Opinion ID: 601815
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: 6 In urging that the district court erred, the government advances two theories: (1) TFIS received over $10,000 per year in federal benefits, or (2) TFIS is a subdivision of TDA, which indisputably receives the requisite amount of federal funding. Finding that this matter is readily resolved under the second postulation we pretermit consideration of the first. 7 The legislative history of 18 U.S.C. § 666 states that the statute was 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. 7 Section 666 provides in pertinent part: 8 (a) Whoever, if the circumstance described in subsection (b) of this section exists-- 9 (1) being an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof-- 10 (A) embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that-- 11 (i) is valued at $5,000 or more, and 12 (ii) is owned by, or is under the care, custody, or control of such organization, government, or agency; or 13 (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....shall be fined under this title, imprisoned not more than 10 years, or both. 14 (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. 8 15 The government contends that TFIS is a subdivision of TDA and, for purposes of jurisdiction, we may look to the federal assistance TDA receives. We find this contention persuasive with a refocusing. Taking the words of the statute at face value it is apparent that for purposes of the conduct proscribed by section 666(a)(1) the defendant must be an agent of the agency receiving federal benefits in excess of $10,000. 9 The critical inquiry is not the role of the TFIS and whether it interposes a separate entity shielding any violations of this statute, but the role of the defendants. Specifically, we must determine whether the defendants were agents of TDA as they performed their functions for TFIS, the creation of TDA and the USDA. 16 We have recognized that in enacting section 666, Congress has cast a broad net to encompass local officials who may administer federal funds, regardless of whether they actually do. 10 Although the conduct prohibited by section 666 need not actually affect the federal funds received by the agency, 11 there must be some nexus between the criminal conduct and the agency receiving federal assistance. In Westmoreland we held that so long as the agency received $10,000 per year from a federal assistance program, its agents are subject to section 666. 12 The particular program involved in the theft or bribery scheme need not be the recipient of federal funds. 13 17 Of critical importance to our inquiry, section 666 defines government agency thusly: 18 [T]he term government agency means a subdivision of the executive, legislative, judicial, or other branch of government, including a department, independent establishment, commission, administration, authority, board, and bureau, and a corporation or other legal entity established, and subject to control, by a government or governments for the execution of a governmental or intergovernmental program. 14 19 TFIS and TDA are both indisputably government agencies as thus defined. TFIS is a legal entity established and subject to control by the federal and Texas state governments for the execution of an intergovernmental program. TDA is a subdivision of the executive branch of Texas state government. If in their roles at TFIS, McRae and Quicksall were agents of TDA, then TDA is a relevant agency for purposes of section 666(b). 20 To determine whether TFIS employees were agents of TDA, we need look no further than the cooperative agreement creating TFIS. TFIS operated under the joint supervision of USDA and TDA. In enforcing state produce regulations, TFIS performed discretionary functions on behalf of TDA. 15 TFIS enforced regulations promulgated by TDA and the funds collected for those regulatory functions were remitted directly to the state treasury. Finally, the agreement provided that upon termination, all remaining funds held by TFIS would be transferred to any successor inspection service, or if no successor was created, then all such funds or property would revert to [TDA] for its use or disposition. 16 We find that for purposes of section 666, McRae and Quicksall, in their positions at TFIS, were agents of TDA--an agency that receives more than $10,000 per year in benefits from federal assistance programs. Moeller's alleged conspiracy with them is also covered by section 666. 21 The order of the district court dismissing Counts Five, Seven, Eight, and a part of Count One of the superseding indictment is VACATED and the matter is REMANDED for further proceedings. 22 The agreement was entered under the authority of the Agricultural Marketing Act of 1946, 7 U.S.C. §§ 1621-27, and applicable Texas law. See Tex.Agric.Code art. 91.001-005.