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Over their long history, the mail and wire fraud statutes have gone through repeated periods of rapid expansion and contraction. The 1970s saw the flowering of the "intangible rights doctrine," an exotic flower that quickly overgrew the legal landscape in the manner of the kudzu vine until by the mid- 1980s few ethical or fiduciary breaches seemed beyond its potential reach. That doctrine was radically pruned by the Supreme Court in 1987 in the McNally decision, which held that the federal mail and wire fraud statutes reached only those schemes that intentionally sought to deprive their victims of money or property, but not schemes seeking to deprive them merely of intangible rights. But McNally failed to drive a stake through the heart of the doctrine. Later that same year, the Court decided that the same statutes did protect victims from schemes to deprive them of intangible property rights. Then, in 1988 Congress seemingly restored the intangible rights doctrine to its previous full scope by enacting 18 U.S.C. § 1346, which broadly defined the critical term "scheme to defraud" (which appears in both the mail and wire fraud statutes) so that it expressly "includes a scheme or artifice to deprive another of the intangible right of honest services." Clearly intended to reverse McNally, this statute seemed to give congressional blessing to a body of law that, prior to McNally, had amounted in substance to a judicially created federal common law crime. For some, this re-enactment ended the debate and implied that federal courts now had the power to determine on an ad hoc basis when conduct so transgressed contemporary moral standards as to amount to a federal crime.

In truth, however, the ebb and flow in the scope of the federal fraud statutes did not stop with the passage of § 1346 in 1988. Rather, by a variety of techniques, federal courts have steadily chipped away at the expansive reach of § 1346. Contemporaneously, a majority of the Supreme Court (albeit a slim majority) has suggested that it intends to limit national authority in favor of enhanced state and local power. Most notably, in United States v. Lopez, for the first time in sixty years, the Court discovered that Congress had exceeded the constitutional limits on the scope of the Commerce Clause, which limits required the invalidation of the Gun-Free School Zones Act of 1990. In so doing, it noted that "under our federal system, the 'states possess primary authority for defining and enforcing the criminal law.’” Although the federal mail fraud statute rests on a different constitutional foundation from the Commerce Clause, a Court unwilling to permit Congress to protect school children from guns at the cost of invading the realm of state authority might also discover internal (and external) limits on the scope of Congress's authority under the postal power. Several recent commentators have made this argument, focusing particularly on the prevalence of the use of mail and wire fraud to prosecute state and local officials in public corruption and conflict of interest cases. From a "Neo-Federalist" or "dual sovereignty" perspective, the use of a federal statute to reshape the structure of state governance may be thought to upset the "healthy balance" that Lopez said it sought to maintain between the states and the federal government.


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