b'Application of Conflict of Interest Rules to Appointees\nWho Have Not Begun Service\nConflict of interest rules first apply when an appointee begins the duties of his office.\n\nMay 8, 2002\n\nMEMORANDUM OPINION FOR THE GENERAL COUNSEL\nOFFICE OF GOVERNMENT ETHICS\nYou have asked for our opinion whether the principal conflict of interest rules\nof the Executive Branch apply to a person who has been appointed to an office by\nthe President with the advice and consent of the Senate but has not yet begun the\nduties of that office. 1 We determine that the conflict of interest rules do not apply\nby virtue of the appointment alone but instead apply only after the appointee has\nbegun the duties of his office.\nI.\nThe principal conflict of interest restrictions that govern the Executive Branch\nare found in the criminal conflict of interest laws, 18 U.S.C. \xc2\xa7\xc2\xa7 202-209 (2000);\nthe directives in Executive Order No. 12674, Principles of Ethical Conduct for\nGovernment Officers and Employees, 3 C.F.R. 215 (1989); and the Standards of\nEthical Conduct for Employees of the Executive Branch, 5 C.F.R. pt. 2635 (2002)\n(\xe2\x80\x9cStandards of Ethical Conduct\xe2\x80\x9d). In each case, the reach of the restrictions\ndepends on the meaning of the terms \xe2\x80\x9cofficer\xe2\x80\x9d and \xe2\x80\x9cemployee.\xe2\x80\x9d\nBy their terms, the potentially relevant criminal statutes cover \xe2\x80\x9cofficers\xe2\x80\x9d and\n\xe2\x80\x9cemployees.\xe2\x80\x9d For example, 18 U.S.C. \xc2\xa7 203(a)(1)(B) forbids, among other things,\na person\xe2\x80\x99s receipt of compensation for certain representational services rendered\n\xe2\x80\x9cat a time when such person is an officer or employee . . . in the executive . . .\nbranch of the government.\xe2\x80\x9d Under 18 U.S.C. \xc2\xa7 205(a), \xe2\x80\x9c[w]hoever, being an\nofficer or employee of the United States in the executive . . . branch of the\nGovernment\xe2\x80\x9d acts as an agent or attorney for anyone before an agency or court is\nguilty of a crime. And 18 U.S.C. \xc2\xa7 209(a) bars receipt of a salary or supplement to\na salary \xe2\x80\x9cas compensation for . . . services as an officer or employee of the\nexecutive branch of the United States Government.\xe2\x80\x9d\nBecause title 18 sets out no definition of \xe2\x80\x9cofficer\xe2\x80\x9d or \xe2\x80\x9cemployee,\xe2\x80\x9d we have\nlooked to the definitions in title 5 as \xe2\x80\x9c\xe2\x80\x98the most obvious source of a definition\xe2\x80\x99 for\ntitle 18 purposes.\xe2\x80\x9d Applicability of Executive Order No. 12674 to Personnel of\n1\nLetter for M. Edward Whelan III, Principal Deputy Assistant Attorney General, Office of Legal\nCounsel, from Marilyn L. Glynn, General Counsel, Office of Government Ethics (Jan. 8, 2002) (\xe2\x80\x9cOGE\nLetter\xe2\x80\x9d). We earlier gave informal advice reaching the same conclusion as in the present opinion.\n\n32\n\n227-329 VOL_26_PROOF.pdf 42\n\n10/22/12 11:13 AM\n\n\x0cApplication of Conflict of Interest Rules to Appointees Who Have Not Begun Service\n\nRegional Fishery Management Councils, 17 Op. O.L.C. 150, 154 (1993) (\xe2\x80\x9cFishery\nManagement Councils\xe2\x80\x9d) (quoting Conflict of Interest\xe2\x80\x94Status of an Informal\nPresidential Advisor as a \xe2\x80\x9cSpecial Government Employee,\xe2\x80\x9d 1 Op. O.L.C. 20\n(1977) (\xe2\x80\x9cInformal Presidential Advisor\xe2\x80\x9d)). Under 5 U.S.C. \xc2\xa7 2104 (2000), an\n\xe2\x80\x9cofficer\xe2\x80\x9d is defined to mean someone who is (1) \xe2\x80\x9crequired by law to be appointed\nin the civil service by [the President, a court of the United States, the head of an\nExecutive agency, or the Secretary of a military department] acting in an official\ncapacity,\xe2\x80\x9d (2) \xe2\x80\x9cengaged in the performance of a Federal function under authority\nof law or an Executive act,\xe2\x80\x9d and (3) \xe2\x80\x9csubject to the supervision\xe2\x80\x9d of the President\nor the head of an Executive agency or military department. Section 2105 defines\n\xe2\x80\x9cemployee\xe2\x80\x9d to include not only an \xe2\x80\x9cofficer,\xe2\x80\x9d but also anyone in a larger class of\npersons who, like \xe2\x80\x9cofficers,\xe2\x80\x9d are engaged in federal functions, but are appointed\nand supervised by specified federal officials other than those able to appoint and\nsupervise \xe2\x80\x9cofficers.\xe2\x80\x9d\nThe Executive Order similarly imposes certain restrictions on \xe2\x80\x9cemployees,\xe2\x80\x9d\ndefined to mean \xe2\x80\x9cany officer[s] or employee[s] of an agency.\xe2\x80\x9d Exec. Order No.\n12674, \xc2\xa7 503(b). Although the Executive Order does not define \xe2\x80\x9cofficer\xe2\x80\x9d or\n\xe2\x80\x9cemployee,\xe2\x80\x9d we previously have concluded that the terms \xe2\x80\x9care identical in scope\nand meaning with the terms \xe2\x80\x98officer\xe2\x80\x99 and \xe2\x80\x98employee\xe2\x80\x99 as used in 5 U.S.C. \xc2\xa7\xc2\xa7 2104\nand 2105.\xe2\x80\x9d Fishery Management Councils, 17 Op. O.L.C. at 153. We rested this\nconclusion on three grounds. First, we noted that we had turned to the title 5\ndefinitions for guidance in interpreting the criminal conflict of interest laws, and\n\xe2\x80\x9c[b]ecause the objectives of the Order and its implementing regulations are closely\nrelated to those of the conflicts statutes, we [thought] it reasonable to look to title\n5\xe2\x80\x99s definition of \xe2\x80\x98employee\xe2\x80\x99 when elucidating the Order.\xe2\x80\x9d Id. at 154 (citation\nomitted). Second, the Executive Order adopts the definition of \xe2\x80\x9cagency\xe2\x80\x9d from title\n5, with certain exceptions, Exec. Order No. 12674, \xc2\xa7 503(c); and \xe2\x80\x9c[w]e [thought] it\nunlikely that the Order was intended to cover personnel who were employed by\n\xe2\x80\x98agencies\xe2\x80\x99 within the meaning of title 5 but who were not themselves \xe2\x80\x98employees\xe2\x80\x99\nwithin the same title.\xe2\x80\x9d 17 Op. O.L.C. at 154. Third, while the Executive Order\nstates generally that it is based on the authority vested in the President \xe2\x80\x9cby the\nConstitution and laws of the United States,\xe2\x80\x9d Exec. Order No. 12674, pmbl., but\ndoes not specify the authorizing statutes, \xe2\x80\x9cthe most obvious statutory source of\nauthority\xe2\x80\x9d is the President\xe2\x80\x99s power under title 5 to \xe2\x80\x9cprescribe regulations for the\nconduct of employees in the executive branch,\xe2\x80\x9d 5 U.S.C. \xc2\xa7 7301 (2000), and this\nauthority brings into play the definition of \xe2\x80\x9cemployee\xe2\x80\x9d in title 5. 17 Op. O.L.C. at\n154.\nThe Standards of Ethical Conduct carry out the Executive Order, and we therefore applied our conclusion in Fishery Management Councils about the applicable\ndefinitions both to the Executive Order and to these implementing regulations. 17\nOp. O.L.C. at 150 n.2, 158. In addition, we note that some of the particular rules in\nthe Standards of Ethical Conduct rest on specific statutory provisions in title 5 that\n\n33\n\n227-329 VOL_26_PROOF.pdf 43\n\n10/22/12 11:13 AM\n\n\x0cOpinions of the Office of Legal Counsel in Volume 26\n\nuse the term \xe2\x80\x9cemployee\xe2\x80\x9d and so invoke the title 5 definition. The rules about gifts\nto superiors, for example, derive in part from 5 U.S.C. \xc2\xa7 7351 (2000), which bars\n\xe2\x80\x9c[a]n employee\xe2\x80\x9d from receiving or making certain gifts. 2 The reach of the\nStandards of Ethical Conduct thus depends, too, on the meaning of the terms\n\xe2\x80\x9cofficer\xe2\x80\x9d and \xe2\x80\x9cemployee\xe2\x80\x9d in title 5.\nII.\nA.\nThe OGE Letter argues that the three parts of the title 5 definitions\xe2\x80\x94\nappointment by a federal official, engagement in a federal function, and federal\ngovernment supervision\xe2\x80\x94need not \xe2\x80\x9cbe applied invariably or formalistically in\nevery case where the application of federal ethics requirements is at issue.\xe2\x80\x9d OGE\nLetter, supra note 1, at 2. In particular, the OGE Letter cites two opinions of our\nOffice\xe2\x80\x94one in which we quoted a previous opinion for the proposition that the\ntitle 5 definition of employee \xe2\x80\x9cis not necessarily conclusive for conflicts purposes,\xe2\x80\x9d Fishery Management Councils, 17 Op. O.L.C. at 154 n.12, and one in which\nwe concluded that \xe2\x80\x9can identifiable act of appointment may not be absolutely\nessential for an individual to be regarded as an officer or employee in a particular\ncase where the parties omitted it for the purpose of avoiding the application of the\nconflict-of-interest laws or perhaps where there was a firm mutual understanding\nthat a relatively formal relationship existed,\xe2\x80\x9d Informal Presidential Advisor, 1 Op.\nO.L.C. at 21. Therefore, the OGE Letter argues, satisfaction of only the first part\nof the title 5 definitions\xe2\x80\x94appointment by a federal official\xe2\x80\x94ought to suffice to\nrender an individual subject to the federal conflict of interest laws.\nWe do not agree. First, as stated above, we have previously opined that the\nterms \xe2\x80\x9cofficer[s]\xe2\x80\x9d and \xe2\x80\x9cemployee[s]\xe2\x80\x9d in the Executive Order and the Standards of\nEthical Conduct \xe2\x80\x9care identical in scope and meaning with the terms \xe2\x80\x98officer\xe2\x80\x99 and\n\xe2\x80\x98employee\xe2\x80\x99 as used in 5 U.S.C. \xc2\xa7\xc2\xa7 2104 and 2105.\xe2\x80\x9d Fishery Management Councils, 17 Op. O.L.C. at 153. We have, in short, concluded that the three parts of the\ntitle 5 definitions must be applied invariably in these contexts. Second, with\nrespect to the criminal conflict of interest laws, we do not read our opinions as\nsuggesting any general flexibility to depart from the three-part test, much less to\nsimply disregard two of the three parts. Indeed, particularly in view of the rule of\nlenity, see Jones v. United States, 529 U.S. 848, 858 (2000) (quoting Rewis v.\nUnited States, 401 U.S. 808, 812 (1971), and United States v. Universal C.I.T.\nCredit Corp., 344 U.S. 218, 221-222 (1952)), we would be loath to dilute the\n2\n\nThe statutory provision that underlies the rules on gifts from outsiders, 5 U.S.C. \xc2\xa7 7353 (2000),\nhas its own definition of \xe2\x80\x9cofficer or employee\xe2\x80\x9d\xe2\x80\x94\xe2\x80\x9can individual holding an appointive or elective\nposition in the executive, legislative, or judicial branch of Government, other than a Member of\nCongress.\xe2\x80\x9d Id. \xc2\xa7 7353(d)(2). This definition, however, is congruent with the analysis we set out below.\n\n34\n\n227-329 VOL_26_PROOF.pdf 44\n\n10/22/12 11:13 AM\n\n\x0cApplication of Conflict of Interest Rules to Appointees Who Have Not Begun Service\n\nthree-part test. In this regard, our statement that the title 5 definition of employee\n\xe2\x80\x9cis not necessarily conclusive for conflicts purposes\xe2\x80\x9d might more sensibly be read\nto mean that, in some circumstances, even satisfaction of the three-part test might\nnot conclusively establish that a person is an officer or employee for purposes of\nthe criminal prohibitions. We further note that our conclusion that \xe2\x80\x9can identifiable\nact of appointment may not be absolutely essential for an individual to be regarded\nas an officer or employee,\xe2\x80\x9d Informal Presidential Advisor, 1 Op. O.L.C. at 21\n(emphasis added), does not mean that we concluded that the requirement of\nappointment by a federal official was not necessary. On the contrary, it presupposes the requirement and merely leaves open the possibility that an individual could\nbe shown to have satisfied the requirement\xe2\x80\x94i.e., to have been appointed\xe2\x80\x94even in\nthe absence of an identifiable act of appointment, if a \xe2\x80\x9cformal relationship\xe2\x80\x9d had\nbeen established between the individual and the government. Id.\nWe therefore look to the statutory definitions of \xe2\x80\x9cofficer\xe2\x80\x9d and \xe2\x80\x9cemployee\xe2\x80\x9d in\ntitle 5 in deciding whether the conflict of interest restrictions apply to a person\nwho has been appointed to office by the President with the Senate\xe2\x80\x99s advice and\nconsent but has not yet begun the duties of office. We conclude that a person in\nthese circumstances would not meet at least two of the three statutory tests\xe2\x80\x94\nengagement in a federal function and federal government supervision\xe2\x80\x94and that\nthe conflict of interest restrictions therefore would not apply to him.\nChief Justice Marshall explained in Marbury v. Madison, 5 U.S. (1 Cranch)\n137, 162 (1803), that \xe2\x80\x9cwhen a commission has been signed by the president, the\nappointment is made.\xe2\x80\x9d In the circumstances here, an appointment in the constitutional sense would thus be complete. Whether the signing of a commission would\nconstitute an \xe2\x80\x9cappointment\xe2\x80\x9d for purposes of 5 U.S.C. \xc2\xa7\xc2\xa7 2104 and 2105 may be\nless clear. The United States Court of Appeals for the Federal Circuit has held, for\nexample, that appointment under the statute requires \xe2\x80\x9caction by the appointee\ndenoting acceptance\xe2\x80\x9d and that \xe2\x80\x9c[a]cceptance is important, as membership in the\ncivil service imports burdens as well as benefits.\xe2\x80\x9d Watts v. OPM, 814 F.2d 1576,\n1580 (Fed. Cir. 1987). We need not resolve this issue here, however; we instead\nassume arguendo that the first part of the test would be met when the President\nsigned the commission.\nNevertheless, status as an employee under 5 U.S.C. \xc2\xa7 2105 (2000) or an officer\nunder 5 U.S.C. \xc2\xa7 2104 requires more than an appointment: \xe2\x80\x9cOne may be an\nappointee and never achieve the status of employee. There are three elements to\nthe statute and all must be complied with to achieve the status of an employee.\xe2\x80\x9d\nMcCarley v. MSPB, 757 F.2d 278, 280 (Fed. Cir. 1985). 3 In McCarley, the\n\n3\n\nOn the question whether the Merit Systems Protection Board or the agency taking the underlying\naction should be the respondent, which is not at issue here, McCarley was overruled by Hagmeyer v.\nDep\xe2\x80\x99t of Treasury, 852 F.2d 531 (Fed. Cir. 1988). Congress then amended the statute to clarify this\nquestion. See Amin v. MSPB, 951 F.2d 1247, 1251-54 (Fed. Cir. 1991).\n\n35\n\n227-329 VOL_26_PROOF.pdf 45\n\n10/22/12 11:13 AM\n\n\x0cOpinions of the Office of Legal Counsel in Volume 26\n\npetitioner had been appointed, but had not entered upon the duties of the position.\nThe Merit Systems Protection Board dismissed his claim for lack of jurisdiction,\nbecause jurisdiction depended upon his being an employee. The Federal Circuit\naffirmed, explaining that relief is unavailable \xe2\x80\x9cto an appointee who has not\nqualified as an employee by performing a federal function subject to the supervision of a federal employee.\xe2\x80\x9d Id.; see also Miller v. MSPB, 794 F.2d 660 (Fed. Cir.\n1986).\nYour question concerns appointees, like the petitioner in McCarley, who have\nnot entered upon the duties of their offices and have therefore not yet performed a\nfederal function, under the supervision of a federal official. Under 5 U.S.C.\n\xc2\xa7\xc2\xa7 2104 and 2105, they are not yet officers or employees and thus are not yet\nsubject to conflict of interest restrictions.\nThe reasoning by which we conclude that the conflict of interest restrictions do\nnot become applicable upon appointment, without more, is not novel. In Marbury,\nChief Justice Marshall carefully distinguished between the President\xe2\x80\x99s act of\nappointment and the appointed officer\xe2\x80\x99s subsequent acceptance of that appointment: \xe2\x80\x9cThe appointment is the sole act of the president; the acceptance is the sole\nact of the officer, and is, in plain common sense, posterior to the appointment. As\nhe may resign, so may he refuse to accept.\xe2\x80\x9d 5 U.S. at 161; see id. at 162 (\xe2\x80\x9cthe\nperson appointed . . . has the absolute, unconditional power of accepting or\nrejecting [the appointment]\xe2\x80\x9d). Thus, it is plain under Marbury that the act of\nappointment does not ipso facto make the appointed person an officer or employee. See also Acceptance of a Promotion, 12 Op. Att\xe2\x80\x99y Gen. 229, 229 (1867) (\xe2\x80\x9ca\nperson cannot be made an incumbent without his consent, and, of course, this he\nmust manifest by some adequate token of his intention\xe2\x80\x9d; \xe2\x80\x9ca formal acceptance is\nthe evidence which, in the public service generally, it has been customary to\nrequire\xe2\x80\x9d).\nAssistant Attorney General William H. Rehnquist used parallel reasoning when\nhe concluded that a United States Attorney would not become subject to a\nparticular rule grounded in conflict of interest principles, where that person had\nbeen appointed as a federal judge but had not yet taken the oath of judicial office\nor begun his judicial duties. See Memorandum for Harlington Wood, Jr., Associate\nDeputy Attorney General, from William H. Rehnquist, Assistant Attorney\nGeneral, Office of Legal Counsel, Re: Delay in Induction of Judge into Office\nFollowing His Confirmation by the Senate (Nov. 27, 1970) (\xe2\x80\x9cRehnquist Opinion\xe2\x80\x9d).\nAccording to the Rehnquist Opinion, \xe2\x80\x9cthe offices of judge and of prosecutor in the\nsame court are incompatible\xe2\x80\x9d: it would be \xe2\x80\x9cimproper as a matter of public policy if\nthe same person carried out their functions,\xe2\x80\x9d with the \xe2\x80\x9cimpropriety deriv[ing] from\nsuch considerations as conflicts of interest or the rule that no person shall be a\njudge in his own cause.\xe2\x80\x9d Id. at 5. The appointee in question wished to complete a\ncriminal prosecution before becoming a judge, but the President had already\nsigned his commission and sent it to him. Because \xe2\x80\x9cthe assumption by an officer\n\n36\n\n227-329 VOL_26_PROOF.pdf 46\n\n10/22/12 11:13 AM\n\n\x0cApplication of Conflict of Interest Rules to Appointees Who Have Not Begun Service\n\nof a new office which is incompatible with the one he is holding has the effect of\nvacating the first office,\xe2\x80\x9d id. (citation omitted), the issue was \xe2\x80\x9cwhether a federal\nofficial vacates his office at the time when the President executes and forwards a\ncommission appointing him to an office incompatible with the one which the\nofficer is holding, or whether the vacation of the office takes place at a later date,\ne.g., when the officer accepts it, or enters upon duty.\xe2\x80\x9d Id. The Rehnquist Opinion\nconcluded that although the appointment is made with the signing of the commission, that signing \xe2\x80\x9cis not the last step in the investiture of an officer,\xe2\x80\x9d id. at 6, and\n\xe2\x80\x9can appointment must be accepted in order to have [the] effect\xe2\x80\x9d of vacating an\noffice already held, id. at 7. As the Rehnquist Opinion explained, \xe2\x80\x9c[t]he rule that\nan incumbent vacates his office only upon acceptance and exercise of an incompatible office, rather than upon appointment to it, is obviously designed to prevent\nthe appointing power from removing an inconvenient officeholder or even a\nmember of the legislature by appointing him to an incompatible office.\xe2\x80\x9d Id. at 8.\nB.\nThe OGE Letter also argues that \xe2\x80\x9cthe underlying purposes of the ethical requirements are better served by the view that officer or employee status commences with a personnel appointment.\xe2\x80\x9d OGE Letter at 2. For example, an appointee\nmight defer his first day of work in order to represent a client before the agency to\nwhich he had already been appointed. Id. We do not dispute that the rule that\nconflict of interest restrictions do not apply immediately upon appointment may\nindeed open the possibility of some abuses. We note, however, that such a rule\nalso enables an appointee to wind up his private affairs in an orderly manner\n(presumably in consultation with the Administration) and therefore may be critical\nto recruiting qualified appointees in the first place. Moreover, in the event of any\nreal abuse, the President could remove the appointee from the office to which he\nhad been appointed, even before he began work.\nThe position advocated in the OGE Letter invites its own set of abuses. If a\nperson were to be subject to conflict of interest restrictions merely upon appointment, the appointing authority \xe2\x80\x9cmight prejudice the appointee,\xe2\x80\x9d Rehnquist Opinion\nat 7, and even subject him to the threat of criminal liability, by appointing him to\nan office he did not want and would not undertake. Even in the case of voluntary\noffice-seekers, while it would be highly unusual for an appointee, having undertaken the rigors of the appointment process, to refuse his office, such a decision is\nfar from implausible. Our files reveal, for example, that in 1971 a presidential\nappointee decided not to serve after the President signed his commission, because\nhe recently had been elected to Congress. See Memorandum for the Honorable\nDaniel Kingsley, Special Assistant to the President, from Thomas E. Kauper,\nDeputy Assistant Attorney General, Office of Legal Counsel, Re: Effect of\nAppointment as a Member of the Air Quality Advisory Board (June 3, 1971).\n\n37\n\n227-329 VOL_26_PROOF.pdf 47\n\n10/22/12 11:13 AM\n\n\x0cOpinions of the Office of Legal Counsel in Volume 26\n\nA similar decision might be made by someone appointed at the time of a presidential election lost by the incumbent\xe2\x80\x99s party.\nOn balance, were we to decide which rule better promoted the underlying\npurposes of the conflict of interest rules, we doubt very much that we would adopt\nthe rule advocated by the OGE Letter. But, for the reasons stated above, the choice\nis not ours to make.\nC.\nThe OGE Letter further states that \xe2\x80\x9c[o]ver the years [OGE has] advised numerous agencies, White House officials, and nominees for Senate-confirmed (PAS)\npositions that an individual becomes subject to the various ethical requirements\nupon appointment.\xe2\x80\x9d OGE Letter at 1. We note that it appears that OGE has not\nalways had this view. In 1984, we issued an opinion concluding that a statutory\nbar against outside employment by commissioners of the International Trade\nCommission applied as of the commencement of duties, rather than as of appointment. Memorandum for Fred F. Fielding, Counsel to the President, from Ralph W.\nTarr, Deputy Assistant Attorney General, Office of Legal Counsel, Re: Appointment of New Members to the International Trade Commission (Mar. 22, 1984)\n(\xe2\x80\x9cITC Opinion\xe2\x80\x9d). In the course of this opinion, we noted that \xe2\x80\x9cOGE has indicated\nthat as a general matter, it does not apply similar ethical and conflict of interest\nstandards to employees until the time when they actually begin their employment\nand receive federal pay.\xe2\x80\x9d Id. at 10. Although our opinion may require a departure\nfrom OGE\xe2\x80\x99s more recent practice, we are persuaded that OGE\xe2\x80\x99s earlier view of the\nmatter was the better one.\nD.\nFinally, the OGE Letter expresses concerns about practical application of our\nconclusion. For example, the letter asks whether an officer starts work when he\ntakes the oath of office or performs some official action. 4 We believe that a\nSenate-confirmed official becomes an \xe2\x80\x9cofficer\xe2\x80\x9d in the relevant sense when, upon\nor after accepting his appointment, he actually begins his duties. At that point, the\nappointee is performing a federal function, under the supervision of the President\nor the agency head. To meet this test, it is not necessary that he take any particular\n\xe2\x80\x9cofficial action\xe2\x80\x9d in his position. It suffices that he has begun the work of that\noffice. 5\n\n4\nIn an analogous situation involving a judicial office, the Rehnquist Opinion found it unnecessary\nto choose between \xe2\x80\x9cthe time when [the appointee] takes the . . . oath, or when he actually begins to\nexercise his . . . office.\xe2\x80\x9d Rehnquist Opinion at 8.\n5\nIf the official is a \xe2\x80\x9cspecial government employee\xe2\x80\x9d under 18 U.S.C. \xc2\xa7 202(a) because he is\nexpected to work no more than 130 days in the next year, the first day that, under usual principles,\n\n38\n\n227-329 VOL_26_PROOF.pdf 48\n\n10/22/12 11:13 AM\n\n\x0cApplication of Conflict of Interest Rules to Appointees Who Have Not Begun Service\n\nThe question when an official begins the duties of his office is a familiar one\nthat must, irrespective of the conflict of interest prohibitions, be addressed and\nanswered for each official. Specifically, an official is entitled to the salary of his\noffice at the time he enters upon the duties of office, see ITC Opinion at 9-10;\nInterstate Commerce Commission, 19 Op. Att\xe2\x80\x99y Gen. 47, 48 (1887), not at the\ntime of appointment or at the time of the oath of office, see United States v.\nFlanders, 112 U.S. 88, 91 (1884); Leave for Transferred Employee, 39 Op. Att\xe2\x80\x99y\nGen. 304, 305-06 (1939) (Jackson, Acting A.G.). A determination of the time\nwhen the conflict of interest rules begin to apply is identical to, and should\ntherefore be no more difficult to make than, the routine determination of the time\nwhen the official begins to accrue his salary.\nM. EDWARD WHELAN III\nPrincipal Deputy Assistant Attorney General\nOffice of Legal Counsel\n\ncounts toward the 130-day limit should be considered the day on which he enters upon his duties. See\nOffice of Government Ethics, Summary of Ethical Requirements Applicable to Special Government\nEmployees, Informal Advisory Op. 00x1, at 5-6 (Feb. 15, 2000), available at http://www.oge.gov/\nOGE-Advisories/Legal-Advisories/Legal-Advisories/ (last visited July 12, 2012). The OGE Letter asks\nwhether a special government employee who is reappointed would be subject to conflict of interest\nrestrictions during the period after reappointment but before the next day on which he actually works.\nThis question seems to concern special government employees who are not appointed by the President\nwith the advice and consent of the Senate but are reappointed annually, either by the President or by\nanother officer. OGE Letter at 3. We believe that the reappointments of such employees do not place\nthem in the same position as the Senate-confirmed appointees we address in this opinion. In many\ninstances, as a matter of practice, special government employees are employed continuously, and the\nsuccessive one-year appointments are primarily a means of enabling the appointing officer to assess\nwhether the work anticipated in the next year will exceed 130 days and require an end to the\ndesignation as a special, rather than ordinary, government employee. See Office of Government Ethics,\nSpecial Government Employees and 18 U.S.C. \xc2\xa7\xc2\xa7 202, 203, and 205, Informal Advisory Op. 81x24,\nat 2-3 (July 23, 1981), available at http://www.oge.gov/OGE-Advisories/Legal-Advisories/LegalAdvisories/ (last visited July 12, 2012). We believe that the conflict of interest restrictions would apply\ncontinuously to a special government employee, until he resigns or the agency notifies him that he has\nnot been reappointed.\n\n39\n\n227-329 VOL_26_PROOF.pdf 49\n\n10/22/12 11:13 AM\n\n\x0c'


b'Authority of the Deputy Attorney General Under\nExecutive Order 12333\nThe Deputy Attorney General has authority to approve searches for intelligence purposes under\nsection 2.5 of Executive Order 12333.\n\nNovember 5, 2001\n\nMEMORANDUM OPINION FOR THE\nASSOCIATE DEPUTY ATTORNEY GENERAL\nYou have asked for our opinion whether the Deputy Attorney General has the\nauthority to grant approvals under section 2.5 of Executive Order 12333, 3 C.F.R.\n\xc2\xa7 200 (1981). We believe that he does.\nExecutive Order 12333 addresses the conduct of intelligence activities. Section\n2.5 provides:\nThe Attorney General hereby is delegated the power to approve the\nuse for intelligence purposes, within the United States or against a\nUnited States person abroad, of any technique for which a warrant\nwould be required if undertaken for law enforcement purposes, provided that such technique shall not be undertaken unless the Attorney\nGeneral has determined in each case that there is probable cause to\nbelieve that the technique is directed against a foreign power or an\nagent of a foreign power. Electronic surveillance, as defined in the\nForeign Intelligence Surveillance Act of 1978 [\xe2\x80\x9cFISA\xe2\x80\x9d], shall be\nconducted in accordance with that Act, as well as this Order.\nUnder the Department\xe2\x80\x99s regulations, the Deputy Attorney General \xe2\x80\x9cis authorized\nto exercise all the power and authority of the Attorney General, unless any such\npower or authority is required by law to be exercised by the Attorney General\npersonally.\xe2\x80\x9d 28 C.F.R. \xc2\xa7 0.15(a) (2000). That regulation rests on the Attorney\nGeneral\xe2\x80\x99s statutory authority to \xe2\x80\x9cmake such provisions as he considers appropriate\nauthorizing the performance by any other officer, employee, or agency of the\nDepartment of Justice of any function of the Attorney General.\xe2\x80\x9d 28 U.S.C. \xc2\xa7 510\n(1994). Consequently, the Deputy Attorney General may exercise the Attorney\nGeneral\xe2\x80\x99s power under section 2.5 of the Executive Order, unless by law the\nAttorney General must exercise that power personally.\nNo statute reserves to the Attorney General the power to grant approvals under\nsection 2.5, although one statute arguably is relevant to the question. Under\n3 U.S.C. \xc2\xa7 301 (2000), the President may delegate any \xe2\x80\x9cfunction which is vested\nin the President by law\xe2\x80\x9d to the head of any department or agency in the Executive\nBranch or to any official of a department or agency required to be appointed with\nSenate confirmation. When the President uses this statute to delegate a function,\n\n236\n\n227-329 VOL_25_PROOF.pdf 246\n\n10/22/12 11:10 AM\n\n\x0cAuthority of the Deputy Attorney General Under Executive Order 12333\n\nwe have concluded that the power may be redelegated only to officials who\noccupy Senate-confirmed positions and would also qualify under the statute to\nreceive delegations directly from the President. See Memorandum for Richard W.\nMcLaren, Assistant Attorney General, Antitrust Division, from William H.\nRehnquist, Assistant Attorney General, Office of Legal Counsel, Re: Revision of\nProclamation 3279 (Oil Import Controls) and Implementing Regulations at 1\n(Jan. 4, 1971). It is far from clear that the President\xe2\x80\x99s delegation under section 2.5\nis pursuant to 3 U.S.C. \xc2\xa7 301. Section 301, according to 3 U.S.C. \xc2\xa7 302 (2000),\ndoes not \xe2\x80\x9climit or derogate from any existing or inherent right of the President to\ndelegate the performance of functions vested in him by law,\xe2\x80\x9d and Executive Order\n12333, which touches on many aspects of the President\xe2\x80\x99s constitutional power\nover national security, does not cite 3 U.S.C. \xc2\xa7 301 as authority. In any event, even\nif 3 U.S.C. \xc2\xa7 301 applies, the Deputy Attorney General occupies an office requiring Senate confirmation, and he may receive the redelegation of a presidential\npower.\nNor do we believe that Executive Order 12333 itself limits the Attorney General\xe2\x80\x99s ability to delegate to the Deputy Attorney General the power to give approvals under section 2.5. The Supreme Court has observed that \xe2\x80\x9c\xe2\x80\x98[t]he complexities\nand magnitude of governmental activity have become so great that there must of\nnecessity be a delegation and redelegation of authority as to many functions.\xe2\x80\x99\xe2\x80\x9d\nGravel v. United States, 408 U.S. 606, 617 (1972) (quoting Barr v. Matteo, 360\nU.S. 564 (1959)). As we have explained, \xe2\x80\x9c[i]t is clear . . . as a \xe2\x80\x98general proposition\xe2\x80\x99 of administrative law, that \xe2\x80\x98merely vesting a duty in [a cabinet officer] . . .\nevinces no intention whatsoever to preclude delegation to other officers in the\n[cabinet officer\xe2\x80\x99s agency] . . . .\xe2\x80\x99\xe2\x80\x9d Delegation of Cabinet Member\xe2\x80\x99s Functions as Ex\nOfficio Members of the Board of Directors of the Solar Energy and Energy Conservation Bank, 6 Op. O.L.C. 257, 258 (1982) (quoting United States v. Giordano,\n416 U.S. 505, 513 (1974)) (footnote omitted). Here, the argument for an implied\nlimitation under the Executive Order would be that the function in question is\nexceedingly sensitive and that, by referring to FISA\xe2\x80\x99s provisions on electronic\nsurveillance, the Executive Order incorporates FISA\xe2\x80\x99s limitation that only the\nAttorney General, Acting Attorney General, or Deputy Attorney General may\nperform functions vested in the Attorney General by the statute. 50 U.S.C.\n\xc2\xa7\xc2\xa7 1801(g) (1994). Even assuming the validity of this reasoning, it would at most\nshow that the Attorney General\xe2\x80\x99s authority under section 2.5 could not be delegated to an official below the Deputy Attorney General. It does not conflict with the\nDeputy Attorney General\xe2\x80\x99s exercise of power under the delegation in 28 C.F.R.\n\xc2\xa7 0.15(a).\nJOHN C. YOO\nDeputy Assistant Attorney General\nOffice of Legal Counsel\n\n237\n\n227-329 VOL_25_PROOF.pdf 247\n\n10/22/12 11:10 AM\n\n\x0c'


b'Effect of 18 U.S.C. \xc2\xa7 600 on\nProposal for Hiring Census Enumerators\nP ro p o sal to g iv e p re fe re n c e fo r h irin g as cen su s e n u m e ra to rs to perso n s reco m m en d ed by\nD e m o c ra tic P a rty lead ers d o e s n ot v io late 18 U .S .C . \xc2\xa7 6 0 0 , w h ic h punishes th o se w h o\np ro m ise fed eral em p lo y m en t o r benefits as an en ticem en t to o r re w a rd for future\npo litical a c tiv ity , b u t d o e s n ot p ro h ib it re w a rd s for past p o litical activ ity .\nE v e n if \xc2\xa7 600 w e re read to p ro h ib it a p ro m ise o f e m p lo y m e n t o r benefits as a re w a rd for\npast p o litical a c tiv ity , u n d e r th e p ro p o se d p ro g ra m n e ith e r D e m o c ra tic P a rty leaders\nn o r an y p o ten tial cen su s e n u m e ra to rs are b ein g m ad e su ch a prom ise.\n\nFebruary 28, 1980\nM EM ORANDUM OPINION FO R T H E ASSISTANT ATTORNEY\nG EN ER A L, CR IM IN A L DIVISION\nThe White House Counsel\xe2\x80\x99s Office has forwarded for our approval\ntwo memoranda to be distributed respectively to Census Bureau offi\xc2\xad\ncials responsible for hiring enumerators and to Democratic Party offi\xc2\xad\ncials whose recommendations will be sought. These memoranda pro\xc2\xad\nvide that Democratic Party leaders will be one of several sources that\nthe Census Bureau will use in compiling lists of names from which to\nhire enumerators. The candidates nominated by party leaders will re\xc2\xad\nceive a preference; in this way the memoranda continue the program of\nselecting census enumerators in its traditional, historically established\nform. We believe that distributing these memoranda will not violate 18\nU.S.C. \xc2\xa7 600, and that no one will violate 18 U.S.C. \xc2\xa7 600 by following\nthe instructions given in these memoranda.\nI. Analysis\n18 U.S.C. \xc2\xa7 600 provides:\nWhoever, directly or indirectly, promises any employ\xc2\xad\nment, position, compensation, contract, appointment, or\nother benefit, provided for or made possible in whole or\nin part by any Act of Congress, or any special consider\xc2\xad\nation in obtaining any such benefit, to any person as\nconsideration, favor, or reward for any political activity\nor for the support of or opposition to any candidate or\nany political party in connection with any general or\nspecial election to any political office, or in connection\n454\n\n\x0cwith any primary election or political convention or\ncaucus held to select candidates for any political office,\nshall be fined not more than $10,000 or imprisoned not\nmore than one year, or both.\nIt is our view that \xc2\xa7 600, a criminal statute, does not flatly prohibit\ngovernment decisionmakers from considering the political consequences\nof their actions in deciding how to administer federal programs. In our\nopinion, the only way \xc2\xa7 600 might be violated in the program at hand is\nif people were promised employment or special consideration for em\xc2\xad\nployment as census enumerators as an enticement or reward for future\npolitical activity or support of a party or candidate; \xc2\xa7 600 cannot be\nread to prohibit rewards for past political activity.1 We believe this\ninterpretation of the statute is correct for several reasons.\nSection 600 punishes only a person who promises a benefit in return\nfor political support or activity; it conspicuously does not make it\nillegal simply to grant a benefit. While it is possible to read \xc2\xa7 600 to\napply to a promise given as a reward for political activity done in the\npast, such a reading is illogical. There is no reason for Congress to have\ndistinguished between promising a benefit in return for past political\nsupport or activity and actually conferring that benefit; indeed, the two\nacts may often be indistinguishable in practice. Since granting benefits\nin return for past support was a widespread, well-established practice,\nand since the language of \xc2\xa7 600 clearly stops short of prohibiting that\nact, we think Congress could not have intended to prohibit the indistin\xc2\xad\nguishable\xe2\x80\x94both as a matter of policy and, often, as a matter of fact\xe2\x80\x94\nact of giving a promise in return for past political activity. Instead, we\nbelieve it only logical to conclude that Congress was concerned with\neliminating the use of federal funds as an enticement for future political\nsupport.\nIf \xc2\xa7 600 is interpreted in this way, the program outlined in the\nproposed memoranda is clearly consistent with it. The people whom\nDemocratic leaders nominate or refer are, of course, being given \xe2\x80\x9cspe\xc2\xad\ncial consideration in obtaining [a] benefit\xe2\x80\x9d provided for by an Act of\nCongress. But those people are not being promised such special consid\xc2\xad\neration to induce political activity or support. By telling Democratic\nleaders not to link referrals to political activity, the Bureau is attempt\xc2\xad\ning to ensure as best it can that these leaders will not use their power to\nobtain special consideration as a way to reward party workers for their\nactivity. Telling Census Bureau workers to give party leaders this\ninstruction also makes it clear that the Bureau\xe2\x80\x99s policy is not itself an\n1\nT h e legislative history o f the com panion statute, IS U.S.C. \xc2\xa76 0 1 , prohibiting the deprivation o f\nem ploym ent for political contribution, supports this limited interpretation o f the statutes. F o r exam ple,\nthe Senate report on \xc2\xa7601 states that it is designed to "prohibit actual, attem pted, o r threatened\ndeprivation o f public em ploym ent o r benefit as a means o f extorting a political contribution o f a thing\no f value . . ." S. Rep. No. 1245, 94th C ong., 2d Sess. 4 (1976) (emphasis added).\n\n455\n\n\x0cindirect way of promising employment or special consideration in\nreturn for political activity. Of course, if a party official does promise\nemployment as a census enumerator, or special consideration in\nobtaining such employment, in return for future political activity or\nsupport by the promisee, that official will be subject to possible crimi\xc2\xad\nnal liability. Such an official would not, however, be acting in accord\xc2\xad\nance with the Administration\xe2\x80\x99s program.\nEven if \xc2\xa7 600 were read to prohibit promises made in return for past\npolitical activity, we believe that the program outlined in the proposed\nmemoranda still would not violate that provision. The policy expressed\nin the memoranda, undoubtedly, does give Democratic Party leaders\nsome privilege; but it does not give those leaders \xe2\x80\x9cany employment,\nposition, compensation, contract, appointment, or other benefit, pro\xc2\xad\nvided for or made possible in whole or in part by any Act of Congress,\nor any special consideration in obtaining any such benefit\xe2\x80\x9d\xe2\x80\x94the benefits\nto which \xc2\xa7 600 applies. Democratic Party leaders are being given only\nthe opportunity to nominate preferred candidates for positions as enu\xc2\xad\nmerators. This opportunity is not among those benefits that, under\n\xc2\xa7 600, cannot be distributed in return for support of a political party.\nThat is, the party leaders are not themselves receiving a covered\nbenefit. There is a clear distinction between receiving employment or\nspecial consideration for employment oneself, and receiving the power\nto award special consideration for employment to others. Because both\nsorts of privileges were historically involved in political patronage, we\nbelieve that Congress would have specified both if it had intended such\na sweeping restriction. Instead, the statute lists benefits of a specific\nnature; because \xc2\xa7 600 is a criminal statute, we believe that list must be\nliterally construed and is exclusive.\nFinally, we believe that, even if \xc2\xa7 600 were read to prohibit a prom\xc2\xad\nise of employment or special consideration as a reward for past political\nsupport, the potential enumerators are not being made such a promise\nin violation of \xc2\xa7 600. The proposed memoranda would instruct party\nleaders not to make their recommendations as a reward for political\nactivity or support, but rather to recommend qualified individuals.\nL arry\n\nA. H am m ond\n\nD eputy Assistant Attorney General\nOffice o f L egal Counsel\n\n456\n\n\x0c'


b'Scope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\nCovered entities and those persons rendered accountable by general principles of corporate criminal\nliability may be prosecuted directly under 42 U.S.C. \xc2\xa7 1320d-6, and the knowingly element of the\noffense set forth in that provision requires only proof of knowledge of the facts that constitute the\noffense.\n\nJune 1, 2005\n\nMEMORANDUM OPINION FOR THE GENERAL COUNSEL\nOF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES\nAND THE SENIOR COUNSEL TO THE DEPUTY ATTORNEY GENERAL\nYou have asked jointly for our opinion concerning the scope of 42 U.S.C.\n\xc2\xa7 1320d-6 (2000), the criminal enforcement provision of the Administrative\nSimplification subtitle of the Health Insurance Portability and Accountability Act\nof 1996, Pub. L. No. 104-191, 110 Stat. 1936 (\xe2\x80\x9cHIPAA\xe2\x80\x9d). Specifically, you have\nasked, first, whether the only persons who may be directly liable under section\n1320d-6 are those persons to whom the substantive requirements of the subtitle, as\nset forth in the regulations promulgated thereunder, apply\xe2\x80\x94i.e., health plans,\nhealth care clearinghouses, certain health care providers, and Medicare prescription drug card sponsors\xe2\x80\x94or whether this provision may also render directly liable\nother persons, particularly those who obtain protected health information in a\nmanner that causes a person to whom the substantive requirements of the subtitle\napply to release the information in violation of that law. We conclude that health\nplans, health care clearinghouses, those health care providers specified in the\nstatute, and Medicare prescription drug card sponsors may be prosecuted for\nviolations of section 1320d-6. In addition, depending on the facts of a given case,\ncertain directors, officers, and employees of these entities may be liable directly\nunder section 1320d-6, in accordance with general principles of corporate criminal\nliability, as these principles are developed in the course of particular prosecutions.\nOther persons may not be liable directly under this provision. The liability of\npersons for conduct that may not be prosecuted directly under section 1320d-6 will\nbe determined by principles of aiding and abetting liability and of conspiracy\nliability. Second, you have asked whether the \xe2\x80\x9cknowingly\xe2\x80\x9d element of section\n1320d-6 requires only proof of knowledge of the facts that constitute the offense\nor whether this element also requires proof of knowledge that the conduct was\ncontrary to the statute or regulations. We conclude that \xe2\x80\x9cknowingly\xe2\x80\x9d refers only to\nknowledge of the facts that constitute the offense. 1\n1\nIn reaching the conclusions discussed below, we have considered the views expressed in your\nsubmissions concerning the questions you have asked. See Letter for Jack L. Goldsmith III, Assistant\nAttorney General, Office of Legal Counsel, from Paul B. Murphy, Associate Deputy Attorney General,\nRe: Request for Office of Legal Counsel Opinion on the Scope of the Criminal Medical Records\nPrivacy Statute, 42 U.S.C. \xc2\xa7 1320d-6 (Jan. 16, 2004); Letter for Jack L. Goldsmith III, Assistant\n\n76\n\n\x0cScope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\n\nI.\nCongress enacted the Administrative Simplification provisions of HIPAA to\nimprove \xe2\x80\x9cthe efficiency and effectiveness of the health care system\xe2\x80\x9d by providing\nfor the \xe2\x80\x9cestablishment of standards and requirements for the electronic transmission of certain health information.\xe2\x80\x9d 42 U.S.C. \xc2\xa7 1320d note (2000). These\nprovisions added a new \xe2\x80\x9cPart C: Administrative Simplification\xe2\x80\x9d to title XI of the\nSocial Security Act and have been codified at 42 U.S.C. \xc2\xa7\xc2\xa7 1320d\xe2\x80\x931320d-8\n(2000). Part C directs the Secretary of the Department of Health and Human\nServices (\xe2\x80\x9cHHS\xe2\x80\x9d) to \xe2\x80\x9cadopt standards for transactions, and data elements for such\ntransactions, to enable health information to be exchanged electronically.\xe2\x80\x9d Id.\n\xc2\xa7 1320d-2(a)(1); see also id. \xc2\xa7 1320d-2(b)(1) (requiring the Secretary to adopt\nstandards concerning unique health identifiers); id. \xc2\xa7 1320d-2(c)(1) (same with\nrespect to code sets); id. \xc2\xa7 1320d-2(d)(1) (same with respect to security); id.\n\xc2\xa7 1320d-2(e)(1) (same with respect to electronic signatures); id. \xc2\xa7 1320d-2(f)\n(same with respect to transfer of information among health plans). Various\nprovisions of this part further specify the standards to be adopted, the factors the\nSecretary must consider, the procedures for promulgating the standards, and the\ntimetable for their adoption. Id. \xc2\xa7\xc2\xa7 1320d-1\xe2\x80\x931320d-3. Pursuant to this authority,\nthe Secretary has adopted standards and specifications for implementing them. See\n45 C.F.R. pts. 160\xe2\x80\x93164 (2004).\nAttorney General, Office of Legal Counsel, from Alex M. Azar II, General Counsel, Department of\nHealth and Human Services, Re: Request by the Office of Legal Counsel for HHS Views on 42 U.S.C.\n\xc2\xa7 1320d-6 (Mar. 18, 2004); Memorandum for Jack L. Goldsmith III, Assistant Attorney General, Office\nof Legal Counsel, from Christopher A. Wray, Assistant Attorney General, Criminal Division, Re:\nCriminal Division Position on the Scope of the Criminal Medical Records Privacy Statute, 42 U.S.C.\n\xc2\xa7 1320d-6 (May 27, 2004) (attaching Memorandum for File, from Ian C. Smith DeWaal, Senior\nCounsel, Criminal Division, Re: CRM response to HHS-OGC Letter (May 20, 2004)); Letter for Dan\nLevin, Acting Assistant Attorney General, Office of Legal Counsel, from Alex M. Azar II, General\nCounsel, Department of Health and Human Services (Aug. 6, 2004); E-mail for John C. Demers,\nAttorney-Adviser, Office of Legal Counsel, from Ian C. Smith DeWaal, Senior Counsel, Criminal\nDivision, Re: 42 U.S.C. 1320d-6 (Nov. 15, 2004) (with attachment); Letter for John C. Demers,\nAttorney-Adviser, Office of Legal Counsel, from Paula M. Stannard, Deputy General Counsel,\nDepartment of Health and Human Services (Dec. 21, 2004); Letter for John C. Demers, AttorneyAdviser, Office of Legal Counsel, from Paula M. Stannard, Deputy General Counsel, Department of\nHealth and Human Services, Re: Scope of Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6; Draft Opinion of\nDecember 17, 2004\xe2\x80\x94Request for Comments (Dec. 23, 2004); Memorandum for File, from Ian C. Smith\nDeWaal, Senior Counsel, Criminal Division, Re: Comments on the Revised OLC Draft Opinion on the\nHIPAA Criminal Medical Privacy Statute (transmitted Feb. 18, 2005); Memorandum for Steven G.\nBradbury, Principal Deputy Assistant Attorney General, Office of Legal Counsel, from John McKay,\nUnited States Attorney for the Western District of Washington, Re: Scope of Criminal Prosecutions\nunder HIPAA (Mar. 17, 2005); Memorandum for Steven G. Bradbury, Principal Deputy Assistant\nAttorney General, Office of Legal Counsel, from Michael Sullivan, United States Attorney for the\nDistrict of Massachusetts, Re: Scope of Criminal Prosecutions under HIPAA (Mar. 20, 2005); Letter\nfor John C. Demers, Attorney-Adviser, Office of Legal Counsel, from Paula M. Stannard, Deputy\nGeneral Counsel, Department of Health and Human Services, Re: Scope of 42 U.S.C. \xc2\xa7 1320d-6 (May\n5, 2005). We appreciate the thoroughness and thoughtfulness of these submissions.\n\n77\n\n\x0cOpinions of the Office of Legal Counsel in Volume 29\n\nSection 1320d-1 specifies the persons to whom the standards apply:\nAny standard adopted under this part shall apply, in whole and in\npart, to the following persons:\n(1) A health plan.\n(2) A health care clearinghouse.\n(3) A health care provider who transmits any health information\nin electronic form in connection with a transaction referred to in\nsection 1320d-2(a)(1) of this title.\nSee also 45 C.F.R. \xc2\xa7 160.102(a) (with respect to general administrative requirements, \xe2\x80\x9c[e]xcept as otherwise provided, the standards, requirements, and implementation specifications adopted under this subchapter apply to\xe2\x80\x9d the entities listed\nin section 1320d-1); id. \xc2\xa7 162.100 (same with respect to additional administrative\nrequirements); id. \xc2\xa7 164.104 (same with respect to security and privacy regulations). The regulations refer to each of these three groups of persons as a \xe2\x80\x9ccovered\nentity.\xe2\x80\x9d Id. \xc2\xa7 160.103. To this list of persons to whom the standards apply,\nCongress later added Medicare prescription drug card sponsors. Medicare\nPrescription Drug, Improvement and Modernization Act of 2003, Pub. L. No. 108173, \xc2\xa7 101(a)(2), 117 Stat. 2071, 2144 (\xe2\x80\x9cFor purposes of the program under this\nsection, the operations of an endorsed program are covered functions and a\nprescription drug card sponsor is a covered entity for purposes of applying part C\nof title XI and all regulatory provisions promulgated thereunder. . . .\xe2\x80\x9d) (codified at\n42 U.S.C. \xc2\xa7 1395w-141(h)(6)(A) (Supp. III 2004)).\nVarious statutes and regulations define these four categories of covered entities.\nA \xe2\x80\x9cprescription drug card sponsor\xe2\x80\x9d is \xe2\x80\x9cany nongovernmental entity that the\nSecretary [of HHS] determines to be appropriate to offer an endorsed discount\ncard program\xe2\x80\x9d including \xe2\x80\x9ca pharmaceutical benefit management company\xe2\x80\x9d and\n\xe2\x80\x9can insurer.\xe2\x80\x9d 42 U.S.C. \xc2\xa7 1395w-141(h)(1)(A)(i), (iii) (Supp. III 2004). A \xe2\x80\x9chealth\nplan\xe2\x80\x9d is \xe2\x80\x9can individual or group plan that provides, or pays the cost of, medical\ncare.\xe2\x80\x9d Id. \xc2\xa7 1320d(5) (2000). A \xe2\x80\x9chealth care clearinghouse\xe2\x80\x9d is an \xe2\x80\x9centity that\nprocesses or facilitates the processing of nonstandard data elements of health\ninformation into standard data elements.\xe2\x80\x9d Id. \xc2\xa7 1320d(2). Finally, a \xe2\x80\x9chealth care\nprovider\xe2\x80\x9d is any \xe2\x80\x9cperson furnishing health care services or supplies,\xe2\x80\x9d including a\n\xe2\x80\x9cprovider of services\xe2\x80\x9d and a \xe2\x80\x9cprovider of medical or other health services.\xe2\x80\x9d Id.\n\xc2\xa7 1320d(3). These latter two terms are further defined in 42 U.S.C. \xc2\xa7 1395x\n(2000). A \xe2\x80\x9cprovider of services\xe2\x80\x9d is a \xe2\x80\x9chospital, critical access hospital, skilled\nnursing facility, comprehensive outpatient rehabilitation facility, home health\nagency, [or] hospice program . . . .\xe2\x80\x9d Id. \xc2\xa7 1395x(u). And a \xe2\x80\x9cprovider of medical\nand other health services\xe2\x80\x9d is any person who provides any of a long list of such\nservices, including \xe2\x80\x9cphysicians\xe2\x80\x99 services,\xe2\x80\x9d \xe2\x80\x9cservices and supplies . . . furnished as\n\n78\n\n\x0cScope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\n\nan incident to a physician\xe2\x80\x99s professional service, of kinds which are commonly\nfurnished in physicians\xe2\x80\x99 offices and are commonly either rendered without charge\nor included in the physicians\xe2\x80\x99 bills,\xe2\x80\x9d \xe2\x80\x9coutpatient physical therapy services,\xe2\x80\x9d\n\xe2\x80\x9cqualified psychologist services,\xe2\x80\x9d \xe2\x80\x9cclinical social worker services,\xe2\x80\x9d and certain\nservices \xe2\x80\x9cperformed by a nurse practitioner or clinical nurse specialist.\xe2\x80\x9d Id.\n\xc2\xa7 1395x(s). These health care providers only qualify as covered entities if they\n\xe2\x80\x9ctransmit[] any health information in electronic form in connection with\xe2\x80\x9d certain\ntransactions described in section 1320d-2. Id. \xc2\xa7 1320d-1(a)(3). The regulations\nfurther define the covered entities. See 45 C.F.R. \xc2\xa7 160.103.\nThese covered entities must comply with the regulations promulgated pursuant\nto Part C. Section 1320d-4 requires compliance with the regulations within a\ncertain time period by \xe2\x80\x9ceach person to whom the standard or implementation\nspecification [adopted or established under sections 1320d-1 and 1320d-2]\napplies.\xe2\x80\x9d 42 U.S.C. \xc2\xa7 1320d-4(b). Failure to comply with the regulations may\nrender the covered entity either civilly or criminally liable.\nThe statute grants to the Secretary of HHS the authority for civil enforcement\nof the standards. Section 1320d-5(a) states, \xe2\x80\x9cExcept as provided in subsection (b)\nof this section, the Secretary shall impose on any person who violates a provision\nof this part a penalty of not more than $100 for each such violation . . . .\xe2\x80\x9d Id.\n\xc2\xa7 1320d-5(a)(1). Subsection (b) provides for three exceptions. First, a civil\n\xe2\x80\x9cpenalty may not be imposed . . . with respect to an act if the act constitutes an\noffense punishable under\xe2\x80\x9d the criminal enforcement provision. Id. \xc2\xa7 1320d5(b)(1). Second, a civil \xe2\x80\x9cpenalty may not be imposed . . . with respect to a\nprovision of this part if it is established to the satisfaction of the Secretary that the\nperson liable for the penalty did not know, and by exercising reasonable diligence\nwould not have known, that such person violated the provision.\xe2\x80\x9d Id. \xc2\xa7 1320d5(b)(2). Third, a civil \xe2\x80\x9cpenalty may not be imposed . . . if the failure to comply\nwas due to reasonable cause and not to willful neglect; and the failure to comply is\ncorrected\xe2\x80\x9d within a specified period of time. Id. \xc2\xa7 1320d-5(b)(3).\nThe statute prescribes criminal sanctions only for those violations of the standards that involve the disclosure of \xe2\x80\x9cunique health identifiers,\xe2\x80\x9d id. \xc2\xa7 1320d-6(a), or\nof \xe2\x80\x9cindividually identifiable health information,\xe2\x80\x9d id., that is, that subset of health\ninformation that, inter alia, \xe2\x80\x9cidentifies the individual\xe2\x80\x9d or \xe2\x80\x9cwith respect to which\nthere is a reasonable basis to believe that the information can be used to identify\nthe individual,\xe2\x80\x9d id. \xc2\xa7 1320d(6). More specifically, section 1320d-6(a) provides:\nA person who knowingly and in violation of this part\xe2\x80\x94\n(1) uses or causes to be used a unique health identifier;\n(2) obtains individually identifiable health information relating to\nan individual; or\n\n79\n\n\x0cOpinions of the Office of Legal Counsel in Volume 29\n\n(3) discloses individually identifiable health information to another person,\nshall be punished as provided in subsection (b) of this section.\nSubsection (b) sets forth a tiered penalty scheme. A violation of subsection (a) is\npunishable generally as a misdemeanor by a fine of not more than $50,000 and/or\nimprisonment for not more than one year. Id. \xc2\xa7 1320d-6(b)(1). Certain aggravating\ncircumstances may make the offense a felony. Subsection (b)(2) provides for a\nmaximum penalty of a $100,000 fine and/or five-year imprisonment for violations\ncommitted under false pretenses. Id. \xc2\xa7 1320d-6(b)(2). And subsection (b)(3)\nreserves the statute\xe2\x80\x99s highest penalties\xe2\x80\x94a fine of not more than $250,000 and/or\nimprisonment of not more than ten years\xe2\x80\x94for those offenses committed \xe2\x80\x9cwith\nintent to sell, transfer, or use individually identifiable health information for\ncommercial advantage, personal gain, or malicious harm.\xe2\x80\x9d Id. \xc2\xa7 1320d-6(b)(3).\nII.\nA.\nWe address first which persons may be prosecuted under the criminal enforcement provision, section 1320d-6. Specifically, we address whether section\n1320d-6 renders liable only covered entities or whether the provision applies to\nany person who does an act described in that provision, including, in particular,\na person who obtains protected health information in a manner that causes a\ncovered entity to violate the statute or regulations. We conclude that an analysis\nof liability under section 1320d-6 must begin with covered entities, the only\npersons to whom the standards apply. If the covered entity is not an individual,\ngeneral principles of corporate criminal liability will determine the entity\xe2\x80\x99s\nliability and that of individuals within the entity, including directors, officers,\nand employees. Finally, certain conduct of these individuals and that of other\npersons outside the covered entity, including of recipients of protected information, may be prosecuted in accordance with principles of aiding and abetting\nliability and of conspiracy liability.\nWe begin with the language of the statute. See Liparota v. United States, 471\nU.S. 419, 424 (1985) (\xe2\x80\x9cThe definition of the elements of a criminal offense is\nentrusted to the legislature, particularly in the case of federal crimes, which are\nsolely the creatures of statute.\xe2\x80\x9d). Section 1320d-6(a) states that:\nA person who knowingly and in violation of this part\xe2\x80\x94\n(1) uses or causes to be used a unique health identifier;\n\n80\n\n\x0cScope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\n\n(2) obtains individually identifiable health information relating to\nan individual; or\n(3) discloses individually identifiable health information to another person,\nshall be punished as provided in subsection (b) of this section.\nBecause Congress enacted the Administrative Simplification provisions for the\nexpress purpose of facilitating the use of health identifiers and the acquisition and\ndisclosure of health information, an act listed in subsections (a)(1) to (a)(3) must\nbe done \xe2\x80\x9cin violation of this part\xe2\x80\x9d in order to constitute a criminal offense. The\nphrase \xe2\x80\x9cthis part\xe2\x80\x9d refers to \xe2\x80\x9cPart C\xe2\x80\x94Administrative Simplification,\xe2\x80\x9d codified at\nsections 1320d to 1320d-8. Section 1320d-1(a) makes clear that the standards\npromulgated under Part C apply only to covered entities: \xe2\x80\x9cApplicability. Any\nstandard adopted under this part shall apply, in whole or in part, to the following\npersons: (1) A health plan. (2) A health care clearinghouse. (3) [Certain] health\ncare provider[s] . . . .\xe2\x80\x9d Id. \xc2\xa7 1320d-1(a); see also 45 C.F.R. \xc2\xa7 160.102(a); id.\n\xc2\xa7 162.100; id. \xc2\xa7 164.104; Exec. Order No. 13,181, 65 Fed. Reg. 81,321 (Dec. 20,\n2000), reprinted in 42 U.S.C. \xc2\xa7 1320d-2 note (\xe2\x80\x9cHIPAA applies only to \xe2\x80\x98covered\nentities,\xe2\x80\x99 such as health care plans, providers, and clearinghouses. HIPAA\nregulations therefore do not apply to other organizations and individuals that gain\naccess to protected health information . . . .\xe2\x80\x9d). Congress expanded this list to\ninclude Medicare prescription drug card sponsors \xe2\x80\x9cfor purposes of applying part\nC[\xe2\x80\x99s]\xe2\x80\x9d Administrative Simplification provisions. 42 U.S.C. \xc2\xa7 1395w-141(h)(6)(A).\nAnd these provisions require only \xe2\x80\x9ceach person to whom the standard or implementation specification applies\xe2\x80\x9d\xe2\x80\x94i.e., the covered entities\xe2\x80\x94to comply with it. Id.\n\xc2\xa7 1320d-4(b). Because Part C makes the standards applicable only to covered\nentities and because it mandates compliance only by covered entities, only a\ncovered entity may do one of the three listed acts \xe2\x80\x9cin violation of this part.\xe2\x80\x9d Other\npersons cannot violate Part C directly because the part simply does not apply to\nthem. When the covered entity is not an individual, principles of corporate\ncriminal liability discussed infra will determine when a covered entity has violated\nPart C and when these violations can be attributed to individuals in the entity. 2\nThat the statute criminalizes the \xe2\x80\x9cobtain[ing]\xe2\x80\x9d of individually identifiable health\ninformation in violation of Part C, id. \xc2\xa7 1320d-6(a)(2), in addition to its disclosure,\ndoes not convince us that our reading of section 1320d-6 according to its plain\nterms is incorrect. It could be argued that, by including a distinct prohibition on\nobtaining health information, the law was intended to reach the acquisition of\nhealth information by a person who is not a covered entity but who \xe2\x80\x9cobtains\xe2\x80\x9d it\n2\nWe express no opinion in this memorandum as to whether any particular person or entity may\nqualify as a covered entity for purposes of liability under sections 1320d-5 or 1320d-6.\n\n81\n\n\x0cOpinions of the Office of Legal Counsel in Volume 29\n\nfrom such an entity in a manner that causes the entity to violate Part C. Id. Further\nexamining the statute and the regulations, however, reveals that the inclusion of\nsection 1320d-6(a)(2) merely reflects the fact that the statute and the regulations\nlimit the acquisition, as well as the disclosure and use, of information by covered\nentities. Those sections of the statute authorizing the Secretary of HHS to promulgate regulations speak broadly of adopting standards, inter alia, \xe2\x80\x9cfor transactions,\xe2\x80\x9d\n\xe2\x80\x9cproviding for a standard unique health identifier,\xe2\x80\x9d and concerning \xe2\x80\x9csecurity.\xe2\x80\x9d Id.\n\xc2\xa7 1320d-2(a)(1)(A), (b)(1), (d). They do not speak only of regulations governing\nthe \xe2\x80\x9cuse\xe2\x80\x9d and \xe2\x80\x9cdisclosure\xe2\x80\x9d of information; the language used in these provisions\neasily encompasses the acquisition of information. 3 Pursuant to this authority, the\nSecretary has promulgated regulations governing the acquisition of certain\ninformation by a covered entity. See, e.g., 45 C.F.R. \xc2\xa7 164.500(b)(1) (\xe2\x80\x9cWhen a\nhealth care clearinghouse creates or receives protected health information . . . .\xe2\x80\x9d)\n(emphasis added); id. \xc2\xa7 164.502(b)(1) (\xe2\x80\x9cWhen using or disclosing protected health\ninformation or when requesting protected health information from another\ncovered entity . . . .\xe2\x80\x9d) (emphasis added); id. \xc2\xa7 164.514(d)(4)(i) (\xe2\x80\x9cA covered entity\nmust limit any request for protected health information to that which is reasonably\nnecessary . . . .\xe2\x80\x9d) (emphasis added). Failure to comply with these regulations may\nrender a covered entity liable for \xe2\x80\x9cobtain[ing] individually identifiable health\ninformation\xe2\x80\x9d \xe2\x80\x9cin violation of this part.\xe2\x80\x9d 42 U.S.C. \xc2\xa7 1320d-6(a)(2). 4\nThe difference between the language used in the civil enforcement provision\nand that used in the criminal enforcement provision does not support a broader\nreading of section 1320d-6. The civil enforcement provision makes liable \xe2\x80\x9cany\n3\nThe only statutory section cast in terms of \xe2\x80\x9cuse\xe2\x80\x9d and \xe2\x80\x9cdisclosure\xe2\x80\x9d is the requirement that the\nSecretary submit to Congress \xe2\x80\x9crecommendations on standards with respect to the privacy of individually identifiable health information . . . address[ing] at least . . . the uses and disclosures of such information.\xe2\x80\x9d Id. \xc2\xa7 1320d-2 note. But as discussed above, this quoted language is not found in the main\nprovisions of HIPAA that grant the Secretary authority to promulgate regulations; those provisions use\nbroader terminology that easily includes the authority to regulate the acquisition of information. See id.\n\xc2\xa7 1320d-2. Instead, this section solicited recommendations for further legislation concerning health\nprivacy, facilitated congressional oversight of the privacy rules the Secretary developed, and required\nthe Secretary to issue such rules if Congress did not act on the recommendations within a certain time\nperiod; it is not a restriction of the authority given elsewhere in the statute. See infra note 12. And on its\nface this provision does not purport to describe the extent of the Secretary\xe2\x80\x99s authority, as it requires the\nprivacy recommendations to address \xe2\x80\x9cat least\xe2\x80\x9d the \xe2\x80\x9cuses\xe2\x80\x9d and \xe2\x80\x9cdisclosures\xe2\x80\x9d of covered information. Id.\n\xc2\xa7 1320d-2 note (emphasis added); see also id. (same with respect to the privacy regulations). Finally, a\nrule \xe2\x80\x9caddress[ing]\xe2\x80\x9d the \xe2\x80\x9cdisclosure\xe2\x80\x9d of information may well regulate the acquisition of information by\na covered entity because obtaining information generally involves the \xe2\x80\x9cdisclosure\xe2\x80\x9d of it by another\nperson. The provision\xe2\x80\x99s use of the noun \xe2\x80\x9cdisclosure,\xe2\x80\x9d therefore, does not help to answer the question\nbefore us.\n4\nNor does the inclusion of \xe2\x80\x9ccauses to be used\xe2\x80\x9d as well as \xe2\x80\x9cuse\xe2\x80\x9d in section 1320d-6(a)(1) compel us\nto conclude\xe2\x80\x94contrary to the plain language of the statute\xe2\x80\x94that the provision renders liable entities that\nare not covered by the regulations but that \xe2\x80\x9ccause\xe2\x80\x9d a covered entity to \xe2\x80\x9cuse\xe2\x80\x9d unique health identifiers in\nviolation of the part. This language is better read to cover those instances in which a covered entity\ncauses, in violation of the part, another person to use a unique health identifier, but where the covered\nentity itself did not use the identifier in an unauthorized manner.\n\n82\n\n\x0cScope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\n\nperson who violates a provision of this part.\xe2\x80\x9d Id. \xc2\xa7 1320d-5(a)(1). The criminal\nenforcement provision makes it a crime to do certain acts \xe2\x80\x9cknowingly and in\nviolation of this part.\xe2\x80\x9d Id. \xc2\xa7 1320d-6(a). To be sure, the statute must be read as a\nwhole and variations in the language of closely related provisions should be given\neffect if possible. See Bryan v. United States, 524 U.S. 184, 191\xe2\x80\x9393 (1998)\n(interpreting the requirement that an act be done \xe2\x80\x9cwillfully\xe2\x80\x9d in one subsection of\nthe statute by reference to the \xe2\x80\x9cknowingly\xe2\x80\x9d requirement contained in other\nsubsections of the same statute). Here, however, the difference in phrasing used in\nthe two provisions does not constitute a basis for concluding that section 1320d-6\nreaches persons who are not, or are not part of, a covered entity. Section 1320d-6\xe2\x80\x99s\nuse of \xe2\x80\x9cin violation of,\xe2\x80\x9d as opposed to \xe2\x80\x9cwho violates,\xe2\x80\x9d reflects only the difference\nin the scope of the conduct proscribed by the two sections. Section 1320d-5 is\nphrased as it is\xe2\x80\x94\xe2\x80\x9cany person who violates a provision of this part\xe2\x80\x9d\xe2\x80\x94because a\nviolation of any of the standards subjects the violator to civil penalties. 42 U.S.C.\n\xc2\xa7 1320d-5(a)(1). In contrast, criminal punishment is restricted to those violations\nof the standards\xe2\x80\x94specified in subsections (a)(1) to (a)(3) of section 1320d-6(a)\xe2\x80\x94\nthat involve the improper use, acquisition, or disclosure of individually identifiable\nhealth information or unique health identifiers. Section 1320d-6(a) makes liable a\nperson who \xe2\x80\x9cuses or causes to be used,\xe2\x80\x9d \xe2\x80\x9cobtains,\xe2\x80\x9d or \xe2\x80\x9cdiscloses\xe2\x80\x9d such health\ninformation. Having described the prohibited acts using present tense verbs, the\nprovision could not retain the \xe2\x80\x9cviolates this part\xe2\x80\x9d formulation; instead, it uses \xe2\x80\x9cin\nviolation of this part\xe2\x80\x9d to make clear that only those uses, acquisitions, and\ndisclosures in a manner contrary to the regulations are illegal. The difference in\nlanguage between section 1320d-5 and section 1320d-6 is thus best understood as\nnothing more than a grammatical accommodation resulting from the need to\ndescribe the acts for which section 1320d-6 prescribes criminal liability. 5\nAlthough we conclude that Part C applies only to covered entities, we do not\nread the term \xe2\x80\x9cperson\xe2\x80\x9d at the beginning of section 1320d-6 to mean \xe2\x80\x9ccovered\nentity.\xe2\x80\x9d Such a reading would not only be contrary to the language of that\nprovision but also create tension with other parts of the statute that appear to use\nthe term broadly, see, e.g., id. \xc2\xa7 1320d-6(a)(3) (prohibiting \xe2\x80\x9cdisclos[ures] to\nanother person\xe2\x80\x9d), and with the Dictionary Act, codified at 1 U.S.C. \xc2\xa7 1 (2000),\nwhich sets forth a presumptively broad definition of person wherever the term is\n\n5\nAt most, the difference in phrasing between section 1320d-5 and section 1320d-6 would render\nthe statute ambiguous. If that were the case, it might be appropriate to apply the rule of lenity and\nconclude that the statute is best read not to subject to direct prosecution persons other than covered\nentities and those rendered liable by general principles of corporate criminal liability. See Rewis v.\nUnited States, 401 U.S. 808, 812 (1971) (\xe2\x80\x9c[A]mbiguity concerning the ambit of criminal statutes\nshould be resolved in favor of lenity.\xe2\x80\x9d). But as the language of the statute unambiguously compels the\nsame result, we do not apply the rule of lenity here. See Chapman v. United States, 500 U.S. 453, 463\n(1991) (\xe2\x80\x9cThe rule of lenity . . . is not applicable unless there is a grievous ambiguity or uncertainty in\nthe language and structure of the Act . . . .\xe2\x80\x9d) (citation and quotation omitted).\n\n83\n\n\x0cOpinions of the Office of Legal Counsel in Volume 29\n\nused in the United States Code, 6 a definition presumptively applicable here\nbecause the defined terms specific to Part C do not include the term \xe2\x80\x9cperson.\xe2\x80\x9d See\n42 U.S.C. \xc2\xa7 1320d. We conclude only that the phrase \xe2\x80\x9cin violation of this part\xe2\x80\x9d\nrestricts the universe of persons who may be prosecuted directly. Section 1320d-6\nprovides criminal penalties for \xe2\x80\x9cperson[s]\xe2\x80\x9d who perform the listed acts \xe2\x80\x9cknowingly\xe2\x80\x9d and \xe2\x80\x9cin violation of this part.\xe2\x80\x9d Id. \xc2\xa7 1320d-6. The \xe2\x80\x9cin violation of this part\xe2\x80\x9d\nlimitation on the scope of liability\xe2\x80\x94like the \xe2\x80\x9cknowingly\xe2\x80\x9d requirement\xe2\x80\x94is distinct\nfrom the definition of \xe2\x80\x9cperson.\xe2\x80\x9d It describes that subset of persons who may be\nheld liable, provided that the other elements of the offense are also satisfied. Under\nthis reading of the statute, section 1320d-6(a)(3) continues to make \xe2\x80\x9ccovered\nentities\xe2\x80\x9d liable for disclosure to any \xe2\x80\x9cperson.\xe2\x80\x9d\nWe have considered other laws using the phrase \xe2\x80\x9cin violation of.\xe2\x80\x9d None of\nthese laws supports the view that, as used in 42 U.S.C. \xc2\xa7 1320d-6, the phrase\nshould be read more expansively than we conclude. For instance, several of these\nlaws apply to the public generally, and, accordingly, do not shed light on whether\nsection 1320d-6 allows direct prosecutions of persons other than those to whom\nthe substantive requirements of HIPAA\xe2\x80\x99s Part C apply. See, e.g., 18 U.S.C. \xc2\xa7 547\n(2000) (\xe2\x80\x9cWhoever receives or deposits merchandise in any building upon the\nboundary line between the United States and any foreign country, or carries\nmerchandise through the same, in violation of law . . . .\xe2\x80\x9d) (emphasis added); 18\nU.S.C. \xc2\xa7 1590 (2000) (\xe2\x80\x9cWhoever knowingly recruits, harbors, transports, provides,\nor obtains by any means, any person for labor or services in violation of this\nchapter . . . .\xe2\x80\x9d) (emphasis added). And the phrasing of other laws makes it clear\nthat \xe2\x80\x9cin violation of\xe2\x80\x9d describes an item involved in the prohibited act, as opposed\nto the act itself. For instance, 18 U.S.C. \xc2\xa7 2113(c) (2000) penalizes \xe2\x80\x9c[w]hoever\nreceives . . . property . . . which has been taken . . . in violation of subsection\n(b) . . . .\xe2\x80\x9d Id. In this case, the placement of the phrase \xe2\x80\x9cin violation of\xe2\x80\x9d following\nthe word \xe2\x80\x9cwhich\xe2\x80\x9d makes plain that the phrase describes only the property, a\nreading confirmed by the provision\xe2\x80\x99s use of the passive \xe2\x80\x9chas been taken.\xe2\x80\x9d Id.; see\nalso 18 U.S.C. \xc2\xa7 1170(b) (2000) (\xe2\x80\x9cWhoever knowingly sells, purchases, uses for\nprofit, or transports for sale or profit any Native American cultural items obtained\nin violation of the Native American Grave Protection and Repatriation Act . . . .\xe2\x80\x9d)\n(emphasis added). In contrast, the phrase \xe2\x80\x9cin violation of\xe2\x80\x9d in section 1320d-6 does\nnot modify the type of health care information involved in the offense; rather, it\nrelates directly to the acts prohibited by the provision (i.e., \xe2\x80\x9cuses or causes to be\nused,\xe2\x80\x9d \xe2\x80\x9cobtains,\xe2\x80\x9d or \xe2\x80\x9cdiscloses\xe2\x80\x9d). Finally, we have reviewed the cases interpreting\nthese and other potentially analogous provisions and have found none that would\n\n6\n\n\xe2\x80\x9cIn determining the meaning of any Act of Congress, unless the context indicates otherwise\xe2\x80\x94 the\nword[] person[] . . . include[s] corporations, companies, associations, firms, partnerships, societies, and\njoint stock companies, as well as individuals.\xe2\x80\x9d 1 U.S.C. \xc2\xa7 1.\n\n84\n\n\x0cScope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\n\ncause us to read section 1320d-6 in any way other than in accordance with its plain\nmeaning. 7\nWe conclude, therefore, that an assessment of liability under section 1320d-6\nmust begin with covered entities. The statute and regulations determine which\nindividuals and entities qualify as a \xe2\x80\x9ccovered entity.\xe2\x80\x9d See 42 U.S.C. \xc2\xa7 1320d; id.\n\xc2\xa7 1395w-141(h)(1); id. \xc2\xa7 1395x; 45 C.F.R. \xc2\xa7 160.103. 8 A health care provider is\nany \xe2\x80\x9cperson furnishing health care services or supplies,\xe2\x80\x9d and will be either an\nindividual or an entity. 42 U.S.C. \xc2\xa7 1320d(3); see also id. \xc2\xa7 1395x. In contrast, a\n\xe2\x80\x9chealth care clearinghouse,\xe2\x80\x9d \xe2\x80\x9chealth plan,\xe2\x80\x9d and Medicare \xe2\x80\x9cprescription drug card\nsponsor\xe2\x80\x9d will virtually never be an individual. See id. \xc2\xa7 1320d(2) & (5); id.\n\xc2\xa7 1395w-141(h)(1)(A). When the covered entity is not an individual, principles of\ncorporate criminal liability will determine the entity\xe2\x80\x99s liability and the potential\nliability of particular individuals who act for the entity. Although we do not\nelaborate these principles here, in general, the conduct of an entity\xe2\x80\x99s agents may be\nimputed to the entity when the agents act within the scope of their employment,\nand the criminal intent of agents may be imputed to the entity when the agents act\non its behalf. See Kathleen F. Brickley, Corporate Criminal Liability \xc2\xa7\xc2\xa7 3\xe2\x80\x934 (2d\ned. 1992). In addition, we recognize that, at least in limited circumstances, the\ncriminal liability of the entity has been attributed to individuals in managerial\nroles, including, at times, to individuals with no direct involvement in the offense.\nSee id. \xc2\xa7 5. 9 Consistent with these general principles, it may be that such individuals in particular cases may be prosecuted directly under section 1320d-6.\n7\nConsistent with our reading of 42 U.S.C. \xc2\xa7 1320d-6, the Sixth Circuit has held that the Video\nPrivacy Protection Act\xe2\x80\x99s (\xe2\x80\x9cVPPA\xe2\x80\x9d) creation of a cause of action for \xe2\x80\x9c[a]ny person aggrieved by any act\nof a person in violation of this section,\xe2\x80\x9d 18 U.S.C. \xc2\xa7 2710(c)(1) (2000), allows suits against only video\ntape service providers and not against all persons. See Daniel v. Cantrell, 375 F.3d 377, 382\xe2\x80\x9384 (6th\nCir. 2004). In that case, the plaintiff had sued several persons who were not video tape service\nproviders, alleging that they had violated the privacy right in his video rental records given him by the\nstatute. Similar to section 1320d-6, the VPPA cause of action provision refers to acts of \xe2\x80\x9ca person in\nviolation of this section.\xe2\x80\x9d 18 U.S.C. \xc2\xa7 2710(c)(1). The court reasoned that because the operative\nprovision of the VPPA provides that \xe2\x80\x9c[a] video tape service provider who knowingly discloses . . .\npersonally identifiable information . . . shall be liable,\xe2\x80\x9d id. \xc2\xa7 2710(b), only such providers could be \xe2\x80\x9cin\nviolation of\xe2\x80\x9d the statute. Daniel, 375 F.3d at 383\xe2\x80\x9384. Accordingly, despite the use of the broad term\n\xe2\x80\x9cperson\xe2\x80\x9d in section 2710(c)(1), only video tape service providers may be sued under that section.\n8\nThe statute and regulations do not limit the actions for which a covered entity may be held liable\nto those activities that render the person a covered entity. Once a person is a covered entity, he must\n\xe2\x80\x9ccomply with [an applicable] standard or specification,\xe2\x80\x9d 42 U.S.C. \xc2\xa7 1320d-4(b)(1)(A) and \xe2\x80\x9cmay not\nuse or disclose protected health information, except as permitted or required by\xe2\x80\x9d the regulations, 45\nC.F.R. \xc2\xa7 164.502. Thus, a physician who is a covered entity in part because he transmits certain health\ncare information electronically must not disclose such protected information, either electronically or\notherwise, except as authorized by the regulations. And a physician who is a covered entity must\ncomply with the standards with respect to protected information concerning both his own patients and\nthose patients he is not treating.\n9\n\xe2\x80\x9cMany regulatory statutes . . . make corporate officials vulnerable to prosecution for criminal\nconduct in which they did not personally participate and about which they had no personal knowledge.\xe2\x80\x9d\nId. \xc2\xa7 5.01; see also United States v. Jorgensen, 144 F.3d 550, 559\xe2\x80\x9360 (8th Cir. 1998) (applying the\n\n85\n\n\x0cOpinions of the Office of Legal Counsel in Volume 29\n\nOther conduct that may not be prosecuted under section 1320d-6 directly may\nbe prosecuted according to principles either of aiding and abetting liability or of\nconspiracy liability. 10 The aiding and abetting statute renders \xe2\x80\x9cpunishable as a\nprincipal\xe2\x80\x9d anyone who \xe2\x80\x9ccommits an offense against the United States or aids,\nabets, counsels, commands, induces or procures its commission\xe2\x80\x9d and anyone who\n\xe2\x80\x9cwillfully causes an act to be done which if directly performed by him or another\nwould be an offense against the United States.\xe2\x80\x9d 18 U.S.C. \xc2\xa7 2 (2000). And the\nconspiracy statute prescribes punishment \xe2\x80\x9cif two or more persons conspire . . . to\ncommit any offense against the United States . . . and one or more of such persons\ndo any act to effect the object of the conspiracy.\xe2\x80\x9d 18 U.S.C. \xc2\xa7 371 (2000). 11 Further\ndiscussion of corporate criminal liability, aiding and abetting liability, and\nconspiracy liability in the absence of a specific factual context would be unfruitful,\nparticularly because the contours of these legal principles may vary by jurisdiction. Accordingly, we leave the scope of criminal liability under these principles\nfor consideration in the ordinary course of prosecutions. 12\nB.\nWe address next whether the \xe2\x80\x9cknowingly\xe2\x80\x9d element of the offense set forth in 42\nU.S.C. \xc2\xa7 1320d-6 requires the government to prove only knowledge of the facts\nthat constitute the offense or whether this element also requires proof that the\ndefendant knew that the act violated the law. We conclude that the \xe2\x80\x9cknowingly\xe2\x80\x9d\nprinciple that \xe2\x80\x9ca corporate officer who is in a responsible relationship to an activity within a company\nthat violates provisions of . . . federal . . . laws . . . can be held criminally responsible even though that\nofficer did not personally engage in that activity\xe2\x80\x9d in the context of a statute that required proof of\n\xe2\x80\x9cintent to defraud\xe2\x80\x9d when the defendant possessed the requisite intent) (quotations and citations\nomitted).\n10\nDepending on the specific facts and circumstances, such conduct may also be punishable under\nother federal laws. See, e.g., 18 U.S.C. \xc2\xa7 1028 (2000 & Supp. III 2004) (identity theft); id. \xc2\xa7 1030\n(2000 & Supp. III 2004) (fraudulent access of a computer).\n11\nFor instance, an individual who is not a covered entity who aids or conspires with a covered\nentity in the use of protected health information in a manner not authorized by the regulations (e.g., to\nestablish a fraudulent billing scheme) could be charged under section 2 or section 371 of title 18.\n12\nWe note that conduct punishable under section 1320d-6 may also be punishable under state law\nand render a person liable in tort. See generally Peter A. Winn, Confidentiality in Cyberspace: The\nHIPAA Privacy Rules and the Common Law, 33 Rutgers L.J. 617 (2002). When Congress enacted\nHIPAA, it was concerned that state statutory and common law provided inadequate and uneven\nprotection for health information. Congress sought to create a nationwide floor for such protection. See\nPreamble, Standards for Privacy of Individually Identifiable Health Information (\xe2\x80\x9cPrivacy Rule\nPreamble\xe2\x80\x9d), 65 Fed. Reg. 82,462, 82,463\xe2\x80\x9364 (Dec. 28, 2000). Thus, HIPAA\xe2\x80\x99s privacy rules preempt\nonly those contrary state laws that are less stringent than the applicable federal privacy rules. See 42\nU.S.C. \xc2\xa7 1320d-7(a)(2)(B); 45 C.F.R. \xc2\xa7 160.203(b) (\xe2\x80\x9cA standard, requirement, or implementation\nspecification . . . that is contrary to a provision of State law preempts the provision of State law . . .\nexcept if . . . [t]he provision of State law relates to the privacy of individually identifiable health\ninformation and is more stringent than\xe2\x80\x9d the federal standard.). All other criminal and civil liability for\nbreaches of a duty concerning the privacy of health information that existed prior to HIPAA remains\nafter its passage.\n\n86\n\n\x0cScope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\n\nelement is best read, consistent with its ordinary meaning, to require only proof of\nknowledge of the facts that constitute the offense.\nWe begin again with the text of 42 U.S.C. \xc2\xa7 1320d-6(a). See Liparota, 471 U.S.\nat 424.\nA person who knowingly and in violation of this part\xe2\x80\x94\n(1) uses or causes to be used a unique health identifier;\n(2) obtains individually identifiable health information relating to\nan individual; or\n(3) discloses individually identifiable health information to another person, shall be punished as provided in subsection (b) of this\nsection.\n42 U.S.C. \xc2\xa7 1320d-6(a). A plain reading of the text indicates that a person need not\nknow that commission of an act described in subsections (a)(1) to (a)(3) violates the\nlaw in order to satisfy the \xe2\x80\x9cknowingly\xe2\x80\x9d element of the offense. Section 1320d-6\nmakes the requirements that the act be done \xe2\x80\x9cknowingly\xe2\x80\x9d and that it be done \xe2\x80\x9cin\nviolation of this part\xe2\x80\x9d two distinct requirements. These two elements do not modify\neach other; rather, they independently modify \xe2\x80\x9cuses or causes to be used,\xe2\x80\x9d \xe2\x80\x9cobtains,\xe2\x80\x9d\nand \xe2\x80\x9cdiscloses.\xe2\x80\x9d For example, defendants will be guilty of an offense if they both\n\xe2\x80\x9cknowingly\xe2\x80\x9d \xe2\x80\x9cdisclose[] individually identifiable health information\xe2\x80\x9d and they \xe2\x80\x9cin\nviolation of this part\xe2\x80\x9d \xe2\x80\x9cdisclose[] individually identifiable health information.\xe2\x80\x9d The\nview that the statute requires proof of knowledge of the law effectively reads\n\xe2\x80\x9cknowingly\xe2\x80\x9d to refer to the \xe2\x80\x9cviolation of this part.\xe2\x80\x9d But this reading is contrary to the\nplain language of the statute, which sets forth these terms as two separate elements\neach independently modifying the third element, i.e., one of the listed acts. Accordingly, to incur criminal liability, a defendant need have knowledge only of those\nfacts that constitute the offense.\nOur reading of the \xe2\x80\x9cknowingly\xe2\x80\x9d element of the offense comports with the usual\nunderstanding of the term. The Supreme Court has stated that \xe2\x80\x9cunless the text of\nthe statute dictates a different result, the term \xe2\x80\x98knowingly\xe2\x80\x99 merely requires proof of\nknowledge of the facts that constitute the offense.\xe2\x80\x9d Bryan, 524 U.S. at 193\n(footnote omitted) (\xe2\x80\x9c[T]he term \xe2\x80\x98knowingly\xe2\x80\x99 does not necessarily have any\nreference to a culpable state of mind or to knowledge of the law.\xe2\x80\x9d). As set forth\nabove, the text of section 1320d-6 does not \xe2\x80\x9cdictate[] a different result.\xe2\x80\x9d Bryan,\n524 U.S. at 193. In fact, its text dictates an interpretation consistent with the\nordinary understanding of \xe2\x80\x9cknowingly\xe2\x80\x9d as referring only to \xe2\x80\x9cknowledge of the\nfacts that constitute the offense.\xe2\x80\x9d Id.\nThe plain meaning of the \xe2\x80\x9cknowingly\xe2\x80\x9d element of section 1320d-6 must control, \xe2\x80\x9cat least where the disposition required by the text is not absurd.\xe2\x80\x9d Hartford\nUnderwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000). We\n\n87\n\n\x0cOpinions of the Office of Legal Counsel in Volume 29\n\nconsider whether our reading of the criminal provision is absurd in light of the\npossible exception to civil liability for reasonable ignorance of the law. Sections\n1320d-5 and 1320d-6 operate in a complementary fashion, covering mutually\nexclusive conduct. See 42 U.S.C \xc2\xa7 1320d-5(b)(1) (excepting from civil penalties\nan act that \xe2\x80\x9cconstitutes an offense punishable under section 1320d-6 of this\ntitle.\xe2\x80\x9d). 13 The civil enforcement section provides, \xe2\x80\x9cA penalty may not be imposed . . . if . . . the person liable for the penalty did not know, and by exercising\nreasonable diligence would not have known, that such person violated the\nprovision.\xe2\x80\x9d Id. \xc2\xa7 1320d-5(b)(2). Section 1320d-5 therefore may be read to premise\ncivil liability on knowledge that the act in question violated the applicable\nstandard, not just on knowledge that the particular act occurred. 14 If civil sanctions\n(of fines up to $100) may be avoided by establishing reasonable ignorance of the\nlaw, it might at first blush appear to be an absurd result to conclude that the\nsignificantly more serious criminal punishments (of fines up to $250,000 and\nimprisonment of up to ten years) may not be similarly excused.\nThe absurd results canon of construction is \xe2\x80\x9crarely invoke[d] . . . to override\nunambiguous legislation.\xe2\x80\x9d Barnhart v. Sigmon Coal Co., 534 U.S. 438, 459\n(2002); Public Citizen v. Dep\xe2\x80\x99t of Justice, 491 U.S. 440, 470\xe2\x80\x9371 (1989) (Kennedy,\nJ., concurring) (noting that the canon is limited \xe2\x80\x9cto situations where the result of\napplying the plain language would be, in a genuine sense, absurd, i.e., where it is\nquite impossible that Congress could have intended the result, and where the\nalleged absurdity is so clear as to be obvious to most anyone.\xe2\x80\x9d). Applying the\nusual definition of \xe2\x80\x9cknowingly\xe2\x80\x9d here does not yield an absurd result, and certainly\nnot one so absurd that it would cause us to read the statute contrary to its plain\nmeaning. The argument that the statute should not be read so as to impose criminal\npunishment on the basis of a lesser degree of intent than that required for civil\nsanction would be more compelling if sections 1320d-5 and 1320d-6 covered the\nsame acts. But they do not. See 42 U.S.C. \xc2\xa7 1320d-5(b)(1). Civil sanctions may be\nimposed for violations of a wide variety of regulations. For these violations, the\nstatute provides a maximum $100 fine and sets forth certain exceptions to liability.\nId. \xc2\xa7 1320d-5 (\xe2\x80\x9cGeneral penalty for failure to comply with requirements and\nstandards\xe2\x80\x9d). 15 In contrast, of all the possible violations of the regulations, section\n13\nThus, the Secretary may not impose civil sanctions for the commission of an act that subjects a\nperson to the possibility of criminal prosecution, regardless of whether the person is in fact punished\ncriminally.\n14\nThis is not the only possible reading of section 1320d-5(b)(2). This paragraph is headed \xe2\x80\x9cNoncompliance not discovered,\xe2\x80\x9d and the language of the provision\xe2\x80\x94\xe2\x80\x9cthe person liable for the penalty did\nnot know, and by exercising reasonable diligence would not have known, that such person violated the\nprovision\xe2\x80\x9d\xe2\x80\x94could be read to refer to ignorance of the facts that constitute the violation, rather than\nignorance of the law. But to answer the questions you have asked, we need not decide which reading is\nbetter.\n15\nIn addition to the exception noted above, section 1320d-5(b) contains another defense to liability\nwhere \xe2\x80\x9c(i) the failure to comply was due to reasonable cause and not to willful neglect; and (ii) the\nfailure to comply is corrected during the 30-day period beginning on the first date the person liable for\n\n88\n\n\x0cScope of Criminal Enforcement Under 42 U.S.C. \xc2\xa7 1320d-6\n\n1320d-6 carves out a limited set and subjects them to criminal punishment. Such\npunishment is reserved for violations involving \xe2\x80\x9cunique health identifiers\xe2\x80\x9d and\n\xe2\x80\x9cindividually identifiable health information.\xe2\x80\x9d Id. \xc2\xa7 1320d-6 (\xe2\x80\x9cWrongful disclosure of individually identifiable health information\xe2\x80\x9d). Thus, the statute reflects a\nheightened concern for violations that intrude upon the medical privacy of\nindividuals. In light of this concern, there is nothing obviously absurd about the\nstatute\xe2\x80\x99s allowing a defense of reasonable ignorance of the law for those regulatory violations subject to civil penalty, but withholding this defense with respect to\nthose violations that threaten the privacy of individuals. Accordingly, even reading\nsection 1320d-6 in light of section 1320d-5(b)\xe2\x80\x99s exception to civil liability for\nreasonable ignorance of the law gives us no reason to doubt that the plain and\nordinary meaning of the \xe2\x80\x9cknowingly\xe2\x80\x9d element of section 1320d-6 is the correct\none.\nNor is it proper to apply here the exception to the usual meaning of \xe2\x80\x9cknowingly\xe2\x80\x9d exemplified by Liparota. See id., 471 U.S. at 424\xe2\x80\x9328. Liparota is the case cited\nby the Supreme Court in Bryan as an example of the exception to the rule\xe2\x80\x94when\n\xe2\x80\x9cthe text of the statute dictates a different result\xe2\x80\x9d\xe2\x80\x94that \xe2\x80\x9cknowingly\xe2\x80\x9d refers to the\nfacts that constitute the offense and not to the law. Bryan, 524 U.S. at 193 & n.15.\nIn Liparota, the Supreme Court held that a statute forbidding fraudulent use of\nfood stamps required proof of knowledge that the use was unauthorized. 471 U.S.\nat 433. The statute in that case read: \xe2\x80\x9cwhoever knowingly uses, transfers, acquires,\nalters, or possesses coupons or authorization cards in any manner not authorized\nby this chapter or the regulations issued pursuant to this chapter\xe2\x80\x9d shall be guilty of\na criminal offense. Id. at 420\xe2\x80\x9321 n.1 (quoting 7 U.S.C. \xc2\xa7 2024(b)(1)). This\nlanguage is at least ambiguous; \xe2\x80\x9cknowingly\xe2\x80\x9d may modify, for example, either only\nthe verb \xe2\x80\x9cuses\xe2\x80\x9d or it may modify the entire verbal phrase \xe2\x80\x9cuses . . . in any manner\nnot authorized.\xe2\x80\x9d Id.; see id. at 424 (The \xe2\x80\x9cinterpretations proffered by both parties\naccord with congressional intent . . . . [T]he words themselves provide little\nguidance. Either interpretation would accord with ordinary usage.\xe2\x80\x9d); id. at 424 n.7\n(referring to the statutory language and noting that \xe2\x80\x9c[o]ne treatise has aptly\nsummed up the ambiguity in an analogous situation\xe2\x80\x9d) (emphasis added). But see\nBryan, 524 U.S. at 193 n.15 (citations omitted) (in Liparota, \xe2\x80\x9cwe concluded that\nboth the term \xe2\x80\x98knowing\xe2\x80\x99 . . . and the term \xe2\x80\x98knowingly\xe2\x80\x99 . . . literally referred to\nknowledge of the law as well as knowledge of the relevant facts\xe2\x80\x9d). The Supreme\nCourt then considered the presumption that criminal statutes contain a mens rea\nelement, 16 applied the rule of lenity, and rested its interpretation, in large part, on\nthe penalty knew, or by exercising reasonable diligence would have known, that the failure to comply\noccurred.\xe2\x80\x9d Id. \xc2\xa7 1320d-5(b)(3).\n16\n\xe2\x80\x9c[C]riminal offenses requiring no mens rea have a \xe2\x80\x98generally disfavored status.\xe2\x80\x99\xe2\x80\x9d Liparota, 471\nU.S. at 426 (quoting United States v. U.S. Gypsum Co., 438 U.S. 422, 438 (1978)); Staples v. United\nStates, 511 U.S. 600, 606 (1994) (\xe2\x80\x9c[S]ome indication of congressional intent, express or implied, is\nrequired to dispense with mens rea as an element of a crime.\xe2\x80\x9d).\n\n89\n\n\x0cOpinions of the Office of Legal Counsel in Volume 29\n\nthe concern that the contrary reading would \xe2\x80\x9ccriminalize a broad range of apparently innocent conduct.\xe2\x80\x9d Liparota, 471 U.S. at 426\xe2\x80\x9327.\nHere, the \xe2\x80\x9cknowingly\xe2\x80\x9d element of section 1320d-6 is not ambiguous; thus, it\nwould be inappropriate to resort to the rule of lenity. See Chapman v. United\nStates, 500 U.S. 453, 463 (1991) (\xe2\x80\x9cThe rule of lenity . . . is not applicable unless\nthere is a grievous ambiguity or uncertainty in the language and structure of the\nAct . . . .\xe2\x80\x9d) (citation and quotation omitted). Moreover, our interpretation of\n\xe2\x80\x9cknowingly\xe2\x80\x9d does not dispense with the mens rea requirement of section 1320d-6\nand create a strict liability offense; satisfaction of the \xe2\x80\x9cknowingly\xe2\x80\x9d element will\nstill require proof that the defendant knew the facts that constitute the offense. See\nStaples v. United States, 511 U.S. 600, 622 n.3 (1994) (Ginsburg, J., concurring)\n(\xe2\x80\x9cThe mens rea presumption requires knowledge only of the facts that make the\ndefendant\xe2\x80\x99s conduct illegal, lest it conflict with the related presumption, deeply\nrooted in the American legal system, that, ordinarily, ignorance of the law or a\nmistake of law is no defense to criminal prosecution.\xe2\x80\x9d) (quotations and citations\nomitted). Finally, the concern expressed in Liparota about criminalizing a broad\nswath of seemingly innocent conduct is less present here. The statute in Liparota\ncriminalized the unauthorized use of food stamps by any participant in the\nprogram, as well as by any person who might come in possession of these stamps.\n471 U.S. at 426\xe2\x80\x9327. In contrast, section 1320d-6, as we conclude above, applies\ndirectly to covered entities. These covered entities\xe2\x80\x94health plans, health care\nclearinghouses, certain health care providers, and Medicare prescription drug card\nsponsors\xe2\x80\x94are likely well aware that the health care business they conduct is\nheavily regulated by HIPAA and other laws. To the extent that some concern\nremains, it is insufficient to override the plain meaning of the statute. Accordingly,\nLiparota provides no support for giving \xe2\x80\x9cknowingly\xe2\x80\x9d in section 1320d-6 a\nmeaning different from its usual understanding as referring only to knowledge of\nthe facts that constitute the offense.\nIII.\nFor the foregoing reasons, we conclude that covered entities and those persons\nrendered accountable by general principles of corporate criminal liability may be\nprosecuted directly under 42 U.S.C. \xc2\xa7 1320d-6 and that the \xe2\x80\x9cknowingly\xe2\x80\x9d element\nof the offense set forth in that provision requires only proof of knowledge of the\nfacts that constitute the offense.\nSTEVEN G. BRADBURY\nPrincipal Deputy Assistant Attorney General\nOffice of Legal Counsel\n\n90\n\n\x0c'