ISSUE 1: The broad language of 18 U.S.C. § 666(a)(1)(A) and its legislative history raise a significant issue regarding the scope of the statute. The primary issue is whether the statute prohibits only the illegal taking of Federal program funds or property acquired with Federal funds or whether the statute prohibits the illegal taking of any funds or property of an organization or of a state or local government agency that receives Federal assistance. An example of the latter situation would be the theft by an employee of a Federally funded organization of a $6,000 automobile acquired independently of the Federal funds. While an 18 U.S.C. § 641 prosecution could not be maintained in the hypothetical described above, case law now suggests that the hypothetical would violate 18 U.S.C. § 666.
In some cases, local prosecutors will have both a strong incentive and the ability to prosecute crimes involving local programs receiving Federal funding. The advisability of a Federal prosecution under 18 U.S.C. § 666(a)(1)(A) should be carefully weighed against the likelihood that State prosecution will be sufficient to protect Federal interests.
ISSUE 2: Another issue within the statute centers on the type of Federal benefit and the manner in which that benefit triggers the statute's protection. Section 666(b) requires that the organization, government or agency must have received, in any one year period, "benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance." This provision does not distinguish between cash and non-cash assistance nor does it explicitly state when an organization "receives" Federal assistance. Generally, prosecution should not be instituted until the agency has actually received cash benefits, in hand, as opposed to the mere appropriation or authorization of cash benefits. Similarly, in cases involving non-cash benefits, i.e., contracts, guarantees or insurance, the agency must have received a fully executed and enforceable instrument that grants the non-cash assistance in order to obtain the statute's protection.ISSUE 3:A third issue is the very broad language of the statute. It seemingly permits the prosecution of any state agent, regardless of whether his or her specific agency received the necessary Federal assistance, as long as the state received the required Federal assistance. This broad reading, while statutorily permissible, would Federalize many state offenses in which the Federal interest is slight or nonexistent.
A narrower reading, consistent with the stated congressional intent, requires that the agent must have illegally obtained cash or property from the agency that received the necessary Federal assistance. This narrower reading is strongly suggested in order to ensure that significant Federal interests are protected and the clear intent of Congress is followed.
(4) A fourth issue concerning the scope of the statute is the measurement of the one-year period within which the necessary $10,000 in Federal assistance must be received. The one-year period should be measured from the date of the offense. If the protected organization received the necessary $10,000 in Federal assistance within the 365 days immediately preceding the offense (including the day of the offense), then Federal jurisdiction is established. If the necessary Federal assistance had not been received in that one-year period, then no Federal jurisdiction exists.