ILLINOIS TAKES THE LEAD IN COMBATTING COMPUTER CRIME Mr. PERCY. Mr. President, over the last several years, I have become concerned with the rapid growth of computer crime in the United States. Thus, it was my great pleasure to join with my colleague, Senator RIBICOFF, in June 1977 In Introducing S. 1766, the Federal Computer Systems Protection Act. This is the first Federal legislation specifically designed to prohibit the misuse of computers owned or controlled by the US. Government, financial institutions, or corporations operating in or affecting interstate commerce. Although that measure did not become law in the 95th Congress, hearings on the bill were held in June 1978 in the Criminal Justice Subcommittee, ably chaired by Senator BIDEN. In the 96th Congress, we have again introduced the measure, now S. 240, with certain re visions suggested by the Department of Justice. Senator BIDEN, and with other members We have continued to work closely with of the Criminal Justice Subcommittee, particularly Senator HATCH and Senator LAXALT. We all want to make certain that S. 240 accurately and effectively reflects the Federal Government's vital interest in stopping computer crime, and in protecting the integrity of the business and financial transactions of this country. I believe we have been successful in that regard. I look forward to early consideration of this measure by the full Judiciary Committee so that the Senate will have the opportunity to take a firm and necessary step in the fight against white collar crime, The legislation originates from a study released in March 1977 by the Governmental Affairs Committee which revealed the insuficient security of Government computers and the absence of adequate protection in our Federal laws against computer crime. Prosecutors have found 20th century crimes with 19th century themselves hamstrung trying to fight statutes. We are moving closer and closer to becoming a cashless society. In so doing. the potential for fraud and abuse through manipulation of computers becomes an ever greater threat. Huge sums of money are already lost each year as a result of computer crimes, with estimates ranging from $100 million to more than $3 billion. And the chances of getting caught are minimal. A few States have begun to take action. I am proud to say that Пlino's is among them. The Illinois State Legislature has recently passed and Governor Thompson has signed a computer crime law. In many of its provisions, it is similar to S. 240. I ask unanimous consent that the text of the Illinois act be printed in the United States Department of Justice ASSISTANT ATTORNEY GENERAL CRIMINAL DIVISION 5 NOV 1979 Honorable Robert F. Drinan Chairman, Subcommittee on Criminal Justice of the House Judiciary Committee House of Representatives Dear Congressman Drinan: I understand that in connection with the Subcommittee's consideration of the Department of Justice's proposals for additional statutory language to cover federal program theft, fraud, and bribery, your staff has suggested that it would be desirable for the Department to furnish a succinct written explanation of the need for these proposed provisions, and also to explain the derivation and effect of the phrase "person connected in any capacity with", which appears in both proposals. The need for the proposals stems from the fact that, while the federal government disburses many millions of dollars in federal funds to private organizations or units of State and local government pursuant to programs authorized or required by Acts of Congress, there is no general federal statute directed at safeguarding the integrity of these programs from theft, fraud, or bribery. With respect to theft and fraud, one of the most frequent obstacles to prosecution has been the strict legal concept of property. In numerous investigations, prosecutors have established that individuals or organizations have stolen from or defrauded a federally-supported program, but because the federal funds have been commingled with other funds or have been paid over to a public or private agency, there is no basis for prosecution since the United States no longer had title to or possession of the property. While in some instances, if the mails or an interstate facility is used to commit the offense, federal prosecution is still possible, other cases do not permit any federal cognizance of such offenses despite the fact that it is the federal government's program which is the direct victim of the theft or scheme. In many cases, state law enforcement officials have understandably declined to prosecute such offenses either because of a belief that the federal and not the state government is the injured party or as a result of local political factors. Дес Log A related situation exists with respect to the lack of ability to prosecute bribery in connection with federally-supported programs. The current federal bribery statute is written in such a way as to allow prosecution only in cases of bribery involving federal employees. We believe, however, that the United States has a strong interest in assuring the integrity of the programs to which it contributes substantial federal funds by retaining the ability to prosecute bribery involving the administrators of such programs, whether or not they are federal public servants, for acts designed to influence their administration of the federally funded projects. Although the magnitude of the problem defies quantification, we believe that the lack of any provisions in the federal criminal code addressed specifically to the program theft and bribery areas, coupled with the natural reluctance of state and local authorities to devote scarce law enforcement resources to these areas, is a substantial defect in our laws which deserves to be remedied in the course of the criminal code recodification and reform effort. With regard to the issue concerning the meaning of the phrase "person connected in any capacity with", this language is not novel and appears, for example, in two related present statutes, 18 U.S.C. 656 and 665. It has been interpreted to reach persons, such as controlling stockholders, who have a substantial influence over an organization or entity although they are themselves not officers or employees. See, e.g., Garret v. United States, 396 F. 2d 489 (5th Cir.), cert denied, 393 U.S. 952 (1968); United States v. Beran, 546 F. 2d 1316, 1320 (8th Cir. 1976), cert denied, 430 U.S. 916 (1977). In our view coverage of such persons for purposes of the proposed offenses of federal program theft, fraud, and bribery is appropriate just as Congress concluded it was in adopting the current coverage of such persons in the statutes referred to, which proscribe acts of theft from financial institutions and the C.E.T.A. Finally, I take this opportunity to note that certain necessary words were omitted from the proposal dealing with federal program theft and fraud previously sent to your staff. A correct draft, with the previously omitted matter underlined, is appended hereto. Your Subcommittee's consideration of these amendments is deeply appreciated. Appendix Insert as jurisdictional base "() the property has a value of $5000 or more and is property of an organization or a unit of state or local government receiving benefits in excess of $10,000 per calendar year pursuant to a program under the laws of the United States involving a grant, contract, insurance, guarantee, subsidy, loan or other form of federal assistance, and the offense involves property of, or utilized by, the program and is committed by an agent of or a person connected in any capacity with, such organization or unit of state or local government. United States Department of Justice ASSISTANT ATTORNEY GENERAL CRIMINAL DIVISION Honorable Robert F. Drinan Chairman, Subcommittee on Criminal Justice of the House Judiciary Committee House of Representatives Washington, D.C. 20515 Dear Congressman Drinan: 5 OCT 1979 Attached here to are three documents requested by the Subcommittee or one of its members. The first document responds to a request of Mr. Conyers concerning the amount of time it takes to initiate prosecutions for various offenses. The second and third documents respond to requests made to me during my testimony before the Subcommittee. The first of these responds to various questions posed concerning the effect of section 2121 of the draft (dealing with eavesdropping) on law enforcement. The second presents our position and alternative language on the "under color of official right" branch of the Hobbs Act. I hope that these responses aid the Subcommittee in its consideration of the draft bill. Sincerely, Enclosures Philip B. Heymann Assistant Attorney General |