This post from mid-May noted former Merrill Lynch executive Daniel Bayly‘s motion to the Fifth Circuit Court of Appeals requesting that he remain free during the appeal of his conviction and sentence in the Enron-related Nigerian Barge case. Subsequently, the Fifth Circuit summarily denied Mr. Bayly’s motion in a one page order.
However, the May 31st Anderson decision of the U.S. Supreme Court has prompted the Bayly appellate team to file this compelling motion requesting that the Fifth Circuit reconsider its denial of Mr. Bayly’s motion for release pending appeal. The money section:

The fundamental errors in this case begin with the government’s novel and unduly creative use of an “honest services” thoery in connection with the wire fraud statute. See 18 U.S.C. 1343, 1346. As Bayly’s motion for release shows, the honest services charge in this case permitted a criminal conviction for conduct — the accelerated booking of gain — that was undertaken primarily on behalf of the alleged victim (Enron), which knew every aspect of the transaction, and not for the self-interest of the alleged conspirators (see Bayly motion at 16-20). No court ever has sanctioned such a broad application of the honset services statute — especially where, as here, no bribe or gratuity was provided to, nor were there any undisclosed conflicts of interest as to, the employees of the purtative victim (Id. at 19-20). As in Andersen, the Enron Task Force in this case secured a conviction through application of an entirely unprecedented theory in a hotly-contested area of the law. . . The government does not dispute that, if our view of the limits of Section 1346 prevails, all three counts of conviction must be set aside. (footnote omitted).

The motion goes on to address other grounds for reversal of Mr. Bayly’s conviction, particularly the trial court’s granting of the Enron Task Force’s objection to a jury instruction that the defense proposed on a key defense theory in the case — i.e., that the Enron promise to Merrill Lynch to arrange a sale of the interest in the barges within six months to a third party — as opposed to an Enron promise to repurchase the interest within that time frame — did not undermine Enron’s accounting of the transaction and, thus, did not constitute the basis of a crime. Inasmuch as Enron ultimately arranged for such a sale to a third party as opposed to buying back the interest in the barges from Merrill itself, the lack of a jury instruction on that issue appears to be another solid basis for reversal of Mr. Bayly’s conviction.
But read the entire motion, which is only eight pages. It is a masterful example of appellate advocacy and brevity that persuasively outlines the major injustice of the convictions of the Merrill Lynch executives in the Nigerian Barge case. Mr. Bayly worked on this relatively small transaction for less than two hours in the ordinary course of one of his business days. He is now facing two and a half years away from his family during the autumn of his life because of the government’s broad application of criminal statutes to cover what is not even clearly questionable business conduct, much less clear criminal conduct.
The Fifth Circuit’s Anderson decision is not a highlight of that body’s judicial decision-making, as the U.S. Supreme Court’s decision in the case reflects. Here’s hoping that the Fifth Circuit sits up and takes notice before yet another grave injustice takes place in the case of Daniel Bayly.