[Federal Register Volume 68, Number 12 (Friday, January 17, 2003)]
[Notices]
[Pages 2615-2628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1123]


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UNITED STATES SENTENCING COMMISSION


Sentencing Guidelines for United States Courts

AGENCY: United States Sentencing Commission.

ACTION: Notice of proposed amendments to sentencing guidelines, policy 
statements, and commentary. Request for public comment, including 
public comment regarding retroactive application of any of the proposed 
amendments.

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SUMMARY: Pursuant to section 994(a), (o), and (p) of title 28, United 
States Code, the United States Sentencing 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.
    The specific amendments proposed in this notice are as follows: (1) 
A proposed amendment to repromulgate the temporary, emergency amendment 
implementing the Sarbanes-Oxley Act, Public Law. 107-204, as a 
permanent, non-emergency amendment, and issues for comment; (2) a 
proposed amendment to repromulgate the temporary, emergency amendment 
implementing the Bipartisan Campaign Reform Act of 2002, Public Law. 
107-155, as a permanent, non-emergency amendment; (3) a proposed 
amendment implementing section 11009 of the 21st Century Department of 
Justice Appropriations Authorization Act, Public Law. 107-273, which 
directs the Commission to review and amend the sentencing guidelines, 
as appropriate, to provide an appropriate sentencing enhancement for 
any crime of violence or drug trafficking crime in which the defendant 
used body armor; (4) a proposed amendment to Sec.  2D1.1 (Unlawful 
Manufacturing, Importing, Exporting, or Trafficking (Including 
Possession with Intent to Commit These Offenses); Attempt or 
Conspiracy) that provides increased penalties for offenses involving 
oxycodone; (5) issues for comment addressing section 11008 of the 21st 
Century Department of Justice Appropriations Authorization Act, Public 
Law. 107-273, regarding an appropriate enhancement for offenses 
involving influencing, assaulting, resisting, impeding, retaliating 
against, or threatening a federal judge, magistrate judge, or any other 
official described in section 111 or section 115 of title 18, United 
States Code; and (6) an issue for comment regarding section 225 of the 
Homeland Security Act of 2002 (the Cyber Security Enhancement Act of 
2002), Public Law. 107-296, which directs the Commission to review and 
amend, if appropriate, the sentencing guidelines and policy statements 
applicable to persons convicted of an offense under section 1030 of 
title 18, United States Code. Additional issues for comment regarding 
the 21st Century Department of Justice Appropriations Authorization Act 
and the Cyber Security Enhancement Act of 2002 were published in the 
Federal Register on December 18, 2002 (see 67 FR 77532).

DATES: Written public comment regarding the proposed amendments set 
forth in this notice, including public comment regarding retroactive 
application of any of these proposed amendments, should be received by 
the Commission not later than March 17, 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 Affairs.

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. 994(a). The 
Commission also periodically reviews and revises previously promulgated 
guidelines pursuant to 28 U.S.C. 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. 994(p). The Commission also may promulgate 
emergency amendments if required to do so by specific congressional 
legislation.
    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.
    The Commission also requests public comment regarding whether the 
Commission should specify for retroactive application to previously 
sentenced defendants any of the proposed amendments published in this 
notice. The Commission requests comment regarding which, if any, of the 
proposed amendments that may result in a lower guideline range should 
be made retroactive to previously sentenced defendants pursuant to 
Sec.  1B1.10 (Reduction in Term of Imprisonment as a Result of Amended 
Guideline Range).
    Additional information pertaining to the proposed amendments 
described in this notice may be accessed through the Commission's 
website at http://www.ussc.gov.

    Authority: 28 U.S.C. 994(a), (o), (p), (x); USSC Rules of 
Practice and Procedure, Rule 4.4.

Diana E. Murphy,
Chair.

1. Corporate Fraud

Synopsis of Proposed Amendment

    This proposed amendment implements directives to the

[[Page 2616]]

Commission contained in sections 805, 905, and 1104 of the Sarbanes-
Oxley Act of 2002 (the ``Act''), Public Law 107-204. The directives 
pertain to fraud and obstruction of justice offenses and 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. Under 
emergency amendment authority, the Commission promulgated guideline 
amendments, effective January 25, 2003, to implement these directives 
and now seeks comment on the following proposed permanent amendment.
    First, the proposed amendment addresses the directive contained in 
section 1104 of the Act regarding fraud offenses involving 
significantly greater than 50 victims by expanding 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. The proposed 
amendment provides an additional two levels, for a total of six levels, 
if the offense involved 250 or more victims.
    Second, the proposed amendment modifies 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 by providing two additional prongs in response to the 
directive. The first prong applies to offenses that substantially 
endanger the solvency or financial security of an organization that, at 
any time during the offense, was a publicly traded company or had 1,000 
or more employees. This prong of the enhancement is based on a 
presumption that if the offense endangered the solvency or financial 
security of an organization that was a publicly traded company or had 
1,000 or more employees, the offense similarly affected a substantial 
number of individual victims. As a result, the court is not required to 
determine whether the offense endangered the solvency or financial 
security of each individual victim. The second prong applies to 
offenses that substantially endangered the solvency or financial 
security of 100 or more victims, regardless of whether a publicly 
traded company or other organization was affected by the offense. The 
court could apply this prong as an alternative to the first prong in 
cases in which there is sufficient evidence to determine that the 
amount of loss suffered by individual victims of the offense 
substantially endangered the solvency or financial security of the 
victims.
    The corresponding application note to the new enhancement sets 
forth a non-exhaustive list of factors that the court shall consider in 
determining whether the offense endangered the solvency or financial 
security of a publicly traded company or an organization with 1,000 or 
more employees. 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 among the list of 
factors that the court shall consider when applying the new 
enhancement.
    The proposed amendment also modifies application of the other prong 
of subsection (b)(12), the financial institutions enhancement, to be 
consistent structurally with the new enhancement. Currently, the 
presence of any one of the enumerated factors automatically triggers 
application of the financial institutions enhancement. Under the 
proposed amendment, the application note to the financial institutions 
enhancement sets forth a non-exhaustive list of factors that the court 
shall consider in determining whether the offense substantially 
jeopardized the safety and soundness of a financial institution. The 
note includes references to insolvency, substantially reducing benefits 
to pensioners and insureds, and inability on demand to refund fully any 
deposit, payment, or investment, among the factors that the court shall 
consider when applying this 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 four level enhancement at Sec.  2B1.1(b)(13). The enhancement 
applies if the offense involved a violation of securities law and, at 
the time of the offense, the defendant was an officer or director of a 
publicly traded company. The enhancement would apply regardless of 
whether the defendant was convicted under a specific securities fraud 
statute (e.g., 18 U.S.C. 1348, a new offense created by the Act 
specifically prohibiting securities fraud) or under a general fraud 
statute (e.g., 18 U.S.C. 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.
    Pursuant to the corresponding application note, ``securities law'' 
(1) means 18 U.S.C. 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. 
78c(a)(47)); and (2) 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).
    Fourth, the proposed amendment expands the loss table at subsection 
(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. These proposed 
additions 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). The proposed amendment also amends the tax 
table in Sec.  2T4.1 to conform to the proposed changes made to the 
loss table in Sec.  2B1.1.
    Also with respect to loss, the proposed amendment includes the 
reduction that resulted from the offense in the value of equity 
securities or other corporate assets among the factors the court may 
consider in estimating loss under subsection (b)(1).
    Fifth, the proposed amendment implements the directives pertaining 
to obstruction of justice offenses contained in sections 805 and 1104 
of the Act. First, the proposed amendment increases the base offense 
level in Sec.  2J1.2 (Obstruction of Justice) from level 12 to level 
14. Second, the proposed amendment adds a new two

[[Page 2617]]

level enhancement to Sec.  2J1.2 that applies if the offense (1) 
involved the destruction, alteration, or fabrication of a substantial 
number of records, documents, or tangible objects; (2) involved the 
selection of any essential or especially probative record, document, or 
tangible object to destroy or alter; or (3) was otherwise extensive in 
scope, planning, or preparation.
    Sixth, 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. 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 by 
adding at the end the following:
    ``(O) More than $200,000,000 add 28
    (P) More than $400,000,000 add 30.''.
    Section 2B1.1(b)(2) is amended to read as follows:
    ``(2) (Apply the greatest) If the offense--
    (A) (i) involved 10 or more victims; or (ii) was committed through 
mass-marketing, increase by 2 levels;
    (B) involved 50 or more victims, increase by 4 levels; or
    (C) involved 250 or more victims, increase by 6 levels.''.
    Section 2B1.1(b)(12)(B) is amended to read as follows:
    ``(B) the offense (i) substantially jeopardized the safety and 
soundness of a financial institution; (ii) substantially endangered the 
solvency or financial security of an organization that, at any time 
during the offense, (I) was a publicly traded company; or (II) had 
1,000 or more employees; or (iii) substantially endangered the solvency 
or financial security of 100 or more victims, 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 an officer or a director 
of a publicly traded company, increase by 4 levels.''.
    The Commentary to Sec.  2B1.1 captioned ``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 adding after ``Resources).'' the following new 
paragraph:
    `` `Equity securities' has the meaning given that term in section 
3(a)(11) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(11)).'';

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. 78l); or (B) that is required to file reports under 
section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o(d)). `Issuer' has the meaning given that term in section 3 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c).'';

and by adding at the end the following:

    `` `Victim' means (A) any person who sustained any part of the 
actual loss determined under subsection (b)(1); or (B) any individual 
who sustained bodily injury as a result of the offense. `Person' 
includes individuals, corporations, companies, associations, firms, 
partnerships, societies, and joint stock companies.''.
    The Commentary to Sec.  2B1.1 captioned ``Application Notes'' is 
amended in Note 2(C) by redesignating subdivision (iv) as (v); and by 
adding after subdivision (iii) the following new subdivision:
    ``(iv) The reduction that resulted from the offense in the value of 
equity securities or other corporate assets.''.
    The Commentary to Sec.  2B1.1 captioned ``Application Notes'' is 
amended in Note 3 by striking ``Victim and Mass-Marketing Enhancement 
under'' in the heading and inserting ``Application of''; by striking 
subdivision (A) and inserting the following:
    ``(A) Definition.--For purposes of subsection (b)(2), `mass-
marketing' means a plan, program, promotion, or campaign that is 
conducted through solicitation by telephone, mail, the Internet, or 
other means to induce a large number of persons to (i) purchase goods 
or services; (ii) participate in a contest or sweepstakes; or (iii) 
invest for financial profit. `Mass-marketing' includes, for example, a 
telemarketing campaign that solicits a large number of individuals to 
purchase fraudulent life insurance policies.'';

    In subdivision (B)(i)(I) by striking ``described in subdivision 
(A)(ii) of this note;'' and inserting ``any victim as defined in 
Application Note 1;'';
    In subdivision (B)(ii)(IV) by inserting ``at least'' after ``to 
have involved''; and in subdivision (C) by inserting ``or (C)'' after 
``(B)''.
    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) Application of Subsection (b)(12)(B)(i).--The following is a 
non-exhaustive list of factors that the court shall consider in 
determining whether, as a result of the offense, the safety and 
soundness of a financial institution was substantially jeopardized:
    (i) The financial institution became insolvent.
    (ii) The financial institution substantially reduced benefits to 
pensioners or insureds.
    (iii) The financial institution was unable on demand to refund 
fully any deposit, payment, or investment.
    (iv) The financial institution was so depleted of its assets as to 
be forced to merge with another institution in order to continue active 
operations.
    (B) Application of Subsection (b)(12)(B)(ii).--
    (i) Definition.--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) In General.--The following is a non-exhaustive list of factors 
that the court shall consider in determining whether, as a result of 
the offense, the solvency or financial security of an organization that 
was a publicly traded company or that had more than 1000 employees was 
substantially endangered:

[[Page 2618]]

    (I) The organization became insolvent or suffered a substantial 
reduction in the value of its assets.
    (II) The organization filed for bankruptcy under Chapters 7, 11, or 
13 of the Bankruptcy Code (title 11, United States Code).
    (III) The organization suffered a substantial reduction in the 
value of its equity securities or the value of its employee retirement 
accounts.
    (IV) The organization substantially reduced its workforce.
    (V) The organization substantially reduced its employee pension 
benefits.
    (VI) The liquidity of the equity securities of a publicly traded 
company was substantially endangered. For example, the company was 
delisted from its primary listing exchange, or trading of the company's 
securities was halted for more than one full trading day.
    11. Application of Subsection (b)(13).--
    (A) Definition.--For purposes of this subsection, `securities law' 
(i) means 18 U.S.C. 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. 
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 such section.
    (B) In General.--A conviction under a 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 a 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, by striking 
subdivision (v); and by redesignating subdivisions (vi) and (vii) as 
subdivisions (v) and (vi), respectively.
    The Commentary to Sec.  2B1.1 captioned ``Background'' is amended 
in the last paragraph by inserting ``(i)'' after ``(B)''.
    Section 2E5.3 is amended in the heading by adding at the end; 
``Destruction and Failure to Maintain Corporate Audit Records''.
    Section 2E5.3(a)(2) is amended to read as follows:
    ``(2) If the offense was committed to facilitate or conceal (A) an 
offense involving a theft, a fraud, or an embezzlement; (B) an offense 
involving a bribe or a gratuity; or (C) an obstruction of justice 
offense, apply Sec.  2B1.1 (Theft, Property Destruction, and Fraud), 
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 
(Obstruction of Justice), as applicable.''.
    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(a) is amended by striking ``12'' and inserting 
``14''.
    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 a substantial number of records, documents, or tangible 
objects; (B) involved the selection of any essential or especially 
probative record, document, or tangible object, 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''.
    Section 2T4.1 is amended in the table by striking the period and 
adding at the end the following:
    ``(O) More than $200,000,000 34
    ``(P) More than $400,000,000 36.''.
    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to 18 U.S.C. 1347 the following new lines:
    ``18 U.S.C. 1348 2B1.1
    18 U.S.C. 1349 2X1.1
    18 U.S.C. 1350 2B1.1''.''
    Appendix A (Statutory Index) is amended in the line referenced to 
18 U.S.C. 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. 1512(b) the following new line:
    ``18 U.S.C. 1512(c) 2J1.2''.
    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to 18 U.S.C. 1518 the following new lines:
    ``18 U.S.C. 1519 2J1.2
    18 U.S.C. 1520 2E5.3''.

Issues for Comment: Corporate Fraud

    1. On January 8, 2003, the Commission promulgated a temporary, 
emergency amendment in response to directives contained in the 
Sarbanes-Oxley Act of 2002. The Commission specified an effective date 
of January 25, 2003, for the amendment. The amendment will remain in 
effect until the Commission repromulgates the emergency amendment as a 
permanent amendment under the Commission's general promulgation 
authority at 28 U.S.C. 994(p).
    (A) As part of that emergency amendment, the Commission expanded 
the loss table in Sec.  2B1.1(b)(1). The amendment provided 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. The Commission 
requests comment regarding whether, when it repromulgates the emergency 
amendment as a permanent amendment, the loss table should be modified 
more extensively to provide increased offenses levels for offenses 
involving lower loss amounts. The Commission requests comment 
specifically on the following three options and invites public comment 
on any other alternative loss table:
    Section Sec.  2B1.1(b)(1) is amended to read as follows:
    Option A:
    ``(1) If the loss exceeded $5,000, increase the offense level as 
follows:

------------------------------------------------------------------------
        Loss (apply the greatest)                Increase in level
------------------------------------------------------------------------
(A) $5,000 or less.......................  no increase
(B) More than $5,000.....................  add 2
(C) More than $10,000....................  add 4
(D) More than $25,000....................  add 6
(E) More than $60,000....................  add 8
(F) More than $100,000...................  add 10
(G) More than $200,000...................  add 12
(H) More than $400,000...................  add 14
(I) More than $700,000...................  add 16
(J) More than $1,000,000.................  add 18
(K) More than $2,500,000.................  add 20
(L) More than $7,000,000.................  add 22
(M) More than $20,000,000................  add 24
(N) More than $50,000,000................  add 26
(O) More than $100,000,000...............  add 28
(P) More than $200,000,000...............  add 30.''.
------------------------------------------------------------------------

    Option B:
    ``(1) If the loss exceeded $5,000, increase the offense level as 
follows:

------------------------------------------------------------------------
        Loss (apply the greatest)                Increase in level
------------------------------------------------------------------------
(A) $5,000 or less.......................  no increase
(B) More than $5,000.....................  add 2
(C) More than $10,000....................  add 4

[[Page 2619]]

 
(D) More than $25,000....................  add 6
(E) More than $50,000....................  add 8
(F) More than $100,000...................  add 10
(G) More than $200,000...................  add 12
(H) More than $400,000...................  add 14
(I) More than $800,000...................  add 16
(J) More than $1,600,000.................  add 18
(K) More than $3,200,000.................  add 20
(L) More than $7,000,000.................  add 22
(M) More than $20,000,000................  add 24
(N) More than $50,000,000................  add 26
(O) More than $100,000,000...............  add 28
(P) More than $200,000,000...............  add 30.''.
------------------------------------------------------------------------

    Option C:
    ``(1) If the loss exceeded $5,000, increase the offense level as 
follows:

------------------------------------------------------------------------
        Loss (apply the greatest)                Increase in level
------------------------------------------------------------------------
(A) $5,000 or less.......................  no increase
(B) More than $5,000.....................  add 2
(C) More than $10,000....................  add 4
(D) More than $30,000....................  add 6
(E) More than $70,000....................  add 8
(F) More than $100,000...................  add 10
(G) More than $200,000...................  add 12
(H) More than $400,000...................  add 14
(I) More than $600,000...................  add 16
(J) More than $800,000...................  add 18
(K) More than $1,000,000.................  add 20
(L) More than $2,500,000.................  add 22
(M) More than $7,000,000.................  add 24
(N) More than $20,000,000................  add 26
(O) More than $50,000,000................  add 28
(P) More than $100,000,000...............  add 30
(Q) More than $200,000,000...............  add 32
(R) More than $400,000,000...............  add 34.''.
------------------------------------------------------------------------

    Additionally, the Commission requests comment regarding whether, 
when it repromulgates the emergency amendment as a permanent amendment, 
it should amend Sec.  2B1.1(a) to provide an alternative base offense 
level, either in conjunction with, or in lieu of, an amendment to the 
loss table, that would apply based on the statutory maximum term of 
imprisonment applicable to the offense of conviction. Specifically, the 
Commission requests comment on amending Sec.  2B1.1(a) to read as 
follows:
    ``(a) Base Offense Level:
    (1) 7, if the defendant was convicted of an offense referenced to 
this guideline for which the maximum term of imprisonment prescribed by 
law is [5][10][15][20] years or more; or
    (2) 6, otherwise.''.
    (B) As part of the emergency amendment, the Commission promulgated 
a new enhancement at Sec.  2B1.1(b)(13) that provides a four level 
enhancement if the offense involved a violation of securities law and, 
at the time of the offense, the defendant was an officer or director of 
a publicly traded company. The Commission requests comment regarding 
whether, when it repromulgates the emergency amendment as a permanent 
amendment, it should expand the scope of Sec.  2B1.1(b)(13) to include 
other individuals or entities who may have a fiduciary or similar 
statutory duty of trust and confidence to the investor. For example, 
should the Commission include in Sec.  2B1.1(b)(13) a registered broker 
or dealer (see 15 U.S.C. 78c(a)(47)), an associated person of a 
registered broker or dealer (see 15 U.S.C. 78c(18)), an investment 
adviser (see 15 U.S.C. 80b-2(a)(11)), or a person associated with an 
investment adviser (see 15 U.S.C. 80b-2(a)(17))? Additionally, should 
the Commission expand the scope of the enhancement to apply to entities 
or individuals that offer and manage securities, commodities, and 
futures but who are not regulated under securities law (as defined by 
the Commission in Application Note 11 of Sec.  2B1.1, effective January 
25, 2003)? For example, should the enhancement apply in cases involving 
violations of the Commodities Exchange Act (7 U.S.C. 1 et seq.) or 
other federal laws that govern the regulation of securities, 
commodities, and futures?
    The Commission additionally requests comment regarding whether, 
when it repromulgates the emergency amendment as a permanent amendment, 
it should maintain the magnitude of the enhancement in Sec.  
2B1.1(b)(13) at four levels. If not, what should be the magnitude of 
the enhancement?
    2. The Commission requests comment regarding whether it should 
provide separate guidelines for theft, property destruction, and fraud 
offenses that currently are referenced to Sec.  2B1.1. If the 
Commission provided separate guidelines for these offenses, what 
components of current Sec.  2B1.1 would be appropriate for each of the 
separate guidelines? Would the definition of ``loss'' need to be 
modified in any fashion as a result of providing separate guidelines? 
Should the Commission, in conjunction with, or in lieu of, separate 
guidelines, amend Sec.  2B1.1 to provide separate loss tables for theft 
and fraud offenses? If so, how should the Commission determine which 
table would be applicable to the offenses referenced to Sec.  2B1.1? 
For example, should the Commission use the pre-consolidation Appendix A 
references to determine which table would be applicable to an offense?
    3. The Commission has received information suggesting that in 
certain cases involving fraud-related contempt, courts have not applied 
the appropriate guideline. The relevant guideline, Sec.  2J1.1 
(Contempt), directs the court to apply Sec.  2X5.1 (Other Offenses), 
which in turn instructs the court to apply the ``most analogous 
guideline.'' Specifically, in certain cases in which the misconduct 
constituting contempt is a violation of a court order enjoining 
fraudulent behavior, courts inappropriately may have applied the 
obstruction of justice guideline, Sec.  2J1.2, instead of the guideline 
relating to fraud, Sec.  2B1.1 (Theft, Property Destruction, and 
Fraud). The Commission requests comment regarding whether this issue 
should be addressed and, if so, in what manner. For example, should the 
Commission add an application note to Sec.  2J1.1 that clarifies that 
for offenses in which the misconduct constituting contempt is a 
violation of a judicial order enjoining fraudulent behavior, the most 
analogous guideline is Sec.  2B1.1? Should the application note more 
generally state that for offenses in which the misconduct constituting 
contempt is fraud, the most analogous guideline is Sec.  2B1.1? In 
addition, the Commission has received information suggesting that the 
enhancement in Sec.  2B1.1(b)(7)(C) is not always applied as 
appropriate in cases involving fraud-related contempt. Should the 
Commission clarify, possibly in the same application note discussed 
above, that in contempt cases involving violations of court orders 
enjoining fraudulent behavior, the enhancement in Sec.  2B1.1(b)(7)(C) 
should apply?
    4. The emergency amendment effective January 25, 2003, increased 
the base offense level in Sec.  2J1.2 (Obstruction of Justice) from 
level 12 to level 14 and provided 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. The Commission requests comment regarding whether, in 
light of these changes to Sec.  2J1.2, modifications also should be 
made to Sec.  2J1.3 (Perjury or Subornation of Perjury; Bribery of 
Witness) 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?

2. Campaign Finance

Synopsis of Proposed Amendment

    This proposed amendment responds to the Bipartisan Campaign Reform 
Act of 2002 (the ``Act''), Public Law 107-155. Under emergency 
amendment authority, the Commission promulgated a temporary amendment, 
effective January 25, 2003, to implement the Act.

[[Page 2620]]

The Commission now seeks comment on a proposed permanent amendment to 
implement the Act. The most pertinent provision for the Commission is 
section 314, which states:
    ``(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 violation 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.''.
    Since section 314 directed the Commission to provide a guideline 
for violations of the Federal Election Campaign Act of 1971 (the 
``FECA'') and related elections laws, examination of the FECA's 
criminal penalty provisions (and related criminal penalty provisions) 
is necessary. 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. 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. 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 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.)
    (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. 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. 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. The term ``foreign prinicipal'' includes foreign governments 
and corporations.
(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. 441b) makes it unlawful for any 
national bank, a corporation organized by authority of any Federal law, 
or any labor union to make a contribution or

[[Page 2621]]

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. 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. 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 (C) 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. 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 thing of 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 more 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 would 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 
8. 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 8 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 8 both insures 
proportionality with relatively similar offenses and permits various 
sentencing enhancements directed by the Act to operate as 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. To address

[[Page 2622]]

this consideration, the proposed amendment provides 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 any conduct prohibited by the FECA and 
related election laws and, with respect to dollar amounts limited by 
the FECA, 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''.
    Second, the proposed amendment provides a two part enhancement at 
subsection (b)(2), providing for the greater of a two level enhancement 
if the offense involved a contribution, donation, or expenditure from a 
foreign national and a four level enhancement if the offense involved a 
contribution, donation, or expenditure from a foreign government or 
organization.
    Third, the proposed amendment provides an alternative pronged 
enhancement at subsection (b)(3) if (1) the offense involved a 
donation, contribution, or expenditure, disbursement, or receipt of 
government funds, or (2) the defendant committed the offense for the 
purpose of achieving a specific, identifiable nonmonetary Federal 
benefit. 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. 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. 
It is also anticipated that this enhancement will apply in situations 
in which a State or local elected official uses State or local 
resources to finance his or her campaign for Federal office.
    Commentary is provided for the alternative prong in subsection 
(b)(3)(B) on the intent to achieve a specific, identifiable nonmonetary 
Federal benefit to make clear that the intent of this prong is not to 
enhance the sentence for seeking heightened access to public officials 
generally; rather, the enhancement provides greater punishment for 
defendants who are seeking some specific benefit such as a Presidential 
pardon or information proprietary to the government.
    Fourth, the amendment proposes to add an enhancement at subsection 
(b)(4) if the defendant engaged in thirty or more illegal transactions 
during the course of the offense, whether or not the defendant was 
convicted of the conduct. This enhancement is added in response to the 
directive to provide an enhancement if the offense involved a large 
number of illegal transactions.
    Fifth, the amendment proposes to add an enhancement at subsection 
(b)(5) if the contribution, donation, or expenditure was obtained 
through, or a solicitation was made by, intimidation, threat of harm, 
including pecuniary harm, or coercion.
    Sixth, the proposed amendment provides a cross reference in the new 
guideline to either the bribery guideline or the gratuity guideline, if 
the offense involved such conduct and the resulting offense level is 
greater than that determined under the new guideline.
    The proposed amendment also amends the guideline on fines for 
individual defendants, Sec.  5E1.2, to set forth the fine provisions 
unique to FECA. 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.
    The proposed amendment also includes counts under this proposed 
guideline under the grouping provision under Sec.  3D1.2(d). Finally, 
the 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: 8
    (b) Specific Offense Characteristics
    (1) If the value of the illegal transactions 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, directly or 
indirectly, an illegal transaction made by or received from--
    (A) a foreign national, increase by 2 levels; or
    (B) a government of a foreign country, increase by 4 levels.
    (3) If (A) the offense involved the contribution, donation, 
solicitation, expenditure, disbursement, or receipt of governmental 
funds; or (B) the defendant committed the offense for the purpose of 
obtaining a specific, identifiable non-monetary Federal benefit, 
increase by 2 levels.
    (4) If the defendant engaged in 30 or more illegal transactions, 
increase by 2 levels.
    (5) If the offense involved a contribution, donation, solicitation, 
or expenditure made or obtained through intimidation, threat of 
pecuniary or other harm, or coercion, increase by 4 levels.
(c) Cross Reference
    (1) If the offense involved a bribe or gratuity, apply Sec.  2C1.1 
(Offering, Giving, Soliciting, or Receiving a Bribe; Extortion Under 
Color of Official Right) or Sec.  2C1.2 (Offering, Giving, Soliciting, 
or Receiving a Gratuity), as appropriate, if the resulting offense 
level is greater than the offense level determined above.

[[Page 2623]]

Commentary

    Statutory Provisions: 2 U.S.C. 437g(d)(1), 439a, 441a, 441a-1, 
441b, 441c, 441d, 441e, 441f, 441g, 441h(a), 441i, 441k; 18 U.S.C. 
607. For additional provision(s), see Statutory Index (Appendix A).
Application Notes
    1. Definitions.--For purposes of this guideline:
    `Foreign national' has the meaning given that term in section 
319(b) of the Federal Election Campaign Act of 1971, 2 U.S.C. 441e(b).
    `Government of a foreign country' has the meaning given that term 
in section 1(e) of the Foreign Agents Registration Act of 1938 (22 
U.S.C. 611(e)).
    `Governmental funds' means money, assets, or property, of the 
United States government, of a State government, or of a local 
government, including any branch, subdivision, department, agency, or 
other component of any such government. `State' means any of the fifty 
States, the District of Columbia, the Commonwealth of Puerto Rico, the 
United States Virgin Islands, Guam, the Northern Mariana Islands, or 
American Samoa. `Local government' means the government of a political 
subdivision of a State.
    `Illegal transaction' means (A) any contribution, donation, 
solicitation, or expenditure of money or anything of value, or any 
other conduct, prohibited by the Federal Election Campaign Act of 1971, 
2 U.S.C. 431 et seq; (B) any contribution, donation, solicitation, or 
expenditure of money or anything of value made in excess of the amount 
of such contribution, donation, solicitation, or expenditure that may 
be made under such Act; and (C) in the case of a violation of 18 U.S.C. 
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. 431(8) and (9)), respectively.
    2. Application of Subsection (b)(3)(B).--Subsection (b)(3)(B) 
provides an enhancement for a defendant who commits the offense for the 
purpose of achieving a specific, identifiable non-monetary Federal 
benefit that does not rise to the level of a bribe or a gratuity.
    Subsection (b)(3)(B) is not intended to apply to offenses under 
this guideline in which the defendant's only motivation for commission 
of the offense is generally to achieve increased visibility with, or 
heightened access to, public officials. Rather, subsection (b)(3)(B) is 
intended to apply to defendants who commit the offense to obtain a 
specific, identifiable non-monetary Federal benefit, such as a 
Presidential pardon or information proprietary to the government.
    3. Application of Subsection (b)(4).--Subsection (b)(4) shall apply 
if the defendant engaged in any combination of 30 or more illegal 
transactions during the course of the offense, whether or not the 
illegal transactions resulted in a conviction for such conduct.
    4. Departure Provision.--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.''.
    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 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. 437g(d)(1)(D), which authorizes, for violations of the 
Federal Election Campaign Act under 2 U.S.C. 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 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, and the extent of compliance with that 
conciliation agreement, may be appropriate factors in determining at 
what point within the applicable fine guideline range to sentence the 
defendant, unless the defendant began negotiations toward a 
conciliation agreement after becoming aware of a criminal 
investigation''.
    Appendix A (Statutory Index) is amended by inserting before the 
line referenced to 7 U.S.C. 6 the following new lines:
    ``2 U.S.C. 437g(d) 2C1.8
    2 U.S.C. 439a 2C1.8
    2 U.S.C. 441a 2C1.8
    2 U.S.C. 441a-1 2C1.8
    2 U.S.C. 441b 2C1.8
    2 U.S.C. 441c 2C1.8
    2 U.S.C. 441d 2C1.8
    2 U.S.C. 441e 2C1.8
    2 U.S.C. 441f 2C1.8
    2 U.S.C. 441g 2C1.8
    2 U.S.C. 441h(a) 2C1.8
    2 U.S.C. 441i 2C1.8
    2 U.S.C. 441k 2C1.8''.
    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to 18 U.S.C. 597 the following new line:
    ``18 U.S.C. 607 2C1.8''.

3. Use of Body Armor in a Crime of Violence or Drug Trafficking Crime

Synopsis of Proposed Amendment

    In December 2002, the Commission published general issues for 
comment (see 67 FR 77532) regarding how to implement the directive in 
section 11009 of the 21st Century Department of Justice Appropriations 
Authorization Act (the ``Act''), Public Law 107-273. The directive 
requires the Sentencing Commission to ``review and amend the Federal 
sentencing guidelines and the policy statements of the Commission, as 
appropriate, to provide an appropriate sentencing enhancement for any 
crime of violence (as defined in section 16 of title 18, United States 
Code) or drug trafficking crime (as defined in section 924(c) of title 
18, United States Code) (including a crime of violence or drug 
trafficking crime that provides for an enhanced punishment if committed 
by the use of a deadly or dangerous weapon or device) in which the 
defendant used body armor.'' The Act further states that it is the 
sense of Congress that any such enhancement should be at least two 
levels.
    In response to the directive, the proposed amendment provides for a 
new adjustment at Sec.  3A1.5 (Use of Body Armor) for the use of body 
armor in an offense involving a crime of violence or drug trafficking 
crime. A proposed application note provides definitions of ``crime of 
violence'', ``drug trafficking crime'', and ``body armor''.
    The definitions of ``crime of violence'' and ``drug trafficking 
crime'' are those required by the directive. Consequently, the 
definition of ``drug trafficking crime'' (taken from 18 U.S.C. 
924(c)(2)) includes any felony punishable under the Controlled 
Substances Act, and the definition of ``crime of violence'' (taken from 
18 U.S.C. 16) includes offenses that involve the use or attempted use 
of physical force against property as well as persons. Both of these 
definitions are somewhat broader than the definitions of ``crime of 
violence'' and drug trafficking offense'' used in a number of other 
guidelines. The definition of ``body armor'' is borrowed from the 
statutory definition provided in 18 U.S.C. 921(a)(35).
    Background commentary is proposed to provide a cite for the 
directive

[[Page 2624]]

underpinning the new guideline. A conforming amendment is proposed for 
the heading of Part A of Chapter Three to accommodate the expanding 
scope of that part.
    An issue for comment follows the proposed amendment requesting 
comment regarding whether the adjustment for use of body armor should 
be defendant based or relevant conduct based.

Proposed Amendment

    Chapter Three, Part A, is amended in the heading by striking 
``VICTIM-RELATED'' and inserting ``GENERAL''.
    Chapter Three, Part A, is amended by adding at the end the 
following new guideline:
``Sec.  3A1.5. Use of Body Armor in Drug Trafficking Offenses and 
Crimes of Violence
    If the offense (1) was a drug trafficking crime or a crime of 
violence; and (2) involved the use of body armor, increase by [2][4][6] 
levels.
Commentary
    Application Note:
    1. Definitions.--For purposes of this guideline:
    `Body armor' means any product sold or offered for sale, in 
interstate or foreign commerce, as personal protective body covering 
intended to protect against gunfire, regardless of whether the product 
is to be worn alone or is sold as a complement to another product or 
garment. See 18 U.S.C. 921(a)(35).
    `Crime of violence' has the meaning given that term in 18 U.S.C. 
16.
    `Drug trafficking crime' has the meaning given that term in 18 
U.S.C. 924(c)(2).
    Background: This section implements the directive in the James 
Guelff and Chris McCurley Body Armor Act of 2002 (section 11009(d) of 
the 21st Century Department of Justice Appropriations Authorization 
Act, Public Law. 107-273).''.

Issue for Comment

    The proposed amendment provides an increase if the offense was a 
drug trafficking crime or a crime of violence and involved the use of 
body armor. The Commission requests comment regarding whether the 
adjustment for body armor should be based on all conduct within the 
scope of relevant conduct, as proposed, or based on the actions of only 
the defendant; i.e., should the enhancement apply only if the defendant 
used or directed the use of body armor, rather than if the offense 
generally involved the use of body armor? Alternatively, should the 
enhancement provide a two level increase if the offense generally 
involved the use of body armor and a heightened increase (e.g., 4 or 6 
levels) if the defendant used or directed the use of body armor? If so, 
what should be the extent of the increase?

4. Oxycodone

Synopsis of Proposed Amendment

    This proposed amendment responds to proportionality issues in the 
sentencing of oxycodone trafficking. Oxycodone is an opium alkaloid 
found in certain prescription pain relievers such as Percocet and 
Oxycontin. This prescription drug is generally sold in pill form, and 
the sentencing guidelines currently establish penalties for oxycodone 
trafficking based on the entire weight of the pill. The proportionality 
issues arise because of the formulations of the different medicines and 
because different amounts of oxycodone are found in pills of identical 
weight.
    As an example of the first issue, the drug Percocet contains the 
non-prescription pain reliever acetaminophen in addition to oxycodone. 
The weight of the oxycodone component accounts for a very small 
proportion of the total weight of the pill. This is in contrast to 
Oxycontin in which the weight of the oxycodone accounts for a 
substantially greater proportion of the weight of the pill. For 
example, a Percocet pill containing five milligrams of oxycodone weighs 
approximately 550 milligrams (oxycodone accounting for 0.9 percent of 
the total weight of the pill) while the weight of an Oxycontin pill 
containing 10 milligrams of oxycodone is approximately 135 milligrams 
(oxycodone accounting for 7.4 percent of the total weight). 
Consequently, at sentencing, the same five year sentence results from 
the trafficking of 364 Percocet pills or 1,481 Oxycontin pills. 
Additionally, the total amount of the narcotic oxycodone involved in 
this example is vastly different depending on the drug. The 364 
Percocets produce 1.6 grams of actual oxycodone while the 1,481 
Oxycontin pills produce 14.8 grams of oxycodone.
    The second issue results from differences in the formulation of 
Oxycontin. Three different amounts of oxycodone (10, 20, and 40 
milligrams) are contained in pills of identical weight (135 
milligrams). As a result, an individual trafficking in a particular 
number of Oxycontin pills would receive the same sentence regardless of 
the amount of oxycodone contained in the pills.
    To remedy these proportionality issues it is proposed that 
sentences for oxycodone offenses be calculated using the weight of the 
actual oxycodone instead of the current mechanism of calculating the 
weight of the entire pill. Currently, the Drug Equivalency Tables in 
Sec.  2D1.1 equate 1 gram of oxycodone mixture to 500 grams of 
marihuana. The proposal would equate 1 gram of actual oxycodone to 
6,700 grams of marihuana. This equivalency would keep penalties for 
offenses involving 10 milligrams of Oxycontin identical to current 
levels but would increase penalties for all other doses of Oxycontin. 
At the same time, penalties for Percocet would be substantially 
reduced.

Proposed Amendment

    Section 2D1.1 is amended in subdivision (B) of the ``*Notes to Drug 
Quantity Table'' by adding at the end the following new paragraph:
    ``The term `Oxycodone (actual)' refers to the weight of the 
controlled substance, itself, contained in the pill or capsule.''.
    The Commentary to Sec.  2D1.1 captioned ``Application Notes'' is 
amended in Note 9 by striking ``or methamphetamine'' and inserting 
``methamphetamine, or oxycodone''.
    The Commentary to Sec.  2D1.1 captioned ``Application Notes'' is 
amended in Note 10 in the Drug Equivalency Tables in the subdivision 
captioned ``Schedule I or II Opiates*'' by striking ``1 gm of Oxycodone 
= 500 gm of marihuana'' and inserting ``1 gm of Oxycodone (actual) = 
6700 gm of marihuana''.

5. The 21st Century Department of Justice Appropriations Authorization 
Act

Issue for Comment

    In December 2002, the Commission published general issues for 
comment (see 67 FR 77532) on implementation of directives in the 21st 
Century Department of Justice Appropriations Authorization Act (the 
``Act''), Pub. L. 107-273. The Commission seeks additional public 
comment on the issues pertaining to section 11008(e) of the Act, as set 
forth herein. Section 11008(e) directs the Commission as follows:
    ``(1) IN GENERAL.--Pursuant to its authority under section 994 of 
title 28, United States Code, the United States Sentencing Commission 
shall review and amend the Federal sentencing guidelines and the policy 
statements of the commission, if appropriate, to provide an appropriate 
sentencing

[[Page 2625]]

enhancement for offenses involving influencing, assaulting, resisting, 
impeding, retaliating against, or threatening a Federal judge, 
magistrate judge, or any other official described in section 111 or 115 
of title 18, United States Code.
    (2) FACTORS FOR CONSIDERATION.--In carrying out this section, the 
United States Sentencing Commission shall consider, with respect to 
each offense described in paragraph (1)--
    (A) any expression of congressional intent regarding the 
appropriate penalties for the offense;
    (B) the range of conduct covered by the offense;
    (C) the existing sentences for the offense;
    (D) the extent to which sentencing enhancements within the Federal 
guidelines and the authority of the court to impose a sentence in 
excess of the applicable guideline range are adequate to ensure 
punishment at or near the maximum penalty for the most egregious 
conduct covered by the offense;
    (E) the extent to which the Federal sentencing guideline sentences 
for the offense have been constrained by statutory maximum penalties;
    (F) the extent to which the Federal sentencing guidelines for the 
offense adequately achieve the purposes of sentencing as set forth in 
section 3553(a)(2) of title 18, United States Code;
    (G) the relationship of the Federal sentencing guidelines for the 
offense to the Federal sentencing guidelines for other offenses of 
comparable seriousness;
    (H) any other factors that the Commission considers to be 
appropriate.''.
    Section 111 of title 18, United States Code, makes it unlawful to 
forcibly assault, resist, oppose, impede, intimidate, or interfere with 
(A) any person designated in section 1114 of title 18 (i.e., any 
officer or employee of the United States, including any member of the 
uniformed services in the performance of that person's official duties, 
or any person assisting that person in the performance of those 
official duties); or (B) any person who formerly served as a person 
designated in section 1114 on account of that person's performance of 
official duties during the term of service.
    The Act increased the statutory maximum term of imprisonment for 
offenses under 18 U.S.C. 111 from three years to eight years; and for 
the use of a dangerous weapon or inflicting bodily injury in the 
commission of an offense under 18 U.S.C. 111, from ten to 20 years.
    Section 115 of title 18, United States Code, makes it unlawful to 
(A) assault, kidnap, or murder, attempt or conspire to kidnap or 
murder, or threaten to assault, kidnap, or murder, a member of the 
immediate family of a United States official, a United States judge, a 
Federal law enforcement officer, or an official whose killing would be 
a crime under 18 U.S.C. 1114; or (B) threaten to assault, kidnap, or 
murder a United States official, a United States judge, a Federal law 
enforcement officer, or an official whose killing would be a crime 
under 18 U.S.C. 1114; in order to impede, intimidate, or interfere with 
the performance of the official's official duties.
    Section 115 of title 18, United States Code, also makes it unlawful 
to assault, kidnap, or murder, attempt or conspire to kidnap or murder, 
or threaten to assault, kidnap, or murder, a former United States 
official, a United States judge, a Federal law enforcement officer, or 
an official whose killing would be a crime under 18 U.S.C. 1114, or a 
member of the former official's immediate family, in retaliation for 
the performance of the official's duties during the official's term of 
service.
    The Act increased the maximum terms of imprisonment for threatened 
assaults under 18 U.S.C. 115 from three to six years, and for all other 
threats under 18 U.S.C. 115, from five to ten years.
    In addition, the Act also increased the maximum term of 
imprisonment under 18 U.S.C. 876 from five years to 10 years for 
mailing a communication to a United States judge, a Federal law 
enforcement officer, or an official covered by 18 U.S.C. 1114 
containing a threat to kidnap or injure any person (the penalty 
remained five years for mailing such a communication to any other 
person).
    The Act also increased the maximum term of imprisonment under 18 
U.S.C. 876 from two years to 10 years for mailing, with the intent to 
extort anything of value, a communication to a United States judge, a 
Federal law enforcement officer, or an official covered by 18 U.S.C. 
1114 containing a threat to injury another's property or reputation or 
a threat to accuse another of a crime (the penalty remained two years 
for mailing such a communication to any other person). The other 
statutory maximum terms of imprisonment for offenses under 18 U.S.C. 
876 were not changed by the Act. Mailing threatening communications 
containing a ransom demand for the release of a kidnapped person or 
containing a threat to kidnap with the intent to extort something of 
value remain punishable by up to 20 years' imprisonment.
    The Act contained a number of other miscellaneous provisions 
directly or indirectly affecting the guidelines, as described below.
    The Commission requests comment on the following:
    1. Should the Commission provide an enhancement in the assault 
guidelines for offenses involving influencing, assaulting, resisting, 
impeding, retaliating against, or threatening a Federal judge, 
magistrate judge, or any other official described in 18 U.S.C. 111 or 
115? If so, what would be an appropriate increase for such enhancement? 
Are there additional, related enhancements that the Commission should 
provide in the assault guidelines, particularly given the directive to 
consider providing sentences at or near the statutory maximum for the 
most egregious cases? Would such an enhancement be appropriate for 
other Chapter Two guidelines that cover these offenses, such as the 
guidelines covering attempted murder (Sec.  2A2.1), kidnapping (Sec.  
2A4.1), and threatening communications (Sec.  2A6.1)? Should the 
Commission increase the three level adjustment in Sec.  3A1.2 (Official 
Victims), and if so, what should be the extent of the adjustment (e.g., 
should the adjustment at Sec.  3A1.2 be [4][5][6] levels)?
    2. Do the current base offense levels in each of the assault and 
threatening communications guidelines provide adequate punishment for 
the covered conduct? If not, what would be appropriate base offense 
levels for Sec. Sec.  2A2.2, 2A2.3, 2A2.4, and 2A6.1? For example, 
should the base offense level for offenses involving obstructing or 
impeding officers under Sec.  2A2.4 be level 15, the same as for 
aggravated assault, and contain the same enhancements as the aggravated 
assault guideline, so that an assault of an official unaccompanied by 
serious bodily injury would nevertheless be severely punished?
    3. Should the Commission consider more comprehensive amendments to 
the assault guidelines as part of, or in addition to, its response to 
the directives? For example, should the Commission consolidate 
Sec. Sec.  2A2.3 and 2A2.4? Should the Commission amend Sec.  
2A2.3(b)(1) to provide a two level enhancement for bodily injury? Some 
commentators have argued that such an amendment would bring the minor 
and aggravated assault guidelines more in line with one another because 
there may be cases in which an assault that does not qualify as an 
aggravated assault

[[Page 2626]]

under Sec.  2A2.2 nevertheless involves bodily injury. Are there any 
other application issues pertaining to the assault guidelines that the 
Commission should address?
    4. Section 3001 of the Act amends 18 U.S.C. 1512 (relating to 
tampering with a witness, victim, or an informant) in a number of ways. 
Section 3001 expands the scope of section 1512 to cover the use of 
physical force or threat of physical force with the intent to 
influence, delay, or prevent the testimony of any person in an official 
proceeding, or induce any person to withhold testimony or alter, 
destroy, mutilate, or conceal an object with the intent to impair the 
integrity or availability of the object for use in an official 
proceeding.
    Section 3001 also increases the statutory maximum penalties for 
violations of section 1512 that involve the use or attempted use of 
physical force from 10 years' to 20 years' imprisonment (statutory 
maximum term of imprisonment under section 1512 is 20 years for 
attempted murder and 10 years for the threatened use of physical 
force). Additionally, conspiracy to commit an offense under section 
1512 or under 18 U.S.C. 1513 (relating to retaliating against a 
witness, victim, or an informant) are now subject to the same penalties 
as those prescribed for the offense the commission of which was the 
object of the conspiracy.
    The Commission, as part of the emergency amendment implementing the 
Sarbanes-Oxley Act, increased the base offense level in Sec.  2J1.2 
(Obstruction of Justice) from level 12 to level 14 (see Proposed 
Amendment 1, proposing to repromulgate the temporary, emergency 
amendment as a permanent amendment). The Commission requests comment 
regarding whether the offense levels in Sec.  2J1.2 further should be 
increased in response to the maximum statutory penalties provided for 
these offenses, and if so, what should be the extent of the increase? 
For example, should the Commission increase further the base offense 
level in Sec.  2J1.2 and, if so, to what offense level? Should the 
Commission increase the magnitude of the eight level enhancement at 
subsection (b)(1) for offenses that involve causing or threatening to 
cause physical injury to a person, or property damage, in order to 
obstruct the administration of justice? Alternatively, should the 
Commission increase the magnitude of the enhancement at subsection 
(b)(1) only for offenses which involve actual physical injury to a 
person? In addition, are higher offense levels needed specifically for 
cases under section 1513 involving particularly severe retaliation 
against government witnesses, or is the availability of departures for 
such cases sufficient? See, e.g., United States v. Levy, 250 F.3d 1015 
(6th Cir. 2001). Should an enhancement be added to Sec.  3C1.1 
(Obstructing or Impeding the Administration of Justice) for 
threatening, intimidating, tampering with, or retaliating against, a 
witness, and if so, what should be the extent of the enhancement?
    5. The Act contains a number of miscellaneous provisions that may 
make amendments to the guidelines appropriate as follows:
    (A) Section 14102 amends section 3 of the Sherman Act (15 U.S.C. 3) 
by providing a maximum fine of $10,000,000 for any corporation, and a 
maximum fine of $350,000 and three years' imprisonment for any person 
who monopolizes, or attempts to monopolize, or combines or conspires 
with any other person or persons, to monopolize any part of the trade 
or commerce in or between any of the States, the District of Columbia, 
the territories of the United States, and foreign states. Should the 
Commission provide a Statutory Index reference to Sec.  2R1.1 (Bid-
Rigging, Price-Fixing or Market Allocation Agreements Among 
Competitors) for this offense? In addition, an amendment to Application 
Note 5 of Sec.  5E1.2 (Fines for Individual Defendants) may be 
appropriate to incorporate the special fine provision.
    (B) Section 3005 of the Act amends 21 U.S.C. 841 (relating to drug 
penalties) and 960 (relating to drug import and export penalties) to 
clarify that supervised release requirements for violations of those 
sections apply notwithstanding 18 U.S.C. 3583. An amendment to Sec.  
5D1.2 (Term of Supervised Release) may be appropriate to incorporate 
this provision.
    (C) Section 2103 of the Act amends 18 U.S.C. 3565(b) and 3583(g) to 
require mandatory revocation of probation and supervised release, 
respectively, for testing positive, as part of drug testing, of illegal 
controlled substances more than three times over the course of one 
year. Amendments to Sec.  7B1.3 (Revocation of Probation or Supervised 
Release) may be appropriate to incorporate this provision. In addition, 
the Commission requests comment regarding whether Sec.  7B1.3 should be 
amended to address more comprehensively other provisions requiring 
mandatory revocation of probation of supervised release for certain 
violations.
    (D) Section 3007 of the Act made a technical amendment to 18 U.S.C. 
3583(d) to clarify that restitution is an appropriate condition of 
supervised release. An amendment to Sec.  5D1.3 (Conditions of 
Supervised Release) may be appropriate to incorporate this provision.

6. Cybercrime

Issue for Comment

    On December 18, 2002, the Commission published a general issue for 
comment regarding section 225 of the Homeland Security Act of 2002 (the 
Cyber Security Enhancement Act of 2002), Public Law 107-296. See 67 FR 
77532. The Commission seeks additional public comment on more detailed 
questions pertaining to section 225 as set forth herein.
    Section 225 directs the Commission to review and amend, if 
appropriate, the sentencing guidelines and policy statements applicable 
to persons convicted of an offense under section 1030 of title 18, 
United States Code, to ensure that the sentencing guidelines and policy 
statements reflect the serious nature of such offenses, the growing 
incidence of such offenses, and the need for an effective deterrent and 
appropriate punishment to prevent such offenses.
    The directive also includes a number of factors for the Commission 
to consider, including the potential and actual loss resulting from the 
offense, the level of sophistication and planning involved in the 
offense, whether the offense was committed for purposes of commercial 
advantage or private financial benefit, whether the defendant acted 
with malicious intent to cause harm in committing the offense, the 
extent to which the offense violated the privacy rights of individuals 
harmed, whether the offense involved a computer used by the government 
in furtherance of national defense, national security, or the 
administration of justice, whether the violation was intended to, or 
had the effect of, significantly interfering with or disrupting a 
critical infrastructure, and whether the violation was intended to, or 
had the effect of, creating a threat to public health or safety, or 
injury to any person.
    Section 1030 of title 18, United States Code, proscribes a variety 
of conduct relating to the misuse of computers, including conduct 
relating to the obtaining and communicating of restricted information 
(see 18 U.S.C. 1030(a)(1)), the unauthorized accessing of information 
from financial institutions, the United States government and 
``protected computers'' (see 18 U.S.C. 1030(a)(2)), the unauthorized 
accessing of a government computer (see 18 U.S.C. 1030(a)(3)),

[[Page 2627]]

fraud (see 18 U.S.C. 1030(a)(4)), the damaging of a protected computer 
resulting in certain types of specified harms (see 18 U.S.C. 
1030(a)(5)), trafficking in passwords (see 18 U.S.C. 1030(a)(6)), and 
extortionate threats to cause damage to a ``protected computer'' (see 
18 U.S.C. 1030(a)(7)). The statutory maximums for violations of section 
1030 range from one year to life, depending upon the subsection 
violated and, in certain cases, whether certain aggravating factors are 
present. For example, although a violation of subsection (a)(2) 
generally carries a statutory maximum term of imprisonment of one year, 
if the offense was committed for purposes of commercial advantage or 
private financial gain (or one of the other aggravating conditions is 
met) the statutory maximum term of imprisonment is five years (see 18 
U.S.C. 1030(c)(2)(B)). Section 1030 also provides heightened penalties 
for subsequent offenses. Currently Appendix A (Statutory Index) 
references convictions of section 1030 to Sec. Sec.  2B1.1 (Theft, 
Fraud, and Property Destruction), 2B2.3 (Trespass), 2B3.2 (Extortion by 
Force or Threat of Injury or Serious Damage), and 2M3.2 (Gathering 
National Defense Information) depending on the conduct involved in the 
offense.
    In response to the directive, the Commission is required to 
consider the eight identified factors and ``the extent to which the 
guidelines may or may not account for them.'' Certain factors that the 
Commission must consider relate to, and in some instances mirror, 
either aggravating factors that result in higher statutory penalties 
under 18 U.S.C. 1030, or elements of certain offenses under 18 U.S.C. 
1030. For example, the Commission has been directed to consider 
``whether the offense was committed for purposes of commercial 
advantage or private financial benefit.'' As noted above, this factor 
is specifically referenced in the statute as an aggravating factor with 
respect to violations of section 1030(a)(2). The current guidelines, 
however, do not provide for enhanced punishment for violations of 
section 1030(a)(2) that involve this aggravated purpose. Similarly, the 
Commission has been directed to consider ``whether the offense involved 
a computer used by the government in furtherance of national defense, 
national security, or the administration of justice.'' Violations of 
section 1030(a)(5) require proof of one of five specified harms, one of 
which is ``damage affecting a computer system used by or for a 
government entity in furtherance of the administration of justice, 
national defense, or national security.'' (see 18 U.S.C. 1030(a)(5)(A) 
and (B)). The guidelines currently do not provide for an enhanced 
punishment when this type of harm results from a violation of section 
1030(a)(5). Certain other factors that the Commission must consider 
already may be taken into account, in part or in whole, by the existing 
guidelines. For example, one factor that the Commission must consider 
is ``the level of sophistication and planning involved in the 
offense.'' Currently, Sec.  2B1.1(b)(8)(C) provides a two level 
increase and a minimum offense level of 12 for offenses that involve 
sophisticated means. This factor, therefore, may be at least partially 
accounted for by the existing guidelines.
    The Commission requests comment regarding how it should address the 
directive and the extent to which the eight factors have or have not 
been accounted for by the guidelines. In addition, the Commission 
requests comment regarding whether it should provide enhancements in 
any of the guidelines that pertain to violations of 18 U.S.C. 1030 
(e.g., Sec. Sec.  2B1.1, 2B2.3, 2B3.2, and 2M3.2) based on any of the 
factors listed in the directive? If so, which factors should be the 
bases for enhancements? What level enhancements (e.g., [2] or [4] 
levels) would be appropriate and should the Commission provide a 
minimum offense level for any enhancement? Should any of the factors 
listed in the directive be identified in the guidelines as encouraged 
bases for upward departure? If so, for which violations of section 1030 
and under which guidelines? Should any such enhancements or departure 
provisions be limited so as to apply only to specific violations of 18 
U.S.C. 1030, and if so, which ones?
    Alternatively, should the Commission structure an enhancement in 
any of the relevant guidelines to apply to convictions under 18 U.S.C. 
1030, in general, or under certain subsections of section 1030 that the 
Commission may identify as warranting increased punishment? If any such 
enhancement is limited to certain subsections, what subsections should 
trigger that enhancement? Should the Commission provide an enhancement 
in the relevant guidelines that applies based on a combination of a 
conviction under section 1030 and certain serious conduct (e.g., 
conduct relating to one of the eight factors contained in the 
directive, an aggravating factor resulting in an increased statutory 
maximum under the statute, or a particular element of an offense under 
section 1030) that may be pertinent to the particular guideline under 
which the defendant is being sentenced? For any enhancement that the 
Commission may promulgate in response to this directive, what level 
enhancement would be appropriate (e.g., [2] [4] levels)?
    The Cyber Security Enhancement Act of 2002 also increased the 
statutory maximum term of imprisonment for convictions under 18 U.S.C. 
1030(a)(5)(A)(i) (intentional damage to a protected computer) when 
certain aggravating conduct is present. The statute now provides a 
maximum term of imprisonment of twenty years' imprisonment if the 
offender knowingly or recklessly caused or attempted to cause serious 
bodily injury and provides a statutory maximum of life imprisonment if 
the offender knowingly or recklessly caused or attempted to cause 
death. The Commission requests comment regarding whether the current 
enhancement for an offense involving a conscious or reckless risk of 
death or serious bodily injury in Sec.  2B1.1(b)(11), which provides a 
two level enhancement and a minimum offense level of 14, is sufficient 
in light of the increased statutory maximum terms of imprisonment for 
convictions with aggravating conduct under 18 U.S.C. 1030(a)(5)(A)(i). 
Alternatively, should the Commission provide an upward departure for 
such convictions? Should the Commission provide a cross reference in 
Sec.  2B1.1 to the appropriate Chapter Two, Part A, Subpart 1 
(Homicide) guideline in order to account for 18 U.S.C. 1030(a)(5)(A)(i) 
offenses that result in death?
    Application Note 2(A)(v)(III) of Sec.  2B1.1 provides a special 
rule of construction regarding offenses involving unlawful access to a 
protected computer. That rule states that for such offenses, actual 
loss includes the pecuniary harm of reasonable costs to the victim of 
conducting a damage assessment and restoring the system and data to 
their condition prior to the offense, and any lost revenue due to 
interruption of service. This rule differs slightly from the statutory 
definition of loss provided in 18 U.S.C. 1030(e)(11), which was amended 
by the USA PATRIOT Act, Public Law 107-56, to include, in addition to 
the factors already included in the guidelines, the cost of responding 
to an offense, the cost of restoring the program or information to its 
condition prior to the offense, and any cost incurred or other 
consequential damages incurred because of interruption of service. 
Should the Commission modify the guidelines' rule to mirror the 
statutory definition of loss?

[[Page 2628]]

Should the Commission provide any additional clarification of the 
definition of loss for cybercrime offenses in any of the relevant 
guidelines, including Sec.  2B3.2 (Extortion)?
    Additionally, the Act increased the statutory maximum term of 
imprisonment for offenses under 18 U.S.C. 2701 (unlawful access to 
stored communications). In particular, the Act increased the maximum 
penalty for a first offense committed for purposes of commercial 
advantage, malicious destruction or damage, or private commercial gain 
from one year to five years' imprisonment, and for subsequent offenses 
from two years' to ten years' imprisonment. The scope of these 
heightened penalties (as set forth in 18 U.S.C. 2701(b)(1)) also was 
expanded to apply to offenses committed ``in furtherance of any 
criminal or tortious act in violation of the Constitution or laws of 
the United States or any State.'' The penalties for all other offenses 
under 18 U.S.C. 2701 were increased from a statutory maximum of six 
months' imprisonment to a maximum of one year imprisonment for a first 
offense, and a maximum of five years' imprisonment for subsequent 
offenses. Currently, the guidelines do not reference 18 U.S.C. 2701 
offenses. The Commission requests comment regarding whether it should 
amend Appendix A (Statutory Index) to include a reference to 18 U.S.C. 
2701, and if so, to which guideline or guidelines should the statute be 
referenced? Additionally, if the Commission does reference the statute 
in Appendix A, are there any enhancements that the Commission should 
provide in any relevant guideline in light of, or relating to, the 
heightened penalties set forth in 18 U.S.C. 2701(b)?

[FR Doc. 03-1123 Filed 1-16-03; 8:45 am]
BILLING CODE 2210-01-U