Federal Criminal Lawyer for Campaign, Corruption, Fraud and Election Law

Public Corruption and Fraud

Public corruption in any form is the misuse of a public or government office for private gain. It is a basic tenet that government is not to be used for personal enrichment and the extending of benefits to the corrupt.

A democracy is effective only if the people have faith in those who govern, and that faith is bound to be shattered when high officials and their appointees engage in activities which arouse suspicions of malfeasance and corruption.

– United States v. Miss. Valley Generating Co. [1961]

Several statutes, mostly codified in Title 18 of the United States Code, provide for federal prosecution of public corruption in the United States. Federal prosecutions of public corruption under the Hobbs Act (enacted 1934), the mail and wire fraud statutes (enacted 1872), including the honest services fraud provision, the Travel Act (enacted 1961), and the Racketeer Influenced and Corrupt Organizations Act (RICO) (enacted 1970) began in the 1970s. “Although none of these statutes was enacted in order to prosecute official corruption, each has been interpreted to provide a means to do so.” The federal official bribery and gratuity statute, 18 U.S.C. § 201 (enacted 1962), the Foreign Corrupt Practices Act (FCPA) (enacted 1977), and the federal program bribery statute, 18 U.S.C. § 666 (enacted 1984) directly address public corruption.


Federal Campaign Law Penalty Table

Federal briberyFederal gratuityProgram briberyHonest services mail and wire fraudHobbs Act (fear)Hobbs Act (under color of official right)Travel Act
WhoFederal officialsFederal officialsFederal funding exceeding $10,000Mail or interstate wire communicationInterstate commerceInterstate commerceInterstate travel, mail, or interstate commerce
IntentQuid pro quo(QPQ) and nexusNexusEither (1) QPQ and intent to be influenced, or (2) nexusBribes or kickbacksIntent hurt the victim in economic terms and victim fearsQPQQPQ
ActFuture official act, fraud on the United States, or violation of dutyPast or future official actFuture official transaction exceeding $5,000Official act or violation of dutyAnyAnyAny
Prison Penalty (years)152102020205

Mail and Wire Fraud – 18 USC §§1341 (Mail), 1343 (Wire)

With respect to the statutes’ use in public corruption cases, a fraudulent scheme includes “a scheme . . . to deprive another of the intangible right of honest services.” (18 USC §1346). It is this definition which makes the statutes a flexible tool for prosecutors to prosecute public corruption at the state or local level.

A public official may be charged with a separate count for each mailing or wiring in furtherance of the charged scheme, with a maximum sentence of up to 20 years imprisonment for each violation of the Mail and Wire Fraud statutes.

For mail fraud, the prosecutor must prove only (a) a scheme to defraud, and (b) the mailing of a letter for the purpose of executing the scheme; and for wire fraud, the prosecutor must prove only (a) a scheme to defraud, and (b) the use of interstate wire communications in furtherance of the scheme. For purposes of the statute, the requisite mailing can be done through the postal service or a private carrier, and the requisite wire communications include radio transmissions, telephone calls and e-mails. Significantly, the requisite mailing or wiring need not itself contain any fraudulent information and may be entirely innocent. However, they must be shown to be at least a “step” in the scheme.

A typical “honest services” corruption case arises in two situations. First, “bribery” where the public official was paid for a particular decision or action, which includes a pattern of gratuities over a period of time to obtain favorable action. Secondly, “failure to disclose” a conflict of interest, resulting in personal enrichment, which encompasses circumstances where the official has an express or implied duty to inform others of the official’s personal relationship to the matter at hand even though no public harm occurred or there was no misuse of office. As to the “conflict of interest” situation, the basis for its condemnation is that “[w]hen an official fails to disclose a personal interest in a matter over which he has decision-making power, the public is deprived of its right either to disinterested decision making itself or, as the case may be, to full disclosure as to the official’s potential motivation behind an official act.” Notably, a person who holds no public office but participates substantially in the operation of government, e.g., a political party leader, may be subject to prosecution under an “honest services” theory.


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Bribery of Public Officials – 18 USC §201

18 USC §201 prohibits the giving of a “thing of value”, the definition of which is very broad, encompassing anything that has a subjective value to the recipient. The crime of bribery is completed when there is shown that something of value was promised or offered, not that a bribe actually be paid. This provision criminalizes both the offer and receipt of bribes and illegal gratuities by federal officials. It applies to every federal employee irrespective of whether they occupy a supervisory position or exercise discretionary authority.

The first offense described in the code prohibits the giving or accepting of anything of value to or by a public official, if the thing is given “with intent to influence” an official act, or if it is received by the official “in return for being influenced.”

The second offense described in the code concerns what are commonly known as “gratuities,” although that word does not appear anywhere in the statute. Section 201(c) prohibits that same public official from accepting the same thing of value, if he does so “for or because of” any official act, and prohibits anyone from giving any such thing to him for such a reason.

The distinguishing feature of each crime is its intent element. Bribery requires intent ‘to influence’ an official act or ‘to be influenced’ in an official act, while illegal gratuity requires only that the gratuity is given or accepted ‘for or because of’ an official act. In other words, for bribery, there must be a quid pro quo a specific intent to give or receive something of value in exchange for an official act. An illegal gratuity, on the other hand, may constitute merely a reward for some future act that the public official will take (and may already have determined to take), or for a past act that he has already taken.”

The two offenses differ in several respects. The most important of these differences concerns how close a connection there is between the giving (or receiving) of the thing of value, on the one hand, and the doing of the official act, on the other. If the connection is causally direct – if money was given essentially to purchase or ensure an official act, as a “quid pro quo” then the crime is bribery. If the connection is looser – if money was given after the fact, as “thanks” for an act but not in exchange for it, or if it was given with a nonspecific intent to “curry favor” with the public official to whom it was given -then it is a gratuity. The distinction is sometimes hard to see, but the statute makes it critical: a § 201(b) “bribe” conviction is punishable by up to 15 years in prison, while a § 201(c) “gratuity” conviction permits only a maximum 2-year sentence. In addition, with a “bribe” the payment may go to anyone or to anything and may include campaign contributions, while with a “gratuity” the payment must inure to the personal benefit of the public official and cannot include campaign contributions.

Bribery law is highly complex, and a recent case has illustrated this issue with a hung jury verdict.

18 U.S. Code § 201 – Bribery of public officials and witnesses

(a)For the purpose of this section—

(1)

the term “public official” means Member of Congress, Delegate, or Resident Commissioner, either before or after such official has qualified, or an officer or employee or person acting for or on behalf of the United States, or any department, agency or branch of Government thereof, including the District of Columbia, in any official function, under or by authority of any such department, agency, or branch of Government, or a juror;

(2)

the term “person who has been selected to be a public official” means any person who has been nominated or appointed to be a public official, or has been officially informed that such person will be so nominated or appointed; and

(3)

the term “official act” means any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.

(b)Whoever—

(1)directly or indirectly, corruptly gives, offers or promises anything of value to any public official or person who has been selected to be a public official, or offers or promises any public official or any person who has been selected to be a public official to give anything of value to any other person or entity, with intent—

(A)

to influence any official act; or

(B)

to influence such public official or person who has been selected to be a public official to commit or aid in committing, or collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or

(C)

to induce such public official or such person who has been selected to be a public official to do or omit to do any act in violation of the lawful duty of such official or person;

(2)being a public official or person selected to be a public official, directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in return for:

(A)

being influenced in the performance of any official act;

(B)

being influenced to commit or aid in committing, or to collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or

(C)

being induced to do or omit to do any act in violation of the official duty of such official or person;

(3)

directly or indirectly, corruptly gives, offers, or promises anything of value to any person, or offers or promises such person to give anything of value to any other person or entity, with intent to influence the testimony under oath or affirmation of such first-mentioned person as a witness upon a trial, hearing, or other proceeding, before any court, any committee of either House or both Houses of Congress, or any agency, commission, or officer authorized by the laws of the United States to hear evidence or take testimony, or with intent to influence such person to absent himself therefrom;

(4)

directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity in return for being influenced in testimony under oath or affirmation as a witness upon any such trial, hearing, or other proceeding, or in return for absenting himself therefrom;shall be fined under this title or not more than three times the monetary equivalent of the thing of value, whichever is greater, or imprisoned for not more than fifteen years, or both, and may be disqualified from holding any office of honor, trust, or profit under the United States.

(c)Whoever—

(1)otherwise than as provided by law for the proper discharge of official duty—

(A)

directly or indirectly gives, offers, or promises anything of value to any public official, former public official, or person selected to be a public official, for or because of any official act performed or to be performed by such public official, former public official, or person selected to be a public official; or

(B)

being a public official, former public official, or person selected to be a public official, otherwise than as provided by law for the proper discharge of official duty, directly or indirectly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of any official act performed or to be performed by such official or person;

(2)

directly or indirectly, gives, offers, or promises anything of value to any person, for or because of the testimony under oath or affirmation given or to be given by such person as a witness upon a trial, hearing, or other proceeding, before any court, any committee of either House or both Houses of Congress, or any agency, commission, or officer authorized by the laws of the United States to hear evidence or take testimony, or for or because of such person’s absence therefrom;

(3)

directly or indirectly, demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of the testimony under oath or affirmation given or to be given by such person as a witness upon any such trial, hearing, or other proceeding, or for or because of such person’s absence therefrom;shall be fined under this title or imprisoned for not more than two years, or both.

(d)

Paragraphs (3) and (4) of subsection (b) and paragraphs (2) and (3) of subsection (c) shall not be construed to prohibit the payment or receipt of witness fees provided by law, or the payment, by the party upon whose behalf a witness is called and receipt by a witness, of the reasonable cost of travel and subsistence incurred and the reasonable value of time lost in attendance at any such trial, hearing, or proceeding, or in the case of expert witnesses, a reasonable fee for time spent in the preparation of such opinion, and in appearing and testifying.

(e)

The offenses and penalties prescribed in this section are separate from and in addition to those prescribed in sections 1503, 1504, and 1505 of this title.

 


18 U.S. Code § 666 – Theft or bribery concerning programs receiving Federal funds

18 USC §666 outlaws theft, fraud or bribery concerning programs receiving federal funds.

18 U.S. Code § 666 – Theft or bribery concerning programs receiving Federal funds

(a)Whoever, if the circumstance described in subsection (b) of this section exists—

(1)being an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof—

(A)embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that—

(i)

is valued at $5,000 or more, and

(ii)

is owned by, or is under the care, custody, or control of such organization, government, or agency; or

(B)

corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving any thing of value of $5,000 or more; or

(2)

corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State, local or Indian tribal government, or any agency thereof, in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more;
shall be fined under this title, imprisoned not more than 10 years, or both.

(b)

The circumstance referred to in subsection (a) of this section is that the organization, government, or agency receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance.

(c)

This section does not apply to bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business.

(d)As used in this section—

(1)

the term “agent” means a person authorized to act on behalf of another person or a government and, in the case of an organization or government, includes a servant or employee, and a partner, director, officer, manager, and representative;

(2)

the term “government agency” means a subdivision of the executive, legislative, judicial, or other branch of government, including a department, independent establishment, commission, administration, authority, board, and bureau, and a corporation or other legal entity established, and subject to control, by a government or governments for the execution of a governmental or intergovernmental program;

(3)

the term “local” means of or pertaining to a political subdivision within a State;

(4)

the term “State” includes a State of the United States, the District of Columbia, and any commonwealth, territory, or possession of the United States; and

(5)

the term “in any one-year period” means a continuous period that commences no earlier than twelve months before the commission of the offense or that ends no later than twelve months after the commission of the offense. Such period may include time both before and after the commission of the offense.

 

ISSUE 1: The broad language of 18 U.S.C. § 666(a)(1)(A) and its legislative history raise a significant issue regarding the scope of the statute. The primary issue is whether the statute prohibits only the illegal taking of Federal program funds or property acquired with Federal funds or whether the statute prohibits the illegal taking of any funds or property of an organization or of a state or local government agency that receives Federal assistance. An example of the latter situation would be the theft by an employee of a Federally funded organization of a $6,000 automobile acquired independently of the Federal funds. While an 18 U.S.C. § 641 prosecution could not be maintained in the hypothetical described above, case law now suggests that the hypothetical would violate 18 U.S.C. § 666.

In some cases, local prosecutors will have both a strong incentive and the ability to prosecute crimes involving local programs receiving Federal funding. The advisability of a Federal prosecution under 18 U.S.C. §  666(a)(1)(A) should be carefully weighed against the likelihood that State prosecution will be sufficient to protect Federal interests.

ISSUE 2: Another issue within the statute centers on the type of Federal benefit and the manner in which that benefit triggers the statute’s protection. Section 666(b) requires that the organization, government or agency must have received, in any one year period, “benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance.” This provision does not distinguish between cash and non-cash assistance nor does it explicitly state when an organization “receives” Federal assistance. Generally, prosecution should not be instituted until the agency has actually received cash benefits, in hand, as opposed to the mere appropriation or authorization of cash benefits. Similarly, in cases involving non-cash benefits, i.e., contracts, guarantees or insurance, the agency must have received a fully executed and enforceable instrument that grants the non-cash assistance in order to obtain the statute’s protection.ISSUE 3:A third issue is the very broad language of the statute. It seemingly permits the prosecution of any state agent, regardless of whether his or her specific agency received the necessary Federal assistance, as long as the state received the required Federal assistance. This broad reading, while statutorily permissible, would Federalize many state offenses in which the Federal interest is slight or nonexistent.

A narrower reading, consistent with the stated congressional intent, requires that the agent must have illegally obtained cash or property from the agency that received the necessary Federal assistance. This narrower reading is strongly suggested in order to ensure that significant Federal interests are protected and the clear intent of Congress is followed.

(4) A fourth issue concerning the scope of the statute is the measurement of the one-year period within which the necessary $10,000 in Federal assistance must be received. The one-year period should be measured from the date of the offense. If the protected organization received the necessary $10,000 in Federal assistance within the 365 days immediately preceding the offense (including the day of the offense), then Federal jurisdiction is established. If the necessary Federal assistance had not been received in that one-year period, then no Federal jurisdiction exists.


Election Fraud

Election fraud usually involves corruption of one of three processes: the obtaining and marking of ballots, the counting and certification of election results, or the registration of voters.


Campaign Financing Crimes – Federal Election Campaign Act of 1971 (FECA), 2 U.S.C. §§ 431- 455

FECA applies to virtually all financial transactions that impact upon, directly or indirectly, the election of candidates for federal office, that is, candidates for President or Vice President or for the United States Senate or House of Representatives. Also as amended by BCRA, FECA now reaches a wide range of communications aimed at influencing the public with respect to issues that are closely identified with federal candidates, referred to in the law as “electioneering communications.”

FECA contains its own criminal sanctions, which in turn provide that, to be a crime, a FECA violation must have been committed knowingly and willfully and, except for campaign misrepresentations and certain coerced contributions, must have involved at least $2,000 in a calendar year. 2 U.S.C. § 437g(d).

FECA violations that result in false information being provided to the FEC may present violations of 18 U.S.C. § 371 (conspiracy to disrupt and impede a federal agency), 18 U.S.C. § 1001 (false statements within the jurisdiction of a federal agency), or 18 U.S.C. § 1505 (obstruction of agency proceedings).


US Constitutional Provisions Against Corruption

Constitution permits impeachment of any officer of the United States, including the President and Vice President, for “Treason, Bribery, or other high crimes and Misdemeanors.” (U.S. Const., art. II, §4).

It also prohibits anyone holding “any Office of Profit or Trust . . . . without the consent of the Congress, [from accepting] any present, Emolument Office, or Title of any kind whatever, from any King, Prince, or foreign State.” (U.S. Const., art. I, §9, cl. 8).

Members of Congress are prohibited from taking any public office created during their tenure or any public office whose compensation has been increased during their tenure. (U.S. Const., art. I, §6, cl. 2).

The Constitution’s Appropriations Clause requires authorization from Congress before any funds could be spent by a federal officer. (U.S. Const., art. I, §9, cl. 7).

 


Citations:

American Bar

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