Public corruption in Massachusetts tends to wax and wane towards a tipping point every few odd years - typically after a notable public official becomes embroiled in a corruption scandal and the lurid details of which are dragged out in the press for all to see. One need not look much further than to the State House for a prime example, but municipal workers have not escaped similar ensnarement -- Boston City employees raked in an impressive 562 convictions between 1976 and 2010.
Yet, despite officials' pledged commitment to statewide ethics reform and the accompanying proposals to reign in public corruption, often left unaddressed is the problematic culture that enables corruption in the first place - a culture pervasive in its transference from the public sector into the private sector. One not even need be a public employee to fall under one of the corruption statutes. Indeed, almost anyone can fall victim to a public corruption scheme, and, worse, one might not even realize the severity of such a predicament before he can remove himself from it.
What Qualifies as Public Corruption?
Public corruption broadly entails the breach of public trust or abuse of position by federal, state, or local officials and their private sector accomplices. Instances of public corruption most familiar generally include charges of embezzlement, kickbacks, bribes, perjury, and/ or extortion, but prosecutors' reach is not limited to such obvious quid pro quo scenarios. Public Corruption extends to any activity that, either by design or in effect, defrauds the Government of public funds.
Who is at Risk of Investigation for Public Corruption?
Public sector workers employed by a Municipality, State or Federal Government(s), or any Agency setup to serve therein are the most readily identifiable targets for public corruption investigations. For example, investigators may also reach individuals serving on a local school board, zoning board, or planning committee.
Family members and friends of public employees may also be subject to scrutiny in a public corruption investigation. While these individuals may have acted in the same manner or received the same benefits absent this relationship, favorable treatment granted to such individuals may raise alarm on the part of investigators.
Finally, where federal funds are involved-even tangentially-- a position of public trust may be imputed onto nonprofit and private sector employees, which renders them "public officials" within the meaning of the Federal Bribery and Gratuity Statute. In essence, public corruption investigations can target any individual or entity whose function necessitates dealings with government or agency officials.
Who Prosecutes Public Corruption?
The initial investigations may arise within the Federal Bureau of Investigation (FBI). Ongoing investigations may require the FBI partner with other agencies, including the Internal Revenue Service (IRS), the Security and Exchange Commission (SEC), the Federal Election Commission (FEC), and even the United States Postal Inspection Service may take part in the investigations. The IRS, SEC, and FEC may impose civil penalties. However, criminal prosecution will come from the Justice Department and local United States attorney's office.
What are the Penalties for Public Corruption?
Federal prosecutors may pursue charges of public corruption under the Hobbs Act, the mail and wire fraud statutes including the honest services fraud provision, the Travel Act, and the Racketeer Influenced and Corrupt Organizations Act (RICO), the Foreign Corrupt Practices Act (FCPA), and the federal program bribery statute, 18 U.S.C. § 666. Penalties vary among the statutes and include severe financial penalties, and/ or imprisonment.
How to Avoid Charges for Public Corruption?
Public officials are required by law to report all financial dealings for the purposes of conflict of interest disclosures, including the identification of external sources of income. Because these officials occupy a position of public trust, full and honest financial disclosures are of critical import as the first step to avoid charges of public corruption.
Non-government entities and private sector employees should abide by best practices in establishing and enforcing strict compliance procedures for dealings with government officials.
Often, the very existence of a compliance manual may establish good faith in the eyes of investigators. Complete and accurate recordkeeping will further support this good faith presumption for the unwitting target of a public corruption investigation.
How Do Investigators Establish the Necessary Link for Quid Pro Quo Corruption?
Quid pro quo-literally "this for that" - corruption investigations may arise from the incomplete financial disclosures of a public official. The absence of public disclosure implies a desire to conceal the official's financial stake with respect to certain official acts in an attempt to avoid detection of quid pro quo corruption.
Investigators will attempt to establish a link between the public official and the influencer, allowing inferences derived from circumstantial evidence. Investigations can look to telephone records, emails, and chats for evidence of communication. They will also look to financial transactions, such as money transfers, taking place after communication of the material, nonpublic information. Investigators can also use cooperating witnesses to provide information. In many cases, the government will attempt to secure cooperating testimony from one individual entangled in the investigation against the investigation's remaining targets.
What to do When You Learn of a Public Corruption Investigation?
Whether as the target of an FBI investigation, a witness, or upon receiving a subpoena, you may not know where to turn. Once you become aware of an investigation, legal counsel can help to make the difficult decisions in what to do next. You must decide how to respond to the company's internal investigation, and the investigating agency's inquiry. The question of cooperation with the government is a critical decision, which could lead to resolution or could expose the individual to criminal and civil liability.
Defending Charges of Public Corruption
The law surrounding public corruption and government fraud are complicated and specialized. An experienced attorney focused in this practice area will be able to clarify the issues facing a client investigated by the IRS, the FBI, or facing prosecution from the Justice Department. A dedicated lawyer can help identify the elements required for a public corruption defense, and make that case successfully in representing his client.