02.17.11

Leahy, Cornyn Bring Back Proposal To Root Out Public Corruption

WASHINGTON (Thursday, Feb. 17, 2011) – Senator Patrick Leahy (D-Vt.) and Senator John Cornyn (R-Texas) introduced legislation Thursday to give prosecutors new tools to identify, investigate, and prosecute criminal conduct by public officials.  It is the third Congress in which Leahy and Cornyn have introduced the proposal.

The Public Corruption Prosecution Improvements Act (PCPIA) will strengthen existing federal criminal law for acts of public corruption, and raise maximum statutory penalties. The bill will also clarify the definition of what it means for a public official to perform an “official act,” and amend the federal bribery statute to show that corrupt payment can be made to influence more than one official act.  The legislation also amends the federal gratuities statute to make clear that a public official cannot accept anything of value given to them because of their official position other than as permitted by existing rules or regulations.

“Public corruption can erode the trust the American people have in those who are given the privilege of public service, and, too often, loopholes in existing laws have meant that corrupt conduct can go unchecked,” said Leahy.  “If we are serious about addressing the kinds of egregious misconduct that we have witnessed in recent years in high-profile public corruption cases, we must give investigators and prosecutors the tools they need to enforce our laws.  I am pleased to join with Senator Cornyn again in this important effort.”

“Public corruption is not new, not geographically isolated, nor is it a partisan issue. But it’s a problem that needs to be addressed now,” Cornyn said. “This legislation strengthens our efforts to combat public corruption by making substantive reforms to public corruption laws, and by giving prosecutors new tools to use in their battle against corrupt officials. I hope my colleagues will join me and Sen. Leahy in our effort to combat public corruption and support our legislation to ensure authorities have the resources needed to prosecute those who betray that trust to the fullest extent of the law.”

The Public Corruption Prosecution Improvements Act of 2011 includes two provisions new to the legislation.  One allows information sharing to make it easier for law enforcement to investigate possible criminal activity by federal judges.  Another further clarifies and strengthens the federal program bribery statute.

A bipartisan majority of the Senate Judiciary Committee approved the legislation last Congress.

 

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Statement Of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,

On Introduction Of The
“Public Corruption Prosecution Improvements Act Of 2011”

February 17, 2011

 

I am pleased to join with Senator Cornyn once again to introduce the Public Corruption Prosecution Improvements Act of 2011, a bill that will strengthen and clarify key aspects of Federal criminal law and provide new tools to help investigators and prosecutors attack public corruption nationwide.

As we have seen in recent years, public corruption can erode the trust the American people have in those who are given the privilege of public service, and, too often, loopholes in existing laws have meant that corrupt conduct can go unchecked.  Make no mistake: The stain of corruption has spread to all levels of government. This is a problem that victimizes every American by chipping away at the foundations of our democracy.  Rooting out the kinds of public corruption that have resulted in convictions of members of Congress, judges, governors, and many others, requires us to give prosecutors the tools they need to investigate and prosecute criminal public corruption offenses. 

The bill Senator Cornyn and I introduce today will increase sentences for serious corruption offenses and will provide investigators and prosecutors more time to pursue public corruption cases.  The bill raises the statutory maximum penalties for several laws dealing with official misconduct, including bribery and theft of government property, to ensure that those who violate the public trust are held accountable.  These increases reflect the serious and corrosive nature of these crimes, and would harmonize the punishment for these crimes with other similar statutes.

The bill extends the statute of limitations from five to six years for the most serious public corruption offenses.  Bank fraud, arson, and passport fraud, among other offenses, all have 10-year statutes of limitations.  We recently increased the statute of limitations for securities fraud to six years.  Public corruption offenses cut to the heart of our democracy and are among the most difficult and time-consuming cases to investigate.  This modest increase to the statute of limitations is a reasonable step to help our corruption investigators and prosecutors do their jobs.

This bill also amends several key statutes to broaden their application in corruption contexts and to prevent corrupt public officials and their accomplices from evading or defeating prosecution based on existing legal ambiguities. It includes a fix to the gratuities statute that makes clear that public officials may not accept anything of value, other than what is permitted by existing rules and regulations, given to them because of their official position.  This important provision contains appropriate safeguards to ensure that only corrupt conduct is prosecuted, but it will help to ensure that the work of public officials cannot be bought, and it will put teeth behind key ethics reforms enacted by Congress in 2007.

The bill also appropriately clarifies the definition of what it means for a public official to perform an “official act” for the purposes of the bribery statute and closes several other gaps in current law.  It adds two corruption-related crimes as predicates for the Federal wiretap and racketeering statutes, lowers the transactional amount required for Federal prosecution of bribery involving federally-funded state programs, and expands the venue for perjury and obstruction of justice prosecutions.

Senator Cornyn and I have added two new modest fixes into this year’s bill.  The first allows information sharing that will make it easier for law enforcement to investigate possible criminal activity by federal judges.  The second further clarifies and strengthens the federal program bribery statute.

I remain committed to ensuring sufficient funding for public corruption enforcement.  Since September 11, 2001, Federal Bureau of Investigation (FBI) resources have been shifted away from the pursuit of white collar crime to counterterrorism.  Director Mueller has consistently affirmed that public corruption is among the FBI’s top investigative priorities, but reports in the past decade indicated that this shift in resources sometimes meant a reduction in the number of public corruption investigations and at times made pursuing key corruption cases more difficult.  The Justice Department and the FBI have been working to reverse this trend, but we must make sure that law enforcement has all the tools and the resources it needs to strongly confront these serious and corrosive crimes. 

In recognition of the difficult budget situation in which we find ourselves and in an effort to maintain maximum bipartisan support for this important legislation, I have agreed to remove from this year’s bill a modest authorization for anti-corruption investigators and prosecutors that we included in past versions.  Nonetheless, given the vital importance of this work, I hope that Senator Cornyn and others will join me in calling on appropriators and the Justice Department and FBI to ensure that significant resources are allocated to investigating and prosecuting public corruption.

Since we last introduced this bill, our country has unfortunately taken a step backward in its efforts to fight fraud and corruption.  Last year, in the case of Skilling v. United States, the Supreme Court sided with a former executive from Enron, whose collapse had such devastating effects on the economy early in the last decade, and greatly narrowed the honest services fraud statute, a law that plays an important role in combating public corruption, corporate fraud, and self-dealing.

The Court’s decision leaves corrupt and fraudulent conduct which prosecutors in the past addressed under the honest services fraud statute to go unchecked.  Most notably, the Court’s decision excluded undisclosed “self-dealing” by state and federal public officials, and corporate officers and directors, which is when those officials or executives secretly act in their own financial self-interest, rather than in the interest of the public or, in private sector cases, their shareholders and employees. 

I introduced legislation in the last Congress, the Honest Services Restoration Act, to close this crucial gap and restore the government’s ability to prosecute key categories of corruption cases.  I have heard from Democrats and Republicans in the Senate and the House who are eager to fix this problem.  I hope to continue working with Senator Cornyn and others to find a bipartisan solution to fixing honest services fraud and perhaps to incorporate a fix into this comprehensive anti-corruption bill at some point in the future.

If we are serious about addressing the kinds of egregious misconduct that we have witnessed in recent years in high-profile public corruption cases, Congress should enact meaningful legislation to give investigators and prosecutors the tools they need to enforce our laws.  It is time to strengthen the criminal law to bring those who undermine the public trust to justice.  I hope that all Senators will support this bipartisan bill and take firm action to stamp out intolerable corruption.

I ask unanimous consent that a copy of the bill be printed in the Record.

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Public Corruption Prosecution Improvements Act

 

For Guidance Purposes Only

 

Short Title (Sec. 1)

 

  • The first section of the bill designates its title.

 

Extension of Statute of Limitations for Serious Public Corruption Offenses (Sec. 2)

 

  • The bill extends the statute of limitations from five to six years for three of the most serious public corruption offenses: bribery, deprivation of honest services involving a public official, and extortion by a public official. 
  • Public corruption cases are among the most difficult and time-consuming cases to investigate and prosecute. They often require use of informants and electronic monitoring, as well as review of extensive financial and electronic records, techniques which take time to develop and implement.
  • This one-year extension brings the statute of limitations for serious public corruption offenses in line with the statute of limitations for federal tax prosecutions. 

Application of Mail/Wire Fraud Statutes to Licenses and Other Intangible Rights (Sec. 3) 

 

  • This section of the bill broadens coverage of the mail and wire fraud statutes to ensure they capture those schemes involving the deprivation of intangible interests, such as contract rights, licenses, permits, trade secrets, franchises and government grants. This would allow prosecution of fraud schemes aimed at obtaining licenses, permits, and other valuable interests.

Venue for Federal Offenses (Sec. 4)

  • This section amends the general venue statute (18 U.S.C § 3237) to clarify that, in the context of mail fraud schemes, venue exists in any district in which any act in furtherance of the offense is committed.
  • This common-sense fix permits venue in the district where the bulk of the fraudulent conduct occurs, regardless of where a letter happens to be dropped in a mailbox.

Theft or Bribery Concerning Programs Receiving Federal Financial Assistance (Sec. 5)

  • This section strengthens 18 U.S.C. § 666, which prohibits theft or bribery from an organization, government or agency that receives federal financial assistance.  These changes are appropriate because there is a strong federal interest in ensuring the integrity of state programs receiving federal funds.
  • The statute currently requires that the government prove that the state bribery defendant corruptly demanded or received anything of value from a person engaged in a transaction valued at $5,000 or more.  This section reduces the $5,000 requirement to $1,000 for bribery offenses, and increases the maximum penalty for all offenses under this section from 10 years to 15 years. 
  • It also clarifies that a “thing” of value can refer to a single item or more than one item.
  • This section also clarifies the scope of the exemption for bona fide salary as a thing of value covered by the statute.

Penalty for Section 641 Violations (Sec. 6)

 

  • This section brings the federal theft statute more in line with mail and wire fraud offenses by increasing the maximum term of imprisonment for theft and embezzlement of federal funds from 10 years to 15 years.

Penalty for Section 201(b) Violations  (Sec. 7)

  • This section increases the maximum term of imprisonment for bribery violations from 15 years to 20 years
  • The generic mail and wire fraud statutes, as well as the federal extortion statute, are now 20-year felonies. It is appropriate that bribery – one of the most serious and corrosive corruption offenses – be on par with these crimes.

Increase of Maximum Penalties for Certain Public Corruption Related Offenses  (Sec. 8)

  • This section increases the maximum punishment to 10 years imprisonment for the following crimes: solicitation of political contributions (section 602); promise of employment for political activity (section 600); deprivation of employment for political activity (section 601); intimidation to secure political contributions (section 606); solicitation and acceptance of contributions in federal offices (section 607); and coercion of political activity by federal employees (section 610). 

Addition of District of Columbia to Theft of Public Money Offense (Sec. 9)

  • This section amends section 641 of title 18 relating to theft from the government to include the District of Columbia government and agencies. 

Additional RICO Predicates (Sec. 10)

  • This section adds section 641 (embezzlement or theft of public money, property or records) and section 666 (relating to theft or bribery concerning programs receiving federal funds), of title 18 as RICO predicates.  These are serious offenses and including them appropriately strengthens an important tool for prosecutors going after corruption.

Additional Wiretap Predicates  (Sec. 11)

  • The section amends 2516(1) of title 18 to add sections 641 (embezzlement or theft of public money, property or records) and section 666 (relating to theft or bribery concerning programs receiving federal funds) as predicate offenses for criminal wiretaps.  These are serious offenses, and are on par with other offenses that already serve as wiretap predicates.

Clarification of Crime of Illegal Gratuities (Sec. 12)

 

  • This section reverses the holding of the Supreme Court in United States v. Sun-Diamond Growers, which restricted the application of the illegal gratuities statute. 
  • Sun-Diamond imposed a nexus requirement on gratuities prosecutions that made this charge nearly identical to bribery and therefore made it essentially useless as a separate and lesser offense. 
  • The expansion of the statute to include gratuities given to a public official “for or because of” that official’s position will allow prosecutors to target a broader range of corrupt conduct that is not otherwise permitted by law or regulation.
  • Public officials acting within applicable regulations are protected by the inclusion of new language creating an exception for conduct permitted by rule or regulation.  This new language would prevent the kinds of absurd results cited by Justice Scalia in the Sun-Diamond opinion, such as the President committing a crime by accepting a sports jersey from a high school team.  A modest gift like that is allowed by federal regulations, or Congressional rules, so accepting such a gift would not cause problems for a public official under this bill.

Clarification of Definition of “Official Act”  (Sec. 13)

 

  • This section broadens the definition of “official act” in section 201(a) (3) of title 18 to include any conduct that falls within the range of official duty of the public official. 
  • This section explicitly adopts the language from the Supreme Court’s 1914 decision in United States v. Birdsall, defining “official act,” and in so doing makes clear that “[e]very action that is within the range of official duty comes within the purview of the bribery statute.”
  • This section also clarifies that an official act can be a single act, more than one act or a course of conduct.

 

Clarification of Course of Conduct Bribery  (Sec. 14)

  • This section, in concert with section 13, amends the federal bribery statute to make clear that a corrupt payment can be made to influence more than one official act, and, to the same end, that a series of such payments may be made to influence a government official in performing a series of official acts.

Expanding Venue for Perjury and Obstruction of Justice Proceedings  (Sec. 15)

 

  • This section amends the perjury and obstruction of justice statutes to expand venue in those prosecutions not only to the district where the false statement or obstructive conduct occurs, but also to the district in which an affected proceeding takes place.

Amendment of the Sentencing Guidelines Relating to Certain Crimes (Sec. 16)

 

  • This section directs the U.S. Sentencing Commission to consider amending the U.S. Sentencing Guidelines in light of the other provisions of this bill.

Expanding Disclosure of Potential Criminal Activity to Law Enforcement Authorities (Sec. 17)

  • This section lifts an existing ban on the disclosure of information regarding potential criminal activity by federal judges to appropriate law enforcement authorities.

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