Opinion ID: 710876
Heading Depth: 2
Heading Rank: 1

Heading: The Bribery Conviction under Sec. 666(a)(1)(B)

Text: 18 Section 666(a)(1)(B) provides, in pertinent part, as follows: 19 Sec. 666. Theft or bribery concerning programs receiving Federal funds 20 (a) Whoever, if the circumstance described in subsection (b) of this section exists-- 21 (1) being an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof-- 22 .... 23 (B) corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more; 24 .... 25 shall be fined under this title, imprisoned not more than 10 years, or both. 26 (b) The circumstance referred to in subsection (a) of this section is that the organization, government, or agency receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance. 27 18 U.S.C. Secs. 666(a)(1)(B) and (b) (as amended in 1986, see Criminal Law and Procedure Technical Amendments Act of 1986, Pub.L. No. 99-646, Sec. 59, 100 Stat. 3592, 3612-13 (1986) (making technical amendments); H.R.Rep. No. 797, 99th Cong., 2d Sess. 30 (1986), reprinted in 1986 U.S.Code Cong. & Admin.News (USCCAN) 6138, 6153). 28 As the terms of Secs. 666(a)(1)(B) and 666(b) make plain, not all bribe-taking by an agent of the state falls within the scope of Sec. 666. A state agent who accepts a bribe violates this section only if (a) the state receives federal program benefits in excess of $10,000 in a one-year period, and (b) the bribe is accepted in connection with a state business or a state transaction or series of transactions involving anything of value of $5,000 or more. While Sec. 666(b) specifies that the more-than-$10,000 in federal program benefits must have been received by the organization, government, or agency of which the defendant is an agent, Sec. 666(a)(1)(B) is silent as to the identity of the person or entity to whom the [ ]thing must have at least a $5,000 value. Accordingly, we look to the legislative history and purpose of the statute for illumination. See generally Dowling v. United States, 473 U.S. 207, 213, 105 S.Ct. 3127, 3131, 87 L.Ed.2d 152 (1985) (court must pay close heed to language, legislative history, and purpose in order strictly to determine the scope of the conduct the enactment forbids).
29 The legislative history of Sec. 666, which was introduced as part of Title XI of the Comprehensive Crime Control Act of 1984, indicates that the section was enacted in an attempt to increase the protection of the integrity of federal funds disbursed through federal programs. Prior to 1984, it was a federal offense to steal property of the United States, see 18 U.S.C. Sec. 641; it was also a federal offense for an officer or employee of an agency receiving assistance under the Comprehensive Employment Training Act (CETA) or the Job Training Partnership Act to, inter alia, steal funds administered thereunder or to demand a bribe in connection with the granting of a job-training contract, see 18 U.S.C. Sec. 665; and it was a federal offense for a federal public official corruptly to, inter alia, accept anything of value personally in return for being influenced in the performance of an official act, see, e.g., 18 U.S.C. Sec. 201. Section 641, however, did not reach thefts of federal property after title or control had passed from the United States to the federal program recipient, see, e.g., United States v. Morris, 541 F.2d 153, 155 (6th Cir.1976); see also United States v. Benefield, 721 F.2d 128, 129-30 n. 2 (4th Cir.1983) (citing cases); by its terms, Sec. 665 dealt only with the job-training programs, not with the myriad other programs receiving federal financial assistance; and the courts of appeals had divided over the question of whether and under what circumstances Sec. 201 reached individuals not employed by the federal government, compare, e.g., United States v. Mosley, 659 F.2d 812 (7th Cir.1981) (state administrator covered), with United States v. Del Toro, 513 F.2d 656 (2d Cir.) (municipal administrator not covered), cert. denied, 423 U.S. 826, 96 S.Ct. 41, 46 L.Ed.2d 42 (1975). 30 Section 666 was enacted in an effort to fill these gaps. The Report of the Senate Judiciary Committee explaining the proposed Sec. 666 stated that the section was 31 designed to create new offenses to augment the ability of the United States to vindicate significant acts of theft, fraud, and bribery involving Federal monies that are disbursed to private organizations or State and local governments pursuant to a Federal program. 32 S.Rep. No. 225, 98th Cong., 2d Sess. 369 (1984) (Senate Report or Report), reprinted in 1984 USCCAN 3510. In describing the then-existing state of the law, the Senate Report stated in part as follows: 33 ... title XI covers both theft and bribery type offenses. With respect to theft, 18 U.S.C. 665 makes theft or embezzlement by an officer or employee of an agency receiving assistance under the Job Training Partnership Act a Federal offense. However, there is no statute of general applicability in this area, and thefts from other organizations or governments receiving Federal financial assistance can be prosecuted under the general theft of Federal property statute, 18 U.S.C. 641, only if it can be shown that the property stolen is property of the United States. In many cases, such prosecution is impossible because title has passed to the recipient before the property is stolen, or the funds are so commingled that the Federal character of the funds cannot be shown. This situation gives rise to a serious gap in the law, since even though title to the monies may have passed, the Federal Government clearly retains a strong interest in assuring the integrity of such program funds. 34 Senate Report at 369, 1984 USCCAN at 3510. The Report also noted the existence of doubt as to whether or under what circumstances persons not employed by the Federal Government could be prosecuted under Sec. 201, Senate Report at 369, 1984 USCCAN at 3510, and indicated that Sec. 666 was intended to reach the conduct of state and local officials such as the administrators in United States v. Mosley, 659 F.2d 812 (bribery in connection with administration of CETA program), and United States v. Del Toro, 513 F.2d 656 (bribery in connection with federally funded program's leasing of office space); see Senate Report at 370 n. 3, 1984 USCCAN at 3511 n. 3. Thus, Sec. 666 was intended to be a law of general application to safeguard federal funds distributed through federal programs, and was designed to permit prosecution for, inter alia, theft, see 18 U.S.C. Sec. 666(a)(1)(A), and bribery, see id. Sec. 666(a)(1)(B), in connection with those funds even after title had passed from the federal government, and to reach not only federal employees, but also, inter alios, employees of the state. 35 In describing the details of the proposed Sec. 666, the Senate Report noted, however, that although Sec. 666's protection of certain federal funds is very broad, this protection extends only to a very specific federal interest, namely, safeguarding the integrity of federal funds that are intended to serve legislatively defined policy objectives: 36 The Committee intends that the term Federal program involving a grant, a contract, a subsidy, a loan, a guarantee, insurance, or another form of Federal assistance be construed broadly, consistent with the purpose of this section to protect the integrity of the vast sums of money distributed through Federal programs from theft, fraud, and undue influence by bribery. However, the concept is not unlimited. The term Federal program means that there must exist a specific statutory scheme authorizing the Federal assistance in order to promote or achieve certain policy objectives. Thus, not every Federal contract or disbursement of funds would be covered. 37 Senate Report at 370, 1984 USCCAN at 3511 (emphasis added). 38 In sum, the legislative history of Sec. 666 indicates that the value of a thing for purposes of Sec. 666(a)(1)(B) is not to be assessed by reference to any and every perspective or measure of value, no matter how subjective or arbitrary. Instead, the assessment of the thing's value must be connected, even if only indirectly, to the integrity of federal program funds.
39 Consistent with Congress's desire to safeguard federal funds, including those that may have become so commingled that their federal character cannot be shown, this Court has held that in order to establish the more-than-$10,000 jurisdictional amount set out in Sec. 666(b), the government need not trace the federal funds received by an organization to the project in connection with which its employee received a bribe. See United States v. Coyne, 4 F.3d 100, 108-10 (2d Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 929, 127 L.Ed.2d 221 (1994). In Coyne, the defendant was a county official accused of, inter alia, taking a bribe in connection with the construction of a county civic center. Although the county received federal funds, it received none that were earmarked for the civic center, and Coyne argued that the more-than-$10,000 jurisdictional amount set out in Sec. 666(b) was therefore not met. We rejected this argument, stating as follows: 40 The statutory language of Section 666 requires proof only that the accused be an agent of a local government that received in excess of $10,000 of federal funds in the one year period. The language neither explicitly nor implicitly requires that the $10,000 be directly linked to the program that was the subject of the bribe. 41 4 F.3d at 109. 42 In a similar effort to honor Congress's objective of protecting federal program funds even when their federal character is difficult to show, other Circuits have ruled that the government has no burden to trace the funds with respect to Sec. 666(a)(1)(B)'s requirement that the [ ]thing have a value of at least $5,000. In United States v. Westmoreland, 841 F.2d 572 (5th Cir.), cert. denied, 488 U.S. 820, 109 S.Ct. 62, 102 L.Ed.2d 39 (1988), for example, the court stated that 43 while the legislative history manifests a congressional intent to preserve the integrity of federal funds, Congress specifically chose to do so by enacting a criminal statute that would eliminate the need to trace the flow of federal monies and that would avoid inconsistencies caused by the different ways that various federal programs disburse funds and control their administration. 44 Id. at 577. Noting that the subsection that establishes the $5,000 or more requirement does not mention federal funds, the court upheld the Sec. 666 conviction of a county supervisor for taking bribes in connection with the granting of contracts for the maintenance of local roads and bridges although the funds corruptly disbursed were not shown to be federal funds. The court stated that it is clear that Congress has cast a broad net to encompass local officials who may administer federal funds, regardless of whether they actually do. United States v. Westmoreland, 841 F.2d at 574-75, 577; see also United States v. Simas, 937 F.2d 459, 463 (9th Cir.1991) (By enacting section 666, Congress plainly decided to protect federal funds by preserving the integrity of the entities that receive the federal funds rather than requiring the tracing of federal funds to a particular illegal transaction.); United States v. Snyder, 930 F.2d 1090, 1091-93 (5th Cir.), cert. denied, 502 U.S. 942, 112 S.Ct. 380, 116 L.Ed.2d 331 (1991). 45 This Court, in dealing with the $5,000 requirement, has held that Sec. 666(a)(1)(B) was applicable where an employee of an organization that received the requisite more-than-$10,000 in federal program funds accepted a bribe in exchange for attempting, in a joint operation between his organization and another that apparently was not shown to meet the more-than-$10,000 requirement, to cause the expenditure of $5,000 or more by the other organization. See United States v. Bonito, 57 F.3d 167 (2d Cir.1995). In Bonito, the defendant, a landlord and real estate developer, was charged with giving a bribe to one DeMatteo, who was, inter alia, Director of Real Estate Services for the City of New Haven, Connecticut (the City). The New Haven Housing Authority was an agency independent of the City, established by the state to select sites for low-income housing in the City and to administer projects funded by the federal Department of Housing and Urban Development (HUD). A joint committee of the City and the Housing Authority was established to recommend such sites. The Mayor of New Haven directed that no site be accepted without his prior approval and appointed DeMatteo to serve on the joint committee as his agent. After receiving an automobile from Bonito, DeMatteo attempted, unsuccessfully, to persuade HUD to allow the Housing Authority to purchase one of Bonito's housing developments. Prosecuted under Sec. 666, Bonito challenged the government's proof that the proposed purchase involved a thing having the value of $5,000 or more within the meaning of Sec. 666(a), arguing that, although the City itself received more than $10,000 in federal funds, the proposed purchaser of his development, whose expenditure would be $5,000 or more, was to be the Housing Authority, which was an agency independent of the City. Thus, he argued that there [wa]s no connection between the corrupted business or transaction and the protection of federal funds. 57 F.3d at 172. Though acknowledging the closeness of the question, we rejected this argument, stating as follows: 46 [T]here are a number of factors in favor of construing Sec. 666 to cover corruption of agents of a federally funded organization even in those official activities that do not implicate their organization's own funds.... [T]he statute does not say that the thing of value of $5,000 must be that of the affected organization. It says only that the corruption must be in connection with the organization's business or transaction involving a thing of value of $5,000 or more. In addition, we have already extended the statute beyond corruption in a local organization's administration of a federally funded program. United States v. Coyne, 4 F.3d at 110. The rationale for this was stated most succinctly by the Fifth Circuit: It is sufficient that Congress seeks to preserve the integrity of federal funds by assuring the integrity of the organization that receives them. United States v. Westmoreland, 841 F.2d [at 578]. 47 United States v. Bonito, 57 F.3d at 172. We concluded that since the determination of the location of low-income housing was a joint enterprise ... that would determine the disposition of federal grant monies, id. at 173, the corruption of an official of one member of the enterprise to influence the disposition of federal funds by the other member was within the purview of Sec. 666. 48 This conclusion does no violence to the actual words of the statute, and, based on the unusual fact that federal funds were sought to be corrupted through the Housing Authority, serves the statute's underlying purpose. It would be quite another case if the corrupted business affected neither the financial interests of the protected organization nor, as in this case through the Housing Authority, federal funds directly. 49 57 F.3d at 173. 50 In United States v. Rooney, 37 F.3d 847 (2d Cir.1994), we dealt with the Sec. 666 prosecution of a defendant who had formed a partnership for the development of a housing project for the elderly, funded by a federal agency, the Farmers Home Administration (FmHA). At a time when costs were mounting, Rooney, who was personally obligated on the partnership's debts both to the contractor and to FmHA, offered to borrow more from the agency and pay the contractor immediately if the contractor would, subject to FmHA approval, install a pond adjacent to the development at no additional cost to the project. After discussing the legislative history of Sec. 666(a)(1)(B), see 37 F.3d at 851-52 (as is evident from the circumstances surrounding its adoption, Sec. 666's manifest purpose is to safeguard finite federal resources from corruption and to police those with control of federal funds), and noting that Rooney was a private individual rather than a public official, and that the only government favor that Rooney had within his control to dole out was the proceeds of a FmHA loan upon which he himself would remain liable, id. at 850, we concluded, inter alia, that the Congressional concern underlying the enactment of Sec. 666, i.e., the preservation of federal funds, was not implicated by Rooney's conduct, see id. at 854. We also noted that the choice proffered by Rooney to the contractor could be viewed as an ordinary business transaction, which Sec. 666(a)(1)(B) was not meant to encompass. 51 In sum, we have held that in order to establish an offense under Sec. 666(a)(1)(B), the government is not required to trace the agent's corrupt expenditures to the federal program funds; but we have held that there was no violation of that section where the preservation of federal funds was not implicated by the defendant's conduct; and we have expressed doubt as to whether Sec. 666(a)(1)(B) would be applicable where the conduct at issue affects neither the federal program funds received by a protected organization nor the receiving organization's financial interests.
52 In the present case, the government presented evidence to show that, without the legislative exemption, Fleet would have been required to divest itself of UBT promptly and that selling off UBT would have cost Fleet substantially more than $5,000. Thus, the jury could have concluded that the exemption enacted by the Connecticut legislature had a value of more than $5,000 to Fleet. Fleet, however, was a private entity, and no evidence was presented that it received federal funds or that it had any role, direct or indirect, in administering or recommending the expenditure of any federal program moneys. Though it is undisputed that the State of Connecticut, during the pertinent period, was a recipient of more than $10,000 in federal assistance, the government did not show that the exemption legislation had any financial value to the State of Connecticut; nor did it show that the exemption had any connection whatever with a federal program. In short, insofar as the evidence presented in this case reveals, the exemption affected neither the financial interests of the protected organization nor federal funds directly. 53 Plainly some briberies of state officials may come within the scope of Sec. 666(a)(1)(B), but we infer from the legislative history that that section was not designed for the prosecution of corruption that was not shown in some way to touch upon federal funds. Accordingly, we conclude that the government failed to prove that Foley was guilty of an offense under Sec. 666(a)(1)(B), and his conviction on the bribery count must be reversed.