[House Report 104-272]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-272
_______________________________________________________________________


 
         DISAPPROVAL OF CERTAIN SENTENCING GUIDELINE AMENDMENTS

                                _______


 September 29, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


   Mr. McCollum, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with



                            DISSENTING VIEWS

                        [To accompany H.R. 2259]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2259) to disapprove certain sentencing guideline 
amendments, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                           TABLE OF CONTENTS

                                                                   Page
Language of the Bill.............................................     2
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     3
Hearings.........................................................     4
Committee Consideration..........................................     5
Vote of the Committee............................................     5
Committee Oversight Findings.....................................     7
Committee on Government Reform and Oversight.....................     8
New Budget Authority and Tax Expenditures........................     8
Congressional Budget Office Estimate.............................     8
Inflationary Impact Statement....................................     9
Section-by-Section Analysis......................................     9
Agency Views.....................................................    11
Dissenting Views.................................................    16

    The language of the bill, as ordered reported, without 
amendment, is as follows:

SECTION 1. DISAPPROVAL OF AMENDMENTS RELATING TO EQUALIZATION OF CRACK 
                    AND COCAINE POWER QUANTITIES FOR TRAFFICKING 
                    OFFENSES.

    In accordance with section 994(p) of title 28, United States Code, 
Amendment number 5 of the ``Amendments to the Sentencing Guidelines, 
Policy Statements, and Official Commentary'', submitted by the United 
States Sentencing Commission to Congress on May 1, 1995, is hereby 
disapproved and shall not take effect to the extent it--
          (1) amends Sec. 2D1.1(c) (1) through (14) of the sentencing 
        guidelines;
          (2) inserts the following sentence in Sec. 2D1.1(c) of the 
        sentencing guidelines: `` `Cocaine,' for the purpose of this 
        guideline, includes cocaine hydrochloride, cocaine base, and 
        crack cocaine.''; and
          (3) deletes ``1 gm of Cocaine Base (`Crack') = 20 kg of 
        marihuana'' from the Commentary to Sec. 2D1.1 of the sentencing 
        guidelines captioned ``Application Notes'' in Note 10 in the 
        subdivision captioned ``Cocaine and Other Schedule I and II 
        Stimulants''.

SEC. 2. DISAPPROVAL OF AMENDMENTS RELATING TO EQUALIZATION OF CRACK AND 
                    COCAINE POWER QUANTITIES FOR POSSESSION OFFENSES.

    In accordance with section 994(p) of title 28, United States Code, 
Amendment number 5 of the ``Amendments to the Sentencing Guidelines, 
Policy Statements, and Official Commentary'', submitted by the United 
States Sentencing Commission to Congress on May 1, 1995, is hereby 
disapproved and shall not take effect to the extent it amends section 
2D2.1.

SEC. 3. DISAPPROVAL OF AMENDMENTS RELATING TO MONEY LAUNDERING AND 
                    TRANSACTIONS IN PROPERTY DERIVED FROM UNLAWFUL 
                    ACTIVITY.

    In accordance with section 994(p) of title 28, United States Code, 
Amendment number 18 of the ``Amendments to the Sentencing Guidelines, 
Policy Statements, and Official Commentary'', submitted by the United 
States Sentencing Commission to Congress on May 1, 1995, is hereby 
disapproved and shall not take effect.

                          purpose and summary

    The purpose of H.R. 2259 is to prevent the U.S. Sentencing 
Commission's proposed amendments to the federal sentencing 
guidelines regarding penalties for crack cocaine and money 
laundering from taking effect. Those two amendments would 
result in reduced sentences for certain crack cocaine-related 
and money laundering offenses. In preventing the amendments 
from taking effect, the bill will preserve the current 
sentences for those offenses. H.R. 2259 will permit the other 
25 of the Sentencing Commission's amendments to go into effect.
    The bill includes three sections. Section 1 disapproves the 
Commission's recommended amendment to equalize the penalties 
for distributing crack and powder cocaine, thereby preserving 
the current guideline sentences for crack cocaine trafficking 
offenses. The Commission's amendment would modify the quantity 
thresholds which are used to determine a sentencing range. The 
resulting sentencing range would fall below the statutory 
mandatory minimum sentences for that offense, thus resulting in 
greatly reduced sentences for crack cocaine trafficking 
offenses than is currently the case. The Administration 
supports this section of H.R. 2259.
    Section 2 disapproves the amendment relating to sentences 
associated with the possession of crack and powder cocaine, 
thereby preserving the current guideline sentences for crack 
cocaine possession offenses. The Administration supports the 
Commission's proposal in this area. In rejecting the 
Commission's recommendation to treat the possession of crack in 
the same manner as simple possession of cocaine powder, 
supporters of H.R. 2259 recognize that the possession of even 
relatively small amounts of crack is frequently inseparable 
from the trafficking of crack. The statute which creates the 
present 100-to-1 ratio for crack possession offenses (21 U.S.C. 
844) was established in response to the unique nature of the 
crack cocaine trafficking trade, which often entails 
trafficking in much smaller quantities of crack cocaine than 
with powder cocaine. Consequently, an offender caught with 5 
grams or more of crack cocaine, as provided under the statute, 
can be reasonably presumed to be trafficking even though the 
quantity possessed is relatively small. While 21 U.S.C. 844 is 
a possession offense, it presumes that an offender who 
possesses 5 grams of crack generally possesses it with the 
intent to distribute. As a result, H.R. 2259 properly avoids 
making an artificial distinction between possession of 5 grams 
or more of crack and distribution of crack.
    Section 3 of H.R. 2259 disapproves the Sentencing 
Commission's proposed amendment to the sentencing guidelines 
for money laundering offenses, thereby maintaining the current 
guideline sentences for the relevant money laundering offenses. 
The Commission's proposed amendment would substantially reduce 
the penalties for laundering proceeds of both financial and 
drug offenses. The Administration supports section 3.

                background and need for the legislation

    On May 1, 1995, pursuant to the Sentencing Reform Act of 
1984, the U.S. Sentencing Commission submitted to Congress 
proposed amendments to the sentencing guidelines. The 27 
proposed amendments include reduced penalties for crack cocaine 
and money laundering, clarification of guideline enhancements 
for sex offenses and non-narcotic drug trafficking, and 
adjustments to the guidelines in conformity with mandatory 
minimum penalties enacted in the 1994 Crime Act. Under the 
Sentencing Reform Act of 1984, the Commission's amendments to 
the sentencing guidelines are to take effect November 1, 1995, 
unless Congress intervenes.
    On June 29, 1995, the Judiciary Committee's Crime 
Subcommittee held a hearing to examine the Sentencing 
Commission's recommended changes to the sentencing guidelines 
that would equalize penalties for similar quantities of crack 
and powder cocaine. Many of the hearing witnesses, including 
members of the Sentencing Commission, acknowledged important 
differences between crack and powder cocaine: crack is more 
addictive than powder cocaine; it accounts for more emergency 
room visits; it is most popular among juveniles; it has a 
greater likelihood of being associated with violence; and crack 
dealers have more extensive criminal records than other drug 
dealers and tend to use young people to distribute the drug at 
a greater rate. In short, the evidence overwhelmingly 
demonstrates significant distinctions between crack and powder 
cocaine. Importantly, with regard to the question of racial 
disparity, the Sentencing Commission's own report states, 
``Clearly, the penalties apply equally to similar defendants, 
regardless of race. * * * [T]here is no evidence that Congress 
or the Sentencing Commission acted with any discriminatory 
intent in setting different statutory guideline penalties for 
different forms of cocaine.'' The Administration expressed its 
opposition to the Commission's proposal to reduce the penalties 
for crack cocaine trafficking offenses.
    On June 22, 1995, the Judiciary Committee's Crime 
Subcommittee heard compelling testimony from law enforcement 
leaders of the District of Columbia, including the police 
chief, the U.S. Attorney, and the chief judge about the effects 
of crack cocaine on the nation's capital. They warned Congress, 
in unmistakable terms, not to lower crack penalties to those of 
powder cocaine offenses, because of the more destructive nature 
of the crack market.
    While the evidence clearly indicates that there are 
significant distinctions between crack and powder cocaine that 
warrant maintaining longer sentences for crack-related 
offenses, it should be noted that the current 100-to-1 quantity 
ratio may not be the appropriate ratio. The goal must 
ultimately be to ensure that the uniquely harmful nature of 
crack is reflected in sentencing policy and, at the same time, 
uphold basic principles of equity in the U.S. Code.
    It is important to note that if the Commission's guideline 
amendments went into effect without Congress lowering the 
current statutory mandatory minimum penalties, it would create 
gross sentencing disparities. Sentences just below the 
statutory minimum would be drastically reduced, but mandatory 
minimums would remain much higher. For example, an offender 
convicted of distributing 5 grams of crack would, under the 
statutory mandatory minimum penalty, face a mandatory prison 
term of 5 years; however, an offender convicted of distributing 
4.9 grams of crack could, under the Commission's amendment to 
the guidelines, receive a sentence within a range of 0-6 months 
of imprisonment. The Commission's crack-related guideline 
amendments would establish penalties for crimes that stand in 
sharp contrast with statutory mandatory minimum penalties.
    The Administration opposes the Commission's money 
laundering amendment. Prosecutors would be deprived of an 
important law enforcement tool if the Commission's money 
laundering amendment took effect. The current money laundering 
penalties are a critical means of attacking criminal 
enterprises that engage in a wide variety of illegal 
activities, and whose very existence depends on their ability 
to deposit and launder the proceeds from these activities. 
Consequently, stiff sentences, which treat the act of money 
laundering itself as a serious offense, should be preserved.

                                hearings

    The Committee's Subcommittee on Crime held 1 day of 
hearings on June 29, 1995 on the Sentencing Commission's 
recommended changes to the sentencing guidelines that would 
equalize penalties for similar quantities of crack and powder 
cocaine. Testimony was received from 11 witnesses on three 
panels. The first panel consisted of members of the Sentencing 
Commission. They were: Richard Conaboy, Chairman, and U.S. 
District Judge, Eastern District of Pennsylvania; Wayne Budd, 
commissioner; Deanell Tacha, Commissioner, and 10th U.S. 
Circuit Court of Appeals. The second panel consisted of one 
witness: Joann Harris, Assistant Attorney General, Criminal 
Division, U.S. Department of Justice. The third panel consisted 
of seven witnesses. They were: Judge Lyle Strom, U.S. District 
Court Judge, District of Nebraska; Wade Henderson, Director, 
NAACP; Richard Cullen, Former United States Attorney, Eastern 
District of Virginia, and Member, Virginia Sentencing 
Commission; Dr. Herbert Kleber, Executive Vice President and 
Medical Director, Center on Addiction and Substance Abuse 
(CASA), Columbia University; Tim Nelson, Special Agent, North 
Carolina State Bureau of Investigation; and Dr. Jeffery Fagan, 
Professor of Criminal Justice, Rutgers University.

                        committee consideration

    On September 9, 1995, the Committee met in open session and 
ordered the bill favorably reported, by a 21-11 recorded vote, 
without amendment, a quorum being present. The recorded vote 
was subsequently vitiated by unanimous consent, and the bill 
was reported favorably by voice vote, a quorum being present.

                         vote of the committee

    The Committee considered the following amendments:
    Mr. Conyers offered an amendment in the nature of a 
substitute to postpone the effective date of the guideline 
amendments relating to cocaine and money laundering until May 
1, 1996. The Conyers amendment was defeated by a 10-21 roll 
call vote.

                               Rollcall 1

        AYES                          NAYS
Mr. Conyers                         Mr. Hyde
Mr. Frank                           Mr. Moorhead
Mr. Berman                          Mr. Sensenbrenner
Mr. Boucher                         Mr. McCollum
Mr. Bryant (TX)                     Mr. Gekas
Mr. Reed                            Mr. Coble
Mr. Nadler                          Mr. Smith (TX)
Mr. Scott                           Mr. Schiff
Ms. Lofgren                         Mr. Gallegly
Ms. Jackson-Lee                     Mr. Canady
                                    Mr. Inglis
                                    Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant (TN)
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Watt

    Mr. Watt motioned to reconsider the vote by which the 
Conyers amendment was defeated. The motion was defeated by a 
12-20 roll call vote.

                               Rollcall 2

        AYES                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Berman                          Mr. McCollum
Mr. Boucher                         Mr. Gekas
Mr. Reed                            Mr. Coble
Mr. Nadler                          Mr. Smith (TX)
Mr. Scott                           Mr. Schiff
Mr. Watt                            Mr. Gallegly
Mr. Becerra                         Mr. Canady
Ms. Lofgren                         Mr. Inglis
Ms. Jackson-Lee                     Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant (TX)
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr

    Motion to report H.R. 2259 favorably. Final Passage. 
Adopted 21-11. (Subsequently vitiated by unanimous consent. 
Adopted by voice vote.)

                               Rollcall 3

        AYES                          NAYS
Mr. Hyde                            Mr. Conyers
Mr. Moorhead                        Mrs. Schroeder
Mr. Sensenbrenner                   Mr. Frank
Mr. McCollum                        Mr. Berman
Mr. Gekas                           Mr. Boucher
Mr. Coble                           Mr. Nadler
Mr. Smith (TX)                      Mr. Scott
Mr. Schiff                          Mr. Watt
Mr. Gallegly                        Mr. Becerra
Mr. Canady                          Ms. Lofgren
Mr. Inglis                          Ms. Jackson-Lee
Mr. Goodlatte
Mr. Buyer
Mr. Hoke
Mr. Bono
Mr. Heineman
Mr. Bryant (TN)
Mr. Chabot
Mr. Flanangan
Mr. Barr
Mr. Reed

    Motion to authorize the Chairman to move to go to 
conference. The motion was agreed to 23-10.

                               Rollcall 4

        AYES                          NAYS
Mr. Hyde                            Mr. Conyers
Mr. Moorhead                        Mrs. Schroeder
Mr. Sensenbrenner                   Mr. Frank
Mr. McCollum                        Mr Bryant (TX)
Mr. Gekas                           Mr. Nadler
Mr. Coble                           Mr. Scott
Mr. Smith (TX)                      Mr. Watt
Mr. Schiff                          Mr. Becerra
Mr. Gallegly                        Ms. Lofgren
Mr. Canady                          Mr. Jackson-Lee
Mr. Inglis
Mr. Goodlatte
Mr. Buyer
Mr. Hoke
Mr. Bono
Mr. Heineman
Mr. Bryant (TN)
Mr. Chabot
Mr. Flanangan
Mr. Barr
Mr. Berman
Mr. Boucher
Mr. Reed

    Mr. Watt motioned to reconsider vote of the Conyers 
amendment to strike the section which prevents the reduction of 
crack cocaine possession penalties from taking effect. The 
motion was defeated 11-22.

                               Rollcall 5

        AYES                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Berman                          Mr. McCollum
Mr. Boucher                         Mr. Gekas
Mr. Nadler                          Mr. Coble
Mr. Scott                           Mr. Smith (TX)
Mr. Watt                            Mr. Schiff
Mr. Becerra                         Mr. Gallegly
Ms. Lofgren                         Mr. Canady
Ms. Jackson-Lee                     Mr. Inglis
                                    Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant (TN)
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Bryant (TN)

                      committee oversight findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         committee on government reform and oversight findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               new budget authority and tax expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               congressional budget office cost estimate

    In compliance with clause 2(l)(C)(3) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 2259, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 27, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 2259, a bill to disapprove certain sentencing 
guideline amendments, as ordered reported by the House 
Committee on the Judiciary on September 12, 1995. CBO estimates 
that implementing H.R. 2259 would result in additional costs to 
the federal government to accommodate more prisoners in federal 
prisons. We estimate that the cost of enacting the bill would 
be about $15 million in fiscal year 1996 and would increase to 
about $90 million in fiscal year 2000, subject to the 
availability of appropriations. Those amounts represent the 
estimated cost of forgoing an expected decrease in spending 
requirements that would occur under current law. Enacting H.R. 
2259 also could affect direct spending and receipts, so pay-as-
you-go procedures would apply. However, we estimate that any 
increases in direct spending and receipts would be less than 
$500,000 annually.
    In May 1995, the U.S. Sentencing Commission submitted to 
Congress proposed amendments to the sentencing guidelines for a 
variety of federal crimes. Under current law, these amendments 
will take effect on November 1, 1995, unless Congress 
intervenes. H.R. 2259 would nullify certain amendments relating 
to crack cocaine and money laundering offenses.
    Taken together, the Sentencing Commission's amendments 
relating to crack cocaine and money laundering offenses would 
result in shorter prison terms for offenders. Therefore, 
enacting H.R. 2259 would maintain the current longer prison 
terms and thus increase costs to the federal prison system--
relative to the expected costs for the shorter terms that would 
be put in place under current law. In other words, the bill 
would maintain current spending requirements per prisoner, 
instead of allowing shorter prison terms to take effect. 
According to the U.S. Sentencing Commission, each year about 
5,000 individuals would be affected by the bill's provisions. 
Sentences in cocaine and money laundering cases vary widely, 
but according to the U.S. Sentencing Commission, enacting H.R. 
2259 would increase the average sentence by about two years 
more than the average under the commission's guidelines. The 
annual cost of incarcerating an inmate is about $20,000.
    Assuming no significant change in the number of 
convictions, CBO estimates that the cost to the prison system 
gradually grow to roughly $200 million annually at current 
prices. However, that level would not be reached for up to 30 
years. Based on the U.S. Sentencing Commission's prison impact 
model, which predicts the distribution of sentences over time, 
we estimate that the additional cost would be about $15 million 
in fiscal year 1996 and would increase to about $90 million by 
the year 2000, subject to the availability of appropriations.
    Relative to the Sentencing Commission's proposed 
amendments, H.R. 2259 would provide for increased criminal 
fines. Therefore, enacting the bill could increase governmental 
receipts through greater penalty collections, but we estimate 
that any such increase would be less than $500,000 annually. 
Criminal fines would be deposited in the Crime Victims Fund and 
would be spent in the following year. Thus, direct spending 
from the fund would match the increase in revenues with a one-
year lag.
    Because this bill would not require state courts to impose 
these sentencing provisions, CBO estimates that enacting H.R. 
2259 would not result in any costs to states or localities.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                     inflationary impact statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that H.R. 
2259 will have no significant inflationary impact on prices and 
costs in the national economy.

                      section-by-section analysis

Sec. 1. Disapproval of amendments relating to equalization of crack and 
        cocaine powder quantities for trafficking offenses

    This section disapproves that part of Amendment 5 which 
would equalize the penalties in the federal sentencing 
guidelines for distributing crack and powder cocaine. 
Consequently, this section prevents Amendment 5 from taking 
effect to the extent that it would amend section 2D1.1(c) of 
the sentencing guidelines, and treat crack cocaine and powder 
cocaine the same for purposes of determining sentences for 
crack and powder trafficking offenses. The Commission's 
proposed amendment to section 2D1.1(c) would modify the 
quantity thresholds, which determine prison sentences under the 
sentencing guidelines below statutory mandatory minimum 
sentences. As an amendment to the guidelines, the Commission's 
proposed amendment would be powerless to effect the statutory 
mandatory minimums, but would significantly alter those 
guideline sentences imposed for crack amounts below the 
statutory mandatory minimum amounts, drastically reducing them, 
while the mandatory minimums would remain much higher. The 
effect would be to create significant sentencing disparities 
for offenses involving minor quantity differences. For example, 
an offender convicted of distributing 5 grams of crack would, 
under the statutory mandatory minimum penalty, face a mandatory 
prison term of 5 years; however, an offender convicted of 
distributing 4.9 grams of crack could, under the Commission's 
amendment to the guidelines, receive a sentence within a range 
of 0-6 months of imprisonment.

Sec. 2. Disapproval of amendments relating to equalization of crack and 
        cocaine powder quantities of possession offenses

    This section disapproves that part of Amendment 5 which 
would equalize the penalties in the federal sentencing 
guidelines for possessing crack and powder cocaine. 
Consequently, this section prevents Amendment 5 from taking 
effect to the extent that it would amend section 2D2.1 of the 
sentencing guidelines and treat crack cocaine and powder 
cocaine the same for purposes of determining sentences for 
crack and powder possession offenses. The Commission's 
recommended changes to section 2D2.1 would modify the quantity 
thresholds which determine prison sentences affecting guideline 
sentences below statutory mandatory minimum sentences. As with 
the part of Amendment 5 addressed by Section 1, this part of 
Amendment 5 which addresses possession offenses would 
drastically alter those guideline sentences below the statutory 
mandatory minimum sentences, leaving them in sharp contrast 
with the mandatory minimums.
    H.R. 2259 allows to take effect that section of Amendment 5 
which increases the sentences for drug-related offenses 
involving dangerous weapons. That section of the Commission's 
amendment would modify section 2D1.1(b)(1)) of the guidelines 
be deleting the subsection which increases the sentence by 2 
offense levels if a dangerous weapon (including a firearm) was 
possessed during the offense. That subsection would be replaced 
by a new subsection providing for three different sentence 
increases.
    The new subsection provides for an increase of 6 offense 
levels if the defendant discharged a firearm, unless the 
resulting offense level is less than level 24, in which case 
the offense level is increased to level 24. The subsection 
further provides for an increase of 4 offense levels if the 
defendant brandished or otherwise used a dangerous weapon 
(including a firearm), unless the resulting offense level is 
less than level 19, in which case the offense level is 
increased to level 19. The subsection further provides for an 
increase of 3 offense levels if a dangerous weapon (including a 
firearm) was possessed, unless the dangerous weapon was a 
firearm and the resulting offense level is less than level 18, 
in which case the offense level is increased to level 18.

Sec. 3. Disapproval of amendments relating to money laundering and 
        transactions in property derived from unlawful activity

    This section disapproves Amendment 18 to the sentencing 
guidelines. This proposed amendment would substantially reduce 
the penalties for laundering proceeds of both financial and 
drug offenses, by deleting sections 2S1.1 and 2S1.2 of the 
sentencing guidelines, and replacing them with reduced base 
offense levels. Current sentencing guidelines treat various 
acts of concealing the proceeds of illegal activity the same, 
regardless of the penalties for the underlying criminal 
activity attempting to be concealed. The Commission's amendment 
would reduce the sentences for acts of money laundering for 
certain categories of ``less serious'' criminal activities. The 
effect would be to reduce sentences for the crime of money 
laundering substantially in many cases. For example, under 
current guidelines, an offender who launders more than $100,000 
worth of fraud proceeds by engaging in a financial transaction 
designed to conceal the source of the funds would be subject to 
a sentence of 37-46 months. If the amendment to the guidelines 
took effect, the guideline range would be 21-27 months 
imprisonment.

                              agency views

                        U.S. Department of Justice,
                             Office of Legislative Affairs,
                                      Washington, DC, May 12, 1995.
Hon. Newt Gingrich,
Speaker, House of Representatives,
Washington, DC.
    Dear Mr. Speaker: Enclosed is a legislative proposal to 
disapprove certain sentencing guideline amendments recently 
submitted to Congress by the United States Sentencing 
Commission for a 180-day review period. The amendments proposed 
for Congressional disapproval relate to two areas--(1) 
equalization of cocaine base (crack) and cocaine powder 
quantities for drug trafficking penalties, and (2) revision of 
the guidelines applicable to money laundering and transactions 
in property derived from unlawful activity. These sentencing 
guideline amendments will take effect November 1, 1995, unless 
an Act of Congress provides otherwise.
    The legislative proposal would disapprove and prevent the 
taking effect of the two sentencing guideline amendments 
described above. The guideline amendments relating to crack, 
which were adopted by a divided Sentencing Commission, would 
drastically reduce crack guideline penalties without 
recognizing the significant differences between crack and 
cocaine powder. Crack is a more dangerous and harmful substance 
than cocaine powder for a number of reasons. It is the more 
psychologically addictive of the two substances through the 
most common routes of administration. Additionally, the open-
air street markets and crack houses used for the distribution 
of crack, which can be broken down and packaged into very small 
and inexpensive quantities for distribution to the most 
vulnerable members of society, contribute heavily to the 
deterioration of neighborhoods and communities. Finally, the 
guideline amendments relating to crack are inconsistent with 
current mandatory minimum penalties.
    The Sentencing Commission's amendments to the money 
laundering guidelines are sweeping in nature and would 
substantially lower the penalties for many serious money 
laundering offenses despite the fact that Congress has treated 
money laundering as a significant offense subject to 10- or 20-
year maximum penalties. The amendments would produce reductions 
in sentence with respect to the laundering of proceeds of both 
financial and drug offenses.
    We urge early consideration of this important legislative 
proposal to prevent these unsatisfactory sentencing guideline 
amendments from taking effect. The Office of Management and 
Budget has advised that there is no objection from the 
standpoint of the Administration's programs to the presentation 
of this legislative proposal.
            Sincerely,
                                               Kent Markus,
                                 Acting Assistant Attorney General.

                                analysis

    On May 1, 1995, the United States Sentencing Commission 
submitted to Congress amendments to the sentencing guidelines, 
policy statements, and official commentary in a number of 
areas. Such amendments will take effect November 1, 1995, 
unless an Act of Congress provides otherwise. The bill would 
overturn amendments relating to two of the areas--(1) 
equalization of cocaine base and cocaine powder quantities for 
drug trafficking penalties, and (2) revision of the guidelines 
applicable to money laundering and transactions in property 
derived from unlawful activity.
    By way of background, the United States Sentencing 
Commission has the power to promulgate amendments to the 
sentencing guidelines. However, the Commission must submit such 
amendments to Congress for at least a 180-day review period. 
Sentencing Guideline amendments take effect no later than 
November 1 of the calendar year in which submitted, ``except to 
the extent that . . . the amendment is otherwise modified or 
disapproved by Act of Congress.'' 28 U.S.C. Sec. 994(p). The 
bill would implement this provision by disapproving the 
Sentencing Commission's amendments with respect to cocaine base 
and money laundering.
    The sentencing guideline amendments relating to cocaine 
base (usually known as ``crack''), which were adopted by a 4-3 
vote of the Commission, would drastically reduce crack 
penalties without recognizing the significant differences 
between crack and cocaine hydrochloride (cocaine powder). Crack 
is a more dangerous and harmful substance than cocaine powder 
for a number of reasons. The most common routes of 
administration of the two drugs cause crack to be the more 
psychologically addictive of the substances, particularly 
because smoking crack produces quicker, more intense, and 
shorter-lasting effects than snorting cocaine powder. 
Identifiable social and behavioral changes occur much more 
quickly with the use of crack than with the use of cocaine 
powder. Crack can also be broken down and packaged into very 
small and inexpensive quantities for distribution and is 
thereby marketed to the most vulnerable members of society, 
including those of lower socioeconomic status and youth. 
Additionally, the open-air street markets and crack houses used 
for the distribution of crack contribute heavily to the 
deterioration of neighborhoods and communities. Finally, the 
present crack market is associated with violent crime to a 
greater extent than that of cocaine powder.
    Despite these realities, the Sentencing Commission has 
taken two steps to lower crack penalties to precariously low 
levels. First, the Commission has recommended that Congress 
eliminate the differential treatment of crack and cocaine 
powder in the mandatory minimum penalties currently provided by 
statute. In addition, the Commission has submitted an amendment 
of the sentencing guidelines to treat crack and cocaine powder 
alike under the guidelines, regardless of whether Congress 
first revises the statutory minimum penalties. As a result, an 
offender convicted of distributing 50 grams of crack (about 500 
doses), for whom the relevant statute imposes a mandatory 
minimum 10-year term of imprisonment, would face a guideline 
sentence of just 21-27 months of imprisonment. If such an 
offender accepted responsibility for his or her offense, the 
sentencing guideline range would be 12-18 months of 
imprisonment. If the court found that such an offender had also 
played a minimal role in the offense, the sentencing guideline 
range would be just 4-10 months of imprisonment, which could be 
satisfied by probation with conditions of confinement, such as 
home detention. Offenses now subject to a 5-year mandatory 
minimum prison term (involving at least 5 grams of crack) would 
potentially be subject to a sentencing guideline range of just 
0-6 months of imprisonment if the defendant accepted 
responsibility for the offense and were a minor player.
    From the above it can be seen that if Congress adopts the 
Commission's recommendation to treat crack and cocaine powder 
alike for purposes of the mandatory minimum penalties, some 
offenses now subject to a 5- or 10-year mandatory minimum 
prison term will potentially result in a sentence involving no 
required prison term at all.
    Even if Congress does not adopt the Commission's 
recommendation as to mandatory minimum penalties for crack, the 
sentencing guideline amendments the Commission has submitted 
create serious problems. The low guideline sentences bring 
about inconsistency between the guidelines and the current 
statutory scheme, with the result that mandatory minimum 
sentences will override many guideline sentences and produce 
sharp cliffs in sentencing, as well as resentment among those 
subject to the statutory penalties. The sentencing guidelines 
should work in concert with, rather than in opposition to, 
mandatory minimum sentences. Moreover, the low guideline 
sentences will prevail in the case of crack offenders subject 
to the ``safety-valve'' exemption from mandatory minimum 
sentences, 18 U.S.C. Sec. 3553(f). The implementation of these 
low sentences for ``safety-valve'' defendants may also violate 
the statutory requirement that guidelines implementing the 
``safety-valve'' must provide a guideline range in which the 
lowest term of imprisonment is at least 24 months for 
defendants who would have been subject to a mandatory minimum 
5-year sentence. Violent Crime Control and Law Enforcement Act 
of 1994, Pub. L. No. 103-322, Sec. 80001(b)(1)(B). The drastic 
reduction in guideline sentences for crack will result in 
safety-valve sentences under Sec. 5C1.2 of the sentencing 
guidelines lower than 24 months in certain cases, as described 
above.
    For the reasons set forth, Congress should disapprove the 
equalization of crack and cocaine powder sentences in the 
sentencing guidelines, as provided in section 1 of the proposed 
legislation. While Section 1 would result in the disapproval of 
those portions of sentencing guideline amendment number 5 that 
would equalize crack and cocaine powder trafficking penalties, 
it would not affect other portions of the amendment. For 
example, the legislative proposal would not affect the portions 
of the amendment that provide enhanced sentences for the use or 
possession of a weapon in the case of any drug trafficking 
offense or that delete the definition of ``cocaine base.'' Nor 
would the legislative proposal affect the amended guidelines' 
treatment of simple possession of crack in the same manner as 
simple possession of cocaine powder. (Of course, current 
mandatory minimum penalties pertaining to the simple possession 
of certain quantities of crack would continue to apply unless 
repealed by Congress.)
    Without Congressional action disapproving the guidelines, 
the amendments will go into effect November 1, 1995. While the 
Department of Justice recognizes that some adjustment of the 
current penalty structure may be appropriate, any such 
adjustment must reflect the greater dangers associated with 
crack than cocaine powder.
    Section 2 of the proposed legislation addresses sentencing 
guideline amendments submitted by the Sentencing Commission to 
Congress relating to money laundering and transactions in 
property derived from unlawful activity. The amendments were 
the product of intense lobbying by the white-collar defense bar 
to lower penalties for money laundering and related activity. 
The guideline amendments are sweeping in nature and would 
substantially lower the penalties for many serious money 
laundering to be a significant offense subject to 10- or 20-
year maximum penalties (depending upon the offender's intent).
    The amendments would produce reductions in sentence with 
respect to the laundering of proceeds of both financial 
offenses and drug offenses. For example, under the current 
guidelines an offender who launders $110,000 worth of proceeds 
of a fraud by engaging in a financial transaction knowing that 
the transaction is designed to conceal the source of the 
illegal funds (and is convicted of violating 18 U.S.C. 
Sec. 1956(a)(1)(B)(i)) would face a current guideline sentence 
of 37-46 months of imprisonment under Sec. 2S1.1 of the 
sentencing guidelines. Under the amended guideline submitted to 
Congress, the guideline range would be just 21-27 months of 
imprisonment. An offender who commits a similar offense 
involving $110,000 worth of illegal drug proceeds would face a 
current guideline sentence of 51-63 months of imprisonment. 
Under the recently submitted guideline amendments the guideline 
sentence would be just 33-41 months of imprisonment.
    The Commission's guideline changes appear to respond in 
part to the class of money laundering cases in which the money 
laundering activity is not extensive, including ``receipt and 
deposit'' cases--those in which the money laundering conduct is 
limited to depositing the proceeds of unlawful activity in a 
financial institution account identifiable to the person who 
committed the underlying offense. While the application of the 
current guidelines to receipt-and-deposit cases, as well as to 
certain other cases that do not involve aggravated money 
laundering activity, may be problematic--and the Department of 
Justice proposed to the Sentencing Commission a sentencing 
guideline amendment that would have addressed this problem 
while preserving appropriately tough sentences for serious 
money laundering activities--past sentencing anomalies arising 
from relatively few cases do not justify a sweeping downward 
adjustment in the money laundering guidelines.
    The broad changes in money laundering sentences reflected 
in the Commission's guideline amendments, if allowed to stand, 
will send a dangerous message that money laundering associated 
with drug and other serious crimes is not viewed as the grave 
offense it once was.
                            DISSENTING VIEWS

    On September 12, 1995, the Republican majority on the House 
Judiciary Committee had the opportunity to eliminate the 
disparity in sentences between crack cocaine and powder cocaine 
offenses. The Committee could have eliminated blatantly 
discriminatory federal laws. Regrettably, the majority opted 
instead to perpetuate these discriminatory laws by passing and 
reporting out H.R. 2259, which disapproves the recommendations 
of the U.S. Sentencing Commission to eliminate the disparities 
in federal sentencing for crack cocaine and powder cocaine 
offenses.
    In response to complaints from the federal bench, the 
criminal defense bar, family members of convicted crack 
defendants and civil rights groups, Congress directed the 
Sentencing Commission in the 1994 Crime Bill to examine the 
obvious disparity in sentences for crack and powder offenses. 
Overwhelming evidence was presented to support the unanimous 
conclusion of the Commission members that the current 100-to-1 
disparity for crack trafficking versus powder trafficking 
offenses cannot be justified \1\ and mandatory minimum 
sentences for simple possession of crack must be eliminated. By 
rejecting the recommendation of the Sentencing Commission, the 
Committee majority rejected documented and analytically sound 
analysis in favor of an insulting paternalistic approach based 
on unsupported anecdotal evidence.
    \1\ United States Sentencing Commission, ``Cocaine and Federal 
Sentencing Policy'' (1995). Three members of the Commission dissented 
from the majority recommendation that base penalties for crack and 
powder cocaine trafficking offenses be equalized with sentencing 
enhancements added to address aggravating factors often associated with 
crack trafficking. However, even these three dissenting voices agreed 
that the current 100-to-1 disparity was unjust and should be reduced.
---------------------------------------------------------------------------
    Just as beer and wine are two forms of the same drug 
(alcohol), crack cocaine and powder cocaine are two forms of 
the same drug. Despite this, there is a vast disparity in the 
federal sentences for crack cocaine and powder cocaine 
offenses. Based largely on media perceptions (and 
misperceptions) surrounding the death of University of Maryland 
basketball star Len Bias, as well as other unsupported 
anecdotal evidence, Congress singled out crack cocaine for much 
harsher penalties than powder cocaine in 1986 when it enacted 
the first set of federal laws for cocaine offenses. Because of 
its relative low cost, crack cocaine is the drug of choice for 
poor Americans, many of whom are African Americans living in 
our inner cities. Conversely, powder cocaine is much more 
expensive and tends to be used by more affluent white 
Americans. Thus, punishing crack cocaine offenses more harshly 
than powder cocaine offenses unjustly and disproportionately 
penalizes African Americans.
    Under current law, defendants convicted of trafficking 50 
grams of crack cocaine receives the same ten-year mandatory 
minimum penalty as defendants convicted of trafficking 5,000 
grams of powder cocaine. See 21 U.S.C.A. Sec. 841, 960. 
Conviction for trafficking a mere 5 grams of crack cocaine 
carries the same five-year mandatory minimum sentence as a 
conviction for trafficking 500 grams of powder cocaine. Id. For 
simple possession of more than 5 grams of crack cocaine, a 
defendant must be sentenced to a minimum of five years in 
federal prison while simple possession of any quantity of any 
other substance--including powder cocaine--is a misdemeanor 
offense, punishable by a maximum of one year in prison See 21 
U.S.C.A. Sec. 844.
    A cost per does comparison puts this disparity in 
perspective. 500 grams of powder cocaine produces 2,500 to 
5,000 doses with a street value of between $32,500 and $50,000. 
In contrast, 5 grams of cocaine produces 10 to 50 doses and has 
a street value of between $225 and $750. Thus, at the high end 
of the scale, a defendant convicted of trafficking $750 worth 
of crack cocaine would receive the same mandatory minimum five-
year sentence as a defendant who trafficked $50,000 worth of 
powder cocaine.\2\
    \2\ United States Sentencing Commission. ``Cocaine and Federal 
Sentencing Policy'' 173 (table 19) (citing United States Drug 
Enforcement Administration, ``Illegal Price and Purity Report, United 
States: January 1990-December 1993'' (1994); United States Drug 
Enforcement Administration, U.S. Drug Threat Assessment: 1993 (1993).
---------------------------------------------------------------------------
    Prisons are literally filled with young African-American 
men and women serving mandatory minimums for crack cocaine 
trafficking and possession offenses. Currently, 61% of federal 
inmates are serving sentences for drug offenses. That figure is 
expected to reach 70% by the year 2,000.\3\ The average prison 
stay for drug offenders has increased from 23.1 months in 1985 
to 68.7 months in 1993.\4\ Twenty-one per cent of the drug law 
violators are classified as ``low level'' security risks (e.g. 
no record of current or prior violence, no involvement in 
sophisticated criminal activity and no prior commitment).\5\ 
Elimination of these types of offenders alone could 
dramatically reduce federal prison population. Similarly, 
studies have shown that $3.5 billion could be saved if the 
terms of already sentenced inmates were reduced to those that 
would have applied for powder offenses.
    \3\ Statement of Kathleen M. Hawk, Director of Bureau of Prisons, 
Oversight Hearing on Matters Relating to Federal Prisons (June 8, 
1995).
    \4\ Id.
    \5\ Id.
---------------------------------------------------------------------------
    Dr. Arthur Curry testified before the Crime Subcommittee on 
June 29, 1995, about his 19 year old son Derrick, who had never 
been in trouble with the law before but is now serving a twenty 
year sentence for a non-violent first offense involving crack 
cocaine. Judge Lyle Strom, the Reagan appointed Chief Judge of 
the U.S. District Court in Nebraska, similarly testified at the 
hearing about the unjust and discriminatory sentences he is 
forced to mete out against young African Americans convicted of 
relatively minor crack offenses. Last year, Chief Judge Strom 
became the first federal judge to refuse to impose a mandatory 
minimum sentence in a crack case. In supporting this decision, 
he asserted that since crack cocaine ``is only minutes away 
from'' powder cocaine, the disparity in sentences for the two 
forms of the same drug cannot be justified, particularly when 
the disparity has such an obvious disproportionate impact upon 
African Americans. In all, ten witnesses testified on June 29. 
When polled by Chairman McCollum, eight of the ten--including 
Assistant Attorney General Jo-Ann Harris--agreed that the 
current 100-to-1 disparity in sentences for trafficking 
offenses could not be justified and that mandatory sentences 
for simple possession offenses should be eliminated.
    One of the most prominent concerns expressed about crack 
cocaine focuses on the violence associated with its emergence. 
However, violence is by no means uniquely associated with crack 
cocaine. The image of the crack-crazed addict wildly and 
randomly shooting whoever crosses his or her path is often 
presented to justify heightened penalties for crack offenses. 
However, this type of drug-induced violence rarely occurs. 
Indeed, the drug which fits this image most appropriately is 
alcohol. Alcohol has been associated with more violent behavior 
than any other drug.\6\ The image of the desperate crack 
cocaine addict committing series of violent crimes to support 
his or her drug habit is similarly misplaced. Most of the habit 
supporting crime associated with crack is petty property theft, 
prostitution and crack cocaine dealing itself.
    \6\ United States Sentencing Commission, ``Cocaine and Federal 
Sentencing Policy'' 56, n. 105 (citing M. de la Rosa, ``Introduction: 
Exploring the Substance Abuse-Violence Connection,'' in M. de la Rosa, 
B. Gropper, and E. Lambert (eds.), ``Drugs and Violence: Causes, 
Correlates and Consequences'' 5 (1990); n. 109 (citing A. Roberts, 
``Psychosocial Characteristics of Batterers: A Study of 234 Men Charged 
with Domestic Violence Offenses,'' 2 Journal of Family Violence 81, 82 
(1987); n. 110; 99 m. 36 (citing P. Goldstein, ``Drugs and Violence 
Crime,'' in ``Pathways to Criminal Violence'' 16, 24 (Neil A. Weiner et 
al., eds. 1989)).
---------------------------------------------------------------------------
    Market place violence accounts for the majority of crime 
associated with crack cocaine. Crack cocaine has created an 
underground economy in the inner city and in these economies, 
violence is used to achieve economic regulation and control. 
Such systemic, market place violence is present in the market 
place for all illicit drugs.\7\ The gangland murders of the 
20's and 30's were directly related to alcohol's underground 
economy. In the late 70's and early 80's, turf wars between 
Colombian and Cuban drug kingpins over powder cocaine made 
Miami the murder capital of the world. In fact, the national 
homicide rates during the earlier powder cocaine war exceeded 
current national homicide rates associated with crack cocaine. 
In 1980, the national homicide rate was 10.2 per 100,000.\8\ 
The highest homicide rate since crack's introduction was 9.8 
per 100,000, which occurred in 1991.\9\ The enormous amount of 
violence associated with the powder cocaine market even invaded 
popular culture through hit television series like ``Miami 
Vice'' and movies like ``Scarface.'' In light of these 
historical facts, punishing crack cocaine more harshly powder 
cocaine is even more indefensible.
    \7\ United States Sentencing Commission, ``Cocaine and Federal 
Sentencing Policy,'' 64 n. 3 (citing Bruce D. Johnson & Ali Manwar, 
``Towards a Paradigm of Drug Eras'' 7-8 (paper presented at American 
Society of Criminology, San Francisco, California) (Nov. 21, 1991); 97 
n. 28 (citing J. Inciardi, ``The Crack-Violence Connection Within a 
Population of Hardcore Adolescent Offenders,'' in M. de la Rosa, B. 
Gropper, and E. Lambert (eds.), ``Drugs and Violence: Causes, 
Correlates and Consequences'' 92 (1990); 108 nn. 90-91 (citing J. 
Inciardi and A. Pottieger, ``Crack-Cocaine Use and Street Crime,'' 
Journal of Drug Issues (forthcoming 1994) (on file with University of 
Delaware Center of Drug and Alcohol Studies)).
    \8\ ``Crime in the United States,'' Federal Bureau of 
Investigation, 1965-93.
    \9\ Id.
---------------------------------------------------------------------------
    Although it is true that nothing in the truncated 
legislative history of the federal cocaine laws suggests the 
existence of a racially discriminatory intent in 
differentiating between sentences for crack and powder cocaine, 
the discriminatory impact of these laws cannot be ignored. 
African Americans accounted for 88.3% of federal crack cocaine 
trafficking convictions in 1993, Hispanics 7.1%, Whites 4.1% 
and others 0.5%.\10\ Congressman Schiff suggested that the 
basis for this discriminatory impact has little to do with the 
law as written but instead reflects targeted enforcement of the 
law in African American communities. While such an analysis has 
some merit, it cannot overcome the fact that treating the form 
of cocaine used more commonly by poor, African Americans 
differently from the form of cocaine used more commonly by 
affluent, white Americans makes the current federal sentencing 
scheme discriminatory on its face.
    \10\ United States Sentencing Commission, ``Cocaine and Federal 
Sentencing'' Policy (1995).
---------------------------------------------------------------------------
    According to the Sentencing Commission:

          ``Federal sentencing data leads us to the inescapable 
        conclusion that Blacks comprise the largest percentage 
        of those affected by the penalties associated with 
        crack cocaine. This does not mean, however, that the 
        penalties are racially motivated * * *. Nevertheless, 
        the high percentage of Blacks convicted of crack 
        cocaine offenses is a matter of great concern to the 
        Sentencing Commission.'' \11\

    \11\ Id.
---------------------------------------------------------------------------
    The Commission went on to state:

          ``When one form of drug can be rather easily 
        converted to another form of the same drug and when 
        that second form is punished at a quantity ratio 100 
        times greater than the original form, it would appeal 
        reasonable to require the existence of sufficient 
        policy bases to support such a sentencing scheme. * * * 
        [especially] when such an enhanced ratio for a 
        particular form of a drug has a disproportionate effect 
        on one segment of the population * * *.'' \12\

    \12\ Id.
---------------------------------------------------------------------------
    No analysis is the racially discriminatory impact of the 
current federal sentencing scheme is complete without 
discussion of the laws' targeted enforcement by federal law 
enforcement. According to a recent Los Angeles Times article, 
the U.S. Attorney's office in Los Angeles openly admits to 
targeting it resources towards minority communities. In an 
interview, Los Angeles U.S. Attorney Nora Manella acknowledged 
that federal agents have focused their resources in minority 
communities, where he crack trade is believed to be the most 
prevalent and violent.\13\ As a result of this acknowledged 
targeting of minority communities in the Los Angeles area, not 
a single white has been convicted of a crack cocaine offense in 
federal courts serving Los Angeles and its six surrounding 
counties since Congress enacted its mandatory sentences for 
crack dealers in 1986.\14\ Instead, virtually all white 
offenders are prosecuted in state court, where sentences are 
far less, with differences of up to eight years for the same 
offense.
    \13\ Dan Weikel, ``War on Crack Targets Minorities Over Whites,'' 
Los Angeles Times, part A, p. 1. (May 21, 1995).
    \14\ Richard Berk, `Preliminary Data on Race and Crack Charging 
Practices in Los Angeles'', 6 Federal Sentencing Reporter 36-37 (1993) 
(memo written by Richard Berk and Alec Campbell re: United States v. 
Jenkins, No. 91-632-TJH in the Central District of California 
suggesting that federal crack prosecutions in Los Angeles have a racial 
distribution different from the racial distribution for arrest).
---------------------------------------------------------------------------
    Comparison of the following two cases offers a striking 
example of this disparity. Stephen Green, a 20 year old, 
African American, first-offender, was arrested with 70 grams of 
crack by a federal undercover agent. He was sentenced in 
federal court to a 10 year prison term. Daniel Siemianowski, a 
37 year old, white first offender, was arrested with 67 grams 
of crack by a county sheriff. He was sentenced in state court 
to less than a year in jail and probation.\15\ Similar 
discriminatory patterns exist outside of Los Angeles, A 1992 
Commission survey shows that only minorities were prosecuted 
for crack offenses in more than half the federal court 
districts handling crack cases. No white were federally 
prosecuted in 17 states and many cities, including Boston, 
Denver, Chicago, Miami, Dallas and Los Angeles. Our of hundreds 
of cases, only one white was convicted in California, two in 
Texas, three in New York and two in Pennsylvania.
    \15\ Dan Weikel, ``War on Crack Targets Minorities Over Whites,'' 
Los Angeles Times, part A, p. 1. (May 21, 1995).
---------------------------------------------------------------------------
    The significance of this targeted enforcement strategy is 
not that it explains he disparate impact current law has on the 
African American community, but that the existence of such a 
facially flawed sentencing scheme undermines the credibility of 
our entire system of federal laws and might invite 
discriminatory behavior by federal law enforcement personnel. 
In an era when blatant bias against African Americans within 
law enforcement agencies is coming increasingly into the open--
from the despicable statements of former Los Angeles police 
detective Mark Fuhrman, through the disgusting behavior of 
Philadelphia police officers who admit to framing African 
American suspects--it is incumbent upon each of us, as he 
drafters of the laws for this great nation, to insure that no 
law remains on the books that calls into question the integrity 
of our system of justice. For this reason, we must dissent from 
the views of the majority on H.R. 2259 as it relates to 
sentences for crack cocaine offenses.

                          b. money laundering

    The proposed money laundering amendments disapproved by 
this bill are the result of a three-year effort by the 
Sentencing Commission. Without holding any hearings on this 
issue, the Congress is willing to substitute its judgment for 
the judgment of the Sentencing Commission despite the fact that 
the proposed amendments directly result from the Commission's 
ongoing guideline review and revision process--a process that 
Congress specifically directed the Commission to undertake. As 
a result, one of the fundamental goals of the Sentencing Reform 
Act--avoiding unwarranted sentencing disparity for similar 
offense conduct--has not been achieved to the extend it should 
in this area.
    When the Commission first promulgated money laundering 
sentencing guidelines in April 1987, the statues establishing 
money laundering offenses had been in effect for less than 6 
months. Accordingly, no actual case experience existed to guide 
the Commission's formulation of the initial money laundering 
guidelines. Of particular importance, key elements of these 
offenses such as the requirement that a financial transaction 
qualify as ``promoting'' criminal conduct--had never been 
judicially interpreted. The Commission therefore had to base 
guideline penalties for money laundering largely on (1) and 
understanding of the kind of relatively serious cases that 
appeared to most concern Congress when it enacted money 
laundering statues, and (2) representations by the Justice 
Department about the kind of money laundering cases that it 
expected to prosecute. Based on these understandings, the 
Commission set relatively high ``base offense levels'' (floors) 
for offenses covered by money laundering statues. In fact, the 
Commission set the base levels higher than the base levels for 
other relatively serious offenses such as robbery, extortion, 
and aggravated assault. Under the guidelines, the least serious 
case in which money laundering is charged is sentenced at a 
relatively high level.
    Over time, judges, probation officers and attorneys all 
began to criticize the guidelines. Eventually, this led the 
Commission to investigate and issue a report. The report noted 
that the typical money laundering defendant is not a 
specialized money launderer for some criminal enterprise such 
as a drug cartel or the mafia, but rather someone who conducted 
a financial transaction in connection with his own underlying 
offense--he spent, deposited or withdrew the stolen money. 
There is often no evidence that these transactions are made 
with the effort to conceal the illegal source of the funds or 
to promote additional criminal conduct.
    In addition, the inherent rigidity of the money laundering 
guidelines has been used by prosecutors to allow drug 
trafficking defendants to ``plead down'' to a money laundering 
charge carrying a lower sentence than would have applied had 
the prosecutor also charged drug trafficking. The Commission 
found that in 70% of the cases in which the defendant had 
engaged in both drug trafficking and money laundering, the 
resulting sentence was lower than it would have been if drug 
trafficking had also been charged.\16\
    \16\ Letter from Sentencing Commission Richard Conaboy to Judiciary 
Committee Chairman Henry J. Hyde (August 11, 1995).
---------------------------------------------------------------------------
    The Sentencing Commission's proposed amendments solve these 
problems by tying the guideline penalties more closely to the 
seriousness of the underlying crime from which the laundered 
funds were derived. Then, if the offense behavior actually 
involves more serious forms of money laundering, such as 
efforts to conceal or promote the underlying criminal conduct, 
substantially enhanced penalties will apply. In fact, the 
proposed amendments actually increase penalties for more 
serious money laundering offenses.
    On the other hand, if an offense charged under the very 
broad money laundering statutes only involves an effort to 
deposit or spend the illegal proceeds of crime, with no effort 
at concealment or promotion, the revised guidelines will call 
for somewhat less stringent penalties, more in line with the 
seriousness of the underlying offense. Therefore, these 
amendments embody an approach that every Commissioner, past and 
present, who has had the opportunity to study the issue has 
come to regard as highly preferable.\17\ The more proportional 
money laundering sentencing guidelines will be more effective 
and better serve our criminal justice system in the long run.
    \17\ Id.
---------------------------------------------------------------------------
    Contrary to Department of Justice assertions, the 
Sentencing Commission's proposal would not substantially lower 
penalties for serious money laundering offenses. It is also 
untrue, as the Justice Department has suggested, that these 
amendments are the result of ``intense lobbying by the white-
collar defense bar.'' Rather, the Sentencing Commission's 
amendments provide that the enhancement in sentencing for money 
laundering will be tied to the underlying offense.\18\ Where up 
to now less serious money laundering offenses have been subject 
to a prosecutor's discretion to charge or not charge money 
laundering, often leading to vast and disproportionately 
increased sentences, the Commission's amendments provide that 
offenders will be punished in a manner more commensurate with 
the actual seriousness of the offense.

    \18\ Id.

                                   John Conyers, Jr.
                                   Patricia Schroeder.
                                   Barney Frank.
                                   Jerold Nadler.
                                   Robert C. Scott.
                                   Melvin L. Watt.
                                   Xavier Becerra.
                                   Jose E. Serrano.
                                   Zoe Lofgren.
                                   Sheila Jackson Lee.

                                
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