Policy

POLICY

Public Corruption

Reforming Our Criminal Law to Enable Effective Prosecution of Public Corruption

The scandals that continue to plague both federal and state governments have eroded public confidence in our country's political leadership.  Yet while public anxiety has increased, the courts have been stripping away the tools prosecutors have successfully employed to target public corruption, and are putting at risk the ability to effectively combat this malfeasance.

Former Representatives William J. Jefferson (D-LA), Randy "Duke" Cunningham (R-CA), and Rick Renzi (R-AZ), former Senator Ted Stevens (R-AK), former Illinois Governor Rod Blagojevich (D), and disgraced former lobbyist Jack Abramoff are just a few of those charged and/or convicted under public corruption laws.

Corruption takes various forms, from classic quid pro quo bribery to gifts given to curry favor. Consequently, the law must be expansive and flexible to root out malfeasance no matter the form. Yet over the past several years, courts have handed down a number of decisions hampering the ability of prosecutors to root out corruption. Without legislative action by Congress, public corruption will further victimize the public by chipping away at good governance and the foundations of our democracy.

The need to shore up prosecutorial tools has been made all the more urgent as a result of a 2010 Supreme Court decision eviscerating the "honest services" fraud statute (see below).

Congress can and must act quickly to ensure the Department of Justice has all of the tools it needs to aggressively tamp down on corruption and restore public confidence that politicians are not above the law.

 

Whittling Away the Illegal Gratuities Statute

At one time, the illegal gratuities statute allowed prosecutors to target officials who had accepted gifts or favors "for or because" of official acts (18 U.S.C. § 201(c)(1)).  Decisions in two cases, one in the Supreme Court and the other in the D.C. Circuit Court of Appeals, have effectively rendered the statute ineffective.  United States v. Sun-Diamond Growers, 526 U.S. 398 (1999) and United States v. Valdes, 475 F.3d 1319 (D.C. Cir. 2007) have created an unrealistically high bar for prosecution of public officials in cases where the explicit quid pro quo required for a bribery conviction does not exist. 

What distinguishes an illegal gratuity from a bribe turns on the mens rea requirement.  Congress intended the illegal gratuities statute to prohibit any gifts given or received "for or because of any official act performed or to be performed."  A bribe, conversely, is an act whereby the giver intends "to influence an official act," and the public official intends "to be influenced" in an official act. 

Put another way, the illegal gratuities statutes was intended to proscribe behavior that did not rise to the level of a bribe, but nonetheless gave the appearance of impropriety.

In Sun-Diamond, the Supreme Court ruled that the illegal gratuities statute requires that a specific official act be identified and proved in connection to a gift to a public official.  In other words, the government must provide another element — a link — between the gratuity and the official act.  Prior to this decision, the mere authority to act on pending matters in favor of the donor was generally held to be sufficient.  The addition of this new element has made the crime of illegal gratuities virtually indistinguishable from bribery. 

The lower court in Sun-Diamond had it right: "the Government must [only] show that Defendant acted simply because of [the individual's] official position."  Congress must amend the law to make clear that illegal gratuities are money or gifts given to a public official not only for "official acts," but also "for or because of" an official's position.

United States v. Valdes further weakened the illegal gratuities statute.  Mr. Valdes was a D.C. Metropolitan Police detective convicted of receiving illegal cash gratuities in exchange for disclosing automobile registration and warrant information from the law enforcement database to an undercover FBI informant posing as a judge.  In Valdes, the court ruled that the defendant's actions were not covered by the term "official act" in the illegal gratuities statute because his actions were not part of a pending matter and not part of his assigned official duties.  While the court may have been technically correct in assessing Mr. Valdes' job description, Congress intended the statute to reach precisely this sort of behavior.  Under the Valdes court's theory, if a public official has no obligation to act on a particular matter, providing that official with a gratuity for doing so is perfectly legal.  Congress should overturn this cramped construction of "official act."

 

The Supreme Court Eviscerates the "Honest Services" Statute

Courts have long interpreted the mail fraud and wire fraud statutes (18 U.S.C. §§ 1341-1351) as criminalizing not only schemes to defraud victims of money and property, but also schemes to defraud victims of intangible rights such as "honest services."

The statute, codified at 18 U.S.C. § 1346, provided that a "scheme or artifice to defraud" includes a "scheme or artifice to deprive another of the intangible right of honest services."  Critics of     § 1346 suggest that honest services fraud is a made-up crime with no real foundation.  Courts, however, have found violations when there has been a breach of duty of loyalty, an intent to deceive, and conflicts of interest while taking official action that furthers that undisclosed interest, or when there has been undisclosed self-dealing, as well as when someone has received a bribe or kickback from a third party as a quid pro quo for some advantage from the employer.

In 2010, the Supreme Court heard three cases concerning the honest services fraud statute: Black v. United States, Weyhrauch v. United States, and Skilling v. United States.  On June 24, 2010, as anticipated, the Court sharply limited the scope of § 1346, invalidating the use of the statute except in cases involving bribery and kickbacks. Skilling v. United States, 130 S. Ct. 2896 (2010).

The ruling remains a devastating blow that deprives prosecutors of an important tool in their efforts to fight public corruption and a disaster for good political governance.  Prosecutors have long used § 1346 to target public officials who engage in malfeasance without evidence of a quid pro quo — the direct exchange of an official act for something of value.  Honest services fraud typically has been charged when politicians have been offered a stream of value: i.e. meals, tickets and trips in exchange for a series of acts, but prosecutors are unable to tie any specific gift to a specific official act.

Despite the Court's assertion that the core of the honest services statute remains intact, a rash of prior convictions have been vacated and in the future, corrupt officials will have an easier time escaping accountability for their misdeeds.  If Congress fails to rectify this disastrous decision, a broad range of public corruption will largely remain immune from federal prosecution.

 

Responding to Skilling & Reinstating the Illegal Gratuities Statutes

Fortunately, Congress has responded to these ill-advised court decisions in both the 111th and 112th Congresses.  Just last fall, both House and Senate Judiciary committees reported out – nearly unanimously – bipartisan legislation that would restore these critical anti-corruption statutes.

In Skilling, the Supreme Court stated specifically that if Congress wants to allow honest services fraud to be used in cases beyond those involving bribes and kickbacks, it needs to specify exactly what conduct is prohibited.  This legislation heeds the Court’s directive for more clarity and specificity by borrowing existing language from 18 U.S.C. § 208, a well-established federal conflict-of-interest statute that already applies to the executive branch and has been upheld as constitutionally sound.[1]  Notably, under the proposed statute, no public official could be prosecuted unless he or she knowingly conceals, covers up, or fails to disclose material information – which the official already is already required by law or regulation to disclose – with the specific intent to defraud.  Thus as crafted, it removes the risk that a public official can be convicted for unwitting conflicts of interest or mistakes.

The legislation also provides fixes to the Sun-Diamond and Valdes cases concerning illegal gratuities.  In response to Sun-Diamond, the bill makes clear that benefits to public officials designed to curry favor for non-specified future acts or to build a reservoir of goodwill are prohibited by clarifying that public officials may not accept anything of value given to them because of their official position.  To respond to Valdes, the bill broadens the definition of "official act" to include "every action that is within the range of official duty," and makes clear that a corrupt payment, or a series of payments, can be made to influence more than one official act.

While this legislation was approved easily in the U.S. Senate, House Republican leadership refuses to consider these critical reforms.  Given the wide bipartisan support of these measures in both chambers, it is difficult to understand why House Majority Leader Eric Cantor stripped the provisions during recent consideration of the STOCK Act.

In light of recent congressional scandals and Congress’ inability to properly hold themselves accountable by failing to pass this legislation, it is no wonder Americans hold elected leaders in such low regard.  While passing these reforms would not be a panacea that ends all corruption, it would certainly be a step in the right direction in restoring the public’s confidence.

 


[1] United States v. Richard J. Nevers, 7 F.3d 59 (5th Cir. 1993).

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