Percoco v. United States
598 U.S. 319
SCOTUS2023Background:
- Joseph Percoco was Executive Deputy Secretary to NY Governor Andrew Cuomo (2011–2016) with an eight‑month 2014 hiatus to run the reelection campaign.
- While off the payroll he accepted $35,000 from developer Steven Aiello to assist with securing state support for a project that ESD conditioned on a Labor Peace Agreement.
- Percoco called a senior Empire State Development official days before returning to office and urged dropping the labor‑peace requirement; ESD reversed course the next day.
- He was indicted for, among other counts, conspiracy to commit honest‑services wire fraud (18 U.S.C. §§1343, 1346, 1349) covering a period that included time when he was not a formal public employee.
- The trial court instructed the jury under the Second Circuit’s Margiotta standard (private person may owe public a duty if he “dominated and controlled” governmental business and government actors relied on a “special relationship”); the jury convicted on the honest‑services conspiracy count and the Second Circuit affirmed.
- The Supreme Court granted certiorari and reversed: the Margiotta‑based jury instruction was impermissibly vague and not a correct statement of §1346 law, and the case was remanded.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a private citizen can be convicted under §1346 for acts while not a formal public official | Government: private persons can owe a duty in discrete circumstances (e.g., when selected to serve or when exercising government functions with acquiescence) | Percoco: a private citizen cannot be convicted for depriving the public of honest services when not an official | Court: rejected categorical bar—nonemployees can owe duties if they become government agents, but §1346 does not extend to all private persons |
| Whether the Margiotta test (dominate + special relationship) correctly identifies when a private person owes honest‑services duty | Government/2d Cir.: Margiotta supplies valid test for private‑person liability | Percoco: Margiotta is overbroad and vague | Court: Margiotta is too vague and cannot serve as the governing legal test |
| Whether the Margiotta‑based jury instructions were proper or harmless error | Government: any imprecision was harmless; alternative theories justify conviction (selected to serve; acquiescence) | Percoco: instructions allowed conviction on an impermissible, vague theory | Court: instructions were erroneous and not the same as the Government’s proffered theories; reversal and remand required |
| Proper scope of §1346 after Skilling—how narrowly must honest‑services fraud be defined | Government: §1346 reinstates broader pre‑McNally theories (including Margiotta) | Percoco: §1346 should not sweep in private influencers absent clear duty | Court: Skilling limits §1346 to a defined core; it cannot be stretched to adopt Margiotta’s indeterminate reach |
Key Cases Cited
- Skilling v. United States, 561 U.S. 358 (2010) (limits §1346 to core honest‑services fraud—primarily schemes involving bribes or kickbacks)
- United States v. Margiotta, 688 F.2d 108 (2d Cir. 1982) (held a private person who “dominate[s]” government could owe a public fiduciary duty; test at issue in this case)
- McNally v. United States, 483 U.S. 350 (1987) (held mail fraud is limited to protection of property rights, prompting Congress to enact §1346)
- McDonnell v. United States, 579 U.S. 550 (2016) (emphasizes need for definiteness in criminal definitions of official‑action and honest‑services concepts)
- United States v. Rybicki, 354 F.3d 124 (2d Cir. 2003) (interpreted the scope of “the intangible right of honest services,” cited in Skilling)