Percoco v. United States
The Supreme Court reversed the federal corruption conviction of a former top aide to New York's governor, ruling that the legal test used at his trial — asking whether he 'dominated and controlled' government and had a 'special relationship' with it — was too vague to form the basis of a criminal conviction.
The decision limits how federal prosecutors can use the honest-services fraud law against private individuals who wield informal influence over government, without holding the formal title of a government employee.
“Margiotta's standard is too vague. From time immemorial, there have been éminence grises, individuals who lacked any formal government position but nevertheless exercised very strong infuence over government decisions.”
The majority explaining why the 'dominated and controlled' test for charging private individuals with honest-services fraud is unconstitutionally vague.
How it got here: A federal district court in New York convicted Percoco and sentenced him to 72 months; the Second Circuit affirmed; Percoco asked the Supreme Court to step in and it agreed to hear the case.
The Case in Depth
What happened
Joseph Percoco spent years as a senior aide to New York Governor Andrew Cuomo but took an eight-month break from government in 2014 to manage Cuomo's reelection campaign. During that break he accepted $35,000 from a real-estate developer to pressure a state agency into dropping a requirement that was blocking the developer from receiving state funding. Federal prosecutors charged him with honest-services wire fraud — a law making it a crime to deprive the public of a government official's uncorrupted service.
The question before the Court
Can a private citizen who temporarily leaves government to run a political campaign be convicted of depriving the public of its right to "honest services" based on how much informal influence he wielded over government decisions?
The Court's answer
No — the jury instructions used to convict Percoco were legally flawed. The trial court told the jury to apply a test drawn from a 1982 Second Circuit decision, asking whether Percoco had "dominated and controlled" government business and whether government employees "relied" on him due to a "special relationship." The Supreme Court held that standard was unconstitutionally vague — it could sweep in well-connected lobbyists and trusted political advisers without giving ordinary people fair warning of what conduct is actually prohibited.
The Court did not rule that a private citizen can never be convicted of honest-services fraud. People who are genuinely acting as agents of the government — formally delegated authority to perform government functions — can owe a duty of honest services to the public. But the loose "domination and control" test from the older Margiotta framework does not meet the required standard of legal clarity. The case was sent back to the lower courts for further proceedings.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Prosecutors who want to charge a private individual — a campaign manager, lobbyist, or political consultant with close government ties — with honest-services fraud will now need a more precise legal theory than the "domination and control" standard struck down here. People who informally influence government have clearer protection from this type of federal corruption charge, though the Court left open when such charges can validly proceed.
What changes now
The case goes back to the lower federal courts for further proceedings. The Court did not decide whether Percoco could be retried under a corrected honest-services theory, nor did it resolve what the correct test should be for private individuals in similar situations. The Court also expressly declined to address Percoco's argument that reversal of this count should undo his other convictions. The precise boundaries of when a private person owes the public a duty of honest services remain legally unsettled.
What this does not decide
The Court did not decide what test should replace Margiotta, nor whether Percoco could be retried under either of the government's proposed alternative theories — that he had been "selected" for future government service, or that he was exercising government functions with officials' acquiescence. The ruling does not address honest-services charges against actual government employees.
Concurrences and dissents
Concurrence in part — Justice Jackson
Justice Jackson joined all of the majority opinion except Part II-C-2, which addressed the government's harmless-error arguments and its two proposed alternative theories for finding a private person owes a duty of honest services. She did not file a separate written opinion explaining her reasons for not joining that section.
Concurrence — Justice Gorsuch
“Congress cannot give the Judiciary uncut marble with instructions to chip away all that does not resemble David.”Justice Gorsuch arguing that Congress, not courts, must write the boundaries of the honest-services fraud law.
Justice Gorsuch agreed the conviction should be reversed but argued the problem runs deeper than a vague jury instruction. In his view, § 1346 itself is irreparably vague — no set of instructions could fix it — because no one, even after decades of litigation, can say what fiduciary relationships give rise to a duty of honest services. He argued that Congress, not the courts, must rewrite the law to provide fair notice, and that the Court should stop effectively inventing the statute's meaning one case at a time.
How the Court got there
The legal reasoning, step by step
- The honest-services fraud law, 18 U.S.C. § 1346, makes it a crime to run a scheme depriving someone of the 'intangible right of honest services.' The Court started with its earlier decision in Skilling v. United States (2010), which had saved § 1346 from being struck down as unconstitutionally vague by narrowing it to the 'core' of prior case law — bribery and kickback schemes. Skilling's lesson: § 1346 must be defined with the clarity typical of criminal statutes and cannot be stretched to reach every informal concept of 'honest services' that some lower court once recognized.
- The Court rejected Percoco's absolute argument that a private citizen can never be convicted of honest-services fraud. Under ordinary agency law, a private person who is actually delegated government authority and performs government functions becomes an agent of the government, and agents owe fiduciary duties to their principals. Percoco himself conceded at argument that individuals formally delegated authority to act on behalf of a public official do owe a duty of honest services.
- Having rejected the absolute rule, the Court turned to whether the specific test used at trial — drawn from the Second Circuit's 1982 Margiotta decision — correctly defined when a private person owes such a duty. The Margiotta test focused on whether a person 'dominated and controlled' government and whether officials 'relied' on the person because of a 'special relationship.' The Court held this standard was too vague, because it would potentially cover countless informal power brokers — longtime political advisers, well-connected lobbyists, respected predecessors — without telling people in advance what conduct crosses into criminal territory.
- The vagueness problem was measured against the due process standard from McDonnell v. United States (2016), which requires that a criminal law define prohibited conduct with 'sufficient definiteness that ordinary people can understand what conduct is prohibited' and 'in a manner that does not encourage arbitrary and discriminatory enforcement.' The Margiotta test, which only kicked in when someone's 'clout exceeds some ill-defined threshold,' satisfied neither requirement.
- The government tried to save the conviction by arguing the jury instructions were harmless error, offering two alternative theories: that a duty arises (1) when a person has been selected for future government service, or (2) when a person exercises the functions of a government position with the acquiescence of relevant government personnel. The Court declined to uphold the conviction on either theory, because both differed substantially from the instructions the jury actually received, and the Second Circuit had not affirmed on either basis.
Doctrinal impact
Cases affected by this decision
Reaffirms Skilling v. United States (561 U.S. 358)
Reaffirmed as the governing framework limiting honest-services fraud to bribery and kickback schemes defined with legal clarity.