The Uncertain Future of the "Demon Statute"
18 USC 666 is the latest on the SCOTUS chopping block
Over the past twenty-five years, the Supreme Court has systematically narrowed federal corruption statutes and made proving such cases more difficult. In almost every corruption case to reach the Court, the Justices have voted – often 9-0 – to limit the law and impose additional hurdles for prosecutors. (I’ve written repeatedly about this trend; if you are interested in more background, check out my blog posts here and here or my piece in the New York Times here.)
One corruption law had, until recently, avoided this trend. The statute, 18 U.S.C. §666, is usually called Federal Program Bribery, although it covers more than bribery. In light of its numerical handle, I’ve nicknamed it the “demon statute” in my white collar crime class. Section 666 is written broadly and historically the courts, including the Supreme Court, have interpreted it that way. But last spring, in Snyder v. United States, the Court began to chip away at §666 as well, holding that it applies only to bribes, not to corrupt gratuities.
Section 666 is also one of the charges in the recent indictment of New York City Mayor Eric Adams. His attorneys have raised another challenge, claiming that a bribery prosecution under §666 requires the government to prove an “official act” as defined by the Supreme Court in the Bob McDonnell case. If the “official act” argument makes it to the Supreme Court, I expect there’s a decent chance this Court will agree with Adams and further limit the statute.
In the spirit of Halloween, here’s a look at the “demon statute,” what it requires, and how it became the latest victim on the Supreme Court’s chopping block.
The Elements of Section 666
Congress passed §666 to combat graft and corruption in entities that receive federal funds. The statute prohibits theft and bribery related to such entities, if certain conditions are met.
Unlike most corruption statutes, bribery under §666 does not require that the bribe recipient be a public official. The statute prohibits bribery of private individuals as well, if they are agents of an entity that receives federal benefits.
To convict someone of accepting a bribe under §666, the government must prove:
The defendant was an agent of a private entity or a state, local, or tribal government or agency;
The defendant corruptly accepted something of value intending to be influenced or rewarded in connection with any business or transaction of that entity or government agency;
The business or transaction was worth $5,000 or more; and
The entity or government agency received more than $10,000 a year in federal benefits.
The statute also criminalizes paying the bribe, under the same conditions. (Note that it does not apply to bribery of federal officials, which is prohibited by other statutes.)
Twenty-five years ago when I first started teaching, §666 seemed relatively obscure. I didn’t even cover it in class. But as other corruption statutes have been gutted by the Supreme Court, prosecutors have increasingly turned to §666 in cases where its requirements can be met. (For example, fifteen years ago the allegations against Mayor Adams almost certainly would have been charged as honest services fraud; now, given the limits the Court has imposed on that theory, prosecutors turn to §666.)
Up until this year, the Supreme Court had given §666 an expansive interpretation. For example, in 2004 in Sabri v. United States the Court held there does not need to be any link between the bribe and the federal benefits received. If a city receives a federal grant of more than $10,000 to build a new park and someone bribes the same city’s health inspector to approve a new meat-packing plant valued at more than $5,000, that bribe may be charged under §666 even though the two events are completely unrelated. As the Court reasoned in Sabri: “Money is fungible, bribed officials are untrustworthy stewards of federal funds, and . . . money can be drained off here because a federal grant is pouring in there.” The federal government has a legitimate interest, the Court held, in ensuring the overall integrity of entities that receive federal dollars.
The Court has also broadly interpreted the requirement that the entity receive federal “benefits.” In 2000 in Fischer v. United States the defendant paid bribes to an agent of a hospital that participated in the Medicare program and received funds for treating Medicare patients. The defendant argued that those funds were not “benefits” to the hospital and that only patients received benefits under Medicare. The Supreme Court disagreed, holding that the funds qualified as benefits to the hospital because at least part of the purpose of the hospital’s participation in Medicare was to improve and maintain its own operations.
If you consider the number of state and local governments and private entities today that receive $10,000 or more from the federal government, you can see the statute has a broad reach. It potentially subjects a great deal of otherwise state, local, or private conduct to federal criminal prosecution, based on the link to federal funds.
The Snyder Decision
Last June, for the first time, the Supreme Court took steps to limit the scope of §666. James Snyder, the former mayor of Portage, Indiana, was convicted of violating §666 for corruptly receiving a gratuity after orchestrating a bid-rigging scheme to ensure that a local truck company received a $1.1 million contract from the city for five trash trucks.
After the contract was awarded, Snyder walked into the trucking company and said, “I need money.” He asked for $15,000; the company cut him a check for $13,000. When the payment came to light Snyder claimed it was for consulting services, but there was no evidence he ever did any consulting for the company. A jury found him guilty of violating §666.
At trial and on appeal Snyder argued that §666 applies only to bribes, not to gratuities. A bribe is a payment made or received to influence an official action. It involves a quid pro quo; because you gave me this, I will do that for you. A gratuity is a gift given or received because of some official action, but it does not require any intent to influence that action. It’s like a gratuity in a restaurant – a tip for services rendered. A good shorthand way to remember the difference is a bribe says “please,” while a gratuity says “thank you.”
The government’s theory was that the $13,000 Snyder received was a gratuity, a thank-you gift for steering the contract to the trucking company, and that such a gratuity violates §666.
The plain language of the statute supports the government’s position that a gratuity like Snyder’s should be covered. Section 666 prohibits accepting something of value with the intent to be “influenced or rewarded” in connection with a transaction. “Influenced” is the language of bribery, but “rewarded” is the language of gratuities. In common usage, a “reward” is something given after the fact as a thank-you for some action taken - the very definition of a gratuity. That’s what the lower courts found when they upheld Snyder’s conviction.
Justice Brett Kavanaugh
But in a 6-3 decision, the Supreme Court agreed with Snyder. Writing for the majority, Justice Kavanaugh concluded that the statute applies only to bribery, not gratuities. He argued this interpretation was supported by the “text, statutory history, statutory structure, statutory punishments, federalism, and fair notice.”
Kavanaugh claimed that the text of §666 more closely resembles other bribery statutes, despite the presence of the word “rewarded.” Structurally, he argued that criminal codes usually punish bribes and gratuities separately and provide a lower penalty for the lesser crime of gratuities. But under the government’s interpretation of §666, he noted, both bribes and gratuities would be covered by the same section of the statute and would carry the same ten-year penalty. He argued that suggests Congress did not intend to cover gratuities.
Kavanaugh also argued that a contrary interpretation would put 19 million state and local officials nationwide at risk of federal prosecution for accepting gift cards, fruit baskets, or other minor gratuities that are permissible under state law. He said that raised federalism concerns about the federal government policing conduct that should be left to the states. He also rejected the government’s claims that such trivial cases would never be prosecuted, saying such assurances are not enough when the statute provides no fair notice about where federal prosecutors would draw the line between benign gratuities and criminal ones.
In a compelling dissent, Justice Jackson (joined by Justices Sotomayor and Kagan) pointed out the flaws in the majority opinion. She said the statutory language was clear in prohibiting gratuities and that Congress had a compelling reason for outlawing conduct like Snyder’s when connected to federal funds. She argued that other elements, including the requirement of corrupt intent and the minimum dollar requirements, serve to limit the statute and “prevent prosecution of the gift cards, burrito bowls, and steak dinners that derail today’s decision.”
Justice Jackson rightly pointed out that the prosecutions for trivial gifts that the majority claimed to fear have not taken place in the decades the law has been in force. The majority’s hypotheticals had nothing to do with Snyder’s shakedown for $13,000: “there is simply no reason to think that decades after the courts of appeals first interpreted 666 to cover gratuities, reading the statute to do so now will ‘suddenly subject 19 million state and local officials to a new and different regulatory regime.’”
I think Justice Jackson got it right. The statutory language is clear: a “reward” is a gratuity. It makes sense that Congress would want to punish gratuities as well as bribes when connected to federal funds. The majority might be correct that the statute is unusually structured, but to the extent that’s a real problem (and it doesn’t appear to have been for decades), the solution would be for Congress to rewrite it, not for the Court to just eliminate half the statute. And many statutes that apply to a wide range of offenses contain a single, high maximum penalty; to the extent a gratuity is less serious than a bribe, we expect judges to sort that out and sentence accordingly.
A Dishonest Framing
My biggest quarrel with the majority opinion in Snyder is that it’s dishonest in how it frames the issue. Right up front, Kavanaugh says the issue is whether §666 punishes gratuities, “for example, gift cards, lunches, plaques, books, framed photos, or the like.” Those examples of trivial, routine gifts have nothing to do with the facts of the case. In fact, the majority hardly talks about the facts of Snyder’s case at all. It relies on scary hypotheticals about prosecutors going after teachers for accepting fruit baskets or trash collectors who receive a holiday tip, without acknowledging there are no examples of such trivial gratuities ever being prosecuted.
The majority presumably would respond that the problem is such trivial prosecutions could be brought, and that the Court “cannot construe a criminal statute on the assumption that the Government will use it responsibly.” That sounds reasonable, on its face. But the flip side, as Justice Jackson highlighted, is this: when there is a decades-long track record of prosecutors actually using the statute responsibly, why should the Court presume they won’t continue to do so?
The Court says it can’t assume prosecutors will act responsibly. But despite the lack of any evidence the statute has been abused, the Court actually adopts the opposite assumption: it assumes that if it upholds the use of the statute against someone like Snyder, prosecutors will suddenly start using the statute in bad faith to bring trivial cases.
As Justice Jackson noted, the other requirements of §666 limit the statute and prevent the trivial cases the majority claims to fear. If a parent gives a teacher a gift card or fruit basket, for example, that is unlikely to be connected to “business” or a “transaction” worth more than $5,000. Nor will either party have acted with the required corrupt intent - an evil or depraved mind conscious of wrongdoing.
It appears these additional requirements have been effective at limiting the statute’s reach. Twenty years ago in Sabri the Court recognized that these elements would prevent prosecutions based on trivial gifts of “liquor and cigars.” Today’s Court sees things very differently, and assumes federal prosecutors have nothing better to do than to suddenly begin pursuing such cases.
In this regard, the Snyder case is very similar to Fischer, the obstruction of justice case decided the same week that we have discussed here many times. In Fischer the Court also disregarded the statute’s plain language and limited the law based on fanciful fears of future prosecutions. The Court argued that if it interpreted the obstruction statute to apply to the Capitol riot, federal prosecutors might start to pursue cases of peaceful protestors and lobbyists that bore no relation to the facts of January 6 — despite the fact that the obstruction law has been on the books for more than twenty years and no such cases have been brought.
The Role of Prosecutorial Discretion
White collar statutes typically are written in broad terms and call for the sound exercise of prosecutorial discretion in deciding which cases to bring. This has always been one of the characteristics of white collar crime.
For example, suppose an employee falsely calls in sick so he can go to the baseball game. That meets all the requirements of federal wire fraud, a twenty-year felony. Prosecutors could bring such cases, but we don’t see them flooding the federal courts. Federal prosecutors have better things to do. They also recognize that would not be an appropriate use of federal prosecutorial resources. The same has been true for the past few decades under §666.
Of course, prosecutorial discretion isn’t foolproof. Occasionally a prosecutor will bring a dumb or inappropriate case. But if prosecutors abuse a statute, the courts are well-equipped to respond in individual cases. If that abuse becomes common, Congress can step in and amend the law.
I’m not saying a system that relies on prosecutorial discretion is perfect — no human system is — but history has shown that, by and large, it works pretty well. And a system that relies on professional, career prosecutors to make such decisions is preferable to one where the courts gut criminal statutes and create loopholes for the behavior of people like Mayor Snyder or the Capitol rioters based on specters of cases that don’t get prosecuted in the real world.
The Snyder decision is disappointing, but it is in line with the Supreme Court’s trend of limiting federal corruption statutes whenever it has the opportunity. And the Court may have more tricks in store for the demon statute.
The Adams Case and “Official Acts”
As we discussed a couple of weeks ago in The Weekend Wrap, New York City Mayor Eric Adams was recently indicted. The most serious charges are that he fraudulently obtained $10 million in matching campaign funds from the city through a straw donor scheme.
Adams is also charged with one count of accepting bribes under §666. The primary allegation is that in exchange for airfare, hotel stays, and other luxury travel benefits from Turkish officials, Adams agreed to pressure city Fire Department officials to speed up the approval of a new Turkish Consulate building despite concerns about its safety.
Adams’s attorneys have already moved to dismiss the §666 charge as legally deficient. They make several different arguments based on the facts of the case, but I want to focus on one legal argument: their claim that a bribery prosecution under §666 requires proof of an “official act.”
In 2016 in McDonnell v. United States, the Supreme Court ruled that bribery charges under two different statutes, honest services fraud and Hobbs Act extortion under color of official right, require proof of an “official act” as defined in the primary federal bribery statute, 18 U.S.C. §201. Relying on the precise definition in §201(a), the Court held that an “official act” is a “decision or action on any question, matter, cause, suit, proceeding, or controversy” that is pending or may come before a public official.
The Court narrowly interpreted this definition to hold that an “official act” requires proof that the official is formally exercising government power regarding some particular matter and taking steps to resolve it or move it forward — the official must be deciding or acting “on” some discrete, identifiable issue. More routine activities done in an official capacity, such as attending meetings, making phone calls to other government officials, making speeches, or hosting an event, standing alone, do not qualify as “official acts.” After McDonnell there are many things public officials do as part of their jobs that cannot support a bribery charge - even if, as in McDonnell’s case, they are done in exchange for secret, undisclosed gifts.
McDonnell is the most significant public corruption decision in recent history. It dramatically narrowed the scope of federal bribery law. Since McDonnell, almost every public corruption case now involves arguments over whether the government has properly alleged or proven “official acts” as part of a bribery charge.
But §666 was not at issue in McDonnell. It does not contain the same “official act” language from 18 U.S.C. §201 that was interpreted in McDonnell. There’s nothing to suggest that the language from §201 should be incorporated into §666.
The statutes that were at issue in McDonnell, honest services fraud and Hobbs Act extortion, also don’t contain the “official act” language. Those laws have been interpreted by the Supreme Court to cover bribery, but they contain no definition of bribery themselves. In McDonnell both sides therefore agreed that the Court should use the language from §201 to define bribery for purposes of those other statutes. (As I’ve written before, I think that was a mistake on the government’s part – a mistake they likely won’t make again when it comes to §666.)
But unlike the laws at issue in McDonnell, §666 does contain language defining the bribery offense under that statute:
Whoever . . . corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions . . .
Unlike §201, this definition of bribery does not turn on the term “official act.” There would be no reason to transport §201’s definition over into §666, which contains its own. And all that §666 requires is that the official intends to be influenced or rewarded “in connection with” any business or transaction.
The Ng Lap Seng Case
The U.S. Court of Appeals for the Second Circuit, which would hear any appeals from the Adams case, has already ruled on this question. In 2019 in United States v. Ng Lap Seng the appellate court rejected the defendant’s argument that a bribery conviction under §666 requires proof of an official act after McDonnell. You can find a post I wrote at the time here:
The court reasoned that McDonnell hinges on the precise statutory language of §201 and that §666 contains different, broader language defining the bribery offense:
[based on the] textual differences among various bribery statutes, we conclude that the McDonnell ‘official act’ standard, derived from the quo component of bribery as defined by §201(a)(3), does not necessarily delimit the quo components of other bribery statutes, such as §666.
Section 666 simply was not part of the McDonnell case and there is no reason, the court concluded, to import that holding into a different statute with different terms and requirements. Other circuit courts have agreed.
Despite the differences in the statutes and the holding in Ng Lap Seng, Adams’s attorneys argue that §666 now requires proof of an “official act” as defined in McDonnell. And they claim that the things Adams is alleged to have done, such as making phone calls to check on the status of the approval of the consulate building, do not qualify as official acts. Accordingly, they argue, the §666 count should be dismissed.
Their primary support this argument comes from Snyder itself. Justice Kavanaugh’s opinion repeatedly uses the term “official act” when describing what section 666 requires:
Section 666 of Title 18 makes it a crime for state and local officials to “corruptly” solicit, accept, or agree to accept “anything of value from any person, intending to be influenced or rewarded” for an official act.
As this quote makes clear, the term “official act” is not part of the statute that Kavanaugh is quoting. It appears to be just sloppy language; the Court uses the term “official act” generically to describe what the official does — the quo — in any bribery prosecution. It does not purport to apply that term as precisely defined in §201.
Whether the precise definition of “official act” as interpreted in McDonnell applies to §666 was not briefed or argued in Snyder and was not part of the dispute in that case. Nevertheless, the Court’s careless language has given Adams’s attorneys some ammunition for their claim that the Court in Snyder effectively adopted the “official act” requirement for §666 and implicitly overturned the result in Ng Lap Seng.
I doubt the trial court will accept this argument. The judge is going to feel bound by the Second Circuit’s holding in Ng Lap Seng absent a more clear statement from the Supreme Court to the contrary. But if Adams is convicted and appeals all the way to the Supreme Court, I wouldn’t be surprised if the Court agrees with him.
This Court seems eager to latch onto anything it can to limit the reach of federal corruption statutes. I could see a majority agreeing that, although the language in §666 is different, the concerns that underlie McDonnell about the breadth of the statute and possible abuses by prosecutors apply with equal force.
The Court could conclude that it makes sense for there to be a uniform standard for bribery across all federal corruption statutes and that the “official act” requirement should be incorporated into §666 as well. That would once again be inconsistent with the plain language of §666. But as we have seen repeatedly, this Court won’t hesitate to ignore the text and rewrite the statute if it thinks that makes sense. And if the result is to limit the scope of a federal corruption law, well, the Court considers that a treat.
These are scary times indeed for those committed to fighting corruption.