[Federal Register Volume 67, Number 229 (Wednesday, November 27, 2002)]
[Notices]
[Pages 70999-71007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30088]


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UNITED STATES SENTENCING COMMISSION


Sentencing Guidelines for United States Courts

AGENCY: United States Sentencing Commission.

ACTION: Notice of proposed temporary, emergency amendments to 
sentencing guidelines, policy statements, and commentary. Notice of 
intent to repromulgate temporary, emergency amendments as permanent, 
non-emergency amendments. Request for public comment.

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SUMMARY: Pursuant to section 994(a), (o), and (p) of title 28, United 
States Code, sections 805, 905, and 1104 of the Sarbanes-Oxley Act of 
2002, Pub. L. 107-204, and section 314 of the Bipartisan Campaign 
Reform Act of 2002, Pub. L. 107-155, the Commission is considering 
promulgating certain amendments to the sentencing guidelines, policy 
statements, and commentary. This notice sets forth the proposed 
amendments and, for each proposed amendment, a synopsis of the issues 
addressed by that amendment. Issues for comment follow each proposed 
amendment.

DATES: Written public comment on these proposed emergency amendments 
should be received by the Commission not later than December 18, 2002, 
in anticipation of a vote to promulgate these emergency amendments at 
the Commission's January 2003 public meeting. Thereafter, written 
public comment on whether to repromulgate the emergency amendments as 
permanent, non-emergency amendments should be received by the 
Commission not later than February 18, 2003.

ADDRESSES: Public comment should be sent to: United States Sentencing 
Commission, One Columbus Circle, NE., Suite 2-500, Washington, DC 
20002-8002, Attention: Public Information.

FOR FURTHER INFORMATION CONTACT: Michael Courlander, Public Affairs 
Officer, Telephone: (202) 502-4590.

SUPPLEMENTARY INFORMATION: The United States Sentencing Commission is 
an independent agency in the judicial branch of the United States 
Government. The Commission promulgates sentencing guidelines and policy 
statements for federal courts pursuant to 28 U.S.C. Sec.  994(a). The 
Commission also periodically reviews and revises previously promulgated 
guidelines pursuant to 28 U.S.C. Sec.  994(o) and submits guideline 
amendments to the Congress not later than the first day of May of each 
year pursuant to 28 U.S.C. Sec.  994(p).
    The Commission seeks comment on the proposed amendments, issues for 
comment, and any other aspect of the sentencing guidelines, policy 
statements, and commentary.
    The proposed amendments are presented in this notice in one of two 
formats. First, some of the amendments are proposed as specific 
revisions to a guideline or commentary. Bracketed text within a 
proposed amendment indicates a heightened interest on the Commission's 
part for comment and suggestions for alternative policy choices; for 
example, a proposed enhancement of [2] levels indicates that the 
Commission is considering, and invites comment on, alternative policy 
choices regarding the appropriate level of enhancement. Similarly, 
bracketed text within a specific offense characteristic or application 
note means that the Commission specifically invites comment on whether 
the proposed provision is appropriate. Second, the Commission has 
highlighted certain issues for comment and invites suggestions on how 
the Commission should respond to those issues.
    Additional information pertaining to the proposed amendments 
described in this notice may be accessed through the Commission's Web 
site at http://www.ussc.gov.

    Authority: 28 U.S.C. Sec.  994(a), (o), (p), (x); sections 805, 
905, and 1104 of Pub. L. 107-204; section 314 of Pub. L. 107-155; 
USSC Rules of Practice and Procedure, Rule 4.4.

Diana E. Murphy,
Chair.

1. Corporate Fraud

    Synopsis of Proposed Amendment: This proposed amendment implements 
the Sarbanes-Oxley Act of 2002, Pub. L. 107-204 (the ``Act''). The Act 
requires the Commission to promulgate guideline amendments under 
emergency amendment authority not later than January 25, 2003. In 
addition to several general directives regarding fraud and obstruction 
of justice offenses, the Act also sets forth specific directives that 
require the Commission to promulgate amendments addressing, among other 
things, officers and directors of publicly traded companies who commit 
fraud and related offenses, offenses that endanger the solvency or 
financial security of a substantial number of victims, fraud offenses 
that involve significantly greater than 50 victims, and obstruction of 
justice offenses that involve the destruction of evidence.
    First, the proposed amendment sets forth two options for amending 
Sec.  2B1.1 (Larceny, Embezzlement, and Other Forms of Theft; Offenses 
Involving Stolen Property; Property Damage or Destruction; Fraud and 
Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments 
Other than Counterfeit Bearer Obligations of the United States) to 
address the directive contained in section 1104 of the Act pertaining 
to fraud offenses involving significantly greater than 50 victims. 
Option One expands the victims table in Sec.  2B1.1(b)(2). Currently, 
subsection (b)(2) provides a two level enhancement if the offense 
involved more than 10, but less than 50, victims or was committed 
through mass-marketing, or a four level enhancement if the offense 
involved 50 or more victims. Option One provides an additional two 
levels, for a total of six levels, if the offense involved 250 victims 
or more. Alternatively, Option Two provides an encouraged upward 
departure provision if the offense involved substantially more than 50 
victims.
    Second, the proposed amendment modifies subsection Sec.  
2B1.1(b)(12)(B) to address directives contained in sections 805 and 
1104 of the Act pertaining to securities and accounting fraud offenses 
and fraud offenses that endanger the solvency or financial security of 
a substantial number of victims. Subsection (b)(12)(B) currently 
provides a four level enhancement and a minimum offense level of 24 if 
the offense substantially jeopardized the safety and soundness of a 
financial institution. The proposed amendment expands the scope of this 
enhancement to apply to offenses that substantially endanger the 
solvency or financial security of a publicly traded company. The 
enhancement does not require the court to determine whether the offense 
endangered the solvency or financial security of each individual 
victim. Such a determination likely would unduly complicate the 
sentencing process. Instead the enhancement is based on a presumption 
that if the offense conduct endangered the solvency or financial 
security of a publicly traded company, the offense similarly affected a 
substantial number of individual victims. The proposed amendment also

[[Page 71000]]

contains options for extending the scope of the enhancement to include 
other organizations with a substantial number of employees. This 
extension might be appropriate because offenses that endanger other 
large organizations may, like offenses that endanger publicly traded 
companies, affect the solvency or financial security of a substantial 
number of victims.
    The corresponding application note to the new enhancement sets 
forth situations in which an offense shall be considered to have 
endangered the solvency or financial security of a publicly traded 
company. The note, which is modeled after an analogous note for the 
financial institutions prong of the enhancement, includes references to 
insolvency, filing for bankruptcy, substantially reducing the value of 
the company's stock, and substantially reducing the company's workforce 
among the list of situations that would trigger application of the new 
enhancement.
    An issue for comment follows the proposed amendment regarding 
whether the list of situations should be a non-exhaustive list that the 
court may consider in determining whether to apply the enhancement.
    Third, the proposed amendment addresses the directive contained in 
section 1104 of the Act pertaining to fraud offenses committed by 
officers or directors of publicly traded corporations by providing a 
new two level enhancement at Sec.  2B1.1(b)(13). This enhancement would 
apply if the offense involved a violation of any provision of 
securities law and, at the time of the offense, the defendant was an 
officer or director of a publicly traded company. This enhancement 
would apply regardless of whether the defendant was convicted under a 
specific securities fraud statute (e.g., 18 U.S.C. Sec.  1348, a new 
offense created by the Act specifically prohibiting securities fraud) 
or under a general fraud statute (e.g., 18 U.S.C. Sec.  1341, 
prohibiting wire fraud), provided that the offense involved a violation 
of securities law. The corresponding application note provides that in 
cases in which the new enhancement applies, the current enhancement for 
abuse of position of trust at Sec.  3B1.3 (Abuse of Position of Trust 
or Use of Special Skill) does not apply. Although the directive only 
specifically addresses officers and directors of publicly traded 
companies, the proposed amendment provides an option to include 
registered brokers or dealers because they also are subject to certain 
requirements under securities law and as such may be considered to hold 
a heightened position of trust to investors.
    Pursuant to the corresponding application note, ``securities law'' 
(i) means 18 U.S.C. Sec. Sec.  1348, 1350, and the provisions of law 
referred to in section 3(a)(47) of the Securities Exchange Act of 1934 
(15 U.S.C. Sec.  78c(a)(47)); and (ii) includes the rules, regulations, 
and orders issued by the Securities and Exchange Commission pursuant to 
the provisions of law referred to in section 3(a)(47).
    The proposed amendment also includes an issue for comment regarding 
whether, in addition to the two level enhancement, a minimum offense 
level should be provided for such offenses committed by officers and 
directors of publicly traded companies. The issue for comment also 
requests comment regarding whether the scope of the enhancement should 
be broadened to apply to an officer or director of other large 
organizations.
    Additional issues for comment are included regarding whether other 
enhancements, possibly to apply cumulatively, should be added to Sec.  
2B1.1 in response to the Act, as well as whether further guidance 
should be provided regarding the calculation of loss in complex white 
collar offenses.
    Fourth, the proposed amendment provides an option for expanding the 
loss table at Sec.  2B1.1(b)(1). Currently, the loss table provides 
sentencing enhancements in two level increments up to a maximum of 26 
levels for offenses in which the loss exceeded $100,000,000. The 
proposed amendment provides two additional levels to the table; an 
increase of 28 levels for offenses in which the loss exceeded 
$200,000,000, and an increase of 30 levels for offenses in which the 
loss exceeded $400,000,000. This proposed addition to the loss table 
would address congressional concern expressed in the Act regarding 
particularly extensive and serious fraud offenses and would more fully 
effectuate increases in statutory maximum penalties, for example, the 
increase in the statutory maximum penalties for wire fraud and mail 
fraud offenses from five to 20 years (section 903 of the Act). An issue 
for comment follows the proposed amendment regarding whether more 
extensive modifications to the loss table should be made in response to 
the Act, particularly for offenses involving significantly lower loss 
amounts.
    Fifth, the proposed amendment implements the directives pertaining 
to obstruction of justice offenses contained in sections 805 and 1104 
of the Act. The proposed amendment adds a new two level enhancement to 
Sec.  2J1.2 (Obstruction of Justice) that applies if the offense (i) 
involved the destruction, alteration, or fabrication of a substantial 
amount of evidence; (ii) involved the selection of especially probative 
or essential evidence to destroy or alter; or (iii) was otherwise 
extensive in scope, planning, or preparation. An issue for comment 
follows the proposed amendment regarding whether the base offense level 
in Sec.  2J1.2 should be increased and whether an enhancement for the 
use of sophisticated means should be included in Sec.  2J1.2. There is 
an additional issue for comment regarding whether modifications also 
should be made to the guideline covering perjury offenses, Sec.  2J1.3 
(Perjury or Subornation of Perjury; Bribery of Witness) in light of the 
proposed amendment to the obstruction of justice guideline, in order to 
maintain sentencing proportionality between the two types of offenses.
    Finally, the proposed amendment addresses new offenses created by 
the Act. Section 1520 of title 18, United States Code, is referenced to 
Sec.  2E5.3 (False Statements and Concealment of Facts in Relation to 
Documents Required by the Employee Retirement Income Security Act; 
Failure to Maintain and Falsification of Records Required by the Labor 
Management Reporting and Disclosure Act). This offense provides a 
statutory maximum of 10 years' imprisonment if the defendant certifies 
the publicly traded company's periodic financial report knowing that 
the statement does not comply with all requirements of the Securities 
and Exchange Commission (and 20 years' imprisonment if that 
certification is done willfully). The proposed amendment also expands 
the current cross reference in Sec.  2E5.3(a)(2) specifically to cover 
fraud and obstruction of justice offenses. Accordingly, if a defendant 
who is convicted under 18 U.S.C. Sec.  1520 certified the financial 
report of a publicly traded company in order to facilitate a fraud, the 
proposed change to the cross reference provision would require the 
court to apply Sec.  2B1.1 instead of Sec.  2E5.3. Other new offenses 
are proposed to be included in Appendix A (Statutory Index) as well as 
the statutory provisions of the relevant guidelines.

Proposed Amendment

    Section 2B1.1(b)(1) is amended by striking the period and inserting 
a semi-colon; and by adding at the end the following:

``(O) More than $200,000,000 add 28
(P) More than $400,000,000 add 30.''.


[[Page 71001]]


[Option 1 for Substantial Number of Victims:
    Section 2B1.1 is amended by striking subsection (b)(2) and 
inserting the following:
    ``(2) (Apply the greatest) If the offense--
    (A) (i) involved more than 10, but less than 50, victims; or (ii) 
was committed through mass-marketing, increase by 2 levels;
    (B) involved at least 50, but less than 250, victims, increase by 4 
levels; or
    (C) involved 250 or more victims, increase by 6 levels.''.]
    Section 2B1.1(b)(12) is amended by striking subdivision (B) and 
inserting the following:
    ``(B) the offense (i) substantially jeopardized the safety and 
soundness of a financial institution; or (ii) substantially endangered 
the solvency or financial security of an organization that, at the time 
of the offense [(I)] was a publicly traded company[; or (II) had 
[200][1,000][5,000] or more employees], increase by 4 levels.''.
    Section 2B1.1(b) is amended by adding at the end the following:
    ``(13) If the offense involved a violation of securities law and, 
at the time of the offense, the defendant was [(i)] an officer or a 
director of a publicly traded company[; or (ii) a registered broker or 
dealer], increase by 2 levels.''.
    The Commentary to Sec.  2B1.1 caption ``Statutory Provisions'' is 
amended by inserting ``1348, 1350,'' after ``1341-1344,''.
    The Commentary to Sec.  2B1.1 captioned ``Application Notes'' is 
amended in Note 1 by inserting after ``Secretary of the Interior.'' the 
following new paragraph:
    `` `Publicly traded company' means an issuer (A) with a class of 
securities registered under section 12 of the Securities Exchange Act 
of 1934 (15 U.S.C. Sec.  78l); or (B) that is required to file reports 
under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 
Sec.  78o(d)). `Issuer' has the meaning given that term in section 3 of 
the Securities Exchange Act of 1934 (15 U.S.C. Sec.  78c).''.
    The Commentary to Sec.  2B1.1 captioned ``Application Notes'' is 
amended by redesignating Notes 11 through 15 as Notes 12 through 16, 
respectively.
    The Commentary to Sec.  2B1.1 captioned ``Application Notes'' is 
amended by striking Note 10 and inserting the following:
    ``10. Application of Subsection (b)(12)(B).--
    (A) Enhancement for Substantially Jeopardizing the Safety and 
Soundness of a Financial Institution under Subsection (b)(12)(B)(i).--
For purposes of subsection (b)(12)(B)(i), an offense shall be 
considered to have substantially jeopardized the safety and soundness 
of a financial institution, if, as a consequence of the offense, the 
institution (i) became insolvent; (ii) substantially reduced benefits 
to pensioners or insureds; (iii) was unable on demand to refund fully 
any deposit, payment, or investment; (iv) was so depleted of its assets 
as to be forced to merge with another institution in order to continue 
active operations; or (v)was placed in substantial jeopardy of any of 
subdivisions (i) through (iv) of this note.
    (B) Enhancement for Endangering the Solvency or Financial Security 
of a Publicly Held Company [or An Organization with more than 
[200][1000][5000] Employees] under Subsection (b)(12)(B)(ii).--
    (i) Definitions.--For purposes of this subsection, `organization' 
has the meaning given that term in Application Note 1 of Sec.  8A1.1 
(Applicability of Chapter Eight).
    (ii) Application.--An offense shall be considered to have 
substantially endangered the solvency or financial security of an 
organization that was a publicly traded company[ or that had more than 
[200][1000][5000] employees] if, as a consequence of the offense, the 
organization (I) became insolvent; (II) filed for bankruptcy under 
Chapters 7, 11, or 13 of the Bankruptcy Code (title 11 of the United 
States Code); (III) suffered a substantial reduction in the value of 
[its equity securities][a class of securities registered under section 
12 of the Securities Exchange Act of 1934 (15 U.S.C. Sec.  78l)] or the 
value of its employee retirement accounts; (IV) substantially reduced 
its workforce; (V) substantially reduced its employee pension benefits; 
(VI) was so depleted of its assets as to be forced to merge with 
another company in order to continue active operations; or (VII) was 
placed in substantial endangerment of any of subdivisions (I) through 
(VI) of this note. [`Equity securities' has the meaning given that term 
in section 3 of Securities Exchange Act of 1934 (15 U.S.C. Sec.  78c).]
    11. Application of Subsection (b)(13).--
    (A) Definitions.--For purposes of this subsection:
    `Registered broker or dealer' has the meaning given that term in 
section 3 of the Securities Exchange Act of 1934 (15 U.S.C. Sec.  78c).
    `Securities law' (i) means 18 U.S.C. Sec. Sec.  1348, 1350, and the 
provisions of law referred to in section 3(a)(47) of the Securities 
Exchange Act of 1934 (15 U.S.C. Sec.  78c(a)(47)); and (ii) includes 
the rules, regulations, and orders issued by the Securities and 
Exchange Commission pursuant to the provisions of law referred to in 
section 3(a)(47).
    (B) In General.--A conviction under securities law is not required 
in order for subsection (b)(13) to apply. This subsection would apply 
in the case of a defendant convicted under a general fraud statute if 
the defendant's conduct violated securities law. For example, this 
subsection would apply if an officer of a publicly traded company 
violated regulations issued by the Securities and Exchange Commission 
by fraudulently influencing an independent audit of the company's 
financial statements for the purposes of rendering such financial 
statements materially misleading, even if the officer is convicted only 
of wire fraud.
    (C) Nonapplicability of Sec.  3B1.3 (Abuse of Position of Trust or 
Use of Special Skill).--If subsection (b)(13) applies, do not apply 
Sec.  3B1.3.''.
    The Commentary to Sec.  2B1.1 captioned ``Application Notes'' is 
amended in Note 16, as redesignated by this amendment, in subdivision 
(A) by striking subdivision (v).

[Option 2 for Substantial Number of Victims:
    The Commentary to Sec.  2B1.1 captioned ``Application Notes'' is 
amended in Note 16, as redesignated by this amendment, in subdivision 
(A) by inserting the following:
    ``(v) The offense involved substantially more than 50 victims.''.]
    Section 2E5.3 is amended in the heading by adding at the end ``; 
Destruction and Failure to Maintain Corporate Audit Records''.
    Section 2E5.3 is amended by striking subsection (a)(2) and 
inserting the following:
    ``(2) If the offense was committed to facilitate or conceal (A) an 
offense involving theft, fraud, or embezzlement; (B) an offense 
involving a bribe or a gratuity; or (C) an obstruction of justice 
offense, apply Sec.  2B1.1 (Theft, Fraud and Property Destruction), 
Sec.  2E5.1 (Offering, Accepting, or Soliciting a Bribe or Gratuity 
Affecting the Operation of an Employee Welfare or Pension Benefit Plan; 
Prohibited Payments or Lending of Money by Employer or Agent to 
Employees, Representatives, or Labor Organizations), or Sec.  2J1.2 
(Perjury or Subornation of Perjury; Bribery of a Witness), as 
appropriate.''.
    The Commentary to Sec.  2E5.3 captioned ``Statutory Provisions'' is 
amended by inserting ``Sec.  '' before ``1027''; and by inserting ``, 
1520'' after ``1027''.
    Section 2J1.2(b) is amended by adding at the end the following:
    ``(3) If the offense (A) involved the destruction, alteration, or 
fabrication of

[[Page 71002]]

a substantial amount of evidence; (B) involved the selection of 
especially probative or essential evidence to destroy or alter; or (C) 
was otherwise extensive in scope, planning, or preparation, increase by 
[2] levels.''.
    The Commentary to Sec.  2J1.2 captioned ``Statutory Provisions'' is 
amended by inserting ``, 1519'' after ``1516''.
    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to ``18 U.S.C. Sec.  1347'' the following new lines:

``18 U.S.C. Sec.  1348 2B1.1
18 U.S.C. Sec.  1349 2X1.1
18 U.S.C. Sec.  1350 2B1.1''.

    Appendix A (Statutory Index) is amended in the line referenced to 
18 U.S.C. Sec.  1512(c) by striking ``(c)'' and inserting ``(d)''.
    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to 18 U.S.C. Sec.  1512(b) the following new line:

``18 U.S.C. Sec.  1512(c) 2J1.2''.

    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to 18 U.S.C. Sec.  1518 the following lines:

``18 U.S.C. Sec.  1519 2J1.2
18 U.S.C. Sec.  1520 2E5.3''.

Issues for Comment

    1. The Sarbanes-Oxley Act of 2002 requires the Commission to 
consider providing an enhancement for officers or directors of publicly 
traded companies who commit fraud and related offenses. The Act also 
requires the Commission to ensure that the enhancements relating to 
obstruction of justice are adequate in cases in which the offense 
involved an abuse of position of trust or use of a special skill. In 
response to these directives, the proposed amendment provides an 
enhancement in Sec.  2B1.1 (Larceny, Embezzlement, and Other Forms of 
Theft; Offenses Involving Stolen Property; Property Damage or 
Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or 
Counterfeit Instruments Other than Counterfeit Bearer Obligations of 
the United States) specifically targeting officers and directors who 
violate securities law, including violations of the rules and 
regulations issues by the Securities and Exchange Commission. The 
Commission requests comment regarding whether it also should provide a 
minimum offense level for this proposed enhancement, and if so, what an 
appropriate offense level would be. Additionally, should this proposed 
enhancement apply to cases in which an officer or director of a large, 
non-public organization violates any provision of security law? Such a 
case may cause similar harm to the organization, its shareholders, and 
employees even though the organization is not a publicly traded company 
and the offense typically would not undermine public confidence in the 
securities market. The Commission further requests comment regarding 
whether, as an alternative to the proposed enhancement, it should 
provide a series of enhancements, possibly to apply cumulatively, to 
address separate aspects of these directives. Specifically, should the 
Commission provide enhancements in Sec.  2B1.1 that would apply if (A) 
the defendant used his or her position as officer or director of a 
publicly traded company in furtherance of a fraud or some other 
corporate crime; (B) the officer or director of a publicly traded 
company worked to defeat or compromise internal corporate controls, 
independent audits, or the oversight by a corporate governing board; or 
(C) an officer or director derived more than $1,000,000 in personal 
gain from unlawful activity? If so, should the Commission also provide 
minimum offense levels for any such enhancements? What would be an 
appropriate minimum offense level for such enhancements?
    2. The proposed amendment expands the scope of Sec.  
2B1.1(b)(12)(B) to apply to offenses that substantially endanger the 
solvency or financial security of a publicly traded company. This 
proposed enhancement is in response to directives pertaining to 
securities and accounting fraud offenses and fraud offenses that 
endanger the solvency or financial security of a substantial number of 
victims. The proposed corresponding application note sets forth 
instances of when an offense shall be considered to have endangered the 
solvency or financial security of a publicly traded company. The note 
includes references to insolvency, filing for bankruptcy, substantially 
reducing the value of the company's stock, and substantially reducing 
the company's workforce, any one of which would require application of 
the new enhancement upon a finding of its presence. The Commission 
requests comment regarding whether the note alternatively should 
provide that the references are a non-exhaustive list that the court 
may consider in determining whether to apply Sec.  2B1.1(b)(12)(B). The 
Commission also requests comment regarding whether additional factors 
should be included in the list of instances that could trigger 
application of the enhancement.
    3. The Commission requests comment regarding whether the loss 
definition in Sec.  2B1.1 should be amended to provide further guidance 
as to how to calculate loss in complex white collar crime cases. For 
example, should loss in such cases be based on a change in the market 
capitalization of a corporation, a change in the value of corporate 
assets, or some other economic effect?
    4. The current loss table in Sec.  2B1.1 provides sentencing 
enhancements in two level increments up to a maximum of 26 levels for 
offenses in which the loss exceeded $100,000,000. The proposed 
amendment provides two additional increases to the table: an 
enhancement of 28 levels for offenses in which the loss exceeded 
$200,000,000, and an enhancement of 30 levels for offenses in which the 
loss exceeded $400,000,000. This proposed addition to the loss table 
would address congressional concern expressed in sections 805, 905, and 
1104 of the Sarbanes-Oxley Act regarding particularly extensive and 
serious fraud offenses and would more fully effectuate increases in 
statutory maximum penalties, for example, the increase in the statutory 
maximum penalties for wire fraud and mail fraud offenses from five to 
20 years (section 903 of the Act). Should the Commission modify the 
loss table more extensively to provide increased offenses levels at 
lower loss amounts? Commission data indicate that approximately one-
third of fraud offenses involve loss amounts less than $20,000, 
approximately one-third involve loss amounts between $20,000 and 
$120,000, and approximately one-third involve loss amounts greater than 
$120,000. For instance, should the Commission modify the loss table to 
result in a Zone D offense level (assuming a two level reduction for 
acceptance of responsibility) for offenses involving more than $50,000? 
Similarly, should the Commission modify the loss table to restrict Zone 
A offense levels (which provide sentences of straight probation) to 
offenses involving loss amounts of $10,000 or less (assuming a two 
level reduction for acceptance of responsibility)? If any changes are 
made to the loss table in Sec.  2B1.1, should the Commission also make 
similar changes to the tax loss table in Sec.  2T4.1 (Tax Table) in 
order to maintain the long standing relationship between the two loss 
tables? In addition, the Commission requests comment regarding whether 
the base offense level in Sec.  2B1.1 should be increased from level 6.
    5. In response to the directives in the Sarbanes-Oxley Act 
pertaining to obstruction of justice offenses, the proposed amendment 
sets forth a new two level enhancement in Sec.  2J1.2

[[Page 71003]]

(Obstruction of Justice) that applies if the offense (A) involved the 
destruction, alteration, or fabrication of a substantial amount of 
evidence; (B) involved the selection of especially probative or 
essential evidence to destroy or alter; or (C) was otherwise extensive 
in scope, planning, or preparation. The Commission requests comment 
regarding whether, in addition to this enhancement, it should provide 
an enhancement that is based on the number of participants recruited to 
commit the obstruction of justice offense. Additionally, should the 
Commission provide an enhancement for obstruction of justice offenses 
committed through the use of sophisticated means, perhaps in lieu of 
the proposed subdivision (C) prong, and if so, what characteristics 
would be common to such an offense? Finally, given congressional 
concern with obstruction of justice offenses, should the Commission 
increase the base offense level in Sec.  2J1.2 from level 12 to level 
14?
    6. Part Three of the proposed amendment addresses the emergency 
amendment directives in the Sarbanes-Oxley Act pertaining to the 
Chapter Two guidelines for obstruction of justice offenses. 
Specifically, the proposed amendment would provide a new enhancement in 
Sec.  2J1.2 addressing the directive relating to the destruction of 
evidence and offenses that are otherwise extensive in scope, planning, 
or preparation. Currently, defendants sentenced under Sec.  2J1.2 or 
Sec.  2J1.3 (Perjury or Subornation of Perjury; Bribery of Witness) are 
sentenced proportionately because these guidelines have the same base 
offense level and provide substantially parallel enhancements. The 
Commission requests comment regarding whether, in light of the proposed 
changes to Sec.  2J1.2, modifications also should be made to Sec.  
2J1.3 in order to maintain proportionate sentencing between these two 
guidelines. For example, should the Commission increase the base 
offense level in Sec.  2J1.3 or increase the magnitude of the 
enhancement of the current specific offense characteristics? Any such 
amendment to Sec.  2J1.3 would be made when the Commission re-
promulgates as a permanent amendment any emergency amendment made to 
Sec.  2J1.2.

2. Campaign Finance

    Synopsis of Proposed Amendment: This proposed amendment responds to 
the Bipartisan Campaign Reform Act of 2002, Pub. L. 107-155 (the 
``Act''). The most pertinent provision of the Act, for the Commission, 
is section 314, which gives the Commission emergency authority to 
promulgate amendments to implement the Act not later than February 3, 
2003. Specifically, section 314(a) and (b) state:
    ``(a) IN GENERAL.--The United States Sentencing Commission shall--
    (1) promulgate a guideline, or amend an existing guideline under 
section 994 of title 28, United States Code, in accordance with 
paragraph (2), for penalties for violations of the Federal Campaign Act 
of 1971 and related election laws; and
    (2) submit to Congress an explanation of any guidelines promulgated 
under paragraph (1) and any legislative or administrative 
recommendations regarding enforcement of the Federal Campaign Act of 
1971 and related election laws.
    (b) CONSIDERATIONS.--The Commission shall provide guidelines under 
subsection (a) taking into account the following considerations:
    (1) Ensure that the sentencing guidelines and policy statements 
reflect the serious nature of such violations and the need for 
aggressive and appropriate law enforcement action to prevent such 
violations.
    (2) Provide a sentencing enhancement for any person convicted of 
such violation if such violations involves--
    (A) a contribution, donation, or expenditure from a foreign source;
    (B) a large number of illegal transactions;
    (C) a large aggregate amount of illegal contributions, donations, 
or expenditures;
    (D) the receipt or disbursement of governmental funds; and
    (E) an intent to achieve a benefit from the Federal Government.
    (3) Assure reasonable consistency with other relevant directives 
and guidelines of the Commission.
    (4) Account for aggravating or mitigating circumstances that might 
justify exceptions, including circumstances for which the sentencing 
guidelines currently provide sentencing enhancements.
    (5) Assure the guidelines adequately meet the purposes of 
sentencing under section 3553(a)(2) of title 18, United States Code.''.
    Section 309(d)(1) of the FECA sets forth the Act's criminal penalty 
provisions as follows:

(1) Violations of the FECA as Penalized under Section 309(d)(1)(A)

    Section 309(d)(1)(A) is the main penalty provision of the FECA (2 
U.S.C. Sec.  437g(d)(1)(A)). As amended by section 312 of the Act, it 
states that ``[a]ny person who knowingly and willfully commits a 
violation of any provision of this Act which involves the making, 
receiving, or reporting of any contribution, donation, or expenditure 
(i) aggregating $25,000 or more during a calendar year shall be fined 
under title 18, United States Code, or imprisoned for not more than 5 
years, or both; or (ii) aggregating $2,000 or more (but less than 
$25,000) during a calendar year shall be fined under such title, 
imprisoned for not more than 1 year, or both.''. (Before amendment by 
the Act, section 309(d)(1)(A) of the FECA provided for a maximum term 
of imprisonment of one year, or a fine, or both.)
    The major violations of the FECA to which section 309(d)(1)(A) 
applies are:
(A) The Ban on Soft Money
    Section 323 of the FECA (2 U.S.C. Sec.  441i) prohibits national 
political party committees (including senatorial and congressional 
campaign committees) from accepting soft money from any person 
(including an individual) after November 6, 2002.
(B) Restrictions on Hard Money Contributions
    The FECA limits the amount of hard money that may be contributed to 
a Federal campaign. The FECA limits the amount of hard money that 
persons other than multicandidate political committees may contribute 
as follows:
    (i) The contribution to a candidate for Federal office may not 
exceed $2,000 per election. (The limit used to be $1,000; see section 
315(a)(1)(A) of the FECA, as amended by section 307(a)(1) of the Act.)
    (ii) The contribution to a national party committee may not exceed 
$25,000 per calendar year. (The limit used to be $20,000; see section 
315(a)(1)(B) of the FECA, as amended by section 307(a)(2) of the Act.)
    (iii) The contribution to any other political committee, including 
a political action committee (PAC), may not exceed $5,000 per calendar 
year. (No change in the former law; see section 315(a)(1)(C) of the 
FECA.)
    (iv) The contribution to a State or local political party may not 
exceed $10,000 per calendar year. (The limit used to be $5,000; see 
section 315(a)(1)(D) of the FECA, as amended by section 102(3) of the 
Act.)
    The FECA limits the amount of hard money that multicandidate 
political committees other than individuals may contribute as follows:
    (i) The contribution to a candidate for Federal office may not 
exceed $5,000 per election. (See section 315(a)(2)(A) of the FECA.)

[[Page 71004]]

    (ii) The contribution to a national party committee may not exceed 
$15,000 per calendar year. (See section 315(a)(2)(B) of the FECA.)
    (iii) The contribution to any other political committee, including 
a political action committee (PAC), may not exceed $5,000 per calendar 
year. (No change in the former law; see section 315(a)(2)(C) of the 
FECA.)
    (iv) The contribution to a State or local political party may not 
exceed $5,000 per calendar year. (See section 315(a)(2)(C) of the 
FECA.)
(C) The Ban on Contributions and Donations by Foreign Nationals
    Section 319 of the FECA (2 U.S.C. Sec.  441e) makes it ``unlawful 
for (1) a foreign national, directly or indirectly, to make (A) a 
contribution or donation of money or other thing of value, or to make 
an express or implied promise to make a contribution or donation, in 
connection with a Federal, State, or local election; (B) a contribution 
or donation to a committee of a political party; or (C) an expenditure, 
independent expenditure, or disbursement for an electioneering 
communication (within the meaning of section 304(f)(3)); or (2) a 
person to solicit, accept, or receive a contribution or donation 
described in subparagraph (A) or (B) of paragraph (1) from a foreign 
national.''.
    ``Foreign national'' is broadly defined to mean (1) a foreign 
principal, as defined in the Foreign Agent Registration Act of 1938 (22 
U.S.C. Sec.  611(b)) or (2) an individual who is not a citizen or 
national of the United States or who is not lawfully admitted for 
permanent residence.
(D) Restrictions on Electioneering Communications
    Section 304(f) of the FECA, as added by section 201 of the Act, 
requires any person who makes a disbursement for the direct costs of 
producing and airing electioneering communications exceeding $10,000 in 
a calendar year to file a disclosure statement to the Federal Election 
Commission.
    Section 316 of the FECA (2 U.S.C. Sec.  441b) makes it unlawful for 
any national bank, any corporation organized by authority of any 
Federal law, or any labor union to make a contribution or expenditure 
in connection with any federal election to any federal political 
office, or a disbursement, using non-PAC money, for an ``electioneering 
communication''.
    An electioneering communication is any broadcast, cable, or 
satellite communication which (A) refers to a clearly identified 
candidate for Federal office; (B) is made within 60 days before a 
general election or 30 days before a primary election. The 
Communication must be targeted to the pertinent electorate. (See 2 
U.S.C. Sec.  434(f)(3)(c).)

(2) Violations of Section 316(b)

    Section 309(d)(1)(B) of the FECA states that ``[i]n the case of a 
knowing and willful violation of section 316(b)(3), the penalties set 
forth in this subsection shall apply to a violation involving an amount 
aggregating $250 or more during a calendar year. Such violation of 
section 316(b)(3) may incorporate a violation of section 317(b), 320, 
or 321.
    Section 316(b)(3) of the FECA (2 U.S.C. Sec.  441b(b)(3)) makes it 
unlawful for a national bank, any corporation organized by authority of 
any law of Congress, or any labor union (A) to use a political fund to 
make a political contribution or expenditure from money or anything of 
value that was secured by physical force, job discrimination, financial 
reprisals (or the threat thereof), or from dues, fees, or other money 
required as a condition of membership in the labor organization or as a 
condition of employment; (B) who solicits an employee for contribution 
to a political fund to fail to inform the employee of the purposes of 
the fund at the time of the solicitation; and (B) who solicits an 
employee for contribution to a political fund to fail to inform the 
employee of his right to refuse to contribute without reprisal.
    The sections which may incorporate violations of section 316(b)(3) 
of the FECA are section 317(b), which prohibits government contractors 
from making contributions of currency in excess of $100 for any 
candidate for Federal office, section 320 which prohibits a person from 
making a contribution in the name of another or accepting a 
contribution so made, and section 321, which prohibits any person from 
making contributions of currency in excess of $100 for any candidate 
for Federal office.

(3) Fraudulent Misrepresentations Under Section 322

    Section 309(d)(1)(C) of the FECA states that ``[i]n the case of a 
knowing and willful violation of section 322, the penalties set forth 
in this subsection shall apply without regard to whether the making, 
receiving, or reporting of a contribution or expenditure of $1,000 or 
more is involved.''
    Section 322(a) of the FECA (2 U.S.C. 441h) states that ``[n]o 
person who is a candidate for Federal office or an employee or agent of 
such a candidate shall (1) fraudulently misrepresent himself or any 
committee or organization under his control as speaking or writing or 
otherwise acting for or on behalf of any other candidate or political 
party or employee or agent thereof on a matter which is damaging to 
such other candidate or political party or employee or agent thereof; 
or (2) willfully and knowingly participate in or conspire to 
participate in any plan, scheme, or design to violate paragraph (1).''
    Section 322(b) states that ``[n]o person shall (1) fraudulently 
misrepresent the person as speaking, writing, or otherwise acting for 
or on behalf of any candidate or political party or employee or agent 
thereof for the purpose of soliciting contributions or donations; or 
(2) willfully and knowingly participate in or conspire to participate 
in any plan, scheme, or design to violate paragraph (1).''

(4) Conduit Contributions under Section 320

    Section 309(d)(1)(D) of the FECA states that ``[a]ny person who 
knowingly and willfully commits a violation of section 320 involving an 
amount aggregating more than $10,000 during a calendar year shall be 
(i) imprisoned for not more than 2 years if the amount is less than 
$25,000 (and subject to imprisonment under subparagraph (A) if the 
amount is $25,000 or more); (ii) fined not less than 300 percent of the 
amount of the violation and not more than the greater of (I) $50,000; 
or (II) 1,000 percent of the amount involved in the violation; or (iii) 
both imprisoned under clause (i) and fined under clause (ii).''
    Section 320 of the FECA (2 U.S.C. Sec.  441f) states that ``[n]o 
person shall make a contribution in the name of another person or 
knowingly permit his name to be used to effect such a contribution, and 
no person shall knowingly accept a contribution made by one person in 
the name of another person.''
    In addition to changes made to the FECA, section 302 of the Act 
amended section 607 of title 18, United States Code, to make it 
``unlawful for any person to solicit or receive a donation of money or 
other thing of value in connection with a Federal, State, or local 
election from a person who is located in a room or building occupied in 
the discharge of official duties by an officer or employee of the 
United States. It shall be unlawful for an individual who is an officer 
or employee of the Federal Government, including the President, Vice 
President, and Members of Congress, to solicit or receive a donation of 
money or other things of

[[Page 71005]]

value in connection with a Federal, State, or local election, while in 
any room or building occupied in the discharge of official duties by an 
officer or employee of the United States, from any person.'' The 
penalty is a fine of not more than $5,000, not more than 3 years or 
imprisonment, or both.
    In order to implement the directive in the Act, this proposed 
amendment expands the scope of Chapter Two, Part C (Offenses Involving 
Public Officials) by providing within that Part a new guideline for 
offenses under the FECA and related offenses. A new guideline, rather 
than amendment of an existing guideline, seems most appropriate to 
implement the directive. Currently there exists no guideline which 
already incorporates the elements of the FECA and related offenses, 
although the fraud guideline in particular (Sec.  2B1.1) and the public 
corruption guidelines to a lesser degree (Chapter Two, Part C) provide 
some overlap in the elements of the offense and aggravating conduct. In 
addition, the enhancements required to be added by the directive in the 
Act would fit nicely into a guideline devoted solely to campaign 
finance offenses but could prove unwieldy if added to the fraud or 
public corruption guidelines, which cover so many other non-campaign 
finance offenses.
    The proposed amendment provides for a base offense level of level 
[6-10]. The statutorily authorized maximum term of imprisonment for the 
conduct covered by the proposed guideline was raised by the Act from 
one year for all such offenses to two years for some offenses and five 
years for others. The base offense level is set at level [6-10] in 
recognition of the relative similarity of these offenses to fraud 
offenses covered by Sec.  2B1.1 and public corruption offenses covered 
by Chapter Two, Part C. A base offense level of level [6-10] both 
insures proportionality with relatively similar offenses and permits 
various sentencing enhancements directed to be added by the Act to 
operate well.
    The proposed amendment also creates a number of specific offense 
characteristics in response to the directive in section 314(b) of the 
Act. First, the directive requires the Commission to provide an 
enhancement if the offense involved a large aggregate amount of illegal 
contributions, donations, or expenditures and to provide an enhancement 
for a large number of illegal transactions. These two directives are 
fundamentally interrelated because the amount of the illegal 
contributions necessarily tends to increase as the number of illegal 
transactions increases. Because of the interrelatedness of these two 
directives, one option is to address these two considerations by 
providing a specific offense characteristic, at subsection (b)(1), that 
uses the fraud loss table in Sec.  2B1.1 to incrementally increase the 
offense level according to the dollar amount of the illegal 
transactions. This approach would foster proportionality with related 
guidelines, notably the fraud guideline and the public corruption 
guidelines (which also reference the fraud loss table), and would 
provide incremental, rather than a flat, punishment according to the 
dollar amount involved in the offense.
    The proposed amendment provides commentary to explain that 
``illegal transactions'' include only those amounts that exceed the 
amount a person may legitimately contribute, solicit, or expend. The 
proposed amendment also provides references in the definition to the 
FECA's definitions of ``contribution'' and ``expenditure''.
    Another option, provided in the proposed amendment, is to provide 
enhancements for both the number of illegal transactions and the dollar 
amount of the transactions. A separate enhancement for the number of 
illegal transactions takes into account the aspect of sophistication 
and planning attendant to multiple violations.
    Second, the proposed amendment provides an enhancement if the 
offense involved a contribution, donation, or expenditure from a 
foreign source. In implementing this enhancement, the proposed 
amendment adopts the expansive definition of ``foreign national'' 
provided in section 319 of the FECA, and provides for a greater 
enhancement if the defendant knew that the source of the funds was a 
foreign government.
    Third, the proposed amendment provides an enhancement if the 
offense involved a donation, contribution, or expenditure of 
governmental funds. The proposed amendment defines ``governmental 
funds'' to mean any Federal, State, or local funds. It is anticipated 
that this enhancement will apply in situations such as using 
governmental funds awarded in a contract to make a donation or 
contribution. The FECA itself addresses this type of situation but in 
very few places. For example, section 317 of the FECA, 2 U.S.C. Sec.  
441c, prohibits any person who enters into a contract with the United 
States for the rendition of services, the provision of materials, 
supplies, or equipment, or the selling of any land or property to the 
United States, if the payment from the United States is to be made in 
whole or in part from funds appropriated from Congress and before 
completion of or negotiation for the contract, to make or solicit a 
contribution of money or anything of value to a political party, 
committee, or candidate for public office or to any person for a 
political purpose. (This provision does not prohibit, however, the 
establishment of a segregated account to be used for political 
purposes.) The concern behind this provision of the FECA, therefore, is 
to prevent the use of Federal funds for political purposes. The same 
concern pertains to State and local funds as well.
    Fourth, the proposed amendment provides a number of options for 
responding to the directive to provide an enhancement for cases 
involving an intent to achieve a benefit from the Federal government. 
One option is to incorporate this factor into the base offense level. 
Examination of available Commission data reveals that this factor is 
present in the majority of illegal campaign finance cases and thus lies 
within the heartland of these cases. Another option presented in the 
proposed amendment defines this factor as the intent to influence a 
Federal public official to perform an official act in return for the 
contribution, donation, or expenditure. A third option is also 
presented that limits the intent to achieve a Federal benefit to the 
intent to achieve a financial benefit.
    The amendment also proposes to add an enhancement if the 
contribution, donation, or expenditure was obtained through 
intimidation, threat of harm, including pecuniary harm, or coercion.
    The proposed amendment also amends the guideline on fines for 
individual defendants, Sec.  5E1.2, to set forth the fine provisions 
unique to FECA and to provide two upward departure provisions related 
to certain FECA fines. This part of the amendment also provides that 
the defendant's participation in a conciliation agreement with the 
Federal Election Commission pursuant to section 309 of the FECA may be 
a potentially legitimate factor for the court to consider in evaluating 
where to sentence an offender within the presumptive fine guideline 
range. An issue for comment is provided regarding whether, in the 
alternative, a downward adjustment should apply in cases involving 
conciliation agreements, or alternatively, whether the Commission 
should discourage downward departures in such cases.
    The proposed amendment provides commentary that counts under this 
proposed guideline are groupable under subsection (d) of Sec.  3D1.2 
(Groups of Closely Related Counts). Finally, the

[[Page 71006]]

Statutory Index is amended to incorporate these offenses.

Proposed Amendment

    Chapter Two, Part C is amended in the heading by adding at the end 
``AND VIOLATIONS OF FEDERAL ELECTION CAMPAIGN LAWS''.
    Chapter Two, Part C is amended by striking the introductory 
commentary in its entirety.
    Chapter Two, Part C is amended by adding at the end the following 
new guideline and accompanying commentary:
``Sec.  2C1.8. Making, Receiving, or Failing to Report a Contribution, 
Donation, or Expenditure in Violation of the Federal Election Campaign 
Act; Fraudulently Misrepresenting Campaign Authority; Soliciting or 
Receiving a Donation in Connection with an Election While on Certain 
Federal Property
    (a) Base Offense Level: [6][7][8][9][10]
    (b) Specific Offense Characteristics
    (1) If the value of the illegal transactions (i) exceeded $2,000 
but did not exceed $5,000, increase by 1 level; or (ii) exceeded 
$5,000, increase by the number of levels from the table in Sec.  2B1.1 
(Theft, Property Destruction, and Fraud) corresponding to that amount.
    (2) (Apply the greater) If the offense involved a contribution, 
donation, or expenditure, or an express or implied promise to make a 
contribution, donation, or expenditure--
    (A) by a foreign national, increase by [2][4] levels; or
    (B) by a foreign government, and the defendant knew that the source 
of the contribution, donation, or expenditure was a foreign government, 
increase by [4][8] levels.
    (3) If the offense involved a contribution, donation, or 
expenditure of governmental funds, increase by [2][4] levels.
    (4) If the offense involved an intent [Option One: to influence a 
Federal public official to perform an official act][Option Two: to 
obtain a financial Federal benefit] in return for the contribution, 
donation, or expenditure, increase by [2][4] levels.
    [(5) If the offense involved more than five illegal transactions in 
a 12-month period, increase as follows:

------------------------------------------------------------------------
      Number of illegal transactions              Increase in level
------------------------------------------------------------------------
(A) 6-15..................................  add [1]
(B) 16-30.................................  add [2]
(C) 31 or more............................  add [3].]
------------------------------------------------------------------------

    (6) If the offense involved a donation or contribution obtained 
through intimidation, threat of pecuniary or other harm, or coercion, 
increase by [2] [4] levels.
    (c) Cross Reference
    (1) If the offense involved the fraudulent misrepresentation of 
authority to speak or otherwise act for a candidate, political party, 
or employee or agent thereof for the purpose of soliciting a donation 
or contribution, apply Sec.  2B1.1 (Theft, Fraud, and Property 
Destruction), if the resulting offense level is greater than the 
offense level determined under this guideline.

Commentary

    Statutory Provisions: 2 U.S.C. Sec. Sec.  437g(d)(1), 439a, 441a, 
441a-1, 441b, 441c, 441d, 441e, 441f, 441g, 441h(a), 441i, 441k; 18 
U.S.C. Sec.  607. For additional provision(s), see Statutory Index 
(Appendix A).

Application Notes

    1. Definitions.--For purposes of this guideline:
    ``Foreign government'' means the government of a foreign country, 
regardless of whether the United States formally has recognized that 
country.
    ``Foreign national'' has the meaning given that term in section 
319(b) of the Federal Election Campaign Act of 1971 (2 U.S.C. Sec.  
441e(b)).
    ``Governmental funds'' means money, assets, or property of a 
Federal, State, or local government[, including a governmental branch, 
subdivision, department, agency, or other component.]
    ``Illegal transaction'' means (A) any contribution, donation, 
solicitation, or expenditure of money or anything of value made in 
excess of the amount of such contribution, solicitation, or expenditure 
that may be made under the Federal Election Campaign Act of 1971, 2 
U.S.C. Sec.  431 et seq; and (B) in the case of a violation of 18 
U.S.C. Sec.  607, any solicitation or receipt of money or anything of 
value under that section. The terms `contribution' and `expenditure' 
have the meaning given those terms in section 301(8) and (9) of the 
Federal Election Campaign Act of 1971 (2 U.S.C. Sec.  431(8) and (9)), 
respectively.
    2. Application of Abuse of Position of Trust Adjustment.--If the 
defendant is an elected official, a candidate for elected office, or 
acting on behalf of, or employed by, an elected official or candidate 
for elected office, an adjustment from Sec.  3B1.3 (Abuse of Position 
of Trust or Use of Special Skill) may apply.]
    3. Multiple Counts.--For purposes of Chapter Three, Part D 
(Multiple Counts), multiple counts involving offenses covered by this 
guideline are grouped together under subsection (d) of Sec.  3D1.2 
(Groups of Closely Related Counts).
    4. Departure Provisions.--In a case in which the value of the 
illegal transactions does not adequately reflect the seriousness of the 
offense, an upward departure may be warranted. For example, a 
relatively small contribution in violation of the Federal Election 
Campaign Act of 1971 may be made in exchange for favorable 
consideration in the award of a substantial Federal government 
contract. Depending on the facts of such a case, an upward departure 
may be warranted.
    In a case in which the defendant's conduct was part of a systematic 
or pervasive corruption of a governmental function, process, or office 
that may cause loss of public confidence in government, an upward 
departure may be warranted.
    Background: This guideline covers violations of the Federal 
Election Campaign Act of 1971 and related federal election laws, such 
as 18 U.S.C. Sec.  607.''.
    Section 3D1.2(d) is amended by inserting ``, 2C1.8'' after 
``2C1.7''.
    The Commentary to Sec.  5E1.2 captioned ``Application Notes'' is 
amended in Note 4 by adding at the end the following:

``[If the count of conviction involves a violation of the Federal 
Election Campaign Act under 2 U.S.C. Sec.  437g(d)(1)(A), an upward 
departure to the maximum fine permitted under 18 U.S.C. Sec.  3571 may 
be warranted. If the count of conviction involves a violation of the 
Federal Election Campaign Act under 2 U.S.C. Sec.  441f punishable 
under 2 U.S.C. Sec.  437g(d)(1)(D), an upward departure to the maximum 
fine permitted under that subsection may be warranted.]''.

    The Commentary to Sec.  5E1.2 captioned ``Application Notes'' is 
amended in the second sentence of Note 5 by striking ``and'' after 
``Control Act;'' and by inserting before the period at the end the 
following:

``and 2 U.S.C. Sec.  437g(d)(1)(D), which authorizes, for violations of 
the Federal Election Campaign Act under 2 U.S.C. Sec.  441f, a fine up 
to the greater of $50,000 or 1,000 percent of the amount of the 
violation, and which requires, in the case of such a violation, a 
minimum fine of not less than 300 percent of the amount of the 
violation.

    There may be cases in which the defendant has entered into a 
conciliation agreement with the Federal Election Commission under 
section 309

[[Page 71007]]

of the Federal Election Campaign Act of 1971 in order to correct or 
prevent a violation of such Act by the defendant. The existence of a 
conciliation agreement between the defendant and Federal Election 
Commission may be an appropriate factor in determining at what point 
within the applicable fine guideline range to sentence the 
defendant.''.
    Appendix A (Statutory Index) is amended by inserting before the 
line referenced to 7 U.S.C. Sec.  6 the following new lines:

``2 U.S.C. Sec.  437g(d)(1) 2C1.8
2 U.S.C. Sec.  439a 2C1.8
2 U.S.C. Sec.  441a 2C1.8
2 U.S.C. Sec.  441a-1 2C1.8
2 U.S.C. Sec.  441b 2C1.8
2 U.S.C. Sec.  441c 2C1.8
2 U.S.C. Sec.  441d 2C1.8
2 U.S.C. Sec.  441e 2C1.8
2 U.S.C. Sec.  441f 2C1.8
2 U.S.C. Sec.  441g 2C1.8
2 U.S.C. Sec.  441h(a) 2C1.8
2 U.S.C. Sec.  441i 2C1.8
2 U.S.C. Sec.  441k 2C1.8''.

    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to 18 U.S.C. Sec.  597 the following new lines:

``18 U.S.C. Sec.  607 2C1.8''.

    Issues for Comment: There may be cases in which the defendant has 
entered into a conciliation agreement with the Federal Election 
Commission under section 309 of the Federal Election Campaign Act of 
1971 in order to correct or prevent a violation of such Act by the 
defendant. For such cases, the proposed amendment provides that such an 
agreement may be an appropriate factor in determining the amount of 
fine that might be imposed. The Commission requests comment regarding 
whether the existence of such a conciliation agreement between the 
defendant and Federal Election Commission should be the basis for a 
downward adjustment under the proposed guideline (and if so, what 
should the extent of the adjustment be), or, alternatively, should the 
Commission discourage downward departures in cases involving 
conciliation agreements so as to limit the effect such an agreement 
might have on the criminal penalties imposed?
    The Commission also requests comment regarding whether, in contrast 
to proposed Application Note 2, application of the abuse of position of 
trust adjustment in Sec.  3B1.3 should be precluded for cases under the 
proposed guideline.

[FR Doc. 02-30088 Filed 11-26-02; 8:45 am]
BILLING CODE 2210-40-P