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Decrying his felony indictment, former State Senate Majority Leader Joseph Bruno accused law-enforcement officials last month of "contorting a federal statute" so they'd have something to show for years spent probing him.

Bruno faces prosecution on a federal statute that has been tested and challenged on and off for decades in U.S. courts - and still prompts controversy. It is known in short as "honest-services fraud."

Sure, you expect Bruno to say what he said, and you expect his lawyers to rebut the charges.

But as fights over federal authority go, this may be a good one to track.

The indictment says the state and its citizens "had an intangible right" to Bruno's "honest services" as an elected official - which the senator allegedly failed to fulfill in his private business dealings under a "scheme to defraud."

To support that, authorities cited Bruno's failure to disclose those dealings - involving, for example, funds controlled by union leaders with an interest in state legislation.

Lawyers for Bruno are moving to dismiss the charges. They call this case an unprecedented stretch of an already stretched statute. They insisted in phone interviews yesterday that the U.S. attorney is "federalizing" a state ethics violation, at worst a minor misdemeanor, into a major felony fraud case.

"It is scary," says Bruno attorney Abbe David Lowell, who's represented clients from President Bill Clinton to lobbyist Jack Abramoff. "It puts into jeopardy a lot of public officials who work on the outside of their public service." Defense lawyer E. Stewart Jones adds: "I am not aware of any other honest-services case that does not involve an underlying substantive crime."

Bruno was no more the reincarnation of Abraham Lincoln than his old antagonist Eliot Spitzer would sound like Mister Rogers in taped conversations with his hooker supplier.

Long before Spitzer's arrival, Bruno's murky blend of business and public dealings aroused suspicion. At the same time, "honest-services fraud" has struck some jurists as vague and elastic in its definition. In the 1980s, the courts even struck down the statute, but the Congress acted to revive it. Currently, it is central to several cases against big-time defendants:

Rod Blagojevich, recently forced out as Illinois governor, has been charged in an "honest services fraud" case in purportedly trying to sell the U.S. Senate seat vacated by President Barack Obama.

Queens Assemb. Anthony Seminerio was charged five months ago in connection with payments from a hospital and other entities to a "consulting" firm he created, allegedly using his public office to help them.

Former Queens Assemb. Brian McLaughlin, still due for sentencing on his guilty plea to a spree of white-collar thefts, was initially charged under the statute.

Federal prosecutors are considering "honest services fraud" as a weapon in their investigation of the Roman Catholic Archdiocese of Los Angeles for the possible cover-up of sex abuse by priests, according to The Wall Street Journal.

For prosecutors, some experts say, "honest services fraud" can be as handy a tool as the very flexible charge of obstruction may be for a police officer. Seasoned New York City attorney Joshua Dratel calls it "part of an overcriminalization arsenal that federal prosecutors have."

We may soon find this law facing new court tests alongside its defendants.

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