This section also contains two specific intent elements. One is encompassed in the definition of "traffic" in paragraph (1) and applies to the conduct of buying, receiving, possessing, or obtaining control of a counterfeiting or forging implement, where prosecution is dependent on the government establishing that the conduct was engaged in with the intent that the counterfeiting or forging implement be sold, transferred, distributed, dispensed, or otherwise disposed of to another person.119

The other specific intent element occurs in paragraph (2), prohibiting possession of a counterfeiting or forging implement, where successful prosecution is conditioned upon the government proving that such possession was for the particular purpose of using the implement in making a counterfeited or forged written instrument. 4. Jurisdiction

There is Federal jurisdiction over the offenses specified in this section in four situations. These provisions are substantially identical to those recommended by the National Commission,120 with one exception, i.e., the Committee has rejected as inappropriate for this offense the National Commission's provision for ancillary or "piggyback" jurisdiction.121

The first situation where Federal jurisdiction exists arises if the offense is committed within the special jurisdiction of the United States, as defined in section 203. This achieves uniform application of this section throughout the various States when such offenses are committed on Federal enclaves and affords jurisdiction over certain places of exclusive Federal cognizance (e.g., the high seas).

Secondly, Federal jurisdiction will exist where the implement is designed for or suited for the making of "a written instrument purporting to be made or issued by or under the authority of, or guaranteed by, the United States." 122

The third situation in which Federal jurisdiction exists arises where the implement is designed for or suited for the making of "a security purporting to be made or issued by or under the authority of a foriegn government." This carries forward 18 U.S.C. 488.

The final situation in which Federal jurisdiction is provided under this section exists where the implement is moved across a State or United States boundary in the commission of the offense. 123 This brings forward the jurisdictional purview of 18 U.S.C. 2314 and 2315. 5. Grading

An offense under this section is graded as a Class C felony (up to fifteen years in prison) if the implement is designed for or suited for the making of a counterfeited or forged obligation of the United States. In all other cases, the offense is graded as a Class D felony

119 See the definition of "traffic" in section 111.

120 See Final Report, § 1752 (5).

121 See the discussion of this point in connection with sections 1741 and 1742.

122 The meaning of "made or issued by or under the authority of, or guaranteed by, the United States" is explained in connection with the discussion of the jurisdictional provisions of sections 1741 and 1742, and reference is made to that discussion for an analysis of the phrase.

123 The term "commission of an offense" includes the attempted commission. consummation, and immediate flight from the commission of an offense. See section 111.

Section 1751.

(up to seven years in prison). These grading distinctions in general parallel the grading provisions for counterfeiting and forgery in the belief that the offenses covered by this section should be treated at the same level as the conduct relating to the written instruments which are made from them. The distinctions also reflect the more severe treatment in current law of offenses relating to obligations of the United States. 124

SECTION 1746. DEFINITIONS FOR SUBCHAPTER E

This section contains several special definitions applicable to the provisions of this subchapter. These definitions have been explained in the context of the substantive offenses to which they apply, and no further discussion is necessary here.

SUBCHAPTER F.-COMMERCIAL BRIBERY AND RELATED OFFENSES

(Sections 1751-1753)

This Subchapter embraces three distinct forms of bribery: commercial (section 1751), labor (section 1752), and sports (section 1753). All of these are covered to a large extent in current statutes. The proposed sections mainly clarify and, to a limited extent, expand coverage into areas where Federal jurisdiction seems plainly warranted. The sections have been drafted, insofar as is practicable, to parallel the offenses in subchapter F of chapter 13, dealing with bribery in relation to public servants.

1. In General

SECTION 1751. COMMERCIAL BRIBERY

This section carries forward those bribery offenses, not involving public servants, that are deemed by the Committee to be most serious. and to warrant felony treatment. The section will replace and somewhat expand 18 U.S.Č. 215 and 216, relating to bribery in the banking industry, 41 U.S.C. 54, relating to bribery of employees of a prime contractor or subcontractor on a contract to which the United States is a party, and 26 U.S.C. 9012 (e), relating to illegal payments in connection with campaign expenses of candidates or their committees. Other specific bribery provisions, discussed infra, are proposed to be retained as misdemeanors but transferred to other titles of the United States Code.

2. Present Federal Law

The commercial bribery aspects of Federal regulation of the banking industry are currently covered in 18 U.S.C. 215 and 216.

Under 18 U.S.C. 215, the officers, employees, and agents of banks the deposits of which are insured by the Federal Deposit Insurance

124 See 18 U.S.C. 474, 487.

Corporation, as well as certain other specified financial institutions,1 are prohibited from stipulating for, receiving, or agreeing to receive anything of value from any person, firm, or corporaton "for procuring or endeavoring to procure," for the giver or for anyone else, "any loan or extension or renewal of loan or substitution of security, or the purchase or discount or acceptance of any paper, note, draft, check, or bill of exchange by" any such bank or financial institution. The penalty is imprisonment for up to one year.

Significantly, this statute does not reach the bribe offeror, but only the recipient of the bribe, although the offering party can be punished by means of the aiding and abetting or conspiracy statutes. This statute has been held to punish receipt of a gift for procuring a loan even though the loan was completed before the gift or fee was received. Because of the inclusion of the term "stipulates for," it has also been construed to proscribe the action of a bank officer who stipulated that a commission for obtaining a loan from the bank be paid to a third party. The court found that Congress' purpose under this statute was to protect the deposits of Federally insured banks by preventing unsound and improvident loans to be made from such banks and that it was thus immaterial who received the commission.3

18 U.S.C. 216 is a somewhat broader statute that reaches payments made to employees and officials of Federal land bank institutions and small business investment companies. It punishes by up to one year in prison whoever, being an employee or official of the type described above, "is a beneficiary of or receives any fee . . . or other consideration for or in connection with any transaction or business of such association or bank, other than the usual salary or director's fee paid to such officer. . . or employee thereof, and a reasonable fee paid by such association or bank to such officer. . . or employee for services rendered." This statute also penalizes whoever causes or procures a Federal land bank institution or small business investment company to charge or receive any consideration not specifically authorized.

Experience under this statutory scheme has led to the conclusion that the above laws are inadequate and obsolete because they neither cover all of the individuals or institutions that should be covered nor all of the activities that should be illegal. As a result legislation has been recently introduced 5 in Congress that would combine 18 U.S.C. 215 and 216 into a single statute, punishing both bribe offerors or givers and bribe recipients, and expanding the institutions covered to include every financial institution the transactions of which the Federal government has a substantial interest in protecting against undue influence by bribery (e.g., in addition to those presently covered under 18 U.S.C. 215 and 216, any member of the Federal Home Loan Bank System and any Federal Home Loan Bank; any institution the deposits of which are insured by the Federal Savings and Loan Insurance Corporation; any credit union the deposits of which are insured under the Federal Credit Union Act of 1934, as amended, etc.). The Committee concurs that such extension in coverage is needed and has

1 The other specified institutions are a "Federal intermediate credit bank" and a "National Agricultural Credit Corporation." See Ryan v. United States, 278 F.2d 836 (9th Cir. 1960).

See United States v. Lane, 464 F.2d 593 (8th Cir.), cert. denied, 409 U.S. 876 (1972). 4 E.g., 18 U.S.C. 215 is limited to the procuring of loans and similar credit transactions. unlike 18 U.S.C. 216, which extends to all matters "in connection with any transaction or business" of the designated institution.

5 H.R. 6531 and S. 1428, 93rd Cong., 1st Sess. (1973).

embodied this suggested increased scope of jurisdiction in this proposed section.R

41 U.S.C. 51 prohibits the payment of any fee, commission, or compensation of any kind or the granting of any gift or gratuity, by or on behalf of a subcontractor, as defined in 41 U.S.C. 52, to any officer, partner, employee, or agent of a prime contractor holding a negotiated contract entered into with an agency or department of the United States for the furnishing of supplies or services of any kind, or to any such subcontractor either as an inducement for the award of a subcontract or order from the prime contractor, or as an acknowledgement of a subcontract or order previously awarded. Under 18 U.S.C. 54, anyone who shall "knowingly, directly or indirectly, make or receive any such prohibited payment" may be imprisoned for up to two years.

It is not necessary under 41 U.S.C. 54 to prove a specific intent to induce or influence the award of a particular subcontract, nor is knowledge by the bribe giver of the terms of the prime contract essential.3 The crime is complete with the bribe offer or acceptance and it is immaterial whether any subcontract or other benefit is awarded.9

26 U.S.C. 9012(e), which became effective in 1973, punishes by up to five years in prison whoever knowingly and willfully gives or accepts any kickback or illegal payment in connection with any qualified campaign expense of eligible candidates or their authorized committees. The terms "eligible candidates," "authorized committees," and "qualified campaign expense" are defined in 26 U.S.C. 9002.10 No reported cases under this statute exist.

In addition to the above statutes, there are three provisions in chapter 11 of title 18 that lie somewhat in between bribery of public servants (covered in chapter 13 of the subject bill) and commercial bribery, covered in this section. They are 18 U.S.C. 212-214.

18 U.S.C. 212 punishes by up to one year in prison any officer or employee of a large group of enumerated banks who gives any loan or gratuity of value to a bank examiner.

18 U.S.C. 213 provides an identical punishment for the receipt of any loan or gratuity by a bank examiner from one of the designated banks or a person connected therewith.11

18 U.S.C. 214 punishes by up to one year in prison whoever stipulates for or gives or agrees to give or receive any thing of value for procuring or endeavoring to procure an advance, loan, extension of credit, or discount or purchase of any obligation or commitment with respect thereto, from a Federal Reserve Bank.

The Committee has proposed that these statutes, which are rarely prosecuted under current law, be transferred to title 12. In a sufficiently grievous case, where a Federal bank examiner is bribed in his official

• The National Commission proposed an even more drastic extension of jurisdiction. See Final Report § 1758.

See Howard v. United States, 345 F. 2d 126 (1st Cir.), cert. denied, 382 U.S. 838 (1965). Of course, the statute by its terms requires that a payment be received as "an inducement for the award of a subcontract" so that knowledge of the purpose of the bribe is required. Id. at 128-129.

8 See United States v. Grossman, 400 F.2d 951, 954 (4th Cir.), cert. denied, 393 U.S. 982 (1968).

See Travers v. United States, 361 F.2d 753, 755 (1st Cir.), cert. denied, 385 U.S. 834 (1966).

10 Notably, the term "eligible candidates" reaches only the candidate of a political party for President and Vice President of the United States; candidates for congressional office and their campaign committees are not covered.

11 No specific intent is required under these offenses. See United States v. Bristol, 473 F.2d 439 (5th Cir. 1973).

capacity with a quid pro quo involved, the general bribery (section 1351) and graft (section 1352) provisions of the proposed Code may be utilized to punish the conduct at a felony level. Similarly, employees of Federal Reserve banks are public servants as that term is defined in section 111, so that coverage under chapter 13 provisions is available in an aggravated case.

49 U.S.C. 1117 (b) is another statute dealing with commercial bribery that will not be brought forward by this section. It punishes by up to two years in prison whoever offers, gives, or causes the offer or gift of any thing of value to any person acting for or employed by any carrier by railroad, with intent to influence his decision or action, or because of his decision or action, with respect to the supply, distribution, or movement of cars or other vehicles used in the transportation of property. The statute also prohibits the solicitation, acceptance, or receipt of such a bribe by any person acting for or employed by a carrier by railroad, with intent to be influenced as provided above. This statute will be retained in title 49 as a misdemeanor.12

Other specific commercial bribery statutes not proposed for inclusion in title 18 are 47 U.S.C. 508, proscribing "payola” in the record industry, and 47 U.S.C. 509, punishing fraudulent practices on televised quiz shows. These infrequently prosecuted offenses, which are currently misdemeanors, will be retained in title 47.

3. The Offense

Subsection (a) provides that a person is guilty of an offense if (1) he offers, gives, or agrees to give to an agent or fiduciary of another person, or (2) as an agent, or fiduciary, he solicits, demands, accepts, or agrees to accept from another person who is not his employer, principal, or beneficiary "anything of value for or because of the recipient's conduct in any transaction or matter concerning the affairs of the employer, principal, or beneficiary."

This formulation follows the lead of the pending legislation to consolidate 18 U.S.C. 215 and 216. It is written in sufficient breadth to cover any transaction instead of only banking matters, but the actual scope of the provision is limited by the jurisdictional subsection which makes the offense applicable only if a participant is an agent or fiduciary of a financial institution, a prime contractor or subcontractor, or the offense involves a kickback in connection with a Presidential election campaign.

As noted above, 18 U.S.C. 216 excepts from coverage the payment by a financial institution of the usual fees and salaries given to its attorneys, agents, and employees for services rendered. The proposed version accomplishes the same result by requiring that the offer of "anything of value" 13 be to the agent or fiduciary "of another" or that the solicitation, etc., of anything of value be by an agent or fiduciary "of another person who is not his employer, principal, or beneficiary.' As a consequence, payment by the financial institution to its own employees or attorneys will not violate the statute. Moreover, such payments would be excluded irrespective of whether they involved a pay

12 The National Commission proposed to include it as a felony and to expand coverage to all employees or agents of all interstate facilities. See Final Report, § 1758 (3) (d). This represented an extension of Federal power not deemed by the Committee to be justified by any as yet demonstrated need. 13 The term "anything of value" is defined in section 111.