[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
CLEAN-UP GOVERNMENT ACT OF 2011
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON CRIME, TERRORISM,
AND HOMELAND SECURITY
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
ON
H.R. 2572
__________
JULY 26, 2011
__________
Serial No. 112-70
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
U.S. GOVERNMENT PRINTING OFFICE
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COMMITTEE ON THE JUDICIARY
LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina JERROLD NADLER, New York
ELTON GALLEGLY, California ROBERT C. ``BOBBY'' SCOTT,
BOB GOODLATTE, Virginia Virginia
DANIEL E. LUNGREN, California MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio ZOE LOFGREN, California
DARRELL E. ISSA, California SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana MAXINE WATERS, California
J. RANDY FORBES, Virginia STEVE COHEN, Tennessee
STEVE KING, Iowa HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona Georgia
LOUIE GOHMERT, Texas PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio MIKE QUIGLEY, Illinois
TED POE, Texas JUDY CHU, California
JASON CHAFFETZ, Utah TED DEUTCH, Florida
TIM GRIFFIN, Arkansas LINDA T. SANCHEZ, California
TOM MARINO, Pennsylvania DEBBIE WASSERMAN SCHULTZ, Florida
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona
[Vacant]
Sean McLaughlin, Majority Chief of Staff and General Counsel
Perry Apelbaum, Minority Staff Director and Chief Counsel
------
Subcommittee on Crime, Terrorism, and Homeland Security
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
LOUIE GOHMERT, Texas, Vice-Chairman
BOB GOODLATTE, Virginia ROBERT C. ``BOBBY'' SCOTT,
DANIEL E. LUNGREN, California Virginia
J. RANDY FORBES, Virginia STEVE COHEN, Tennessee
TED POE, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
JASON CHAFFETZ, Utah Georgia
TIM GRIFFIN, Arkansas PEDRO R. PIERLUISI, Puerto Rico
TOM MARINO, Pennsylvania JUDY CHU, California
TREY GOWDY, South Carolina TED DEUTCH, Florida
SANDY ADAMS, Florida DEBBIE WASSERMAN SCHULTZ, Florida
BEN QUAYLE, Arizona SHEILA JACKSON LEE, Texas
MIKE QUIGLEY, Illinois
Caroline Lynch, Chief Counsel
Bobby Vassar, Minority Counsel
C O N T E N T S
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JULY 26, 2011
Page
THE BILL
H.R. 2572, the ``Clean-Up Government Act of 2011''............... 3
OPENING STATEMENTS
The Honorable F. James Sensenbrenner, Jr., a Representative in
Congress from the State of Wisconsin, and Chairman,
Subcommittee on Crime, Terrorism, and Homeland Security........ 1
The Honorable Robert C. ``Bobby'' Scott, a Representative in
Congress from the State of Virginia, and Ranking Member,
Subcommittee on Crime, Terrorism, and Homeland Security........ 22
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 24
WITNESSES
Mary Patricia Brown, Deputy Assistant Attorney General, Criminal
Division, U.S. Department of Justice
Oral Testimony................................................. 26
Prepared Statement............................................. 29
Lisa K. Griffin, Esq., Professor of Law, Duke University
Oral Testimony................................................. 38
Prepared Statement............................................. 41
Timothy P. O'Toole, Esq., Partner, Miller & Chevalier
Oral Testimony................................................. 47
Prepared Statement............................................. 49
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Material submitted by the Honorable F. James Sensenbrenner, Jr.,
a Representative in Congress from the State of Wisconsin, and
Chairman, Subcommittee on Crime, Terrorism, and Homeland
Security....................................................... 21
APPENDIX
Material Submitted for the Hearing Record
Response to Post-Hearing Questions submitted to Mary Patricia
Brown, Deputy Assistant Attorney General, Criminal Division,
U.S. Department of Justice, from Ronald Weich, Assistant
Attorney General, Office of Legislative Affairs, U.S.
Department of Justice.......................................... 83
Response to Post-Hearing Questions from Timothy P. O'Toole, Esq.,
Partner, Miller & Chevalier.................................... 87
Prepared Statement of Julie Stewart, President, Families Against
Mandatory Minimums (FAMM)...................................... 92
Letter from Steven H. Cook, President, National Association of
Assistant United States Attorneys.............................. 96
CLEAN-UP GOVERNMENT ACT OF 2011
----------
TUESDAY, JULY 26, 2011
House of Representatives,
Subcommittee on Crime, Terrorism,
and Homeland Security,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to call, at 10 a.m., in room
2141, Rayburn Office Building, the Honorable F. James
Sensenbrenner, Jr. (Chairman of the Subcommittee) presiding.
Present: Representatives Sensenbrenner, Gohmert, Poe,
Marino, Adams, Quayle, Scott, Conyers, Cohen, Jackson Lee, and
Quigley.
Staff present: (Majority) Caroline Lynch, Subcommittee
Chief Counsel; Sam Ramer, Counsel; Lindsay Hamilton, Clerk;
(Minority) Bobby Vassar, Subcommittee Chief Counsel; Joe
Graupensberger, Counsel; and Veronica Eligan, Professional
Staff Member.
Mr. Sensenbrenner. The Subcommittee will come to order.
Without objection, the Chair will be authorized to recess the
Subcommittee during votes today.
The Chair recognizes himself for 5 minutes for an opening
statement.
On November 19, 1863, Abraham Lincoln delivered the
Gettysburg Address. In dedicating a portion of the battlefield,
President Lincoln said that the dead did not die in vain; that
the Nation would have a new birth of freedom; and that
government of the people, by the people, for the people shall
not perish from the Earth.
A government that is by the people and for the people is
the very foundation of a democracy. If elected officials decide
to pursue a course of greed, to profit from their positions,
they betray the sacred trust and responsibility of the office,
and weaken the very foundation of our democracy.
While citizens may have differing views as to how much the
government should be involved in their daily lives, and they
may have differing opinions of their government and of their
elected officials, every citizen has the right to expect an
honest government.
Ideally, an oath of office or the ballot box should be
sufficient to hold public officials accountable to their
constituents. But in reality, it is not.
The criminal justice system, with its ability to
investigate and prosecute public corruption and related frauds,
is a necessary component to ensure an honest government. Our
criminal justice system investigates and prosecutes public
corruption and related frauds in order to ensure an honest
government.
The FBI identified the investigation of public corruption
as a top priority and recognized that public corruption poses a
fundamental threat to our national security and way of life. It
impacts everything from how well our borders are secured and
our neighborhoods protected to verdicts handed down in courts,
to the quality of our roads, schools and other government
services. And it takes a significant toll on our pocketbooks,
wasting billions in tax dollars every year.
Today's hearing examines the gaps in our Federal corruption
laws that limit their effectiveness and allow corruption to
persist.
I and my colleague from Illinois, Mr. Quigley, introduced
H.R. 2572, the ``Clean Up Government Act of 2011,'' to
strengthen our public corruption laws. This bill restores tools
that prosecutors had previously relied upon that have been
eroded over the years by the courts. The bill also enhances
other Federal statutes used to fight and deter public
corruption. Additional penalties and more robust investigative
techniques will ensure that public corruption and related
offenses are addressed.
A significant statute for prosecuting corruption was
diluted as a result of the Supreme Court's decision in Skilling
v. the United States. In this case, the Court held that the
honest services fraud statute does not apply to prosecutions
involving undisclosed self-dealing by a public official, but
only to cases that involve traditional bribery or kickback
schemes.
Both types of honest services fraud prosecutions are
equally essential to maintaining government integrity while
ensuring that decisions made by public officials are made in
the best interests of the people. Many instances of public
corruption do not involve a classic bribery or extortion
scenario, but, rather, public officials who exploit their
positions and influence to benefit outside entities or
individuals.
Undisclosed self-dealing is not covered by any other area
of Federal law. It is imperative that Congress restore the
statute to its original intent. Although the Skilling decision
seriously eroded the ability to prosecute both public officials
and corporate officers for their undisclosed self-dealings,
this bill restores the honest services fraud statute only as it
relates to public officials.
The bill also improves the government's ability to
prosecute public officials who accept gifts because of their
official position, and amends the definition of ``official
act'' to include conduct that falls within the range of
official duties of a public official. The bill extends the
statute of limitations for serious public corruption offenses,
increases the penalties for certain public corruption offenses,
and gives investigators additional tools to address these
related crimes in the form of additional wiretap and RICO
predicates.
There is bipartisan support from both houses for reforming
our Federal public corruption laws, and this bill proposes
commonsense and straightforward reforms to achieve this goal.
The bill, H.R. 2572, follows:]
__________
Mr. Sensenbrenner. And before recognizing the gentleman
from Virginia, Mr. Scott, for his opening statement, let me ask
unanimous consent to insert in the appropriate part of the
record a letter from the FBI Agents Association and a letter
from the Citizens for Responsibility and Ethics in Washington,
or CREW for short, in support of this legislation.
[The information referred to follows:]
__________
__________
Mr. Sensenbrenner. And I now recognize the gentleman from
Virginia, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman, and thank you for
calling today's hearing.
I welcome today's hearing about proposed changes in our
laws against public corruption. Certainly the fight against
public corruption is one of the most important functions of our
Federal prosecutors.
As we consider whether to modify the existing laws in this
area, or whether to adopt new ones, I want to make sure we
carefully examine these proposals.
Before discussing the proposals to expand these laws, I
want to caution that we should resist calls to increase
statutory levels without specific evidence that current
sentences are too low. The Justice Department's prepared
statement supports increased penalties for public corruption
offenses, but does not provide specific justification for
raising the statutory maximums, in some cases, drastically.
So while we may want to ask the U.S. Sentencing Commission
to review the current sentencing guidelines for certain
offenses and make changes if appropriate, we should not direct
the commission to adjust sentences upward if, upon review, they
calculate that it is not warranted.
At least we know that the Sentencing Commission will study
the need for sentences before acting, which is more than
Congress usually does when we increase maximum levels.
I will note, Mr. Chairman, that you do not require in your
bill mandatory minimums, so intelligent, well-prepared, and
well-reasoned sentences can be applied by the Sentencing
Commission and judges. Even if the maximum sentence is
increased significantly, or even unreasonably, intelligent
sentences can still prevail.
In regard to proposals to expand the public corruption
laws, I note that there are a number of statutes on the books
that Federal law enforcement uses to prosecute public
corruption offenses, such as antibribery statutes, anti-
gratuity statutes, anti-extortion statutes, and the mail and
wire fraud statutes. Mail and wire fraud statutes are already
extremely broad and allow Federal authorities to pursue public
corruption related to fraud or if someone uses a mail or wire
communication to obtain money or property.
Expanding these laws even further raises concerns that we
are overcriminalizing behavior that is properly investigated by
State authorities. When we broaden the terms of a criminal
statute even just a little bit, with language which prohibits
in generalities and not too specific, we invariably end up
covering a range of conduct sometimes unforeseen, which may
arguably be covered but we did not intend to cover.
The vagueness stemming from lack of notice to the public as
to about what specifically is prohibited is unfair, and it is
our job to avoid it.
This has been a problem with some well-intentioned statutes
on the books dealing with various issues of bribery and public
corruption. If a statute is too broad, reasonable people may
disagree about how the statute should be applied, and sometimes
it is applied in an overzealous and unfair way. The courts are
left to sort out the mess, and we are called up to clarify the
law.
In many respects, that is what brought us here today. And
the bill, in large part, is a response to several court cases
which limited the scope of existing statutes.
In the Cleveland case, the Supreme Court ruled that
fraudulent schemes to obtain business licenses did not violate
the mail fraud statute, because such licenses were not
considered property; they did not obtain property or money. In
response to this, the bill expands coverage to mail and wire
fraud, to cover schemes to obtain anything of value.
The Sun-Diamond Growers case, the Supreme Court ruled that
prosecutors must prove a link between the gratuities and a
specific act performed by the official accepting the
gratuities. In response, this bill expands the anti-gratuity
statute to those given because of an official's position, and
not just because of an official act performed.
In the Valdes case, the Court of Appeals for the D.C.
Circuit ruled that the police officer who provided information
about citizens from a police database to someone who paid him
for the information was not criminally liable because his
action was not deemed to be an official act. This bill would
extend liability for receiving gratuities received for any act
within the official's duties.
And as you mentioned in the Skilling case, the Supreme
Court held that the honest services fraud statute only applies
to bribes and kickbacks and may not be used to prosecute other
schemes. In response, the bill establishes a new crime of
undisclosed self-dealing.
We obviously need to address these cases, but if we act, I
hope we will do so in a way that avoids problems that leads to
courts having to step in to limit them.
Today our witnesses will present opinions about whether or
not we should update the laws. If there is reason to expand the
coverage of some of these statutes, I want to make sure that we
do so in a way that is not overbroad and gives clear notice to
the public of the conduct which violates the statutes.
If there are criticisms of the bill, we need to hear them,
and we need the Justice Department to respond. And I hope that
any criticisms will also be constructive, in that alternatives
will be presented when possible.
Thank you, Mr. Chairman. I look forward to the witnesses.
Mr. Sensenbrenner. The Chair recognizes the Ranking Member
of the full Committee, the gentleman from Michigan, Mr.
Conyers?
Mr. Conyers. Thank you, Chairman Sensenbrenner and
Subcommittee Ranking Member Scott. I am happy to be here today
to join you in this discussion.
You would think that public corruption legislation would
have been taken care of long before now, I mean all the public
corruption cases we have. But my hat is off to Chairman
Sensenbrenner, who works closely with me on civil rights cases;
on the data retention bill; on the issue of Haiti, the poorest
country in the Western Hemisphere; and Bobby Scott, with whom I
work regularly.
Now, there is only one problem with this bill, so we might
as well get down to business on it, and that is it increases
sentencing in at least five or six areas. And that has
prevented me from cosponsoring the bill, and I am now more
disposed to voting for this bill when it comes out of
Committee.
But we incarcerate more people, proportionately, than any
country on Earth. So why in the world would I come here and
vote to lengthen and toughen sentences? That is why Scott isn't
on the bill, and he probably has even more and better reasons
than I for not being a cosponsor.
But that, I say to my good friend, the Chairman, is the
problem that we have.
Now, what is good about the bill? Well, the first thing is
that Sensenbrenner and Quigley use some restraint in the
extension of the statute of limitations for prosecuting certain
public-corruption offenses. This bill originally sentenced from
5 to 10 years; they lowered it from 5 to 6--they increased it
from 5 to 6. That was a good thing.
It is a good thing in this bill that we prohibit public
officials from receiving bribes to perform any act within their
official duties. Maybe you will explain to me why, on July of
2011, we are proposing to prevent public officials from
receiving bribes. I mean, is that saying that there is no law
about that? That unless we do this, public officials can bribe
and get away with it? Well, I don't think so.
And then I think there is a good case to be made in the law
that we expand the law to prohibit undisclosed self-dealing;
that is, when a public official conceals material information,
when their conduct or their acts would benefit their financial
interests, and when the official has a duty to disclose it.
I would like to work with Chairman Sensenbrenner and
Ranking Member Scott on a statute that covers that particular
area.
And then, of course, I am always watching to make sure that
the Department of Justice doesn't overreach too frequently. My
history, my experience, tells me--am I over time?
Mr. Sensenbrenner. You can----
Mr. Conyers. I am getting there. The light isn't on. Oh,
okay. All right. I get the message.
Oh, now somebody turned the red light on.
Mr. Sensenbrenner. It was the machine that did that. The
yellow light isn't working.
Mr. Conyers. Oh, I see.
Okay, but let me just conclude by counseling my friends at
DOJ, and I have lots of them, that they are always using the
law to overrule or curtail a court's interpretation of the law,
or to try to make the criminal law fit some unusual case that
may be before them. And I wanted to give that friendly warning
as well.
Thank you for the additional time, if that is what you gave
me, Chairman Sensenbrenner.
Mr. Sensenbrenner. You are welcome, and it was.
Let me say that the Chair is very willing to work with the
gentleman from Michigan, the gentleman from Virginia, and
others, because there have been some holes that have been blown
into the public corruption statutes by the Court that need to
be plugged, and the quicker, the better.
It is now my pleasure to introduce today's witnesses.
Mary Pat Brown has been with the U.S. Department of Justice
since 2009, first acting as the acting counsel for the Office
of Professional Responsibility. She currently serves as the
Deputy Assistant Attorney General overseeing the Criminal
Division's Public Integrity Section and the Office of
Enforcement Operations.
After law school, she worked as a litigation associate at
the firm of Dickstein Shapiro until she joined the U.S.
Attorneys' Office for the District of Columbia in 1989 as
Assistant U.S. Attorney. She became a supervisor in 1997,
serving first as the Deputy Chief of the Appellate Division in
the Fraud and Public Corruption Section, and then as Executive
Assistant U.S. Attorney for Operations, and, finally, as Chief
of the Criminal Division.
She received both her bachelor of science in Foreign
Service and her juris doctor degrees from Georgetown
University.
Ms. Lisa Griffin has been professor of law at Duke
University since 2008. She teaches courses on a variety of
topics, such as criminal procedure, investigation, and
evidence. Before coming to Duke University, she was a lecturer
at the UCLA School of Law. And prior to her work as a
professor, Ms. Griffin was an Assistant U.S. Attorney from 1999
through 2004 in Chicago.
After law school, she clerked for Judge Dorothy W. Nelson
in the U.S. Court of Appeals for the Ninth Circuit and also for
Justice Sandra Day O'Connor in the Supreme Court.
She received her bachelor of arts and master of arts degree
in Georgetown University, and her juris doctor degree at
Stanford.
Timothy O'Toole is a partner at Miller & Chevalier in
Washington, D.C. Prior to joining Miller & Chevalier, he served
as the chief of the Special Litigation Division of the Public
Defenders Service for the District of Columbia, where he
supervised and handled cases in local and Federal courts.
He is also a former assistant Federal public defender in
Las Vegas, Nevada. And he served as a member of the board of
directors of the National Association of Criminal Defense
Lawyers and co-Chair at large of the NACDL White Collar Crime
Committee.
He received both his bachelor of arts and juris doctor from
the University of Virginia.
Each of the witness statements will be entered into the
record in its entirety.
I will ask that each witness summarize his or her testimony
to 5 minutes or less.
And I recognize Ms. Brown.
TESTIMONY OF MARY PATRICIA BROWN, DEPUTY ASSISTANT ATTORNEY
GENERAL, CRIMINAL DIVISION, U.S. DEPARTMENT OF JUSTICE
Ms. Brown. Mr. Chairman, Vice Chairman Ranking Member
Scott, and distinguished Members of the Subcommittee, thank you
for the opportunity to discuss the Department of Justice's
efforts to combat public corruption and to speak to you about
H.R. 2572, the ``Clean Up Government Act of 2011.''
The Department strongly supports the bill, and we
appreciate the Subcommittee's efforts to strengthen our ability
to fight public corruption in all of its forms.
Protecting the integrity of our government institutions is
one of the highest priorities for the Department of Justice.
Our citizens are entitled to know that their public servants
are making decisions based upon the best interests of those
they serve, not based on bribes, extortion, or hidden financial
interests.
Let me give you just a few examples of the Department's
sustained efforts to prosecute public corruption in all its
forms.
Last month, the Department's Public Integrity Section began
a trial of several Alabama State legislators, businessmen, and
lobbyists for their roles in a wide-ranging conspiracy to buy
and sell votes on pro-gambling legislation. They also recently
obtained a jury conviction against a senator from Puerto Rico
and a local business owner for engaging in a bribery scheme in
which a lavish trip was given to the senator in exchange for
his vote on certain pieces of legislation.
As we all know, the U.S. Attorney's Office in Chicago
recently convicted the State's former Governor on substantial
public corruption charges.
And right next door to us in Maryland, the U.S. Attorney's
Office recently secured the conviction of former Prince
George's County executive and others in connection with a
scheme involving extortion and evidence tampering.
Despite the Department's successes, we believe there are
some gaps in our public corruption statutes that must be
closed, and we thank the Subcommittee for its leadership on
this issue. Let me mention some of the key elements of the
bill.
First, the bill would remedy problems that have arisen from
judicial interpretations of the Federal bribery statutes. For
example, right now a corrupt police officer who searches
restricted law enforcement databases in exchange for money
slipped to him under the table can act without fear of Federal
prosecution. This bill ensures that this corrupt behavior falls
within the meaning of ``official act'' in the statute.
Likewise, under current law, a Federal public official may
repeatedly accept, without fear of repercussions, lavish gifts
such as plane tickets, sports tickets, expensive art objects,
and cash that are given to him in a general effort to curry
favor.
Because of the Supreme Court's decision in Sun-Diamond, the
government must prove that there is a direct link between a
payment and a specific official act. This is almost, and often,
impossible to establish a one-to-one link.
The bill would ensure that public officials cannot cash in
on their official positions. To be clear, this last category of
payments does not, and never has, included lawful campaign
contributions. Nor does it include de minimis gifts that are
permitted by existing government rules and regulations.
The bill would also allow government to use court-ordered
wiretaps to gather evidence in cases involving Federal program
bribery, theft of United States Government property, and major
fraud against the United States. It would also make clear that
these crimes can form predicate offenses under the RICO
statute.
The bill also would expand the statute of limitations for
public corruption offenses. Public corruption allegations, by
their very nature, may not surface until years after the crimes
were committed. Expansion of the statute of limitations, even
modestly, will help ensure that we are able to uncover and
address the full extent of these schemes, and to address the
corruption allegations fairly and thoroughly.
Finally, the bill would fill the substantial gap left by
the Supreme Court's decision last year in Skilling v. United
States.
For decades before Skilling, honest services fraud covered
schemes involving bribes and kickbacks and hidden financial
dealings. However, the Supreme Court held that the honest
services fraud statute was vague, and limited it only to
kickbacks and bribes. But not all public corruption is about
bribes or kickbacks.
If a mayor were to solicit tens of thousands of dollars in
bribes in exchange for giving city contracts out to unqualified
bidders, unquestionably that would be bribery. But if that same
mayor wants to make even more money, he could instead secretly
create his own company and funnel those same city contracts to
his company.
Although this second type of scheme is clearly corrupt and
plainly undermines public confidence in the integrity of
government, it can no longer be reached after Skilling.
The Department of Justice is committed to prosecuting
public corruption offenses at all levels of government, using
all the tools available to us. We support the Subcommittee's
effort to bolster the Department of Justice's ability to carry
out this mission.
Thank you for the opportunity to testify here today, and I
would be pleased to take any questions.
[The prepared statement of Ms. Brown follows:]
__________
Mr. Sensenbrenner. The time of the gentlewoman has expired.
Ms. Griffin?
TESTIMONY OF LISA K. GRIFFIN, ESQ., PROFESSOR OF LAW, DUKE
UNIVERSITY
Ms. Griffin. Chairman Sensenbrenner, Ranking Member Scott,
Ranking Member Conyers, Members and staff of the Subcommittee,
thank you for the opportunity to testify about the purpose and
shape of public corruption prosecutions.
The criminal statutes enforcing public integrity now fail
to reach a significant group of cases in which public officials
abuse their positions for personal gain.
The Supreme Court's decision in Skilling v. United States
limited prosecutions for honest services fraud to cases of
bribes and kickbacks, and excluded concealed conflicts of
interest from the reach of the fraud statutes. When it did so,
it created a rare Federal criminal shortfall.
Congress can act not only to close that gap, but also to
clarify the scope of Federal enforcement and address problems
of vagueness and over-breadth in the statutory scheme. Let me
illustrate with some examples.
Consider a public official who accepts a substantial and
unreported sum of money with no particular strings attached,
who is later moved to take action favorable to the benefactor;
or an individual who takes advantage of public office to steer
contracts to a company in which he has a concealed financial
interest; or a politician seeking private-sector employment,
who fails to disclose that connection, yet votes favorably on
legislation that affects her prospective employer.
These are all acts that would no longer fit within the
statutory scheme or any other statute of which I am aware. Yet
in each case, there is leverage over the public officials,
self-interested deception, and hidden financial motivation
every bit as corrosive as straightforward bribery.
The harm of secret self-dealing is serious, because it
distorts official action and detracts from the legitimacy of
government. It deprives the public of neutral decisionmaking
and of the information it needs to determine whether public
officials are faithful agents. A conflict of interest provision
focuses on the source of that harm, financial gain that is
knowingly concealed from the public.
Accordingly, I support the provisions of the proposed
legislation that restore the government's ability to prosecute
undisclosed conflicts of interest and also refine the
definition of self-dealing. Overturning the restrictive
interpretations of bribes and gratuities in United States v.
Sun-Diamond, and expanding that concept to include benefits
conferred because of official position, is one step toward
closing the enforcement gap, but it does not address all of the
scenarios I described.
More importantly, I urge Congress to deal directly with the
problem of undisclosed self-dealing. A freestanding conflict of
interest offense modeled on the prohibitions in 18 U.S.C.
Section 208 that govern Federal employees would accomplish
that. Alternatively, I agree that the fraud enforcement scheme
should be enlarged through the proposed Section 1346(a) to
include self-enriching conduct by public officials.
Overcriminalization is a real concern when confronting new
or expanded Federal crimes, and it is critical for public
officials to know the boundaries of the law. It should be clear
what prosecutors must prove and what officials can and cannot
do.
This statute has the potential, though, to rein in
prosecutorial overreaching. It does not reinstate the very
spare terms of the former honest services provision, but rather
makes an effort to be quite specific about the harm that
justifies criminal sanction.
First, tying the offense to a preexisting disclosure
requirement under Federal, State, or local law addresses a
major inconsistency in the application of the honest services
provision pre-Skilling. That requirement, paired with an
official act taken to benefit the concealed interest, protects
against liability for unwitting deception.
A defendant who knowingly conceals material financial
information is aware that disclosure is mandated and acts with
the requisite specific intent to defraud can hardly claim a
failure of notice.
I also believe it would be helpful to add an exemption for
small benefits falling below a certain threshold. One of the
reasons the Supreme Court was moved to curtail honest services
fraud was that the statute could be read to reach ordinary and
harmless exchanges. It might be prudent to take benefits like
restaurant reservations and team jerseys off the table, to
preempt that obvious criticism and ensure that the statute does
not extend to de minimis interests in disclosure.
If a public official is acting to benefit or further her
own financial interests, then there is presumptively a breach
of the public's trust. But the criminal sanctions should extend
only to nontrivial harms, and therefore cover only those gains
that could actually give rise to hidden incentives.
Some of the ethics codes and disclosure obligations already
folded into the proposed legislation would include such
thresholds, but the statute might also establish a general
Federal standard that provides a safe harbor.
[The prepared statement of Ms. Griffin follows:]
__________
Mr. Sensenbrenner. The gentlewoman's time has expired. I
grant you that the yellow light hasn't gone on. We have a
mechanical aberration up here.
Ms. Griffin. Thank you, Chairman Sensenbrenner.
Mr. Sensenbrenner. Thank you.
Mr. O'Toole?
TESTIMONY OF TIMOTHY P. O'TOOLE, ESQ.,
PARTNER, MILLER & CHEVALIER
Mr. O'Toole. Good morning. My name is Timothy O'Toole, and
I am a practicing criminal defense lawyer at the law firm of
Miller & Chevalier. I am appearing today on behalf of the
National Association of Criminal Defense Lawyers.
It is difficult to stand up and publicly announce myself as
being opposed to something that has been named the ``Clean Up
Government Act.'' Like you, I believe that public corruption is
an insidious crime that undermines the public's trust in those
who serve us.
So let me be very plain, I am not here today to defend
public corruption, nor am I recommending that you do so. But I
am here today to remind the esteemed Members that we already
have a very powerful set of over 20 Federal laws that punish
those public officials who trade on their public office for
private gain, just as we heard in some of the earlier
statements.
Twice over the past 2 years this Subcommittee came
together, under the bipartisan leadership of Bobby Scott and
Louie Gohmert, to learn about the problem of overcriminalizing
conduct.
Duplicative statutes, federalization of conduct
traditionally belonging to the States, vague laws that can be
applied to innocent conduct, excessive prison sentences, this
is overcriminalization.
My written testimony contains a discussion of exactly how
H.R. 2572 would have such an effect, despite the well-meaning
intentions that might have motivated its drafters.
Specifically, the bill proposes to overrule three decisions
in which the entire Supreme Court bench thought there would be
dramatic and negative consequences to doing precisely what this
bill proposes, and the bill would also substantially increase
what are already decades-long sentence lengths.
Section 2 would expand the conduct covered by Federal mail
and wire fraud to cover false statements made in obtaining
licenses issued by States and municipalities. Any
misrepresentation on a Virginia marriage license, or a
Wisconsin fishing license, or a license to sell a hotdog in
Illinois, would suddenly serve as a basis for Federal
prosecution.
In Cleveland v. the United States, every member of the
Supreme Court rejected such an application of the mail fraud
statute, concluding it would dramatically intrude on areas
properly regulated by State and local law. This attempt to
overrule Cleveland is an example of overcriminalization and
certainly has nothing to do with either public corruption or
cleaning up government.
Section 16 would create a Federal crime of undisclosed
self-dealing by any public official. This decision, as we have
heard, would overrule the Supreme Court's decision in the
United States v. Skilling, in which every member of the Court
agreed that this undisclosed self-dealing theory was
unconstitutionally vague. In fact, the Court identified a host
of questions that such a theory would need to answer in order
to pass constitutional muster.
And yet Section 16 leaves many of these same questions
unanswered. The bill fails to define the significance of the
conflicting financial interests. It fails to define the extent
to which the official action has to further that interest. And
it fails to explicitly define the scope of the disclosure duty.
In addition, State and local jurisdictions often have their
own extensive anticorruption laws, yet this bill allows the
Federal Government to override the laws that locals have
adopted to address the conduct of their own officials.
Take the part-time citizen legislator in Texas who also
owns a car dealership. Does this law apply to him when he votes
on a State bill to increase highway funding, because better
roads mean more people buying cars? It could, if the legislator
does not disclose the interest, maybe because he cannot imagine
that a disclosure rule applies to him, because everybody knows
he owns the car dealership.
The Federal prosecutors could pursue this charge even if
the punishment for such nondisclosure would normally be
administrative and the rule had never been construed to require
disclosure like this one. Thus, if Section 16 becomes law,
Federal prosecutors get to decide what Texas disclosure rules
mean and get to bring one-size-fits-all prosecutions without
any understanding of the jurisdictions in which these
prosecutions are brought.
Section 8 is a response to United States v. Sun-Diamond, in
which the Supreme Court unanimously held that that the
gratuities law could only be used to prosecute individuals who
had given gifts based on their official acts. The proposed
amendment adopts the government's losing position in Sun-
Diamond, criminalizing any gift given at any time to any public
official in any situation where that gift was given as a result
of the public official just being a public official.
As the Supreme Court unanimously noted in Sun-Diamond, the
broader provision urged by the government could result in the
criminalization of many kinds of legitimate gifts, such as
replica jerseys given to the President by championship teams.
Section 6 seems to attempt to avoid this absurd result by
permitting gifts that are expressly allowed under existing laws
or regulation. But the vast network of administrative rules
weren't written to serve that purpose, and the effect Section 6
will actually have in preventing unfair prosecutions is
unclear.
Sections 4, 5, 6, and 12 substantially increase the maximum
terms of imprisonment for certain offenses. Section 10,
moreover, orders the Sentencing Commission to increase already
high penalties for corruption offenses. But there is simply no
evidence that the current lengthy statutory maximums and
guidelines fail to provide adequate punishment and deterrence.
Thank you for the opportunity to express NACDL's concerns.
My written statement sets forth several other serious concerns
we have about the bill, but which I did not have time to
address with you this morning.
We urge the Committee to consider the wide array of
existing criminal laws that already prevent and punish public
corruption before it acts further.
[The prepared statement of Mr. O'Toole follows:]
__________
Mr. Sensenbrenner. Thank you very much. The gentleman's
time has expired.
The Chair will defer his round of questions until the end.
And for the first 5 minutes of questioning, the Chair
recognizes the gentlewoman from Florida, Ms. Adams.
Mrs. Adams. Thank you, Mr. Chairman.
Ms. Brown, you said something earlier, and I am confused,
and I have listened to all three of you. You said that if a
police officer searches a database, there is no way to
prosecute him. However, there are NCIC rules and regulations in
States, and local agencies will prosecute, is that not correct?
Ms. Brown. For----
Mrs. Adams. For using the database illegally. In other
words, going in and getting information because, if I remember
my days, and it has been a while since I have been a police
officer, my training and my certification through NCIC, there
was prosecution available if you abuse that system, correct?
Ms. Brown. There may be prosecution or administrative
remedies when a police officer or law enforcement officer
abuses that privilege, but in this way, the police officer and
the person who is doing the bribing can be brought together
under one statute and prosecuted for it.
So I don't know what the State law is in Florida, but I do
know here, in the District of Columbia, where I work with the
Metropolitan Police Department and with the U.S. Attorney's
Office, we would have brought that matter in Federal court, and
we did in that particular case.
Mrs. Adams. Okay. Well, I just wanted to make sure that I
was remembering correctly, and it is possible things have
changed since I was a police officer.
Ms. Griffin, from your perspective, what if anything is not
being prosecuted that should be?
Ms. Griffin. I think the cases of undisclosed self-dealing
that both Ms. Brown and I described. Probably the most serious
offense is the example given of a public official who steers
public contracts into a company in which that official has an
interest. I am not aware of a Federal statute that currently
would criminalize that conduct, and I believe that this
legislation closes that gap.
Mrs. Adams. Is that the only thing that you can think of
that wasn't already covered currently?
Ms. Griffin. Other varieties as well. One aspect of it
would be closed in terms of the gap by another part of the
proposed legislation, and that is the retainer theory of
bribery, or a stream of benefits conferred on a public official
with no immediate strings attached that later produces a stream
of favors. That theory is currently not accessible to Federal
prosecutors, because of Sun-Diamond and Skilling. This statute
remedies that either through overturning the limitation on
bribes and gratuities in Sun-Diamond or, more broadly,
criminalizing undisclosed self-dealing.
And then of course there is the example of an official who
is seeking employment in the private sector subsequent to
public service who acts to benefit the potential employer and
has not disclosed the future interest in that employment.
Mrs. Adams. Well, what about the part-time legislator who
owns the car dealership? Is this language vague enough that
they could be pulled in, based on the comments that Mr. O'Toole
said?
Ms. Griffin. I actually do not believe that a legislator
whose interests in a car dealership is known to constituents
would be criminalized.
There are two important elements to the new or renewed
provision in the statute. One is to tie it to actual disclosure
requirements that have not been met, so we are talking about,
let's say, a mayor of a small town who works part time and also
happens to own the car dealership. If everyone is aware of that
interest in the car dealership, then I don't believe there is
corruption, if voters can assess whether that mayor is a
faithful public agent when making decisions that might affect
the car dealership.
Mrs. Adams. Mr. O'Toole said something different. What he
said was, as a car dealership owner, a part-time legislator
votes on a transportation bill, could it be construed as not
disclosing and, therefore, cause this person to be charged,
even though there was really no intent to violate the law?
Because I know a lot of States, a lot of localities, have
their own corruption laws, and he may have complied to those
requirements but may not have realized, based on the Federal
law, could he then be charged?
Ms. Griffin. As I read the provision, the mental state
standards are quite stringent. The official would need to know
of the mandatory disclosure of the interests, knowingly fail to
disclose that interest, and then act as well with the specific
intent to further his or her own personal financial interests
and conceal that from the public.
I think by combining each of those steps with the strict
mental state requirement actually does go quite a long way
toward preventing prosecutorial overreaching.
Mrs. Adams. Ms. Brown, you look like you wanted to answer.
Ms. Brown. Yes, I do. Thank you so much.
I want to emphasize that this is not like the citizen
legislator, because for the exact same reasons. It is all about
transparency, these public corruption laws. The voters need to
know what their public officials are doing.
Mrs. Adams. Agreed.
Ms. Brown. In this case, under this statute, you must show
that he knew it, he intended to violate it, he kept it secret.
The car dealership analogy just doesn't fit.
Mrs. Adams. Thank you.
Mr. Sensenbrenner. The gentlewoman's time is expired.
The gentleman from Michigan, Mr. Conyers?
Mr. Conyers. Thank you, Mr. Chairman, and Mr. Scott, for
allowing me to precede you both.
I wanted to commend all of the witnesses. First, I want the
representative of the Department of Justice to know that I
appreciate her career in DOJ and being here today.
And, of course, Attorney Griffin, you did a great job. I
think you have raised some very good points.
But the consideration that I am raising to Chairman
Sensenbrenner is the comments of Attorney O'Toole.
Now, I didn't hear anybody refute the fact that we may be
overcriminalizing this whole area.
Does anybody contradict his assertion that the way this
bill is written, a mistake on a marriage license or the seeking
of a fishing permit would make you subject to the law?
Ms. Brown. I would be happy to answer that.
Mr. Conyers. All right, please do.
Ms. Brown. Thank you.
This honest services fraud statute was never intended, and
never covered in the past, someone who gets a fishing license
in the State of Texas, or operates the local hotdog stand.
Again, one must show that the misrepresentation on that was
intentional. It was intended to defraud. It was intended to be
kept secret.
Those stringent things do not cover those sort of
situations and never have.
It is all about public officials taking actions in secret
for their own financial gain, so the average citizen who goes
and gets a fishing license is not a public official hiding
something on the fishing license for personal gain.
Mr. Conyers. Okay.
O'Toole is talking about the Cleveland case, and you are
talking about the Skilling case, right?
What do you say, Counsel O'Toole?
Mr. O'Toole. Yes, my testimony was directed toward Section
2, which is the provision of the bill which would overrule the
Cleveland case by defining an application for a license as a
form of property that would be subject to the fraud laws. And
then the Cleveland case was specifically about a
misrepresentation on a gambling license, and there is no reason
that this definition wouldn't apply to the sorts of licenses
that I had in my testimony.
It is not about the undisclosed conflict of interest
theory, which I think has other problems, but that was not one
of them.
Ms. Brown. If Professor Griffin wants to jump in here about
the Cleveland case, I am happy to defer to her, but my response
to that stands. You can't read the Cleveland case without
reading the Skilling case and Sun-Diamond.
And I don't want to repeat myself, but it goes back to the
issue of it is undisclosed self-dealing by a public official
who intends to do that.
So an honest mistake on any type of license is not going to
be covered by the statute, and it never has been.
Now, we are not overcriminalizing or overfederalizing,
because this legislation really is to fill gaps that have been
created over the course of judicial interpretation.
As I mentioned, judicial interpretation of the bribery
statutes in the Skilling decision--the Skilling decision was
very careful when it said absolutely does the legislator, does
Congress, have to be careful in how this fix is made. And we
agree with that. But it didn't say there is no possible fix
available.
That is why the Department of Justice is happy to work with
the Subcommittee to make it fit, back to the way it was 20
years ago.
Mr. Conyers. You are pretty persuasive.
Now, Chairman Sensenbrenner, would it meet with your
approval that your staff and mine continue working on this
important bill that you and Judge Louie Gohmert and Quigley all
participated in, so that--I am moving more to a supportive
position and----
Mr. Sensenbrenner. Will the gentleman yield?
Mr. Conyers. Yes.
Mr. Sensenbrenner. The gentleman knows that my door is
always open. It has been in the past. You haven't made me mad
enough to slam it yet. [Laughter.]
Mr. Conyers. Well, yeah, but we come pretty close to it
sometimes. [Laughter.]
But at any rate, I appreciate your response, and I will
continue to work with it.
And I'd like to bring the former Chairman of the
Subcommittee on Crime in on this too, because, you know, let's
face it, he's got some reservations and we would like
Sensenbrenner's name to get on another bill here, if we can,
during this session of Congress.
Mr. Sensenbrenner. Well, with the caveat that Senator
Durbin said negotiating with me is like eating somebody for
lunch and spitting out the bones, I will be happy to negotiate
with you. [Laughter.]
Mr. Conyers. Thank you. I yield back my time.
Mr. Sensenbrenner. The gentleman from Texas, the Vice-
Chairman of the Committee, Mr. Gohmert.
Mr. Gohmert. Thank you, Mr. Chairman.
And I am trying to muddle my way through the legislation. I
didn't participate in the preparation of it, so I am just
trying to understand some of these things.
But, Ms. Brown, you had mentioned that when someone
searches a crime data for money, and they cannot be federally
prosecuted, that that is a problem. You are not saying there
are not State laws against doing such a thing, are you?
Ms. Brown. Sometimes there are State laws. In the District
of Columbia, we----
Mr. Gohmert. But if they are not, then you feel the Federal
Government needs the use of that power and jump in for the
States?
Ms. Brown. That is one reason. The other reason----
Mr. Gohmert. Would you feel the same way if a State didn't
have a burglary statute, that then we would need to federalize
burglary and make it a Federal crime if the States chose not
to?
Ms. Brown. No. What I think that is appropriate is that
there are Federal statutes and State statutes that cover the
same thing----
Mr. Gohmert. Well, let me ask you, do you think the
language that says inserting, quote, ``anything or things of
value,'' unquote, is a T-shirt a thing of value, or a baseball
cap? Would those be things of value?
Ms. Brown. Well, that is where the State and local
regulations do come in, Congressman, because----
Mr. Gohmert. So if they don't have a de minimis exception
in State or local regulations, then that would be something of
value, correct?
Ms. Brown. It is not a matter of whether it is a de
minimis. It is a matter of transparency and reporting.
Mr. Gohmert. Right. And I am familiar with the fact that
the public normally assumes, if someone is a legislator in a
State or Federal legislature, the public just kind of presumes
that since they make the law, they surely must know them, and
the presumption normally goes against a legislator.
Because I am thinking you had pointed out that a legislator
must know of disclosure requirements, but if the evidence shows
that someone is a member of the legislature and didn't disclose
something, then usually the public will say, well, he surely
knew, he makes the laws.
But I want to get to something else.
You, Mr. O'Toole, mentioned one example, but here on page
14 of the bill, where it defines undisclosed self-dealing: A
public official performs an official act for the purpose in
whole or in material part of furthering or benefitting a
financial interest of.
And then I come down, and like you all talked about, it
involves self-interest: The public official; the spouse; a
minor child; a general business partner of a public official; a
business or organization in which the public official serves as
an employee, officer or director, trustee, or general partner.
So if a Member of Congress, Mr. O'Toole, were a director of
a charitable organization, and I understand there are a lot of
Members of Congress that are, and he were to commit the
official act of cosponsoring or voting for a charitable
donation to be deductible, do you have any concerns that that
might be subject to meeting this definition of a corrupt act?
Mr. O'Toole. I do. I think this is part of the problem that
I described before, which is that the law doesn't describe the
significance of the financial interest, which is what the
Supreme Court said must be defined. And so here there may be
some----
Mr. Gohmert. Wouldn't it be clear in that situation that
charitable organization would definitely benefit, and benefit
in a financial way, correct?
Mr. O'Toole. That is correct.
Mr. Gohmert. There is no doubt, right?
Mr. O'Toole. Right. And so, since this law defines any
benefit, I certainly think that a creative prosecutor could
easily look at this and find it covered by the law.
And I am not even sure it takes a creative prosecutor,
because I do think the plain language of the law, as you point
out, does cover exactly the sort of conflict of interest
situation where someone is----
Mr. Gohmert. Do you think that is a conflict of interest?
That if you think, in your heart, that a charitable institution
should be able to have donors deduct, that that is good for the
overall benefit of the entire country, that even though that
benefits one--he's a director, or she's a director on that,
that that is corrupt?
Mr. O'Toole. Absolutely not corrupt. I think that that is
part of the problem, is that this law would criminalize
ordinary conduct that the average, everyday person would
recognize is not corrupt, and is an important and completely
legitimate part of the way that our government does business.
Mr. Gohmert. Well, it sounds like, then, as long as the
prosecutors are not ever upset with a legislator, there
shouldn't be any problem.
Mr. O'Toole. And I am sure that never happens.
Mr. Gohmert. Okay, thank you.
I yield back.
Mr. Sensenbrenner. Mr. O'Toole, do you want to qualify
that, before I say that Mr. Gohmert's time is up?
Mr. O'Toole. Qualify?
Mr. Sensenbrenner. That it never happens.
Mr. O'Toole. I will----
Mr. Sensenbrenner. I think all of us on the Committee know
it has.
Mr. O'Toole. And I'd say, I guess I should qualify by
saying I hope it never happens.
Mr. Sensenbrenner. Conceded. Without objection, the
gentleman may revise and extend his remarks.
I am happy to announce that the yellow light is now
working, and recognize the gentleman from Virginia, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Chairman, obviously we need to make some changes. But
as I said, we need to be careful about what we do.
And I wanted to ask, we have gone back and forth on this
business license thing, where if a guy lied and got a business
license, if he lied and committed fraud to get the business
license unbeknownst to the agency or any official, does this
law address that?
Ms. Brown. The honest services fraud addresses, as do the
mail and wire fraud statutes, always involve a specific intent
to defraud, regardless of the property at issue.
Mr. Scott. Wait a minute. If the business license is
obtained by fraud, lying on the form, and you got your business
license, that is obviously something of value. But it was
unbeknownst--if you bribe the official to get it, colluded with
the official, that is easy.
Ms. Brown. Yes.
Mr. Scott. Is the person who lied on the form guilty for
having illegally obtained a business license, because he did it
by lying and fraudulent activity?
Ms. Brown. If he intended to commit that, yes.
Mr. Scott. Right. Does this bill cover that?
Ms. Brown. Yes.
Mr. Scott. And the person who obtained the license by fraud
would be guilty?
Ms. Brown. If he had the specific intent.
Mr. Scott. Right, he lied. He straight up lied.
Ms. Brown. Well, there is a lie and then there is----
Mr. Scott. He lied. He fraudulently----
Ms. Brown. Yes, then this bill covers that.
Mr. Scott. Now, why wouldn't that same--and we went to the
fishing license, why wouldn't the person, the individual lying
on a fishing license, be in the same boat?
Ms. Brown. Is the person applying for the fishing license a
public official?
Mr. Scott. No. The person getting a business license wasn't
a public official.
Ms. Brown. Yes. It has to be a public official.
Mr. Scott. Okay, you didn't say that. If an individual, not
a public official, lied to get a business license----
Ms. Brown. I am not bringing that case in Federal court.
Mr. Scott. Well, I am not sure--that is you. Does this bill
cover it?
Ms. Brown. No.
Mr. Scott. Okay.
Ms. Griffin. I think that there is a provision of the bill
which would enlarge the definition of money and property in
Sections 1341 and 1343, and thereby extend the definition of
mail and wire fraud. And it would include within the definition
of property licenses as a thing of value, as property.
That is a separate provision from the ones that have been
the primary----
Mr. Scott. Well, let's back up a step.
If you lie and mail the application in on a form, you are
not a public official, you lied to get your business license,
does this legislation cover that individual? Now Ms. Brown said
no.
Ms. Brown. That would be mail fraud. That would be under
1343.
Mr. Scott. So the bill would cover that, so if you mail in
the application, if you mail in your fishing license, you are
now covered?
Ms. Brown. If you are a public official----
Mr. Scott. No, wait a minute. Wait a minute. You are going
back to----
Ms. Brown. You want a private citizen?
Mr. Scott. A private citizen----
Ms. Brown. Sure. A private citizen----
Mr. Scott [continuing]. Mails in the fraudulent license.
That is wire fraud.
Ms. Brown. That is mail fraud.
Mr. Scott. And if we change it under this bill, and now we
are covering that situation, the fishing license?
Ms. Brown. This bill does not cover private individuals. It
covers public officials.
Mr. Scott. Okay, but Ms. Griffin said you just did cover
the private official, because he mailed it in.
Now is a private official covered under this legislation?
Is he now at risk? He's not at risk now, would he be at risk if
we changed this for lying on the fishing license?
Ms. Griffin. It is a separate section of the bill. It has
not been the subject of our testimony or the thrust of most of
the discussion today.
There is a section of the proposed legislation that
separately makes a change. That refers back to the earlier
discussion----
Mr. Scott. So, well, maybe you can respond in writing,
since I am having trouble, I don't want to use my 5 minutes on
a simple question: Is a fishing license covered or not?
Mr. O'Toole. If I could try to clarify this? Section 2 of
the bill does expand Section 1341 and Section 1343, which I
believe Professor Griffin will confirm applies to private
individuals. Those are the mail and wire fraud----
Mr. Scott. So if you mail in your fishing license, two out
of three think it is covered?
Ms. Brown. No, I agree with that. I said that mail fraud--
--
Mr. Scott. Okay, so the fishing license is covered now?
Ms. Brown. Under mail fraud.
Mr. Scott. Under the bill.
Ms. Brown. Under the bill, under the honest services fraud,
it could, as in the Skilling case. In the Skilling case----
Mr. Scott. Well, wait a minute. That is a simple yes or no
question, and I'd like to ask another question----
Ms. Brown. Then I will answer yes.
Mr. Scott. And you answered no to begin with, and now it is
yes.
Ms. Brown. I am saying, yes, but----
Mr. Scott. Thank you.
There is a difference between bribes and gratuity. Under
the bribes section, the bill reduces the threshold for a bribe
from $5,000 to $1,000. But the gratuities section, as we have
noted, covers any kind of gratuity.
There are no exceptions for the gratuities? We talked about
baseball caps and T-shirts. What about written material?
Ms. Brown. I am sorry, what about written?
Mr. Scott. Written material. If a lobbyist comes in with
research that cost him $1,000 to put together, he gives it to
me to support his position on a bill, is that a gift?
Ms. Brown. No.
Mr. Scott. Why?
Ms. Brown. Because he's lobbying. It is not a gift. A gift
is something that is given personally to an individual.
And the ones we were talking about in the statute, the ones
that were involved in Sun-Diamond, were things like tickets to
the World Series, free plane tickets, cut-crystal balls,
artwork.
Mr. Scott. Well, I mean, I know what's covered, but what
else is covered?
Ms. Brown. Things like that.
Mr. Scott. But written material is not, and there is no
written exception to it?
Ms. Brown. No.
Mr. O'Toole. I actually would disagree. I think, based on
the broad language of the statute, if it is anything of value,
which I think written material would clearly be, and it is
given because of your official position under this bill, which
it would be, because it would be given to you as a congressman,
it would seem to clearly be governed by the new gratuities law
of the bill.
Mr. Sensenbrenner. The gentleman's time has expired.
The gentleman from Illinois, Mr. Quigley?
Mr. Quigley. Thank you, Mr. Chairman, and thank you for
your efforts on this legislation.
Mr. O'Toole, forgive me, let me ask you a question. What
did one Illinois prisoner say to the other Illinois prisoner?
Mr. O'Toole. I have no idea.
Mr. Quigley. The food was better here when you were
Governor.
I mention that for a reason. I am from Illinois, and I know
the association you work for, and I suppose I am a traitor to
the cause, because I was a criminal defense attorney for 10
years at 26th Street, so I get what you are getting to.
But I hear those jokes all the time, right? Hunting for
corruption in Illinois is like hunting for cows.
So we have to recognize that the public is strongly
desirous of getting something done. And so what I am getting to
with you is, you and your association may be uniquely suited to
help us clear up that which you have concerns about.
So what I am asking you, and I would mention to Ms. Brown,
is what I hear most concerns about with this legislation are
making sure it is not vague, that we don't repeat the same
mistakes. And the questions today seem to evoke those same
concerns, some sense of uniformity of what is de minimis.
And I know transparency is first and foremost. But from
transparency there appears to be a need for some uniformity in
what is disclosed.
I remember a colleague of mine at the county. They showed
her disclosure statement as a county elected official and what
she had to disclose, and then when she ran for senate, what she
had to disclose. And it was a whole different game.
And across this country, it is extraordinary the difference
of what elected officials have to disclose, and what that means
for transparency.
And wouldn't you agree that those aspects of uniformity are
critical to having the public's trust that they know what's
happening and that the prosecution is on an equal playing
field?
Ms. Brown. Yes, I do. But one of the things I wanted to
emphasize in response to that remark, Congressman, is that one
of the things we have to be careful about is making sure that
the public official knows what needs to be reported and knows
what is illegal.
But each State, each legislature, each local community, and
the Federal Government agencies and Congress, you are right,
has different disclosure forms.
But at least the way that this bill is designed is that
those disclosure obligations are linked to what is required. So
when you take your ethics course at your new employer, or when
you become a State legislator, presumably you are advised of
those things.
But you are right, it is certainly a problem that there are
all different kinds of reporting requirements.
Mr. Quigley. There is no way to help, in this legislation,
protect those that you are prosecuting, and also give the
American public a sense of what is being done uniformly across
the country?
Ms. Brown. Well, I think that the first instance is there
is a specific reporting requirement under law and that has been
violated. Then the public will know that has been violated.
There was a reporting requirement--I mean, your average
citizen doesn't go online to see the financial disclosure forms
for people who are running for public office, or who are public
employees.
Mr. Quigley. Yes, but the editorial boards do, and others--
--
Ms. Brown. Right.
Mr. Quigley [continuing]. That will help trumpet this and
get it out there.
Ms. Brown. Right.
Mr. Quigley. It makes it easier. And it is part of the same
sense of continuity.
Mr. O'Toole, you talked about the auto dealer. Is it the
uniformity of what is private interest versus public interest?
And obviously in the example you gave, the fact of the matter
is, and what seems to be the dividing line in our ethics rules,
is that, you know, you may be or have friends who are auto
dealers, but improving all the roads helps everyone.
So while it may help you, but it is also helping many
others, and that seems to be the dividing line.
Don't you see an opportunity to create sharper lines and
prevent problems with court enforcement?
Mr. O'Toole. Well, I think the sharper lines are important.
And I think that with that example, I was trying to point out a
problem with the lack of sharp lines that are in the current
bill. Because I think the language of the bill would include
the State legislator who owns a car dealership as someone who
is taking action to benefit themselves.
I know that my colleagues here pointed out the other
reasons that they think that that legislator wouldn't be
prosecuted. But I think the bill is very clear that that sort
of interest, even though I think you and I may well agree that
it is not something that the public would call a conflict of
interest, would be classified as a conflict of interest under
this bill.
Mr. Quigley. I am sorry. Go ahead.
Ms. Griffin. I think precisely because motivations can be
difficult to disentangle, in terms of the difference between
the public and the private, that a focus on private financial
gain at a certain level is important.
I mean, I agree with you, and I think the thrust of your
question is, can there be clarity in this legislation----
Mr. Quigley. Yes.
Ms. Griffin [continuing]. Over and above the clarity that
comes from State and local disclosure laws?
And I think it is something to consider, that I think is
important, whether there might be a general Federal safe harbor
for things that are insignificant, because we are looking for
those motivations that give rise to distorted decisionmaking.
And very minor benefits, like the team jerseys, and the
restaurant reservations, and some of the things in the parade
of horribles that have not actually been prosecuted, but
certainly get mentioned in a lot of pieces and commentary,
could be taken off the table with a general Federal safe
harbor.
Mr. Quigley. Mr. Chairman, thank you for the extended time.
I appreciate your efforts on this bill. I apologize for the
weak attempt at humor, but unfortunately there is more jokes
about Illinois corruption than we have time for.
You know, I will be here all week. [Laughter.]
Mr. Sensenbrenner. Well, the Chair recognizes himself for 5
minutes to say that usually the retirement home for Illinois
Governors is in Wisconsin, in Adams County, in particular.
That is where one of them is and one of them may be going.
I want to get some clarification. I agree with both what
Mr. Scott and Mr. Quigley have been saying relative that there
be need for clarification.
Ms. Brown, you talked about having a secret arrangement as
one of the predicates for this crime. Congress and most state
legislators have to file financial disclosure statements, which
are public. Does that completely blow apart the secrecy
business, if you disclose that you are a car dealer and you
still take some type of gratuity?
Ms. Brown. Yes.
Mr. Sensenbrenner. It does? Okay.
Ms. Brown. Yes, it does, because it lets the public know.
Mr. Sensenbrenner. Okay.
Now we all know that a state legislator who owns a car
dealership can vote for more money for roads. We have gone
through that. What about if the legislation before the general
assembly talks about changing the laws for disputes between car
dealerships and the manufacturer from a judicial remedy to an
arbitration remedy, which applies specifically to car
dealerships as a class, and he does not recuse himself. Would
that be a violation, if he voted in favor of that legislation?
Ms. Brown. Not if he had disclosed it on his form. I think
in those circumstances he would do well to recuse himself from
being part of that legislation, because the interests are so
closely related.
Mr. Sensenbrenner. Now let me talk about de minimis
exceptions. I think we have gone through the T-shirt example
issue as de minimis, and maybe written material, which I assume
would be a coffee table book that would talk about the
wonderful things that a specific industry does. But how about a
volunteer fire department awarding a legislator or a Member of
Congress a coat with that legislator's name embroidered on it,
and the coat would probably cost a couple hundred dollars?
Ms. Brown. To me, it depends upon the reporting requirement
for that particular Member of Congress. If the rules and
regulations under which that congressmen or State legislator
operates permits that--for example, I am allowed to have a
friend take me to lunch, so long as it is less than $20--if
those regulations allow it, he certainly could keep it.
And he reports it. That is the other thing. I could go on
something that is more expensive than that, but I have to
report it.
And so it is all, again, it is all about the transparency.
Can he keep it? Sure, but he has to report it
Mr. Sensenbrenner. Well, I think that this was in the
instance involving one Member of Congress after the definition
of gift or gratuity was changed here, where the Member of
Congress didn't know that he or she was going to get this
embroidered jacket. And there was such a question about it,
that everybody ended up getting embarrassed when the fire chief
presented her with the jacket and said it is illegal for me to
take that in front of a whole crowd of people.
Are we setting up traps where people can end up
embarrassing themselves?
Ms. Brown. I think these, particularly the honest services
fraud statute, is not a trap for the unwary. In these
circumstances when we have been talking about, you don't know--
--
Mr. Sensenbrenner. We are talking about the gratuity
statute here.
Ms. Brown. Oh, well, the gratuity statute certainly. If
there are reporting requirements--excuse me, I thought we were
talking about the honest services fraud. Forgive me.
But again, it is all about the reporting requirements. And
if that is reported as a gift and on the forms, as opposed to--
and the other thing is, you have to think about, is it
something that is going to go in someone's office, that is
going to go on the wall for everybody to see when the
citizens----
Mr. Sensenbrenner. A $200 volunteer fire department jacket,
that would be pretty tough to hang on the wall of one of our
offices.
Ms. Brown. We have fire hats all over the place in the
department.
Mr. Sensenbrenner. I am not talking about hats.
Ms. Brown. No, no, I know--I am not being frivolous. I am
just saying that if it is reported, if it is not secret,
personal gain in exchange for a favor, if it is not a thank you
under the gratuity statute, or a quid pro quo under the bribery
statute, then it is fine to be able to receive that.
Then you move into different things about conflict of
interest and reporting requirements and things like that. But
under gratuities and bribery, if there is no link between
secret dealing between the legislator and the volunteer fire
department, then it is not going to be----
Mr. Scott. Mr. Chairman, I ask unanimous consent that you
be given an additional minute to follow through on this.
Mr. Sensenbrenner. Without objection.
Mr. Scott. And because----
Mr. Sensenbrenner. I yield to the gentleman from Virginia.
Mr. Scott. And because the question on the gratuity statute
is just a gratuity. You are given a particular gift because of
your position. And this fire jacket is given to you because of
your official position. There is no disclosure requirement.
There is no disclosure connection on that section. It is a
violation.
Ms. Brown. What is it for, is the real question.
Mr. Scott. No, the gratuity--that is the bribery section,
``What is it for?'' The gratuity section is that you got a gift
because of your position.
Mr. Sensenbrenner. Well, my time has expired.
I guess I would make the observation that I am the author
of this bill with Mr. Quigley of Illinois. You know what I can
say is that the whole purpose of this bill is to try to have
very clear definitions, so that public officials know what is a
violation and what isn't. And I am afraid that the testimony on
the part of all three of our witnesses today indicate that
there isn't any agreement on what is a violation and what
isn't.
We have got to update the statute, as a result of a couple
court decisions. But when we do the updating of the statute, I
hope that we will be able to put this issue to rest, so that
everybody, including the courts, knows what is inbounds and
what is out-of-bounds.
So this bill needs quite a bit of work, and as I told the
gentleman from Michigan, Mr. Conyers, we are going to have to
work on this, and I hope to get some constructive input from
the Justice Department.
The gentleman from Tennessee, Mr. Cohen?
Mr. Cohen. Thank you, Mr. Sensenbrenner.
I understand and certainly appreciate and favor, and always
have, trying to make laws as specific as possible.
But what has been thrown up here by Mr. O'Toole about a
marriage license or a fishing license, and you mentioned a
jersey, the honest services statute has been on the books for
how many years?
Ms. Brown. Twenty.
Mr. Cohen. Twenty. How many times has it ever been used for
somebody that got a jersey or restaurant reservations or any of
these other innocuous, de minimis things that you all have
thrown out here, that now seems to be a problem with the law?
Ms. Brown. I don't have those----
Mr. Cohen. Do you know of any times it has ever been used
for something like that?
Ms. Brown. I don't. But I can't----
Mr. Cohen. Mr. O'Toole, do you know of any times that a
wedding license, a fishing license, a jersey has been the basis
of a prosecution in a Federal court?
Mr. O'Toole. Well, it cannot currently be. Under the
Cleveland decision, the fraud laws do not apply to State and
local applications. That is the holding of Cleveland.
And so currently, the Federal statutes cannot apply to
that. This change would allow that. And so I know of none,
because the law currently doesn't apply to----
Mr. Cohen. But under honest services, which is Skilling,
right?
Mr. O'Toole. Yes.
Mr. Cohen. That anything that you do that gets some public,
you get some benefit for yourself--and Ms. Griffin, Professor
Griffin, talked about having a big business, and you are
shuffling contracts, you could have a small business and
shuffle a jersey over there.
But that has never happened, has it, Professor Griffin?
Ms. Griffin. Well, there are examples of cases in which
prosecutors brought charges under the former honest services
provision, where it is difficult to identify the harm, where we
are not just talking about an intangible harm, but an
insubstantial harm.
I think one of the better examples is the Thompson case
from the Seventh Circuit, where an official acted in a way that
the prosecutors construed as intended to impress her
supervisors. She received a salary bonus because she directed
some contracts toward approved contractors who were favored for
political reasons by her supervisors. But she did not gain
financially in any direct way from that. And the only benefit
that could be articulated that she received was institutional
benefit of pleasing her supervisors. And that is literally the
way it was articulated by prosecutors.
And her conviction was reversed. And it is one of the cases
that is often cited as abusive under the former honest services
provision.
That type of case led to the parade of horribles that, for
example, Justice Scalia cited in his dissent from the denial of
cert in the Sorich case, which is another Illinois case, which
really primed the Supreme Court to take the Skilling case and
reach the decision that it did.
So there are some cases where the harm is quite
insignificant, and therefore could hardly be said to distort
the political process in a way that Congress would have----
Mr. Cohen. And how could you possibly draw a statute to
distinguish between the two?
Ms. Griffin. Well, I think there are two answers to that.
It is absolutely the case--Mr. O'Toole is right in much of what
he says.
It is definitely the case that there are due process
concerns with any new statute, and the Supreme Court
articulated those in the Skilling decision, and Congress should
be responsive to those.
But it can do so in a variety of ways, including by clearly
linking liability to the failure to disclose under an existing
requirement.
And it is not the failure to disclose itself that is being
punished. That is why there shouldn't be so much concern about
patchwork requirements in State and local jurisdictions. It is
the failure to disclose combined with taking advantage of the
official position to then benefit financially from whatever
that undisclosed interest might be.
Mr. Cohen. And, Ms. Brown, what do you think, in the
decision in Skilling, do you think it needs to be more clear?
Ms. Brown. I agree 100 percent with what Professor Griffin
just said, that the gist of this bill is to link those actions
to reporting requirements, whether they be State, local,
municipal.
That is the limit that it has provided. That is the
knowledge to the individual legislator or public official to
know----
Mr. Cohen. What if there is no reporting requirement in
this at all in a city or--I mean, States have it. They may or
may not affect a municipal official. Sometimes they cover
municipal officials, sometimes they don't.
What if the city doesn't have any disclosure requirement?
Is it ``Olly, Olly, in free'' for the mayor?
Ms. Brown. I don't know the answer to that question. I am
sorry. I'd be happy to get back to you, but I----
Mr. Cohen. Why do we need to increase the penalty
provisions? Don't you think--I mean, I am all for the bill and
for the concept, and I think if a public official does any of
these acts, they ought to be prosecuted and they ought to be
convicted, and they ought--but they lose their reputation, they
lose their job, they are probably never going to get elected
again.
I don't know what the sentences are now, but why do they
need to be increased? I mean, is that really going to be more
of a deterrent than this public shame, embarrassment, loss of
office and prestige?
Ms. Brown. We think so, because that could be said in any
white-collar case.
Mr. Cohen. What is the penalty now for a violation? What
was it under honest services?
Ms. Brown. It was 5 years.
Mr. Cohen. Five years----
Mr. Sensenbrenner. The gentleman's time has expired.
The gentlewoman from Texas, Ms. Jackson Lee?
Ms. Jackson Lee. Thank you very much, Mr. Chairman.
And I think all of us have a sense of understanding for the
legislation. You have a sense of pride regarding the importance
of public service and the necessity of ensuring that we are
held to the highest standards.
I raised questions, and I have been listening to my
colleagues, and so let me pursue some, sort of, out-of-the-
ordinary kinds of questions.
To the representative from the Department of Justice, how
extensive is public corruption? Do you have some statistics?
Have you been in this for a long time? What is your sense of
it?
Ms. Brown. I don't have statistics at my fingertips. But
having worked on public corruption cases for over 20 years, I
can say that it is quite widespread and quite common.
Just today I read in the newspaper about a police officer
here in Washington, D.C., who agreed to plead guilty and was
sentenced to 7 months in prison, in addition to having to
resign from her job.
We know what is happening in Prince George's County. We
know what is happening in Chicago. I know what is happening in
the case today in Alabama. There are many, many cases about
this.
And I will tell you, as a prosecutor who has been in court
for these sentencings, that it really undermines the public's
confidence in their public officials when they see that people
who are convicted of these offenses, who have been taking
hundreds of thousands of dollars, or even less, are getting, in
essence, a slap on the wrist.
Ms. Jackson Lee. What was the police officer's charge?
Ms. Brown. The police officer was charged, in the District
of Columbia, for aiding and abetting a burglary. She acted as a
lookout.
Ms. Jackson Lee. Would that almost be like a mass murderer,
where he draws the attention of the world, but yet there are
millions of individuals walking the Earth and walking in
America that are not mass murderers?
I mean, don't the cases that are most conspicuous draw the
most attention, while there are throngs who are doing their job
every day?
Ms. Brown. There are throngs who are doing their jobs----
Ms. Jackson Lee. But when you say widespread--let me do it
this way: Are 90 percent of the public servants in America
corrupt?
Ms. Brown. I don't have any statistics for you,
Congresswoman. I would be happy to get statistics for you about
how many public corruption cases the 94 U.S. Attorney's Offices
handle across the country.
Ms. Jackson Lee. Yes, I would appreciate it. And I would
also appreciate--and I guess that will be under the Federal
system, because I guess it would be important to note as well
how they are addressed in the present framework of the legal
system, meaning the tools that you have.
So what is the one tool that you believe this legislation
gives you that you need?
Ms. Brown. I think restoring the honest services fraud
post-Skilling is one of the most important things that----
Ms. Jackson Lee. Say it again?
Ms. Brown. Restoring the concept of honest services fraud
as applied to undisclosed financial interests. That existed
before Skilling. I think that is the most important thing that
we are talking about.
Ms. Jackson Lee. So if you are involved in some actions in
your company, or involved in that you don't let it be known
publicly that you have a vested interest or someone has an
interest?
Ms. Brown. Right, that you are keeping it secret. You are
doing it to defraud, and you are----
Ms. Jackson Lee. So the clear delineation of that language
is what you think is helpful as notice to the public servant,
and then notice--or basis upon which you can bring a case? Is
that what you are saying?
Ms. Brown. Yes.
Ms. Jackson Lee. Let me go to Mr. O'Toole.
I think you see my line of questioning. It is not so much
embedded in this bill. I think we all need to have a level of
oversight. But what are the Achilles' heels?
My Achilles' heels for all of these is that, no matter what
you are standing, you deserve due process. And the broader the
bill, the lesser due process, even if there is clarity.
Mr. O'Toole, what do you say?
Mr. O'Toole. Yes, if I could respond to a couple of things.
I mean, first, we at the National Association of Criminal
Defense Lawyers believe that 99 percent of public servants are
honest, hardworking people who do not fall into the area of
public corruption at all. And so I do think that it is a
problem that is limited to a small number of people.
Second, those people, as everyone agrees, are currently
being prosecuted, and pleading guilty and getting long
sentences.
And if I could correct one statement earlier, the honest
services maximum sentence is already 20 years. It is not 5
years. It is 20.
And so those sentences are already very long, very tough.
People go to jail when they do these sorts of things.
And so what we are concerned most about is that if you are
going to change the law, that you do so in a way that is very
clear.
Because, again, these are unanimous Supreme Court decisions
that are being overruled. It is not a 5-4 decision, where the
liberals or the conservatives split.
These are decisions that all nine justices, bipartisan,
came together and said not only is this not the law, but it
would be a very bad situation if it was the law.
And so I think going slow is really what we would urge
here.
Mr. Sensenbrenner. The gentlewoman's time is expired.
Ms. Jackson Lee. Thank you.
Mr. Sensenbrenner. The gentleman from Pennsylvania, Mr.
Marino?
Mr. Marino. Mr. Chairman, I have no questions.
Mr. Sensenbrenner. Okay.
Well, thank you very much, everybody. Let me say what I
said a few minutes ago, that I think this bill needs to be
fine-tuned to provide clarity.
Again, as long as the gentleman from Virginia and his
mentor, the gentleman from Michigan, don't make me angry, the
door is open. And I hope that we can have some input from all
of you as we try to make this bill much clearer, so that
everybody, from the Justice Department, to a school board
member in a very small school district, realize what can be
done and what can't be done.
I would ask unanimous consent that the witnesses respond
promptly to any questions that Members of the Subcommittee may
send to them, in order that we may complete the record.
And hearing that, the purpose of the Committee's session
this morning having been completed, without objection, the
Committee stands adjourned.
[Whereupon, at 11:23 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record