A federal appeals court on Wednesday overturned, as was expected, the corruption conviction of Joseph L. Bruno, the upstate Republican who was once one of the most powerful men in New York State government.

But the three-judge court rejected Mr. Bruno’s effort to avoid a new trial on charges that he committed fraud by taking bribes or kickbacks totaling at least $240,000 from a businessman seeking his help in the Legislature. Mr. Bruno, who had been the Republican majority leader in the State Senate, resigned in 2008 while he was under investigation.

Federal prosecutors conceded during his appeal that his 2009 conviction should be overturned because of a ruling last year by the United States Supreme Court that undermined the government’s legal claims against him.

But the federal prosecutors in Albany have long said that they planned to retry Mr. Bruno, and they said Wednesday that they would seek a new indictment. In its unanimous ruling, a panel of the United States Court of Appeals for the Second Circuit, in New York, rebuffed Mr. Bruno’s claim that a new trial would violate his right to avoid double jeopardy.

In unvarnished language, the panel said the prosecutors had presented evidence from which a new jury could conclude that Mr. Bruno violated a federal law that makes it a crime to deprive people of “honest services.”

“The government’s evidence,” the ruling said, “would permit a reasonable jury to find that Bruno performed virtually nonexistent consulting work for substantial payments” and “attempted to cover up” his dealings.

The court said a new jury could conclude, for example, that one $40,000 payment was “an illegitimate gift” disguised as payment for a racehorse, Christy’s Night Out, that was not worth much.

Mr. Bruno has insisted that the case reflected nothing more than the fact that New York’s legislators often have other jobs. But the case was widely seen as a test of whether the courts could limit what have often been seen as lax ethical standards in Albany. The case highlighted how Mr. Bruno mixed private and government duties and, the appeals court said, showed that he used state employees to help him collect “exorbitant consulting fees.”

Mr. Bruno was sentenced to two years, but he has remained free during the appeal.

In a statement on Wednesday, Mr. Bruno’s lawyer, Abbe David Lowell, asserted that he and Mr. Bruno were “delighted” that the court had agreed Mr. Bruno “was charged with something that was not a crime.”

But the statement also appeared to seek negotiations with federal prosecutors to try to bring an end to the case. “We hope,” the statement said, “the U.S. attorney will now let go of its pursuit of this 82-year-old man who has given so much to New York State and suffered for six years under wrongful charges.”

In their initial case, the federal prosecutors charged that Mr. Bruno committed fraud by failing to disclose conflicts of interest when he took money in exchange for help on government matters.

But in a decision on an unrelated case in 2010, the Supreme Court ruled that the federal honest-services law could not be used to prosecute defendants for hiding conflicts of interest. The court left open, however, the possibility of prosecution based on kickbacks and bribery.

The decision on Mr. Bruno’s case was written by Circuit Judge Barrington D. Parker, and was joined in by Circuit Judge Denny Chin and District Judge Edward R. Korman, who was sitting on the panel by designation.

(Source: NY Times)