Percoco v. United States
The Supreme Court threw out the fraud conviction of a former top aide to New York's governor, ruling that the jury instructions used to convict him set a legal standard too vague to hold up.
The decision leaves federal prosecutors without a clear legal test for charging private citizens — as opposed to actual public officials — with depriving the public of honest government services.
How it got here: A federal district court in New York convicted Percoco; the Second Circuit affirmed; Percoco petitioned the Supreme Court to review whether the jury instructions were legally valid and the Court agreed to hear the case.
The Case in Depth
What happened
Joseph Percoco spent years as a top aide to New York Governor Andrew Cuomo. When he temporarily left government in 2014 to run the Governor's reelection campaign, he accepted $35,000 from a real-estate developer to pressure a state agency into dropping a requirement that the developer sign a labor agreement with local unions. Federal prosecutors charged him with depriving the public of its right to his "honest services" — even though he held no government position at the time of the scheme.
The question before the Court
Can a private political operative be prosecuted for depriving the public of "honest government services" based on his informal influence over state officials, even when he holds no government job?
The Court's answer
Partly — the Court overturned Percoco's conviction but stopped short of saying private citizens can never be charged with this kind of fraud. The jury instructions in this case asked whether Percoco "dominated and controlled" government business and had a "special relationship" with government officials — a standard the Court found too vague. That test could reach effective lobbyists, trusted political advisers, or anyone with strong informal influence, without any clear line telling ordinary people what conduct is actually prohibited.
At the same time, the Court acknowledged that a private person who formally agrees to act as an agent of the government — performing government functions on the government's behalf — can owe a duty of honest services to the public. The case was sent back to the lower courts, but the Court did not specify what legal standard should replace the one it struck down.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Political consultants, former officials, and others who maintain informal influence over government cannot be prosecuted under the sprawling "dominate and control" theory rejected here. Federal prosecutors must find a clearer, narrower standard before charging private citizens with honest-services fraud, and Congress may need to rewrite the statute to supply that clarity.
What changes now
The case returns to the lower courts for further proceedings. On remand, courts will need to determine whether Percoco's conviction can be sustained under a legally valid standard — and neither of the Government's proposed alternative theories was endorsed by the Supreme Court. The ruling does not define what the correct test is, leaving that question for future cases or potential Congressional action revising the statute.
What this does not decide
The Court does not define the correct legal standard for when a private citizen owes the public a duty of honest services. It also takes no position on whether Percoco's other convictions should be reversed due to the spillover effect of the flawed jury instructions, and expresses no view on the viability of the Government's theory that a person selected for future government work owes such a duty.
Concurrences and dissents
Concurrence in part — Justice Jackson
Justice Jackson joined all of the Court's opinion except Part II-C-2, which analyzes the Government's harmless-error arguments and its two proposed alternative legal theories for when a duty of honest services attaches. She agreed with the core holding that the Margiotta-based jury instructions were too vague, but did not join the portion of the opinion evaluating whether those errors might have been harmless under either of the Government's newly offered tests.
Concurrence — Justice Gorsuch
Justice Gorsuch agreed the jury instructions were too vague but argued the problem is far deeper: the honest-services fraud statute (§ 1346) is itself irredeemably vague, and no set of jury instructions could cure that. He traced decades of lower courts and the Supreme Court struggling to define the concept, argued that Skilling's attempt to rescue the statute through judicial narrowing was invention rather than interpretation, and called on Congress to rewrite § 1346 with the clarity a criminal law requires. Until then, he wrote, courts should stop trying to fill in what Congress left undefined.
How the Court got there
The legal reasoning, step by step
- The honest-services wire fraud statute (18 U.S.C. § 1346) makes it a crime to deprive someone of their 'intangible right of honest services.' In Skilling v. United States (2010), the Court held that this phrase must be defined with the clarity required of criminal laws — limited to its 'core' pre-1987 meaning of bribery and kickback schemes — and cannot be stretched to cover any loosely related concept a lower court once recognized.
- The trial court used a test drawn from a 1982 Second Circuit ruling, Margiotta, which held that a private party who 'dominated government' owed the public a duty of honest services. The jury was instructed that if Percoco 'dominated and controlled any governmental business' and government workers 'actually relied on him because of a special relationship he had with the government,' he could be convicted of honest-services fraud.
- The Court rejected the absolute rule that a private citizen can never owe the public a duty of honest services. Under basic agency law — the legal rules governing when one person acts officially on behalf of another — a private individual who formally agrees to act as a government agent takes on a fiduciary duty (a legal obligation of loyalty and honesty) to the government and the public it serves.
- Testing the Margiotta-based instructions against Skilling's clarity requirement, the Court found them too vague. The instructions implied the public holds a right to honest services from any private person whose informal clout exceeds some unspecified threshold — a standard that could sweep in effective lobbyists, longtime political advisers, or respected former officials, with no limiting principle telling anyone in advance what behavior is prohibited.
- The Government argued the flawed instructions were harmless because the facts supported conviction under two alternative tests: (1) a person who has been selected for future government work owes a duty of honest services, or (2) a person who exercises government functions with the approval of government officials does too. The Court rejected this harmless-error argument because neither alternative theory was given to the jury, both differed substantially from the instructions actually used, and the Second Circuit had not affirmed on either ground.
Doctrinal impact
Cases affected by this decision
Reaffirms Skilling v. United States (561 U. S. 358)
The Court builds directly on Skilling's rule that § 1346 covers only the core of honest-services law and must be defined with criminal-law clarity.
Distinguishes McNally v. United States (483 U. S. 350)
Discussed as historical background showing Congress responded to McNally by enacting § 1346, not disturbed by this ruling.