The US Department of Justice (DOJ) [official website] on Wednesday asked a federal judge to drop fraud and conspiracy charges against a former Merrill Lynch executive accused of taking part in the Enron [corporate website; JURIST news archive] Nigerian barge scam. James Brown was convicted [JURIST report], along with three other former Merrill Lynch executives in 2004, in the first criminal trial stemming from the Enron collapse. Brown and his co-defendants were convicted on charges of conspiracy and wire fraud relating to a deal that allowed Enron to sell shares [WSJ report] in Nigerian power-producing barges to Merrill Lynch, with the promise that Merrill Lynch's interests would be bought out within six months at a pre-determined profit. The US Court of Appeals for the Fifth Circuit [official website] reversed the convictions [opinion, PDF; JURIST report] in 2006 "on the legal ground that the government's theory of fraud relating to the deprivation of honest servicesone of three theories of fraud charged in the Indictmentis flawed." Brown's retrial was scheduled to begin next week, after the district judge denied [Bloomberg report] the government's request to postpone the proceedings. The government previously ended attempts to re-prosecute Brown's co-defendants on the charges. Brown is currently in the process of appealing his conviction on the charges of perjury and obstruction of justice to the US Supreme Court [official website; JURIST news archive].
One statute utilized by the government in the original convictions of the executives was the "honest service" doctrine [18 USC § 1346 text], which was recently limited in scope by the Supreme Court. In June, the court ruled [opinion, PDF; JURIST report] in Skilling v. United States [Cornell LII backgrounder; JURIST report] that the doctrine is not unconstitutionally vague under a limited construction. In its ruling, the court limited the honest services doctrine to the protection of intangible rights of honest service deprived through bribery and kickbacks. As a result of the ruling, the court vacated the conviction of former Enron CEO Jeffrey Skilling [JURIST news archive] under the statute because his misconduct did not fall under either category. The court also vacated the conviction of Canadian media mogul Conrad Black [JURIST news archive] and former Alaskan congressmen Bruce Weyhrauch who were also convicted under the doctrine.