Earlier today, the Supreme Court threw out federal program and wire fraud convictions for two former public officials who conspired to induce traffic jams in Fort Lee, New Jersey as political retaliation in 2013. Bridget Anne Kelly and William Baroni were convicted of fraud charges in 2015 for their role in diverting lanes of traffic on the George Washington Bridge to “send [Fort Lee’s Mayor Mark Sokolich] a message” after Sokolich refused to support Governor Christie’s re-election campaign in 2013. Kelly was Deputy Chief of Staff to Christie and Baroni was Deputy Executive Director of the Port Authority of New York and New Jersey, having been Christie’s appointee. The two, along with David Wildstein, Baroni’s Chief of Staff who eventually pled guilty, agreed to conceal their true intention in diverting traffic lanes away from Fort Lee, instead reporting to the public that the lane change was part of a study to assess traffic patterns.
Justice Kagan, delivering the unanimous opinion for the Court in Kelly v. United States, explained that the federal program and wire fraud statutes prohibit deceptive schemes to deprive victims of money or property. Accordingly, for the Supreme Court to sustain their convictions, the Government must have demonstrated that the object of Baroni’s and Kelly’s deception was to obtain property. The Supreme Court rejected the Government’s arguments, finding that the object of their deception was not to obtain property, but to flex the government’s regulatory authority, albeit in a deceptive and abusive fashion. Despite the Government’s attempt to describe property rights in Baroni and Kelly’s “commandeer[ing]” of the bridge lanes and in their use of Port Authority-paid employees in their scheme, the Court was clear – this “was a quintessential exercise of regulatory power,” with any loss “only an incidental byproduct of the scheme.”
Citing precedent that sharply limits the reach of the property fraud statutes, the Court confirmed it would not convert general dishonesty by public officials into federal crimes. “The upshot is that federal fraud law leaves much public corruption to the States (or their electorates) to rectify,” Justice Kagan wrote.
And that suggestion to the States—to take up the mantle of public corruption—more than anything is the upshot of Kelly. For now, and likely continuing barring a significant pivot from the Court, the federal fraud statutes are meant to target deprivations of money or property or those involving bribes and kickbacks, not the more expansive theories, however attractive they are to prosecutors.