945. McNally And Intangible Rights

In McNally v. United States, 483 U.S. 350 (1987), the Supreme Court held that the mail fraud statute does not reach "schemes to defraud citizens of their intangible rights to honest and impartial government" . . . and that the statute is "limited in scope to the protection of property rights." See Carpenter v. United States, 484 U.S. 19, 25 (1987) (quoting McNally and extending it to wire fraud statute); see also Evans v. United States, 504 U.S. 255, 292 (1992) ("[I]n McNally . . . we rejected the Government's contention that the federal mail fraud statute . . . protected the citizenry's 'intangible right' to good government . . . . ") (Thomas, J., dissenting).

In response to McNally, Congress passed Section 1346 of Title 18, United States Code, which provides that "For the purposes of this Chapter, the term 'scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services."

Section 1346, which became effective November 18, 1988, seemed to resolve the intangible rights issue. See Madeoy, 912 F.2d 1486, 1492 (D.C. Cir. 1990) ("McNally has been overruled by legislation."), cert. denied, 498 U.S. 1105 and 498 U.S. 1110 (1991); cf. United States v. Bush, 888 F.2d 1145, 1145-46 (7th Cir. 1989) (ex post facto concerns bar the application of section 1346 to pre-1988 conduct). In United States v. Brumley, 79 F.3d 1430, 1440 (5th Cir. 1996), petition for rehearing en banc pending, however, the court concluded that the wording of §  1346, "simply does not effect a change in the portion of the McNally opinion which held that the mail fraud statute does not reach 'schemes to defraud citizens of their intangible rights to honest and impartial government.'"

[cited in JM 9-43.100]