VII. REMEDIES AND ENFORCEMENT MECHANISMS Recommendation 24 The Commission recommends the addition of misdemeanor and civil penalties A. Present Law There are no provisions in 18 U.S.C. §§ 203-209 that specifically provide for civil monetary penalties for a violation of those statutes. With the exception of § 209 and the partners provision in § 207(g), violations of these statutes are felonies punishable by imprisonment for up to two years and a felony level fine. Pursuant to 18 U.S.C. § 3571, the fine generally may extend to any amount up to $250,000. Violations of § § 207(g) and 209 are misdemeanors punishable by imprisonment for up to one year and, pursuant to § 3571, a fine in most instances of up to $100,000. The various offenses are established if the person acted "knowingly," that is, if he merely intended to act as he did. There is no requirement, as with some criminal statutes that the individual act willfully, that is, with a bad purpose or with a deliberate intent to violate the law. B. Considerations The Commission believes that the omission of civil penalties and misdemeanor sanctions from current law impairs the effectiveness of the prohibitions in 18 U.S.C. § § 203-205 and 207-209. We therefore recommend the enactment of legislation adding these remedies to the current statutory scheme. As to civil penalties, the standard of proof should be a preponderance of the evidence, and the Attorney General should be given authority to seek such penalties in the appropriate federal district court. The penalty should extend to the greater of a specified amount or the amount of money a person receives in the course of violating the provision in question. The civil penalty should be in addition to any criminal penalty. In our view, willful violations of 18 U.S.C. §§ 203-205 and §§ 207-209 should be punishable as felonies; merely knowing violations should constitute misdemeanors. Not all violations of the conflict of interest statutes are egregious enough to warrant felony prosecutions. Yet, faced with, for example, a minor violation of one of these statutes, prosecutors now have no choice between felony prosecution and no prosecution at all. Since courts may often be unwilling to impose sentences of imprisonment for negligent violations of these sections, in many cases prosecutors will simply choose to decline prosecution. By providing alternative prosecutorial tools that can be more carefully tailored to the offense, the Commission intends to expand the number of enforcement actions. In particular, civil penalties are no less appropriate for violations of the complex regulatory scheme set forth in 18 U.S.C. §§ 203-209 than for violations of other regulatory schemes such as that in the Internal Revenue Code. Civil penalties are a particularly useful supplement to criminal fine authority because the standard of proof in a civil action, preponderance of the evidence, is easier to meet than the heavy burden in a criminal case of proving guilt beyond a reasonable doubt. Moreover, criminal conviction carries with it a stronger stigma and, in the case of a felony conviction, collateral consequences that may be unjustified in some cases as when the defendant violated the statute through understandable inadvertence. It is not uncommon for civil penalties to exist as possible sanctions for conduct also proscribed by criminal statutes. (A recent example is § 6486 of the Anti-Drug Abuse Act of 1988, Pub. L. No. 100-690, 102 Stat. 4181, which imposed a civil penalty of up to $10,000 for possession of personal use amounts of marihuana.) The Commission further believes that treatment of willful violations of 18 U.S.C. § § 203-209 as felonies and mere knowing violations as misdemeanors, appropriately distinguishes between the seriousness of these offenses. Those who deliberately ignore the statutory limits on their conduct are guilty of extremely serious offenses against the public trust. Those who are careless in their compliance are also properly found guilty of criminal conduct, but in our judgment, such conduct, to be deterred and properly punished, need not be treated as a felony. This is not to say that these offenses are not serious, but just as not every violation of the Internal Revenue Code constitutes a felony, not every violation of the conflict statutes need be a felony either. The Commission believes that a distinction based on the actor's intent is logical. H.R. 5043 in the last Congress would have adopted civil penalties and misdemeanor sanctions as outlined above for violations of the post-employment restrictions in 18 U.S.C. § 207 (as that statute would have been amended by the bill). H.R. 5043 would have made non-willful violations into misdemeanors punishable by up to one year in prison and a misdemeanor level fine. (In accordance with 18 U.S.C. § 3571, the fine for such a misdemeanor can be any amount up to $100,000.) The Commission notes that the Office of Government Ethics, the Department of Justice, and President Reagan in his veto message on H.R. 5043, all supported the creation of civil sanctions for violations of the post-employment restriction provisions. President Reagan and the Department of Justice also supported the addition of misdemeanor penalties, although the Office of Government Ethics did not take a position. The Commission agrees that civil and misdemeanor penalties are appropriate remedies for some violations of the post-employment restrictions and further proposes that these remedies should be adopted for the conflict-of-interest provisions generally. C. Alternatives Considered The Commission considered whether authorizing civil penalties and misdemeanor sanctions might be perceived as a concession that violations of these provisions are not serious matters. It should be emphasized that the recommendation is not for civil penalties or misdemeanor sanctions to take the place of a felony prosecution in every instance. Rather, these new sanctions should be available in addition to existing sanctions. In some situations, for example, it might be appropriate for a prosecutor to seek both criminal and civil penalties. On the whole, it is the Commission's judgment that the addition of these new sanctions will expand rather than reduce enforcement of 18 U.S.C. §§ 203-209 and will more likely deter individuals from violating these statutes. Recommendation 25 The Commission recommends that Chapter 11 of title 18 of the United States A. Present Law Injunctive relief is not expressly available for any of the provisions of 18 U.S.C. §§ 203-209. B. Considerations In the last Congress, H.R. 5043 contained a civil injunction provision for postemployment violations. Proposed 18 U.S.C. § 207(p) would have allowed the Attorney General to seek injunctions from federal courts to halt impending or ongoing violations. The provision was praised by President Reagan in his Memorandum of Disapproval, 24 Weekly Comp. Pres. Doc. 1561 (Nov. 22, 1988), as one that "would substantially improve the effectiveness of Federal post-employment restriction laws." The Commission agrees with this assessment. Moreover, although civil injunctive relief is particularly appropriate in halting or preventing violations of the post-employment restrictions in 18 U.S.C. § 207, the Commission believes that such relief should be available for violations of other conflict-of-interest provisions as well. Ordinarily agency disciplinary proceedings could be expected to respond to violations by current employees, and criminal sanctions are already available, but the Commission believes that injunctive relief should also be an enforcement option. Agency disciplinary proceedings are often slow, and, when high level officials are involved, may not be perceived as impartial. Moreover, the Commission notes that the conflict-of-interest provisions often present very difficult factual situations in which honest differences of opinion may arise as to whether a course of conduct violates a statute. Seeking a civil injunction is a way to resolve this question judicially without the difficulty of a criminal trial and under the less stringent burden of proof applicable to civil cases. C. Alternatives Considered The Commission considered whether injunctive relief would be seen as an unconstitutional prior restraint on speech, as some have suggested. We concluded that while abuses were possible, there was no reason to doubt that the Justice Department would be careful to use this remedy appropriately. The risk that this remedy would be improperly applied did not seem to us to be a valid reason to deprive the Justice Department of this enforcement tool. The Commission considered limiting civil injunctive relief to violations by former employees and persons who made illegal payments in violation of 18 U.S.C. §§ 203 and 209 but for the above reasons decided such relief should be available for all violations of 18 U.S.C. §§ 203-209. |