“American Hustle”- Bribery and Graft Law Under RICO

Many have seen the recent movie starring Christian Bale, Bradley Cooper, and Amy Adams in which the ABSCAM scandal was portrayed under the caveat that “some of this actually happened.” The oddsmakers in Hollywood are already declaring Bale, Cooper, and Adams as strong contenders in their Oscar categories. In ABSCAM, mostly federal officials — including six members of the House of Representatives and a U.S. Senator — were found guilty of federal bribery, graft, conspiracy, and other offenses as a result of accepting bribes from people whom they believed to be Arab Sheiks (actually FBI agents posing as such) in return for assisting the bribe givers with obtaining permanent residence and helping them with an investment in a hotel.

The federal bribery statute is codified at 18 U.S.C. section 201(b) (2) and punishes United States officials, including officers or employees of the U.S., from receiving monies or anything of value in return for being influenced in the performance of any official act. This is bribery as we know it. That is, a person gives the official monies with the agreement that the official will perform an official act; there is that quid pro quo (this for that). Both the giver (as an aider and abettor) and the receiver (the official) can be convicted for violating this statute.

On the other hand, the federal gratuity statute, 18 U.S.C. section 201(c), prohibits the public official from receiving anything of value “for or because of” any official act performed or to be performed by such public official. The gratuity, which receives a lesser penalty under the federal guidelines, is commonly known as the “thank you” for doing work (think of giving your waiter at a restaurant a tip for providing consistent excellent service) fee.

So, how does this relate to the RICO statute? Well, under RICO a local or state official believed to have engaged in acts of corruption is usually charged with predicate acts of state law bribery, while the federal official or employee can be charged with any conduct indictable under section 201, which includes graft, i.e., the thank you. This results from the peculiarities resulting from the definition of racketeering activity in section 1961 of the RICO statute. Section 1961(1)(A) defines “racketeering activity” to involve “any act or threat involving” listed types of state offenses, which includes bribery. The Department of Justice has interpreted the RICO legislative history and Supreme Court cases to find that we should look to the “ordinary meaning” of the state offenses, i.e., the generic definition as of the time RICO was enacted (1970). So, in other words, courts will find that the state and local official, to be convicted of engaging in a pattern of racketeering activity based on the state law offense of bribery, must find that the defendant engaged in traditional bribery, i.e., the meeting of the minds and the quid pro quo, and so violated a state statute punishing such bribery conduct.

By contrast, racketeering activity for Title 18 offenses, including section 201(b) must be “acts” that are “indictable under” one of the listed statutes. Thus, a federal official can be convicted under RICO for conducting the affairs of his office (the enterprise) through a pattern of racketeering consisting of multiple acts of bribery and graft under section 201. Take the case of U.S. v. Bustamante, 45 F.3d 933, 940 (5th Cir. 1995), wherein a member of the House of Representatives who was convicted of RICO by committing two predicate acts, each one under section 201, one a bribe and the other a graft payment. Clearly, this conduct would not be sufficient to convict a state and local official for conducting the affairs of their office through acts involving bribery, in violation of state law. Courts have not decided whether or not a gratuity prosecution under the federal statute requires proof of a “causal relation to any ‘specific, identifiable act.’”

So, the technicalities of the complex RICO law lead to some unusual results. However, do not cry for these state and local officials, as many more of these officials are prosecuted under RICO than federal officials. The prosecution of state and local officials can present various conflicts and thus necessitate federal law enforcement intervention. These state and local officials can be prosecuted under RICO for both conducting the affairs of their office through acts of bribery, as well as prosecuted for violating the federal extortion statute, i.e. the Hobbs Act, which applies when the extortionate activity affects or obstructs the flow of interstate commerce.

That is why the con-man game of “American Hustle” will always continue, and the complexities of the RICO law will determine who is a “racketeer” and who is not.