19 suit, even though the standard of proof is only a preponderance of the evidence, the government still must prove that the defendant intended to commit two or more criminal predicate offenses. We believe the issue of good-faith reliance on a regulatory ruling should be resolved in the context of determining whether the defendant had the requisite criminal intent, rather than injecting a potentially confusing affirmative defense into the equation. Section 2 of the bill adds numerous offenses to the list of RICO predicates in 18 U.S.C. § 1961(1). We have generally resisted the wholesale addition of predicate offenses to RICO, because we believe the statute should retain its original focus on crimes characteristic of organized criminal activity. As that focus becomes blurred through the addition of crimes of a different nature, there is a danger that the statute will become increasingly overextended and controversial, possibly leading to increased attacks in court and by RICO's critics. In general, there is no great need for the proposed new predicates. It would be a rare case in which an act of violence, particularly one involving murder, could not already be prosecuted under RICO or other existing federal statutes, such as 18 U.S.C. §§ 19581959. With respect to fraud, we do recognize a need to add some predicate offenses to address the widespread involvement of organized crime and other criminal influences in corrupting financial institutions. From this point of view, following is our analysis of the merits of each offense that would be added by H.R. 1046: 20 Prostitution involving minors (state law): We support this addition. - 18 U.S.C. § 32 (destruction of aircraft or aircraft facilities): We oppose this addition. The maximum prison sentence of 20 years provides a sufficient penalty for this offense, in our view. If the existing penalty is deemed to be insufficient, the better approach is to amend the statute itself to increase the penalty. - Most acts 18 U.S.C. § 81 (arson): We oppose this addition. involving arson are already predicate offenses under state law. 18 U.S.C. § 112(a), (c)-(f) and 115 (attacks on foreign and federal officials): We oppose these additions. If the conduct If not, is serious enough to result in harm to the individual, it is 18 U.S.C. §§ 510, 513 (forgery of certain securities): We support these additions. - 18 U.S.C. § 875 (a) (communications involving kidnapping): oppose this addition for the reasons stated in connection with We sections 112 and 115, above. 23 - 21 18 U.S.C. § 1030 (computer fraud): We support this addition. 18 U.S.C. §§ 1111-1112, 1114, 1116-1117 (homicide): We oppose these additions. Virtually all murders that could be prosecuted under these statutes are already covered by RICO's existing predicate offenses of state murder or under 18 U.S.C. § 1958 (murder for hire). In addition, most murders characteristic of organized crime can also be prosecuted individually under Section 1958 or under 18 U.S.C. § 1959, involving violent crimes in aid of racketeering. This proposed addition is a good example of an amendment that appears on its face to be worthwhile, but that would, in reality, unnecessarily expand RICO without a concomitant benefit to law enforcement. - 18 U.S.C. §§ 1501-1506, 1508-1513, 1515 (obstruction of justice): We support these additions. 18 U.S.C. § 2277 (explosives aboard vessels): We do not oppose this addition, although the more direct approach would be to increase the penalty for this offense. 23 We note a possible technical problem with this addition. The parenthetical description in the bill says "relating to threats and extortion," whereas 18 U.S.C. § 875(a) does not specifically deal with threats or extortion. Perhaps the intended provision is Section 875 (b), (c), or (d), or, possibly, Section 878, which is included in the Senate version of this bill, S. 438, in lieu of Section 875(a). 22 18 U.S.C. § 2318 (trafficking in counterfeit records, motion pictures, etc.): We support this addition. - 18 U.S.C. § 2331 (terrorist acts abroad): We oppose this addition for the reasons stated in connection with sections 112 and 115, above. 24 Section 134 of the Truth in Lending Act (15 U.S.C. § 1644) (credit card fraud): We support this addition. Section 5861(b)-(k) of the Internal Revenue Code of 1986 (26 U.S.C. § 5861(b)-(k)) (firearms controls): We oppose this addition. To the extent that firearms are actually used to commit violent acts, those acts are most likely reachable under RICO or under 18 U.S.c. §§ 1958-1959. The improper possession or transfer of the firearms themselves is better addressed through the existing framework of regulatory statutes. In addition, we are opposed to the provision in Section 8 of the bill that would make the limitations on private suits retroactive in some cases. Although this provision would not affect the government's use of RICO, we do not believe this 24 There is a slight technical problem with this addition. The bill inserts Section 2331 in the list of RICO predicates after Section 2320, relating to motor vehicle and motor vehicle parts; however, Section 2320 has now been re-designated as Section 2321. 23 approach comports with the American tradition of fair treatment for all litigants. New Finally, we believe one provision should be clarified. subsection 1964 (c) (1) (B) (i) would require that all RICO damages suits by the United States be brought by the Attorney General "or other legal officer authorized to sue." This last phrase is vague, and could lead to confusion. We believe it is important that all government RICO suits be brought or authorized by the Attorney General or his designee; accordingly, we would prefer that the quoted language be deleted. We express no opinion with respect to several other features of the bill that concern punitive damages for private plaintiffs, particularity of pleading, survivability of actions, and jurisdiction of state courts (new Subsections 1964 (c) (2), 1964 (c) (4), 1964 (c) (8), and 1964 (c) (9), and Section 6 of the bill). In sum, subject to the reservations expressed above, we support enactment of H.R. 1046. Mr. Chairman, that concludes my prepared remarks. I would be happy to address any questions you or the other Members of the Subcommittee may have. |