US Trends in Public Corruption Prosecutions
Public corruption is defined as the misuse or abuse of an individual’s public office for private gain. In contrast, commercial corruption is the use of a private or business position of trust for one’s personal gain. While both types of corruption involve misuse/abuse of one’s position, public corruption affects everyone because it involves public trust and/or money, whereas commercial corruption affects only those doing business with the individual or firm.
Corruption has been broadly defined as “the use of public office for private gain” or “the abuse of entrusted power for private gain” (Rose-Ackerman and Palifka 2016; Transparency International 2017; World Bank 2017). However, broad definitions are not useful to understand the exact behaviors result in liability and public corruption prosecutions. The modern era of US prosecution of public corruption might have started in 1970, when Herbert Stern, US Attorney for New Jersey, convicted on Hugh Addonizio, mayor of Newark, for conspiracy and extortion in exploiting his role as mayor to take money illicitly – a clear quid pro quo exchange of money for awarding public contracts (Stern 2012). In 1976, following Watergate, the US Department of Justice created the Public Integrity Section to oversee public corruption prosecutions across the country. This unit must review and approve prosecutions against judges, governors, and other elected officials. The 94 US Attorneys Offices, distributed across the United States, conduct all federal prosecutions. There has been a rise in prosecutions and convictions for public corruption over the last 30 years.
Most public corruption prosecutions occur at the federal level in the US. Cordis and Milyo (2016) examined all newspaper and newswire coverage from 1986 to 2014 and found a total of 17,362 cases, once they were screened to include only cases involving public employees. The overwhelming majority of cases (n = 16,452) were prosecuted in federal court. In contrast, only 910 convictions involving public corruption were brought in state courts, consisting primarily of local government employees, such as thefts by public school teachers and administrators, local police, and firefighters. The remaining portion involved state employees, most frequently motor vehicle licensing bureau clerks selling licenses, or thefts by university employees, state police, and prison guards (Cordis and Milyo 2016). Therefore, according to these data, approximately 94% of all public corruption convictions in the US occur by federal prosecutions in the federal courts (but a substantial number of those convicted in federal court involved state and local officials).
Corruption convictions in federal court, 1986–2015
When examining the record of prosecutions, four main types of illicit conduct are found: bribery, extortion, fraud, and conspiracy. Bribery, typically recognized as quid pro quo, is a common corruption offense, because it involves a voluntary exchange of a benefit to influence an official act. Both parties, the bribe giver and receiver, are liable under law. In contrast, extortion involves a threat of some kind of future harm to obtain the property (usually money). Bribery is distinguished from extortion in that bribery occurs when the payer received “better than fair treatment,” while extortion occurs when the payer must pay “just to be treated fairly.” In both cases, there is a corrupt exchange (Arrieta 2016).
Fraud occurs when either a private citizen or public official obtain government money or property using false representations. The Public Integrity Section of DOJ includes any type of fraud perpetrated against the government or its programs (e.g., false claims for medical procedures). Therefore, some of these cases more closely resemble white-collar crimes of fraud, but they are considered corruption because public funds are involved. Embezzlement of public funds occurs when a public official or public servant misuses their authority to steal money from the government. Conspiracy punishes the planning to commit a crime. It occurs when two or more persons agree to commit a crime, so it can be used for a variety of planned crimes involving multiple people, such as organized crime, corruption, and some white-collar crimes (Albanese 2015). An expansion of conspiracy law to criminal enterprises, the “Racketeer Influenced and Corrupt Organizations,” (herein RICO), was enacted in 1970, making it unlawful to acquire, operate, or receive income from an enterprise through a pattern of racketeering activity. An individual or group (an “enterprise”) who commits two or more indictable offenses (“racketeering activity”) within a 10-year period (a “pattern”) is subject to 20 years’ imprisonment, fines up to $25,000, and forfeiture of any interest in the enterprise, as well as civil damages and dissolution of the enterprise itself (Urbina and Kreitzer 2004). The RICO law targets the enterprise behind the illicit behavior and was designed to combat organized crime infiltration of legitimate businesses, although it has since been employed to prosecute criminal activities by government agencies and corporations (Blakey 2006).
18 USC 201 – Bribery of public officials and witnesses
18 USC 666 – Theft or bribery in programs receiving Fed funds
18 USC 1951 – Hobbs Act (extortion)
18 USC 1001 – Fraud/false statements or entries generally
18 USC 641 – Public money, property or records
18 USC 1341 – Mail Fraud – frauds and swindles
18 USC 371 – Conspiracy to commit offense or to defraud US
18 USC 287 – False, fictitious or fraudulent claims
18 USC 1343 – Fraud by wire, radio, or television
18 USC 1962 – RICO – prohibited activities
Behaviors underlying federal prosecutions
Connection to corruption
Bribery is a voluntarily exchange (solicitation or acceptance) of any benefit to influence an official act (18 USC 201, 666)
A corrupt exchange between a public official and a private business or citizens that benefits both parties. It subverts a lawful process (e.g., pay to avoid a ticket, pay to get a permit, pay a kickback to obtain a government contract).
Fraud is theft by deception, often funds obtained or misused without authorization for their personal enrichment or benefit (18 USC 1001, 641, 1341, 287, 1343)
The government is deceived in obtaining public funds through false documentation, false statements, or purposeful avoidance of procedures that are required by law.
Extortion involves obtaining property, using threats of future harm (18 USC 1951)
The person soliciting the property is liable due to the threats made to extract payment from the victim who has been placed under duress.
Conspiracy and racketeering - organized or ongoing efforts to violate the law in systematic fashion (USC 371 and 1962)
Conspiracy punishes the planning to commit a crime by two or more persons. Racketeering targets the enterprise behind ongoing or systematic criminal behavior.
Therefore, over 30 years of federal prosecutions indicate that these cases rely on a small number underlying forms of misconduct: bribery, fraud, extortion, and conspiracy (Albanese et al. 2018).
Types of Corrupt Behavior and Governmental Level
Public corruption behaviors appear to vary by level of government. For example, in cases involving federal defendants, the mixture of charges brought differs than for cases involving state and local public corruption defendants. Fraud-related corruption charges underlie most cases overall, as well as in cases involving federal defendants. At the state and local level, however, fraud behaviors were second most common after bribery (in local cases) and extortion (in state cases). The lower-levels of fraud-related corruption at the state and local level may be the result of DOJ’s Public Integrity Section’s inclusion of frauds perpetrated against federal programs, including no public official or employee participated in the fraud. Bribery was the second most common underlying behavior overall but was found to be the most common charge in local cases. At the state level, corruption charges involving extortionate behavior were the most common. Overall, 54% of corruption cases over 30 years cases involved federal defendants, 30% involved local defendants, and 16% involved state-level defendants.
Federal defendants were most often charged with following offenses (in order of most to least): bribery, fraudulent statements/entries, theft of public funds, conspiracy and fraudulent claims. However, state and local defendants were more likely to be charged with a different ordering of offenses: extortion, theft from government programs, mail fraud, and conspiracy for state defendants and theft from government programs, extortion, mail fraud, and bribery for local defendants in the last 30 years.
Though federal corruption cases have been brought under 58 lead charges over the last 30 years, only 10 of these charges account for nearly 60% of all cases made. These 10 charges target four types of underlying behavior, which, together, form the operational meaning of corruption in practice. At the federal level, fraud is the most common corrupt behavior prosecuted. In contrast, state and local officials more often accept money or gifts for actions either through bribes (offered at the local level) or extorting payments for access (at the state level). The majority of prosecutions are occurring against public officials at the state and local level. In addition the level of the prosecution effort against corruption has been consistent over the years with some drop-off after 2001. The drop may have resulted from a shift in resources to focus on national security after 9/11 attacks, a change in behavior as people are deterred because of high profile cases or a change in behavior to avoid detection. The future of public corruption convictions may be more determinative based on the recent Supreme Court decision of McDonnell v. US that exclusively defines public corruption as the quid pro quo in the conduct of official acts which is a limited view on corrupt behaviors (136 S. Ct. 2355, 2016). Court decisions have also curtailed use of the honest service doctrine in the federal mail fraud statute to prosecute state and local officials on public corruption charges. In addition, Congress has been reluctant to enact statutes that provide clear authority to investigate state and local officials for offenses that do not involve a direct quid pro quo (Heilman 2017). It remains to be seen whether the federal prosecution effort will be sustained in the face of increasing judicial and legislative limitations, or whether corruption prosecutions will occur more often at the state level.
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