Racketeer Influenced and Corrupt Organizations Act

“ With cases where state regulation supplied the motive for the direct commission of fraud we are not directly concerned here, but in all the cases where the collusion of inspectors is involved we have to note that government regulation of business has made easy the transmutation of what before was merely corrupt and morally offensive into direct bribery. And from the point of view of a venal official or political machine the extension of state control means the widening of the opportunities for levying tribute. ”

“ In some American cities charges have even been made that corporate interests which did not enjoy the favour of the gang or boss have contributed largely to “anti-graft” campaigns, their real purpose being to place themselves in a position to claim the favour of the “honest” administration elected by their efforts. Knowledge of corrupt transactions, discretely hinted at in the press, has been used in other instances as a sort of political blackmail to [Pg 289] club the gang or boss into the granting of privileges to applicants who had hitherto been denied. ”

“ Now that same Committee would have this court find it a victim, and allow it to recover from its creator by using civil RICO. Such a plaintiff, which was never legitimate or innocent, however, was not the intended beneficiary of the RICO statute.
Applying RICO to disputes between two wholly illegitimate enterprises would lead to results clearly not intended by Congress. "Congress was aware that organized crime operates by infiltration of legitimate enterprises through a pattern of racketeering activity." ”

“ The majority styles this novel interest as simply a different kind of corruption, but has no support for its assertion. While it is questionable whether such imprecision would suffice to justify restricting political speech by for-profit corporations, it is certain that it does not apply to nonprofit entities.
The evil of political corruption has been defined in more precise terms. We have said: "Corruption is a subversion of the political process" whereby " [e] lected officials are influenced to act contrary to their obligations of office by the prospect of financial gain. ”

“ The public hardly realizes the infamous character of much of our state legislation. It is a frequent practice of legislators to introduce bills injuriously affecting corporations for the mere purpose of blackmail. The corporation is expected to pay tribute in the shape of cash bribes to the members of the committee having the bill in charge ”

“ No doubt evasion of this sort is possible, but it will hardly become common because it involves the collusion of so many men not only in the management of the corporation but also in the party management, all of whom will fully understand the criminal nature of the transaction. On the corporation side, moreover, the act remains a gift, and withal a gift of a much more hazardous nature and one much less certain to bring returns than such gifts are reputed to have been in the past. ”

“ More than one American State is literally governed by unprincipled corporations, which not only defy the legislative power, but have, too often, corrupted even the administration of justice. The tremendous power of these associations is due not merely to pecuniary corruption, but partly to an old legal superstition—fostered by the decision of the Supreme Court of the United States in the famous Dartmouth College case—in regard to the sacredness of corporate prerogatives. ”

“ Additional investigations coordinated by our corporate fraud task force are underway across the country. It should be clear to every shareholder, investor and employee in America that this administration will investigate, arrest and prosecute corporate executives who break the law. ”

“ There can be no bribe-taker without a bribe-giver, but corruption can and frequently does exist even when there are no personal tempters or guilty confederates. A legislator may be approached by a person interested in a certain corporation and may be promised a definite reward for his favourable vote on a measure clearly harmful to the public interest but calculated to benefit the corporation concerned. If the bargain be consummated it is unquestionably a case of bribery, and the action involved is also corrupt. ”

“ Like any individual or corporation under the same circumstances it is liable to be victimised by practices designed fundamentally to make it sell cheaply or buy dearly,—both to the advantage of corrupt outside interests. Franchise grabbing is perhaps the most magnificent single example of the difficulties the state encounters when it appears as a vendor. ”

“ Those members of Congress who supported the amendment were concerned with corruption of collective bargaining through bribery of employee representatives by employers, [7] with extortion by employee representatives, [8] and with the possible abuse by union officers of the power which they might achieve if welfare funds were left to their sole control. ”

“ It means that the use of patronage by members of Congress is essentially corrupt and corrupting. It is not that gross form of corruption which consists in passing bribe money from hand to hand. But it is that more dangerous and demoralizing, because more insinuating, corruption which wraps itself in the garb of party zeal, of gratitude, of generous sympathy, and in this disguise is received and countenanced among respectable people. Never has there been a more elaborate combination of self-deception and deception of others. ”

“ The complainants furthermore aver that the railroad companies make use of their influence, as employers of large bodies of voters, to corrupt Legislatures and courts that they may remain unpunished in committing acts of fraud and rapacity, and defeat attempts by the State to exert the control which the highest authorities declare to be within its rightful powers. ”

“ Although one of the classic and recurring activities of the Communist Party is the infiltration and subversion of other organizations, either openly or in a clandestine manner, the Court holds that even where a legislature has evidence that a legitimate organization is under assault and even though that organization is itself sounding open and public alarm, an investigating committee is nevertheless forbidden to compel the organization or its members to reveal the fact, or not, of membership in that organization of named Communists assigned to the infiltrating task. ”

“ One might feel greater confidence in the restraining influence of party centralisation were it not for the fact that the more dangerous to party success are the forms of corruption which an organisation tolerates the more lucrative they are apt to be. Though its sins be as scarlet still they produce funds sufficient to buy indulgences and to leave a handsome profit over. In connection with business regulation, for example, bribery in any considerable amount is not possible until legislation is enacted or close at hand. ”

“ They may have succeeded in securing all the favours which they need, and yet stand in constant terror of blackmail and strike legislation by their former political confederates or of exposure by reformers. Finally, although they may be so fortunate as to escape indictment for particular misdeeds, the general belief that a business has been corruptly managed is likely to bring about a demand for legislation affecting its conduct which, temporarily at least, may reduce its profits and the value of its securities very materially. ”

“ As the Court sees it, you can't get agency and conspiracy separated in this case. A corporation may be a member of a conspiracy if its officers and agents take part in it and it furthers the conspiracy. You look to the evidence and see if it preponderates as to these organizations. Was there an agency that bound the National Association * * *? ”

“ Congress should examine the methods by which corruption flourishes and the means to detect and deter the financial misconduct that fuels this driver of global instability. Congress should monitor government efforts to enforce United States anti-corruption laws and regulations. ”

“ There is no allegation that the directors and managing officers are incapacitated from acting because their interests are adverse to the corporation or its members, or that their action should be interfered with because they are purposing to exercise their powers fraudulently or otherwise in violation of their trust. ”

“ The responsibility is on the dishonest and incapable men whom the American public elects to office, and who under the specious plea of protecting the rights of the plain people levy blackmail on corporate interests. Corporations do not wish to bribe, but they are forced to do so in self-defence.' There! ”

“ If, nevertheless, grabs are permitted by the machine, the boodle must be sufficient to pay both for the personal services involved and to repair any resulting damage to party prestige at the next election. Of course many citizens are apathetic with regard to such abuses or even ignorant of their existence, and there are others who are so involved in corrupt practices, particularly in connection with tax dodging, meter fixing, and the protection of vice, that they feel themselves allied in interest with the party organisation and accordingly vote its ticket. ”

“ It has the effect of converting a municipal organization into a trading company, and puts it in the power of corrupt officials to involve a political community in irretrievable bankruptcy. No such power ought to exist, and in our opinion no such power does legally exist, unless conferred by legislative enactment, either express or clearly implied. ”

“ When you have a weak administration with feeble powers and resources and strong unscrupulous private corporations seeking to override the law and public welfare, the possibilities of bribing are at the highest point. In a community given over to the pursuit of gain, powerful private enterprises will resort to corruption to get and protract franchises, to evade penalties, to postpone expropriation, and they will do it systematically and successfully. ”

“ The use of such means and such agents will have the effect to subject the State governments to the combined capital of wealthy corporations, and produce universal corruption, commencing with the representative and ending with the elector. ”

“ Proof of membership in a blacklisted organization, or of association with its members, can weigh heavily against a government employee's loyalty. Thus an employee may lose his job because of the Attorney General's secret and ex parte action. ”

“ The Anti-Racketeering Act condemns the obtaining or conspiracy to obtain the payment of money or delivery of property by 'the use of * * * force, violence, or coercion * * *.' To this definition of the offense Congress added two-and only two qualifications. It does not embrace the 'payment of wages by a bona-fide employer to a bona-fide employee', and the provisions of the Act are not to be applied so as to 'affect the rights of bona-fide labor organizations in lawfully carrying out the legitimate objects thereof, as such rights are expressed in existing statutes of the United States'. ”

“ Any legitimate business not "cornered" or controlled by combinations or rings can be successfully prosecuted, and to say, as does The Nation in substance, that if railroad companies are forbidden to act dishonestly and corruptly, no more railroads will be constructed, is an admission that the whole system is a fraud, and is a strong argument in favor of immediate, prompt, and efficient action on the part of state legislatures and of the courts. ”

“ The corruption begun in the electorate, has spread beyond the political system and has reached and invaded business life. This progress is so easy to trace that every business man in the country is familiar with it. Political leaders and bosses are purchasable and so are often machine-made legislators. Hence the two-fold evil, on the one hand the bribery of legislators and public officials, and on the other, threats and acts of oppression by the latter so as to compel business to pay tribute. ”

“ It should be clothed with broad preventive powers to forestall the commission of graft and corruption and should be endowed with sufficient per­sonnel to watch government corporations, banks, financial institutions, tax collecting offices and agencies, offices dis­pensing privileges, franchises, permits, licenses, quota alloca­tions and the like; and with such other offices as may be determined by the Commission.
Nothing will satisfy our people less than a total war against corruption. I have full faith that Congress will rise equal to the task demanded by the situation. ”

“ Even those of its business men who are engaged in legitimate pursuits are constant sufferers from the general neglect of administrative duty, and sometimes even from the extortionate practices, of its corrupt government. ”

“ The corruption of judges and juries and the bribing of legislators should be more abhorrent than larceny itself to every captain of industry and all corporate officials, who should have equal respect for the truth and their own honor. Great wrongdoers should be no more exempt from punishment than small offenders and mere millions should furnish no protection to them. ”

“ Is it necessary even to observe that the particular consequence of fraud in this man might, it is true, be but the ridding his employer of superfluities, scarcely missed, for the relief of most urgent want in two or three individuals; but the general consequences of fraud and treachery would be the disorganization of all society? ”