. And the city often fights back by hiring lawyers with ties to Ald. Edward M. Burke, chairman of the City Council Finance Committee, which has sole authority to settle workers compensation claims against the city.”

    But, Alderman Burke’s control of Chicago’s financial purse strings isn’t his only lever of power. Cook County has the largest unified court system in America. In heavily Democratic Cook County, 100% of all of the judges are Democrats. The Chairman of the Democratic Party Judicial Slating Committee is none other than Alderman Burke.The Chicago Reader astutely observed Burke’s “Seat on the Democratic Party judicial slate-making committee ensures that Cook County judges owe him their jobs.” Alderman Burke’s influence goes beyond the Cook County level: his wife Anne is a justice on the Illinois Supreme Court.

    Along with all of Alderman Burke’s power to control Chicago’s tax code and Cook County’s judicial system comes campaign contributions. Alderman Burke doesn’t represent a wealthy ward, nor has he ever faced a serious political opponent, but he still has amassed an eye popping campaign fund. The Chicago Tribune explains:

    But the state’s richest political family was Ald. Edward Burke (14th) and his wife, Illinois Supreme Court Justice Anne Burke. Together, their political committees held $8.3 million in cash. The Tribune reported Monday that Anne Burke’s campaign was returning a large portion of her cash to donors because she is running unopposed in the Democratic primary.

    Mayor Richard M. Daley, who traditionally ceases fundraising after elections, raised just $43,000 in the last six months, but had $3.1 million in cash on hand.

    In terms of cash at the very least, Burke is already more potent not only than Daley but has more in his coffers than Daley and all 49 Aldermen combined. But, the ever active Alderman Burke is also a businessman, not surprisingly a rather successful one.

    The state of Illinois has rather lax ethics laws, and since being an Alderman is a “part time” job, Alderman Burke has outside employment. Burke runs a successful property tax appeals business. Burke’s latest ethics form filed with the city of Chicago shows his impressive list of clients. Such big corporations as AT&T, American Airlines, Bank of America, Northern Trust, Harris Bank, T Mobile and many others have done at least $5000 in legal business with Alderman Burke’s law firm in the last year. They also – I am sure readers will be shocked – do business with the city of Chicago. WBBM, the local CBS affiliate, even has Alderman Burke handle some of its legal business.

    Occasionally, Alderman Burke’s conflicts get reported on. When Obama ally and Blagojevich influence peddler Tony Rezko was looking to get his taxes cut on a big land deal the Chicago Sun-Times explained:

    Why did Ald. Edward M. Burke vote to approve Tony Rezko’s plans to develop the South Loop’s biggest piece of vacant land even as he was working for Rezko on that same deal?

    Burke says: I forgot to abstain.

    When Rod Blagojevich first decided to run for Governor in 2001, he got important backing from Burke. Blago’s father in law, by the way, is Alderman Dick Mell, a colleague of Alderman Burke’s who got the ball rolling.The Daily Herald unearthed this revealing statement from Alderman Burke in 2001 concerning Blago:

    “I am with Rod 100% because he has what it takes to win – money, message and an army of supporters,” said Burke, referring to a rousing announcement speech given by Blagojevich to a reported throng of 10,000 people on August 12. Burke also mentioned filings with election officials that show Blagojevich with over $3 million in his campaign fund, double the amount of cash on hand of all of his potential Democratic opponents combined.

    In the coming years, as Chicago style politics seeps into America’s mainstream, remember Alderman Burke. Thirty of Burke’s colleagues on Chicago’s City Council went on to become convicted felons since 1970. But Alderman Burke is still standing, and still dominating in the shadows, atop much of what happens in the Windy City.

    Steve Bartin is a resident of Cook County and native who blogs regularly about urban affairs at http://nalert.blogspot.com. He works in Internet sales.

  4. Pension troubles huh? The Democrats spend all the pension money and raise taxes to the moon and spend like drunken sailors. These Democratic cities cannot pay all these sweetheart pensions and health care for all their political workers they have hired in government for sky high wages and life long benefits so now they want national health care to pay for all their promises. Then when everyone with money leaves all the big cities the democrats are left broke, so they need to get a Democratic president to take our money on the federal level. The crash is here from all this over spending and it can’t be avoided. All this financial slight of hand will not prevent the un-preventable. The “crash” is the only way to get things right again and it Will Never Ever Be Avoided. It has to happen to slap all these politicians from over spending. They should just let it happen already because it is unavoidable. Let the correction correct itself now. Prices are too high. When a mother and father in a family blow all their money on lavish vacations and on gambling, the reality sets in that they need to shop at Aldi’s for the next few years and just sit home and watch TV for enjoyment. No more spending. But Obama says the only way to get out of all this debt we are in is “to spend more money”. We are really screwed! Bush was bad on being fiscally responsible, but Obama is way , way over board! WHERE IS PATRICK JAGGOFF DALEY BY THE WAY?

  5. This is an excellent video on Chicago. Charles got the shart from Mayor Daley. Daley treats blacks like crud.

  6. Chicago police freed of spying limits
    June 8, 2009 6:23 PM | 1 Comment
    A federal judge has dissolved decades-old legal restrictions placed on Chicago police because of their infamous Red Squad.

    U.S. District Court Judge Joan Gotschall voided the consent decrees today in response to a joint motion from Mayor Richard Daley’s administration and the American Civil Liberties Union.

    The city agreed to the decrees, which limited the police’s ability to gather intelligence, to resolve a class-action lawsuit in 1982.

    The restrictions came in response to the Red Squad that spied on political activists in the 1960s and 1970s. In 2001, the courts eased the rules, arguing that the decrees made it difficult for police to combat terrorist groups.

    –Dan Mihalopoulos

  7. June 9, 2009

    BY FRAN SPIELMAN City Hall Reporter/fspielman@suntimes.com
    The tightly knit Daley family is struggling to solve an internal crisis caused by a nephew who they say refused to stop embarrassing his uncle.

    Sources said Robert Vanecko was told nearly two years ago that his uncle, Mayor Daley, wanted him out of a risky real estate venture involving city employee pension funds. Another Daley nephew, Patrick Thompson, was given the same directive one week earlier — and promptly dropped out as an attorney representing the Children’s Museum at heated community meetings on the controversial Daley-backed plan to build a new Children’s Museum in Grant Park.

    » Click to enlarge image “Everyone wishes this wasn’t going on. In hindsight, it looks bad.” A Daley family member talking about Robert Vanecko’s (left) pension deals.
    (Sun-Times photos)

    RELATED STORIESPDF: Vanecko resignation announcement
    Unlike his cousin, Robert Vanecko ignored the mayor’s advice — apparently until this week.
    Vanecko “has resigned as a general partner for DV Urban Realty,” according to an e-mail sent Monday afternoon to police pension board members from John J. Gallagher Jr., executive director of the pension fund. “A press release will be issued [today] about this resignation, and other than that, no further information was provided at this time.”

    It was unclear whether Vanecko can get completely out of the pension-fund deals because of the collapse of the real estate market. Meanwhile, the Daley family is stuck with a headline that won’t quit and a federal investigation into how DV Urban won $68 million in pension investments in the first place.

    “It’s a terrible situation. Everyone wishes this wasn’t going on. In hindsight, it looks bad. And it’s obvious this is gonna continue,” said one family member, who asked to remain anonymous.

    “It’s not easy watching your nephew being trashed. We all feel sorry for him. But he’s finding out what we all learned 30 years ago — that if you stay around [government] long enough, you’re gonna get burned.”

    Sources said other family members have been trying for some time to persuade Vanecko to dissolve his partnership with developer Allison Davis because of the perception that Daley family clout landed the deal.

    Vanecko told them he was in the process of getting out, sources said. But that apparently didn’t happen until this week.

    Mayor Daley was described as livid and distraught about the controversy, but dead-set against touching off a family feud by publicly criticizing Vanecko, the eldest of Richard J. Daley’s 22 grandchildren.

    In September 2007, the Chicago Sun-Times disclosed Vanecko had formed a partnership with Davis and persuaded city employee pension funds to invest $68 million with their start-up company.

    Davis and Vanecko are guaranteed $8 million in management fees — $2.7 million of it paid so far — under the deal that expires in 2014. They can also share in any profits from their real estate investments.

    They’ve invested pension funds in eight Chicago properties, but that portfolio has declined in value.

    Attempts to reach Vanecko and Davis were unsuccessful.

    Mayor Daley has insisted he had no control over how city employee pension funds invest their money — or over the professional lives of his nieces and nephews. “It could be any business. They could be in real estate. They could be in development. They could be anything,” the mayor said.

    Asked whether city pension funds should be making such speculative investments at a time when they’re saddled with unfunded liabilities, he said, “I am not on that board. They make decisions.”

    Last month, a federal grand jury subpoenaed pension fund records after pension officials refused to comply with similar subpoenas issued by Inspector General David Hoffman. It’s Hoffman’s second joint investigation with federal authorities into Vanecko’s businesses.

    The other involves the undisclosed ownership stake Vanecko and the mayor’s son, Patrick Daley, held in a sewer cleaning company that won millions of dollars in no-bid contract extensions from City Hall.

    Vanecko and Patrick Daley have said they sold their investment in the company in late 2004. That’s when Patrick Daley enlisted in the Army and Vanecko forged his partnership with Davis.

    Last week, the Sun-Times disclosed City Hall has paid nearly $500,000 in the last 15 months to lease space at a South Side site owned by DV Urban, which bought the land with city pension money.

    Contributing: Tim Novak and Chris Fusco

  8. Says he didn’t know of Robert Vanecko’s deal to lease SW Side building to the city

    June 11, 2009

    By FRAN SPIELMAN City Hall Reporter
    Mayor Daley acknowledged today that he tried to get his nephew to drop out of a risky real estate venture involving city employees’ pension funds a year and a half ago but said his nephew didn’t listen, causing tension in the closeknit Daley family.

    The mayor confirmed a report this week in the Chicago Sun-Times that his nephew Robert Vanecko had ignored Daley’s advice to end his involvement with DV Urban Realty Partners, a real estate investment company Vanecko co-founded.

    Vanecko didn’t do so until this week — two weeks after a federal grand jury subpoenaed records from city pension funds that invested with his firm.

    Daley said he learned of his nephew’s involvement in the pension deal in September 2007, when the Sun-Times first reported it.

    He said he knows that people find that hard to believe. But he said it’s the truth.

    “While many of you have speculated that I knew of Bob’s business relationship, I did not,” he told reporters. “I found out about it the same way most people did — in the news when the story broke. When I did find out, I made it very clear that it was not a good decision and that he should end the business relationship immediately.

    “But, as an adult, Bob made a difficult decision — a different decision — which leads to a very painful string of news stories that have indeed caused tension in my family. I will not get into the inner workings of my family or your family, except to say that we’re not different than anyone else. Sometimes we agree, and sometimes we disagree.”

    “Perception is everything,” Daley went on to say.

    And he acknowledged that it looked like Daley family clout landed the $68 million in city pension funds investments with his nephew’s startup company.

    “Bob’s decison very clearly led to the perception that rules were broken, and preferential treatment was given,” the mayor said. “It is a perception that follows almost every business transaction involving any Daley family member or any aspect of local government.”

    Daley said the revelations about DV, which Vanecko started with businessman and Daley political ally Allison S. Davis, have put him in a difficult position.

    “I love my nephew,” Daley said. “It is difficult for me to have my disappointment in him made public. But, as the mayor, dealing with difficult decisions publicly comes with the job.”

    He said he doesn’t intend to address the matter further.

    But, in response to a question, Daley said he knew nothing about a city lease with a building on Pulaski Road on the Southwest Side owned by his nephew and Davis.

    On Tuesday, Vanecko announced he will “end his involvement with DV Urban Realty Partners, both as a general partner and as an investor,” on July 1. He cited a desire to minimize “unwarranted distractions.”

    The Sun-Times has reported that the city has paid nearly $500,000 to lease space in the building at 3348 S. Pulaski that Vanecko and his partners — in addition to Davis, Davis’ son Jared is also a partner — bought with some of the city pension money they’re managing.

    The city’s Web site shows the city paid $50,026 in rent in 2006 and 2007 to the building’s previous owner. The city has paid $480,408 in rent to Vanecko and his partners since they bought the warehouse on Nov. 27, 2007.

    City officials have refused to release documentation about the lease with the Water Department.

  9. DOJ may rein in use of ‘honest services’ statute Fraud statute up for review was key to many convictions.Lynne MarekJune 15, 2009A key weapon in the arsenal of U.S. Attorney Patrick Fitzgerald and his prosecutors in Chicago has been a section of the federal anti-fraud statute that makes it a crime to deprive citizens or corporate shareholders of “honest services.” It’s been used to convict dozens of state and local government officials, as well as newspaper magnate Conrad Black and former Gov. George Ryan of Illinois. Fitzgerald cited the honest services in the April indictment of another ex-Illinois governor, Rod Blagojevich.But the U.S. Supreme Court’s May decision to review Black’s 2007 conviction may put the brakes on the honest services provision. The U.S. Department of Justice is likely to rein in use of the provision, 18 U.S.C. 1346, until the high court rules on Black’s appeal next term, former federal prosecutors say. “Anytime that there’s a high-profile review of a conviction, the department tends to just stop in its tracks, and this is a very high-profile review,” said Matt Orwig, a partner and criminal defense attorney in the Dallas office of Sonnenschein Nath & Rosenthal and former U.S. attorney for the Eastern District of Texas. “There’s going to have to be some very careful analysis of how they’ve approached these cases in the past.”Using the honest services section of the fraud statute allows prosecutors to charge defendants with robbing a general group of people, such as shareholders of a public company or residents of a state or city, of the honest fiduciary duties or government services they are due. It’s typically used to shore up other fraud counts, but increasingly has been used as a primary count as well. Orwig, who didn’t recall using the charge when he was a U.S. attorney, said he thinks the section has been “over-used.” It was the lead charge lodged by U.S. attorney offices against 79 suspects in fiscal year 2007, up from 63 in 2005 and 28 in 2000. (The Justice Department doesn’t consistently track it as a secondary charge.)AGGRESSIVE USE Fitzgerald, the special counsel who won a conviction against vice presidential aide I. Lewis Libby Jr., so far is bucking the usual turnover for U.S. attorneys and is extending his eight-year stint in Chicago from the Republican Bush administration into the Democratic Obama administration. Former federal prosecutors-turned-criminal defense lawyers in the Northern District of Illinois said they believe Fitzger­ald’s office has been among the most aggressive in using the honest services charge. Although statistics show that his office used the law only twice in fiscal year 2007 as a lead charge, the office has often used the statute as a secondary allegation in cases targeting Illinois and Chicago officials for political corruption.”The Northern District has argued for an aggressive interpretation of this statute on many occasions,” said Robert Kent, a partner in the Chicago office of Baker & McKenzie who was formerly chief of the complex fraud section in the U.S. attorney’s office there.The office has met with success, posting an overall conviction rate for fiscal year 2008 of 96%, compared to the national rate of 92%. Randall Samborn, a spokesman for the office, declined to comment on use of the charge or the Black case.The criminal defense lawyers said the Supreme Court is likely to focus on the second question presented by the Black petitioners: whether the law “applies to the conduct of a private individual whose alleged ‘scheme to defraud’ did not contemplate economic or other property harm to the private party to whom honest services were owed.”Black’s Supreme Court counsel, Miguel Estrada of the Washington office of Gibson, Dunn & Crutcher, didn’t return calls seeking comment, but argued in the petition that the “vagueness” of Section 1346 and differing appellate courts’ interpretation of the law call out for Supreme Court clarification. Solicitor General Elena Kagan contends in response that the law is clear: The government need not show that a defendant intended to deprive a victim of property or money, and the appellate courts differ only slightly in determining whether a given honest services fraud is “material.”The court’s decision to grant certiorari in the Black case led to a release from prison of one of Black’s three co-defendants, John Boultbee, and Black may resubmit a request for release in the Northern District of Illinois after Justice John Paul Stevens denied his request for release on bail on June 11. The defendants argue that the Supreme Court may very well overturn their three mail fraud convictions. Black’s counsel contends that he would then have to be retried on the only other outstanding charge against him, an obstruction of justice charge, because of the “highly inflammatory evidence” presented in support of the fraud counts.In the case, prosecutors charged Black and his fellow executives from Hollinger International Inc., publisher of the Chicago Sun-Times and other newspapers, with fraud for pocketing money from bogus noncompete agreements drawn up when the company was selling off its smaller newspapers in the 1990s. Prosecutors argued that millions of dollars should have gone to shareholders of the company. Black was convicted by a jury on four of the 13 counts against him.U.S. attorney’s offices will pursue “honest services” infractions much more carefully while Black’s case is pending before the high court to avoid having cases overturned in the future, the criminal defense lawyers said. Prosecutors are more likely to use it to shore up other charges or avoid it altogether, they said. “It’s likely to mean that prosecutors will only use it in the circumstances that every court agrees it would work — that way they’ll have some level of confidence no matter what happens,” Kent said. “At this point, it would be risky to do anything else.”Still, in cases such as the one against Blagojevich, which includes a host of other criminal charges, anticipation of the Supreme Court’s decision on Black is unlikely to make a difference, the lawyers said.A SCALIA DISSENTJustice Antonin Scalia in February dissented when the Supreme Court declined to grant certiorari in another honest services conviction case against a top aide to Chicago Mayor Richard Daley, also prosecuted by Fitzgerald’s office. In his dissent, he said that not taking the case allowed “the current chaos” in application of the statute to prevail. Now it seems Scalia has managed to win over three additional justices on the honest services issue with respect to the Black case.”They need some sharper definition,” said Mark Rotert, a Chicago criminal defense attorney at Stetler & Duffy and a former federal prosecutor who was once chief of the major crimes division in Chicago’s U.S. attorney’s office. “There are some real questions about…the appropriate reach of the criminal statute.”Scalia in his dissent regarding the case of Daley aide Robert Sorich said that the circuits are clearly divided on how to interpret the honest services section. The U.S. Court of Appeals for the 5th Circuit has held that the statute criminalizes only the unlawful deprivation of services, though other courts have disagreed with that, he stated. The 7th Circuit has read the statute to prohibit the abuse of a post for private gain, while some circuits don’t see such a gain as part of the crime, he said.”Without some coherent limiting principle to define what the ‘intangible right of honest services’ is, whence it derives, and how it is violated, this expansive phrase invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators, and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct,” Scalia wrote.At the core of the issue is the notion that would-be defendants have a right of due process that provides clarity in the laws that they are expected to obey, said criminal defense attorneys. This isn’t the first time that the Court has wrestled with the statute. In its 1987 ruling in McNally v. U.S. , the Supreme Co
    urt dismissed prosecutors’ and courts’ widely held view that the mail fraud statute could be used to fight public corruption and misconduct on the basis that citizens had an ‘intangible right’ to good government. Congress the following year enacted the honest services section to revive the practice of prosecuting under that right. “The confusion arises in part from the fact that the law appears to apply differently to public officials and private individuals,” said John Cline, a partner in Jones Day’s San Francisco office who represented Sorich in his appeal. “It will be interesting to see if the Supreme Court tries to develop a unified standard for the two types of cases.”Some attorneys expect the high court to rule narrowly on the application of the law to private individuals, such as corporate chieftains like Black and avoid weighing in on circumstances related to public officials, at least for now.

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