Federal Bureau of Investigation

1
Federal Bureau of Investigation
2
What is the FBI?

• Investigates violations of federal law including
  the theft of federal funds
• Works closely with the United States Attorneys
  Office.
• Coordinates with state and local agencies to
  investigate and prosecute crimes.

3
Public Corruption

• The abuse of trust or position by an elected or
  appointed person
• Personally profiting through schemes involving an
  elected or appointed position
• Bribery, kickbacks, contracts to friends
• Acting in your own best interest and not that of
  the public

4
Obstacles

• Public corruption is not easily detected because
  it is secretive and the participants benefit with
  no clear victim
• Corrupt activity can be part of routine business
  and not apparent without inside knowledge

5

Obstacles

• Traditional White Collar Crime is uncovered
  through audits, reports from victims and routine
  investigations of bank transactions
• Public corruption is different and we rely on the
  public to report problems that might not directly
  affect them.

6
Examples of Corruption

• Sole source contracts for friends or relatives
• Contracts that lack a competitive bid process
• Kickbacks paid to contracting officers for
  issuing contracts

7
HONEST SERVICES FRAUD

• Scheme to Defraud in Honest Services Context
• Misuse of Position for Gain
• The Function of State Law
• Concealed Financial Interest

8
Bribery of Federal Officials18 U.S.C. 201(b)

• Payer must offer or give a thing of value to a
  public official with intent to influence.
• Public Official must solicit or accept a thing of
  value in return for being influenced.

9
Gratuities to Federal Officials18 U.S.C.
201(c)

• A thing of value is offered or given to a public
  official for or because of any official act
  performed or to be performed.

10
Federal Program Fraud18 U.S.C. 666

• Government or organization receives 10,000 in
  federal assistance
• Bribery relates to a transaction or series of
  transactions involving 5,000 or more
• Agent of the government/organization solicits or
  receives a thing of value
• Acts corruptly, intending to be influenced or
  rewarded

11
Hobbs Act Extortion Under Color of Official
Right, 18 U.S.C. 1951

• The Government need only show that a public
  official has obtained a payment to which he was
  not entitled, knowing that the payment was made
  in return for official acts.
• Effect on Interstate Commerce

12
Conflict of Interest18 U.S.C. 208

• Executive Branch official or employee
• Participates personally and substantially
• In a matter in which any of the following has a
  financial interest
• the official, spouse, or minor child
• A general partner, or an organization with whom
  the official is employed or is negotiating for
  employment

13
Federal Government Official

• Jane is the GSA official in charge of procurement
  of construction services for all federal
  buildings in Texas. John runs Acme Construction
  Company, which specializes in small scale office
  renovations. Acme operates throughout the South
  and is respected for the quality of its work and
  known for its low prices. Several years ago when
  Jane was promoted to her current position, John
  remembered that they had gone to college
  together. John invited Jane to dinner at
  Houstons most luxurious restaurant to celebrate
  Janes new job. At dinner, John asked Jane
  whether she could help Acme do more business
  renovating federal office buildings. Jane said
  she would see what she could do.
• Over a five-year period, John made it a point to
  treat Jane to a nice dinner about once a month.
  Usually both Jane and John also brought their
  spouses. John also remembered Janes birthday
  each year usually with a 200 Nordstrom gift
  certificate. On about 10 occasions during the
  same time period, Johns company submitted bids
  to renovate Texas federal buildings. On each of
  these occasions, John called Jane and told her he
  hoped that Acme would get the contract. Jane was
  the deciding official on these contracts. Acme
  was awarded 8 of the 10 contracts it bid on
  it was the low bidder on 4 of those contracts.
  The contracts awarded to Acme totaled 750,000
  and Acme made 500,000 in profits from these.
  After the largest of the contracts was awarded
  for 300,000 John surprised Jane by telling
  her he had arranged a three day all expense paid
  golf trip for the two couples to Pebble Beach.
  Half of the contract awards took place more than
  five years ago.
• On two occasions, John also asked Jane to
  recommend Acme to other prospective clients.
  Jane called her GSA counterpart in Alabama and a
  friend of hers who is a City of Houston
  procurement official, and sang the companys
  praises. Acme then bid on, but did not win
  business in Alabama it did get a 1 million
  sole source contract from Houston.

14
The Elements of Fraud

• The crime of mail or wire fraud has three
  elements
• (1) The defendant knowingly devised or
  participated in a scheme to defraud
• (2) The defendant did so knowingly and with the
  intent to defraud and
• (3) For the purpose of carrying out the scheme or
  attempting to do so, the defendant used or caused
  the use of the United States mails or a private
  or commercial interstate carrier.

15
Concealed Financial Interest

• There are two types of honest services fraud
  either bribery of the official or failure to
  disclose a conflict of interest, resulting n
  personal gain.
• Conflict of interest gives rise to fraud when
  an official fails to disclose a personal interest
  in a matter over which they have decision-making
  power and the public is deprived of its right
  either to disinterested decision making itself or
  . . . to full disclosure as to the officials
  potential motivation behind an official act.

16
Concealed Financial Interest (contd)

• Where a public official conceals a financial
  interest in violation of state criminal law and
  takes discretionary official action . . . that .
  . . will directly benefit the concealed interest,
  the official has deprived the public of his
  honest services, regardless whether the concealed
  financial interest . . . influenced the
  officials actions.

17
Where to Report

• Your local office of the Federal Bureau of
  Investigation
• Seattle Division [phone]
• Olympia Resident Agency [phone]

18
What Can I Do?

• Look at things differently
• Get involved in your community
• Report your suspicions early even if second-hand
  information

19
Most Common Myths

• There is no corruption in Washington State
• If I know something, then the FBI must already
  know it
• The victim of corruption always reports the
  problem
• Business as Usual mentality