By Jonathan Stempel and Joseph Ax
NEW YORK (Reuters) - A federal appeals court on Thursday overturned the conviction of former New York state Assembly Speaker Sheldon Silver, citing a recent U.S. Supreme Court decision narrowing what kind of conduct can support corruption prosecutions.
But the 2nd U.S. Circuit Court of Appeals in Manhattan also said prosecutors had "sufficient" evidence to prove the honest services fraud, extortion and money laundering counts on which Silver was convicted in November 2015, and sentenced to 12 years in prison.
Acting U.S. Attorney Joon Kim in Manhattan said his office plans to retry Silver, 73, who has been free on bail.
"We look forward to presenting to another jury the evidence of decades-long corruption by one of the most powerful politicians in New York State history," Kim said.
Steven Molo and Joel Cohen, lawyers for Silver, said in a statement: "We are grateful the court saw it our way and reversed the conviction."
Silver, a Democrat, represented Manhattan's Lower East Side, and was Assembly speaker from 1994 to 2015.
Along with Governor Andrew Cuomo and former Senate Majority Leader Dean Skelos, he was one of the "three men in a room" with effective power to dictate New York legislative priorities.
Prosecutors accused Silver of collecting close to $4 million of illegal fees for awarding state grants to a top cancer researcher, and steering real estate developers to a friend's law firm and supporting their interests on rent legislation.
In June 2016, the Supreme Court overturned the corruption conviction of former Virginia Governor Bob McDonnell, saying routine political activities such as arranging meetings or reaching out to public officials did not qualify as "official acts."
In Thursday's decision, Circuit Judge Jose Cabranes said that ruling tainted the instructions that Silver's jury received from U.S. District Judge Valerie Caproni, through no fault of her own or prosecutors.
Cabranes said this made it unclear beyond a reasonable doubt that Silver would otherwise have been convicted, though "many would view the facts adduced at Silver's trial with distaste."
Kim said a retrial would likely provide "the justice that New Yorkers got upon Silver's conviction."
Skelos, a Republican, and his son Adam are awaiting the appeals court's decision on whether to overturn their own corruption convictions.
Silver's and Dean Skelos' convictions were among the biggest prosecutions by Kim's predecessor, Preet Bharara, who made fighting public corruption a priority.
"I expect Sheldon Silver to be retried and re-convicted," Bharara said in a tweet. "The evidence was strong."
The case is U.S. v. Silver, 2nd U.S. Circuit Court of Appeals, No. 16-1615.
(Reporting by Joseph Ax and Jonathan Stempel in New York; Additional reporting by Nate Raymond; Editing by Bernadette Baum and Steve Orlofsky)