Federal Bureau of
Investigation
What is the FBI?



Investigates violations of federal law
including the theft of federal funds
Works closely with the United States
Attorney’s Office.
Coordinates with state and local agencies
to investigate and prosecute crimes.
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
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
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.
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
HONEST SERVICES FRAUD
 “Scheme
Context
 Misuse
to Defraud” in Honest Services
of Position for Gain
 The Function of State Law
 Concealed Financial Interest
Bribery of Federal Officials
18 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.
Gratuities to Federal Officials
18 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.”
Federal Program Fraud
18 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
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
Conflict of Interest
18 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

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 Houston’s most luxurious
restaurant to celebrate Jane’s 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 Jane’s birthday each year – usually with a $200 Nordstrom gift
certificate. On about 10 occasions during the same time period, John’s 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 company’s praises. Acme then bid
on, but did not win business in Alabama – it did get a $1 million sole source contract
from Houston.
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.
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 official’s potential motivation behind an official
act.”

Concealed Financial Interest (cont’d)
 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 official’s
actions.”
Where to Report

Your local office of the Federal Bureau of
Investigation
Seattle Division (206) 622-0460
Olympia Resident Agency (360) 352-3234
What Can I Do?



Look at things differently
Get involved in your community
Report your suspicions early even if
second-hand information
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