Opinion ID: 710876
Heading Depth: 3
Heading Rank: 2

Heading: Judicial Interpretation of Sec. 666

Text: 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.