In sum, Mr. Chairman, we do recognize that some legislative action should be taken to limit the availability of private civil RICO actions. Subject to our request for changes in these two bills that affect the Government's criminal and civil RICO actions, and to our reservation about some of the provisions affecting private actions, we have no serious objection to either of these bills, although we prefer the more straightforward prior conviction approach of H.R. 4923. Mr. Chairman, that concludes my remarks, and we would be glad to answer any questions which the subcommittee might have. [The prepared statement of Mr. Keeney follows:] STATEMENT OF JOHN C. KEENEY DEPUTY ASSISTANT ATTORNEY GENERAL CRIMINAL DIVISION Mr. Chairman and Members of the Subcommittee, it is a pleasure to be here today to discuss with you H.R. 4923 and H.R. 4920, two new proposals to amend the criminal and civil provisions of the RICO statute. Before providing our comments on these two bills, I would like to make a few general remarks about civil RICO reform. Under the current criminal code, two of the most powerful and effective statutes are RICO and CCE (the Continuing Criminal Enterprise, or drug kingpin, statute). Since RICO is broader in scope and has impact on private as well as governmental litigation, it has been widely used. numerous requests in recent years to cut back, or even eliminate, private civil RICO actions. The United States Supreme Court, in 1985, implied that Congress might wish to consider some changes Congress has received in private civil RICO. 2/ Although some legislative proposals in the past have sought such changes only in the principal civil RICO provision (18 U.S.C. Section 1964), some current recommendations would spill over into the criminal RICO provisions by redefining such terms as "enterprise" and "pattern of racketeering." 1/21 U.S.C. S 848. 2/The Court noted: "It is true that private civil actions under the statute are being brought almost solely against [legitimate businesses], rather than against the archetypal, intimidating mobster. Yet this defect--if defect it is--is inherent in the statute as written, and its correction must lie with Congress." (Footnote Continued) -2 Today, I wish to emphasize two points at the outset. First, the Federal Government needs a strong RICO statute, in its criminal and civil forms, if our recent successes against organized crime are to continue. Second, we support the Subcommittee's efforts to identify and correct problems in the civil RICO arena. I. THE NEED FOR A STRONG RICO STATUTE The Department has achieved unprecedented successes against organized crime in recent years. Results against La Cosa Nostra (the LCN) have been particularly satisfying. The government has used RICO to dismantle organized crime families around the country. In the 1980s, we have secured RICO convictions of the heads and principal lieutenants of LCN families in Boston, Chicago, Buffalo, Kansas City, Cleveland, Los Angeles, New Orleans, Philadelphia, Rochester, and four of the five LCN families in New York City. This list does not include dozens of additional RICO convictions of organized crime members and associates. In most of these cities, several RICO prosecutions have been brought as part of a unified campaign. A few examples should demonstrate, I believe, how important RICO is to the government and why any legislative cutback in RICO should be confined to private civil RICO suits. (Footnote Continued) Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 499 (1985) (footnote -3 Perhaps the sincerest endorsement of RICO since it was enacted came in 1981 from none other than Gennaro Angiulio, boss of the Boston LCN leadership. In United States v. Angiulo,3/ the hierarchy of the Boston crime family (including Angiulo, his counselor, and several capos) were convicted of RICO in 1986, after an eight-month trial. At the time of the electronic surveillance of the Angiulo defendants, the landmark Turkette case Court.5/ case4/ was before the Supreme Mr. Angiulo and his associates, discussing a newspaper article saying that, under Turkette, RICO only applied to legitimate businesses, had the following to say about the RICO statute: "We're off the hook. We can do anything we want. They can stick RICO. I wouldn't be in a legitimate business for all the money in the world to begin with." 3/Crim. No. 83-235 (D.Mass). 4/United States V. Turkette, 632 F. 2d 896 (1st Cir. 1980), rev'd, 452 U.S. 576 (1981). 5/In Turkette, the Supreme Court held that an organized crime group could constitute a RICO "enterprise." The Turkette case came out of Boston, where the Court of Appeals for the First Circuit had ruled that a RICO enterprise must be a legitimate entity. Thus, the outcome of Turkette was of great interest to the Angiulo group, which knew it was a potential RICO target. -4 In our testimony on civil RICO last October before the Senate Judiciary Committee, we described some of the more dramatic successful uses of RICO in recent years. That list included: - the La Cosa Nostra (LCN) "Commission" case, involving the ruling body of New York City's five LCN families; the "Pizza Connection" case, resulting in convictions, after more than a year of trial, of 30 heroin traffickers who imported tons of heroin into the United States; - the convictions of 15 defendants associated with the Bonanno LCN family and the entire leadership of Teamsters Local 814 in Brooklyn; - the convictions of a Teamsters official and persons associated with the Lucchese LCN family for labor racketeering involving international freight forwarders at New York's Kennedy Airport; - the convictions of mob bosses Carl Civella and Carl DeLuna in Kansas City on charges involving skimming from several Las Vegas casinos; and |