Judicial Favoritism: How the Roberts Court Shields White Collar Criminals
The Roberts Court has handed down a slew of consequential decisions since Donald Trump came into office, with the most recent critical cases being Snyder v. United States (2024) and Securities Exchange Commission v. Jarkesy (2023). These decisions represent a shifting attitude towards white-collar criminal prosecution––one where the onus is on prosecutors and regulatory agencies to go above and beyond, while financial criminals can more easily get away with their fraudulent acts. In Snyder, the Court ruled on the issue of bribing public officials; it held that there is a difference between bribes and gratuities, or tips, so the federal bribery statute cannot apply in the case of gratuities given for past actions that were never stipulated in a quid pro quo agreement. [1] Similarly, in Jarkesy the Court sidestepped Congress and held that securities fraud cases must be heard by an Article III court with a jury instead of in an administrative hearing, as it typically would through the SEC. [2] All in all, the Roberts Court has similarly decided in Percoco v. United States (2023), Kelly v. United States (2020), and McDonnell v. United States (2016). The Roberts Court has established a position of leniency towards white collar criminals, as demonstrated by its Trump-era rulings which limit the scope of prosecutorial authority and narrow interpretation of fraud statutes.
Prior to its decisions pertaining to white collar cases, the Roberts Court was already at the center of criticism for its detrimental abandonment of stare decisis, the legal doctrine that stresses following precedent. In 2008, Professor Geoffrey R. Stone of the University of Chicago Law School wrote that Chief Justice Roberts and Justice Alito purported to be staunch supporters of stare decisis during their confirmation hearings, but ultimately ditched the principles in “a particular insidious manner” that is even criticized by conservative justices like Scalia and Thomas. [3] Stone particularly criticizes the Roberts Court’s decisions in Gonzales v. Carhart (2007), Federal Election Commission v. Wisconsin Right to Life, Inc. (2007), Hein v. Freedom from Religion Foundation, Inc. (2007), Morse v. Frederick (2007), and Community Schools v. Seattle School District No. 1 (2007). In each of these cases, the Roberts Court retreats from decisions it had previously made. Notably, in Federal Election Commission v. Wisconsin Right to Life, Inc., Stone points out that the same majority that had previously upheld a provision of the Bipartisan Campaign Reform Act struck it down a mere four years later. [4] His critique rests on the argument that it is virtually absurd for the Court to strike down laws it had merely a few years ago upheld. This inconsistency between what the Roberts Court purports to be––ethical, principled, and committed to integrity––and how it actually rules is at the heart of its less than favorable approach. While the issue of stare decisis is not completely relevant to the topic of its white-collar crime rulings, it represents the overall meandering approach of the Roberts Court which has significant implications for those left to carry out its runaway rulings.
With this critical abandonment of stare decisis, the Roberts Court began to illustrate its leniency towards white-collar crimes, particularly concerning public corruption, with its decision in McDonnell v. United States (2016). McDonnell concerned former Virginia Governor Robert McDonnell and his wife accepting $175,000 in loans, gifts, and other benefits from the CEO of Star Scientific Jonnie Williams. Star Scientific, a Virginia-based company, “developed a nutritional supplement made from anatabine, a compound found in tobacco” and Williams was eager to obtain FDA approval for his supplement “as an anti-inflammatory drug.” [5] McDonell carried out several favors to Williams in exchange for financial support, as he and his wife were struggling with massive debt and loans. McDonnell was later indicted for “performing official actions on an as-needed basis, as opportunities arose, to legitimize, promote, and obtain research studies for Star Scientific’s products.” [6] The charges McDonell faced included conspiracies to commit honest services frauds, Hobbs Act extortion, and making false statements. [7] These charges rested on the claim that McDonell committed these crimes as part of “official acts.” The Court unanimously held that McDonell’s actions were not sufficient enough to be described as official acts for the purpose of the bribery statute. The majority opinion by Chief Justice Roberts stated that “in the Government’s view, nearly anything a public official accepts—from a campaign contribution to lunch—counts as a quid; and nearly anything a public official does—from arranging a meeting to inviting a guest to an event—counts as a quo.” [8] The Court’s ruling in McDonell allows public officials to be courted by interested parties, and permits this leaders to do favors for various constituents, as long as they do not directly relate to matters before the official on which he must act: “. . . the Government must prove that the public official made a decision or took an action ‘on’ that question, matter, cause, suit, proceeding, or controversy, or agreed to do so.” [9] As a result of this narrowed view of “official acts,” it became much more difficult to prosecute cases of public corruption. For instance, in the case of former New Jersey Senator Bob Menendez, prosecutors must now meet the McDonell threshold of proving that acts of corruption were tied to “official acts,” as defined by the Roberts Court [10]. Holding public officials accountable for their actions is critical to preserving a “law and order” society. The decision in McDonell abandons stare decisis and departs from traditional conservative legal philosophy. It should give the public and elected officials alike pause, as it reveals where the justices’ true allegiance may lie.
Just four years later, in Kelly v. United States (2020), the Court examined an incident known as “Bridgegate,” in which Bridget Anne Kelly, a staffer of New Jersey Governor Chris Christie and William Baroni, a Port Authority executive, closed two lanes to the George Washington Bridge’s toll plaza, leaving Fort Lee commuters with a single lane for entry. [11] Kelly and Baroni worked together to execute this transportation collapse as a way to punish the mayor of Fort Lee who did not support Christie’s re-election bid. However, the pair created a cover story: the lane closures were for a traffic study. The Court held that “because the scheme here did not aim to obtain money or property, Baroni and Kelly could not have violated the federal-program fraud or wire fraud laws.” [12] Once again, when facing a case of public corruption, the Court made the process of bringing these officials to justice more difficult. The decision in Kelly narrowed the scope of wire fraud statutes, which make it illegal to use electronic means to defraud, and prosecutorial ability to charge individuals with violation of these laws. The Court reviewed a similar case of public corruption in Percoco v. United States (2023). Joseph Percoco served as New York Governor Andrew Cuomo’s Executive Deputy Secretary from 2011 to 2016, except “for a brief but important hiatus” in 2014, during which he coordinated with senior leadership at ESD to get rid of the labor-peace requirement for the “Buffalo Billion” initiative that a developer was trying to push through the red-tape. [13] The Court held that Percoco could be charged with honest-services fraud, which is fraud pertaining to honest-services that constituents can expect of public officials. However, “the jury instructions, which did not tell the jury that Percoco could be found to owe a duty of honest services because he had been selected for future government service” were unclear, and therefore too vague to lead to a conviction of Percoco. The Court time and time again makes it more difficult for prosecutors to bring white-collar criminals to justice, as seen with their decisions in Kelly and Percoco.
The Roberts Court differs in its approach to deciding cases concerning white-collar crimes and prosecutorial responsibility. It is consistently making it more burdensome for prosecutors to bring these cases forward and succeed. However, previous benches have not taken this view. Specifically, the Rehnquist Court issued decisions that expanded definitions or prosecutorial scope in white-collar cases. Notably, its decisions in United States v. O'Hagan (1997) and Pasquantino v. United States (2005) shaped a Court that in fact made it easier to successfully prosecute white-collar criminals. In United States v. O’Hagan, the Court held that an individual who trades securities while misappropriating confidential information “may be held liable for violating § 10(b) and Rule 10b–5.” [14] Additionally, the Court held that confidential information may be defined as property that the company has the exclusive right to, and that undisclosed use of this information “constitutes fraud akin to embezzlement.” [15] All in all, the decision in O’Hagan cracked down on securities traders and their ability to misappropriate information for their own personal financial gain. The Court’s decision in this case also empowers the SEC to go after securities fraud: the Court ruled that the SEC has the right to “define and prescribe means reasonably designed to prevent fraudulent...acts...in connection with any tender offer.” [16] O’Hagan was a solid win for regulatory agencies to be able to hold fraudulent securities traders accountable. Almost a decade later, the Rehnquist Court remained firm in its position when deciding a foreign tax fraud case. In Pasquantino V. United States, the Court examined a plot to defraud a foreign government of tax revenue, and the Court held that since “the plain terms of §1343 criminalize such a scheme”––despite not typically enforcing foreign tax laws––the case may be tried under U.S. fraud statutes. [17] Once again, the Court decided to stand with prosecutors in this case and hold financial fraudsters accountable––even when the fraud concerns a foreign government and not the U.S. government.
Over the course of its terms, the Roberts Court has distinguished itself as the lenient bench when it comes to white-collar crimes. Its predecessor, the Rehnquist Court, differed greatly in its decisions and overall outlook. The Rehnquist Court clearly issued rulings which broadened the scope of fraud statutes and prosecutorial approaches. However, the Roberts Court has differentiated itself on this matter as a result of its overall abandonment of stare decisis. It is because the Roberts Court fails to uphold precedent that it has become the bench known for leniency towards white-collar criminals. While some may argue that the Court’s decisions are not necessarily lenient, but rather an attempt to prevent overreach by executive and regulatory agencies, these decisions in fact do demonstrate leniency towards the conduct of white-collar criminals. The individuals committing various white-collar crimes may be shielded from prosecution under the fullest extent of the law if prosecutors fail to set up their cases in a seemingly flawless manner––whether it be jury instructions or proving an act of bribery was an “official act.” Ultimately, this combination of judicial activism and leniency will have detrimental, long-lasting consequences for bringing white-collar criminals to justice, as already evidenced by difficulties prosecuting former elected officials. Prosecutors will now have to go above and beyond in adhering to new rulings from the Roberts Court. These changes in the status quo will hinder prosecutorial and regulatory ability to hold these individuals accountable.
Edited by Cara Wreen
[1] Snyder v. United States, 603 U.S. 2 (2024)
[2] Securities Exchange Commission v. Jarkesy, 603 U.S. 2 (2024)
[3] Geoffrey R. Stone, “The Roberts Court, Stare Decisis, and the Future of Constitutional Law,” University of Chicago Law School Chicago Unbound, 2008
[4] Stone, “The Roberts Court, Stare Decisis, and the Future of Constitutional Law”
[5] McDonnell v. United States, 579 U.S. 1 (2016)
[6] McDonnell v. United States, 579 U.S. 8 (2016)
[7] McDonnell v. United States, 579 U.S. 8 (2016)
[8] McDonnell v. United States, 579 U.S. 22 (2016)
[9] McDonnell v. United States, 579 U.S. 2 (2016)
[10] Kenichi Serino, “The Supreme Court ruling that made it harder to convict public officials like Menendez for corruption,” PBS News, 2024, https://www.pbs.org/newshour/politics/sen-bob-menendez-is-on-trial-for-corruption-why-his-trial-and-that-of-other-public-officials-may-not-end-in-jail-time
[11] Kelly v. United States, 590 U.S. 1 (2020)
[12] Kelly v. United States, 590 U.S. 13 (2020)
[13] Percoco v. United States, 598 U.S. 2 (2023)
[14] United States v. O’Hagan, 521 U. S. 642 (1997)
[15] United States v. O’Hagan, 521 U. S. 643 (1997)
[16] United States v. O’Hagan, 521 U. S. 644 (1997)
[17] Pasquantino v. United States, 544 U. S. 1 (2005)