Cecil Greek, University of South Florida

Originally Published in FREE INQUIRY IN CREATIVE SOCIOLOGY

Volume 19 No 1, May 1991

 ABSTRACT

The purpose of this essay is to analyze the debate over criminal and civil RICO forfeitures as a result of their greatly expanded usage in the late 1900s. RICO was considered by both the public and the media as intended to combat traditional organized crime and its infiltration of legitimate enterprises. However, the RICO statute as enacted by Congress was liberally construed and has proven quite capable of being used in a number of unique and, in some cases, potentially unconstitutional ways. RICO has been employed against white-collar criminals, terrorists, Wall Street insider trading vldeo store owners who rent X-rated tapes, anti-abortion protesters, and local law enforcement agencies, among others. Thls essay discusses these various ways that RICO has actually been used. In addition, criticisms of potential abuses of the RICO statute made by the business community, civil libertarians, and the legal establishment are analyzed. Key Supreme Court cases that allowed the expansion of RICO beyond traditional organized crime cases are reviewed. RICO represents a major expansion of the federalization of crime and which, for now, appears to be quite acceptable, despite those protesting its wider use, to both the courts and a large segment of the American public as well. The expansion of law represents an underdeveloped area of research within the sociology of law.

INTRODUCTION

In the 1931 Hollywood film Little Caesar Edward G. Robinson, playing the role of Caesar Enrico Bandello (aka Rico), dies at the hands of the police while uttering the famous last words: "Is this the end of Rico?" While Rico's career in organized crime had been terminated, the film's implied message is that the mob survived as a never ending circulation of elites. The methods employed by the police to put an end to organized crime are shown to be quite ineffective. The police simply wait out the gang hoping that one of the mobsters will grow tired of the rackets and willingly become an informant on his fellow gangsters. The specially appointed crime commissioner is killed early in the film by Rico, never to be replaced. Prosecutors and judges are pictured as themselves corrupt, making the job of convicting mobsters nearly impossible. What our cities need, according to the movie's foreward, is a more effective way of eliminating organized crime.

Some forty years later, in 1970, after many hearings and protracted debate, the Congress enacted into law what it hoped would be the ultimate solution to the organized crime problem: RICO (Racketeer Influenced and Corrupt Organizations Act) (18 U.S.C. Sections 1961-681982 & Supp. 1111985) and CCE (Continuing Criminal Enterprises Act) (21 U.S.C. Section 848 1982 & Supp. 111 1985). While some have suggested that the acronym RICO had its origins in the Edward G. Robinson character, G. Robert Blakey (1982 237) Chief Counsel of the Senate Subcommittee on Criminal Laws and Procedures of the U.S. Senate in 1969-70 while the legislation was being drafted, has offered an alternative account of origins of the title RICO. Its goals were to eliminate organized crime by concentrating on illegal monies made from crime through the use of new criminal and civil forfeitures, rather than by the old means of attempting to dismantle the mob by imprisoning gang bosses. It turned out they could too easily simply be replaced. (RlCO's maximum criminal penalties include a $25,000 fine and imprisonment for 20 years. In addition, violations shall be punished by forfeiture to the U.S. of all properties and interests, as broadly described, which are related to the violations. (18 U.S.C. Section 1963a 1982). Civil penalties under RICO include the awarding of treble damages and attorney's fees to the successful plaintiff. (18 U.S.C. Section 1964 a & c 1982).) The situation was further complicated by the fact that organized crime often infiltrated legitimate businesses either to launder their illegally obtained monies or as fronts to concoct additional criminal schemes with or without the knowledge/ consent of the business' original owners. RICO took aim at these practices through the use of forfeitures as well. RICO specifically makes unlawful as activities by any person, persons or organization:

The latter shows RlCO's similarity to conspiracy law.

RICO represented the reintroduction of in personam criminal forfeitures following a 180 year period in which they were virtually never used and many perceived them as banned by the Constitution (for treason) and by the first U.S. Congress (for any federal felony). (See Greek (1991) for a detailed analysis of the history of criminal forfeiture in England and the virtual elimination of its use as a criminal penalty by the American colonists.) Modern criminal forfeitures are considered constitutional on the basis that they do not represent forfeiture of estate (the complete impoverishment of a convicted felon), but only call for the return of illegally obtained monies and any properties or interests the tainted funds had purchased. In rem civil forfeitures, which originated in English and colonial admiralty law, have been used throughout American history and provided the major means whereby contraband items could be seized by the state. (See Maxeiner (1977 779-792) for a discussion of the use of civil forfeiture from the colonial period through 1970. He also argues that the 1970 Congress was mistaken in its belief that in personam forfeitures have been entirely banned since 1790. They have been employed sporadically over the last two centuries in criminal court. Property was seized criminally following conviction as part of a fine.) In civil court the contraband property is itself considered the guilty party, rather than its current owner. Many legal defenses available to defendants in criminal court do not apply to property that is seized civilly (Myers, Brzostowski 1981 34-36). A lesser standard of proof applies in such civil cases: "preponderance of the evidence" rather than "beyond a reasonable doubt." The former requires only that the majority of the evidence must support the plaintiff's allegations against the defendant (Calvi, Coleman 1989 76).

WHO IS A RACKETEER?

The public perception of the intent of RICO and CCE was that the statutes would be used to prosecute traditional organized crime families; particularly those that had infiltrated legitimate businesses or labor unions, or were involved in international drug smuggling. However, both criminal and civil RICO have been used in a number of other ways. While a complete list is impossible here, RICO defendants include terrorists, anti-abortion protesters, anti-obscenity picketers, video store owners and adult bookstore owners, major corporations and banks, Wall St. investment firms, the Chicago Mercantile Exchange (Gorman 1989), politicians, doctors, local and state law enforcement personnel, and husbands who have been sued by their ex-wives for defrauding them of marital property (Lynch 1987a, 1987b; U.S. House of Representatives 1987 169-170). While civil RICO lay dormant throughout the 1970s, it has been used quite frequently in the 1980s as plaintiffs discovered that virtually anyone could be charged with racketeering. E.A. Ross (1973 45-71) and Edwin Sutherland (1949) might be quite satisfied to know that finally a statute has been created that equates all (twice convicted) white-collar criminals with racketeers. Needless to say the business community is not pleased and has lobbied Congress repeatedly to reform RICO and stop stigmatizing them unfairly (Dahl 1990; Pickholz 1985; Sanders 1989).

The debate centers around three key phrases in the RICO statutes: enterprise, racketeer, and pattern of racketeering activity. Proponents of expanded use of RICO argue that the intent of the statutes was to include all types of white-collar crime, not just traditional organized crime. Opponents of a broad interpretation of RICO have called upon both the courts and Congress to redress their grievances and put an end to perceived RICO abuses, but to little avail. The overall pattern in the RICO cases heard before the Supreme Court has been to favor a liberal interpretation of the statutes and permit their expanded usage (Fried 1988 329).

Defining exactly what is meant by the phrase "organized crime" has proven quite elusive (Maltz 1976). (See Dombrink (1988 57-60) and Block (1983129) for discussion of the debates within criminology. See Bradley (1984) for a history of the federal government's struggle to define racketeering and Mieczkowski and Albini (1987) on the government's difficulties in conceptually linking organized crime and drug dealing.) After 20 years of attempting to eliminate La Cosa Nostra, the Justice Department in 1990 disbanded its special strike forces under the Organized Crime and Racketeering Section of the department's Criminal Division. The strike forces were criticized for being slow to respond to new organized crime elements such as Columbian drug cartels, Asian groups and major street gangs (Sniffen 1990). RICO itself made no attempt to define organized crime, other than to implicitly define it by what it did rather than what it was, by listing a variety of crimes claimed to be committed by racketeers (Lynch 1987a 683).

Organized crime (racketeering) is conceptually defined by RICO as a pattern of racketeering activity committed by an individual or group either as part of an enterprise or against an enterprise. A pattern of racketeering activity is defined as committing two of the listed predicate acts within a ten year period. The two acts are expected to be related (have similar purpose or similar results) (Bradley 1980 862-868). The original 24 federal felonies considered racketeering activities included murder, intimidation of witnesses, kidnapping, obstructing justice, counterfeiting, theft of interstate shipments, white slavery, embezzlement of pension funds, certain federal drug offenses, bankruptcy fraud, mail fraud and wire fraud. In 1984, obscenity was added as a predicate act (18 U.S.C. Section 1961 1 a Supp. III 1985). An enterprise can be either illegitimate or legitimate, making it possible for a legitimate business to be subject to forfeiture because its owner has committed a crime in the course of its operation. In addition, the distinction between the pattern of racketeering activities and the enterprise can on occasion represent a form of Catch 22 (Bradley 1980 854). The enterprise can be defined solely by reference to the pattern crimes themselves. A pattern of racketeering activities is the enterprise. Such cases have led Lynch (1987a 661) to conclude that RICO is best categorized as "the crime of being a criminal."

Two of the major legal scholars involved in the dispute over RlCO's original intent are G. Robert Blakey (1982; Blakey, Gettings 1980; Blakey, Cessar 1987) of Notre Dame and Craig Bradley (1980) of Indiana University. Bradley argues that Congress' reaction to organized crime was similar to the "red scares" of the 1950s. The result was that Congress overreacted to the problem and mistakenly created a statute that was overly broad and constitutionally suspect. Blakey (1987 526), who helped draft RICO, takes the position that while broad application may or may not have been Congress' intent (he believes it was), it certainly was his. RICO was not created to apply "only to organized crime in the classic 'mobster' sense" (Blakey, Cessar 1987 529). In its deliberations Congress recognized that it would be difficult, if not constitutionally impossible to narrowly limit RICO to traditional crime such as La Cosa Nostra (LCN 1982 280). If persons or enterprises involved in the same types of activities as traditional organized crime families, why should they not be prosecuted similarly? However, what is clear is that congressional debate as led by Senator McClellan focused almost exclusively on previous testimony (such as Donald Cressey's (1969) concerning traditional organized crime). The infiltration of the mob into legitimate businesses, labor unions, etc., received considerable deliberation (Blakey 1982 249-280). When earlier cases involving white-collar offenders were appealed in court, arguing that there was no organized crime involvement, several were overturned (Melley 1989 3). In one the Supreme Court argued that an injury could be inflicted by anyone, including legitimate businesses (Sedima S.P.R.L v Imrex Co. 1985). (Sedima also ended the discussion over whether RlCO's predicate acts must be criminal convictions. Civil court findings of guilt based upon a preponderance of the evidence were deemed sufficient.)

The liberal construction of the RlCO has produced a considerable number of appealed verdicts. One issue considered is whether RICO fails the vagueness doctrine. However, the argument that RICO is constitutionally vague has been uniformly rejected (Lynch 1987a 717). Since the list of predicate acts is clearly spelled out, those that desire to avoid RICO prosecution need merely not commit murder, mail fraud, narcotics violations, obscenity offences, or other pattern crimes. RICO merely imposes additional liability on those who commit certain offenses repeatedly.

RICO AND CIVIL LIBERTIES

There have been a number of RICO cases, both criminal and civil, appealed on the basis that the statutes are in conflict with basic constitutional protections afforded all criminal defendants. The bulk of these cases focus on First Amendment protections of speech and assembly, Sixth Amendment concerns such as access to legal counsel and double jeopardy, and various due considerations.

A number of the First Amendment cases involve the use of RICO in obscenity trials. The key issues here are whether the use of forfeiture involves a prior restraint (Eggenberger 1988; Marin 1988; Mayton 1982; O'Donnell 1988), creates a "chilling effect" on publishers (Randolph 1988 595-598; Schauer 1978), or relies on vaguely drawn obscenity statutes (DiGennaro 1988). The 1985 Meese Commission on Pornography very strongly advocated the use of forfeiture to eliminate obscenity from American society (Nobile, Nadler 1986). Based on the case U.S. v. Pryba (1988) the (U.S. Justice Department's) National Obscenity Enforcement Unit (1988 6) rejected the prior restraint claim made against RICO. However, in 1989 in Fort Wayne Books, Inc. v. Indiana, the Supreme Court relied upon the prior restraint argument to disallow the padlocking of an adult bookstore without a court verdict that any of the materials therein were obscene (Melnick 1989 391). In September 1989, a California U.S. District Judge ruled that the government could not bring a civil RICO action in obscenity cases (DeWitt 1989 1, 10). The U.S. Justice Department is currently appealing the ruling.

RICO has also been used against both prolife demonstrators (Northeast Women's Center v. McMonagle 1989) and antipornography protesters (Walden Book Co. Inc. et al v. American Family Association of Florida 1989), raising questions about RlCO's possible effect on freedom of assembly (Kilpatrick 1989). In McMonagle an abortion clinic had the Supreme Court uphold a civil RICO suit they filed against anti-abortion protesters who staged four sit-ins at the clinic. Equipment worth $887.00 was damaged during one of the demonstrations after protesters forcibly entered the clinic. The defendants were charged with extortion and robbery as RICO predicates (Melley 1989 5-6). In the Walden Books' suit, the conservative religious pressure group, the American Family Association, has been charged with RICO violations (extortion) for protesting the selling of Playboy and Penthouse by bookstores.

Another First Amendment issue raised by RICO concerns the free exercise clause and religious freedom. The inclusion of mail and wire fraud as RICO pattern offenses has allowed for criminal charges and civil claims against religious organizations that use fraudulent solicitation practices (Turley 1988). While there must be some means of redressing such grievances, should TV evangelists be treated as common racketeers? Blakey (1982 250) has suggested that the whole debate over whether a racketeering statute applies to more traditional forms of white-collar crime or, for that matter, any type of crime can be solved simply by substitution of the less pejorative phrase "criminal activity" for "racketeering activity" throughout the RICO statute.

A number of legal scholars have questioned whether the Sixth Amendment right to counsel has been imperiled by RICO (Cloud 1987; Levin 1988; Roadman 1986; Wade 1988). RICO cases are quite complicated and difficult to defend, requiring expert legal assistance. When RICO was passed it was unclear if forfeiture affected attorney's fees, or whether they were exempt from seizure. This is part of a much larger issue of where third parties stand when they have received property or money that is later ruled subject to forfeiture. However the legal establishment has focused upon the loss of attorney's fees, an issue that directly effects their livelihood. Cloud (1987:825) argues that allowing forfeiture of attorney's fees violates the Sixth Amendment in three ways:

Levin (1988 263-269) makes the claim that Fifth Amendment due process protections will be compromised if quality attorneys are prevented from defending RICO clients because they will not be compensated adequately.

In 1989, the Supreme Court decided Caplin & Drysdale, Chartered v. U.S., ruling that attorney's fees are not exempt. The defendant's attorney can not legitimately make the claim that he had no knowledge of his client's criminal activities which resulted in the monies used to pay his fees. As a third party at the time of the transaction with his client, an attorney would know that the defendant's assets were subject to forfeiture. While the Sixth Amendment guarantees to all defendants the right to counsel, it does not grant the right to privately-retained counsel simply because forfeiture cases are so complex Wade's (1988 219) concern that, if the court ruled against the exemption of attorney's fees, lawyers might be subsequently forced to provide information that could later be used against their client or to violate attorney-client privilege was validated when in late 1989 the Internal Revenue Service ordered that lawyers must report all clients who paid them more than $10,000 in cash or face felony charges (St. Petersburg Times 1989 4B). Over 100 lawyers refused to do so.

Fried (1988 424-434) has written at length on the problems third parties suffer under RICO. Since 1984, monies and properties subject to seizure effectively become government property at the moment the initial crime was committed, a policy known as the "relation back" doctrine (Cloud 1987 821 822). Only those who can prove they had no knowledge whatsoever of the source of the monies or property given or sold to them by the convicted racketeer or had title to the property prior to the date the offender committed his crime are to be granted redress. RICO requires third parties to wait until a post-conviction hearing to assert their claims opposing forfeiture of assets to the government (18 U.S.C. Section 1963 j & m Supp. III 1986). In cases in which the forfeiture proceedings are civil, the rights of innocent third parties to property are often considered extinguished (Blakey, Gettings 1980 1036).

In addition, criminal RICO has no provisions of relief for victims of racketeering activity other than third parties, although they are certainly free to file a civil RICO suit. Fried is critical of the fact that the government, and law enforcement in particular, has benefited handsomely from forfeitures while there is so little money set aside for victim restitution:

The 'privatization' of the funding of law enforcement is a retrograde step reminiscent of the payment of naval officers in the eighteenth century largely out of the proceeds of the sale of captured ships. (1988 366)

In fact, while seizures of drug monies has been a windfall for law enforcement agencies at the federal, state and local levels (DEA seized money and property worth $210 million in Miami alone in 1989), the federal government's seized property program has yet to show any profit whatsoever (Shannon 1989). Fire sale auctions and high maintenance costs eat up any potential profits.

The broad latitude that the courts have given in RICO cases also raises new questions concerning double jeopardy (Bradley 1980 855-858). If a defendant is charged with the same crime under state and federal statutes (possible without violating double jeopardy), that crime can be used as separate crimes for the purpose of establishing the necessary two RICO predicates (18 U.C Section 1961 1 A & B). What might be a four year felony can then become a 20-year felony under RICO.

A number of attorneys have raised questions about RlCO's impact on due process (Coffee 1989; Hafetz 1986; Lefcourt, Horowitz 1988; Reed, Gill 1987). The megatrials that RICO often creates are extremely costly (including the costs of providing court-assigned counsel), frequently join together at a single trial individuals who have a right to separate determinations of their guilt and allow evidence (some of it inflammatory) that would be inadmissible at an individual trial (Lefcourt, Horwitz 1988). Coffee (1989) argues that the draconian penalty of enterprise forfeiture and the high costs associated defending a RICO suit gives prosecutors enormous leverage, leading to plea bargains in cases which the defendant might be acquitted but is unwilling to risk a trial conviction.

The use of pre-trial restraining orders to restrict the defendant's access to potential forfeitable interests has also been questioned (Hafetz 1986 255-265). Obviously, the individual's guilt has not yet been determined. On the other hand, defendants could easily dispose of assets or hide them if they were permitted access to them. In the congressional revision of RICO in 1984 both pre-indictment and post-indictment restraining orders were deemed appropriate. (The Comprehensive Forfeiture Act of 1984 was Title III of the Comprehensive Crime Control Act 1984 [Pub. L. No. 98-473, 98 Stat. 15 (1984)].) Pre-indictment restraints are permissible without notice or an opportunity for a hearing as long as the government can demonstrate probable cause to believe property would, in the event of a conviction, be subject to forfeiture (Hafetz 1986 25). Congress also indicated that post-indictment restraining orders did not require a hearing, although a number of court cases had upheld the need for post-restraint hearings to insure due process (Hafetz 1986 258). In 1989, the Criminal Division of the Justice Department instituted a new policy for post-indictment restraining orders as a result of the many complaints by third parties who do business with defendants (Dennis 1989). All future restraining orders were to be approved by Washington, less intrusive means (bonds) used if possible, and the impact on innocent third parties calculated. In addition, the actual amount of forfeiture sought was to be proportional to the crime committed, rather than the largest forfeiture permissible under the law.

During the post-conviction phase a jury determines the extent of the defendant's interest in an enterprise and therefore subject to forfeiture. Whether profits were to be included was debated by the courts since originally RICO did not mention profits specifically while CCE did (Reed, Gill 1987 96). (Russello v. U.S. (1983) ended the debate over whether profits were forfeitable. They are now included.) Also questioned was whether a forfeiture can result simply because the defendant owns "enterprise" property or whether a criminal nexus between the property and the owner must be established. (The U.S. Supreme Court in Calero-Toledo v Pearson Yacht Leasing Co. (1974) held that for some in rem seizures a criminal nexus must be established.) As a way of preventing overzealous prosecutorial use of forfeiture, Reed and Gill (1987 102) argue that a postconviction hearing should be necessary since during the trial the defendant has no opportunity to present evidence regarding his potentially forfeitable interests. In addition, third parties such as shareholders, partners, and joint venturers should be permitted to testify because they could provide the jury with information concerning property interests that belong to them and not the defendant (Reed, Gill 1987 81).

A major source of all of these problems is the confusion over in rem v. in personam forfeiture. RICO forfeitures require a finding of personal guilt in a criminal prosecution (18 U.S.C. Section 1963 c 1976). However, the federal government through the Attorney General's office is not precluded from filing civil RICO suits, but may only seek injunctive relief and not treble damages (18 U .S.C. Section 1964 b 1976). On the other hand, CCE allows the use of either in rem or in personam seizures to prosecute federal drug offenses. The states that have created so-called "little RICO" laws use both criminal and civil forfeitures, adding to the confusion within the courts (Stellwagen 1985). Florida is an example of a state that uses separate civil procedures to seek forfeitures. The Contraband Forfeiture Act first passed in 1980 was applied only in drug felonies. In 1983, the act was amended to included all felonies (Martin 1988). The Department of Justice suggests that states use civil proceedings when they can because of the lesser burden of proof (National Criminal Justice Association 1988 9). Since criminal forfeitures have been virtually non-existent for 180 years, the courts have sometimes mistakenly relied upon civil law forfeiture procedures that have less due process protections.

A proceeding in which the claimant must prove his property 'not guilty,' and in which innocence is not a defense...is constitutionally sufficient only if the action is in fact against property. If forfeiture depends upon a showing of the property owner's criminal intent, familiar principles of criminal procedure apply. (Reed, Gill 1987 69)

Federal prosecutors at the Drug Enforcement Administration (DEA) advocate the use of civil forfeiture because a number of criminal defenses can be avoided (Myers, Brzostoski 1981 34-54). For example neither entrapment, double jeopardy, illegal seizure of the property, acquittal on the criminal charges, nor the property owner's lack of knowledge that their property was being used in a drug offense can be employed as defenses to avoid civil forfeiture.

Weiner (1981 233) notes that RICO has been challenged under the Eighth Amendment as constituting cruel and unusual punishment. The courts have argued that it is not for two reasons: 1 ) It does not constitute estate forfeiture; and 2) the punishment is roughly proportional to the magnitude of the defendant's crime.

THE FIRESTORM OVER CIVIL RICO

The debate over the use of civil RICO in ways that appear unintended by Congress has been even more heated than that surrounding criminal RICO. The major objection is that individuals and groups that in no ways resemble racketeers are unfairly stigmatized when civil RICO suits are brought against them (Whitney 1987 278). The business community has been the most vocal in its criticisms of civil RICO (Moore 1989 576; Sanders 1989). However, at the same time, it must be pointed out that businesses have been making use of civil RICO to sue other businesses, as well as their own clients (Siegel 1989). For example, Texas Air's Frank Lorenzo aimed a civil RICO suit at its own pilots' and machinists' unions, claiming that their public complaints about the airline's safety record were part of a racketeering pattern (Hentoff 1989).

One criticism of civil RICO focuses on the broad use of the term "pattern," particularly when mail or wire fraud are the only predicates involved. Whitney argues that:

The effect of permitting two instances of mail or wire fraud was to open the civil RICO statute to nearly every instance of fraud that exists in the modern world, because all modern activities depend so heavily on the postal and telephone communication links. (1987 282)

RICO does not discriminate between common fraud characterized by occasional criminal acts and organized criminal activity. While federal prosecutors have been cautious in not bringing criminal RICO suits when mail fraud is the only predicate (U.S. Department of Justice 1985 13), a number of civil RICO complaints have been filed using mail or wire fraud as predicates. (Moore (1989 575) claims the Justice Department is now ignoring its own guidelines restricting the use of RICO in criminal cases that involve mail fraud.) An interesting (though complicated) example is the use of civil RICO in cases of alleged patent fraud (Fasman 1988). Patent law requires those applying for a patent to collect and send to the patent office by mail all documents related to previous patents for similar inventions. Failure to provide such documents during the original examination can constitute fraud if the current patent holder can prove the admissibility and relevance of prior patents thought to be known to the applicant. Since the mails are used in the application process, patent fraud can be applied as the RICO predicate of mail fraud and triple damages plus attorney's fees sought.

In 1985-86 Congress held hearings on RICO and specifically heard testimony concerning alleged civil RICO abuses. The American Bar Association (ABA) presented evidence concerning the types of predicates employed in civil RICO actions. Of 118 cases cited, only one involved a violent crime traditionally associated with organized crime (arson), while 93 involved business fraud (mail fraud or wire fraud) (U.S. House of Representatives 1987 40). The ABA suggested reforming RICO so that civil RICO claims would not overlap federal statutes that specifically regulate commercial transactions. Their suggestion was turned down. In 1989, Congress was asked to consider replacing the treble damages recoverable under RICO with a limitation to just single damages (Siegel 1989 13). The proposal was also voted down. In 1990, the request has been made again, this time by Charles Keating and others involved in the S & L scandal (Dahl 1990).

There are several legal experts who argue that the charges against civil RICO have been exaggerated (Goldsmith, Keith 1986; Jost 1989). Wexler (1983 340) argues that the debate over civil RICO has been dominated by a "visceral response" rather than reasoned analysis. While the complaints have been many, the actual number of civil RICO cases is quite small. Through 1979 an average of only one case a year was the norm. In 1980 there were three cases, 22 in 1981, 25 in 1982, and 58 in 1983 (U.S. House of Representatives 1987 30). The peak year for new complaints was 1987 with 1,095. Currently there are around 1,300 cases pending in the courts. That represents a very small percentage of the federal court calendar, about one-half of one percent (Jost 1989 49). Although these cases do take more time than others, most are not successful. As many as two-thirds are thrown out prior to trial. Only 15 jury verdicts were rendered in civil RICO cases during a two and a half year period (Jost 1989 49). Jost (1989 50) argues that "Legitimate businesses have nothing to fear from RlCO--if they're following the law and conducting their businesses in an honest way." In addition, evidence fails to corroborate the charge made by RlCO's critics that white-collar defendants will routinely settle RICO suits out of court rather than face the threat of triple damages and a smeared reputation (Jost 1989 51).

Goldsmith and Keith (1986 57) assert that critics have seriously overstated the abuse argument while failing to recognize the need for an effective remedy against fraud in the consumer marketplace. They (1986 66) point out that the Supreme Court has ruled that although civil RICO is not being used primarily against the archetypal, intimidating mobster, the defect in the statute (if it is a defect) must be corrected by Congress and not the courts. Goldsmith and Keith (1986 71) argue that RICO abuses are unlikely because lawyers will not take such cases on a contingent fee basis. Few litigants are prepared to initiate an action and risk money if their claim is obviously meritless. Triple damages are necessary, not only to make the civil action worthwhile, but as a deterrent to future violations by the defendant (1986 82).

Blakey and Gettings (1980 1012) argue that most of the allegations leveled at RICO of possible abuse are just that, possible abuses. The possibility of abuse is a charge that can be made about any number of statutes. Their suggestion is to listen to the allegations, but not to give them undue attention.

HOW HAS RICO BEEN USED?

Several authors have sought to quantify the types of cases in which RICO has been employed. Typically this has been done by analyzing the predicate acts upon which RICO suits have been based or by classifying defendants as traditional organized criminal enterprises or not. Meeker and Dombrink (1984) did an early study of the application of criminal RICO. They concluded, based on their analysis of 39 randomly selected appeals cases, that the racketeering activities that occurred in the majority of the RICO cases were the type traditionally associated with organized crime. For example, extortion was involved in 19 percent of the cases, labor racketeering in 19 percent, and narcotics in 17 percent (Meeker, Dombrink 1984 317).

Lynch (1987a, 1987b) has done the most complete survey of RICO defendants to date, analyzing all 250 federal appeals generated by criminal RICO through 1985. He (1987a 726) argues that the use of RICO in attacking traditional organized crime's infiltration of legitimate businesses has been a dramatic failure. Fewer than 8 percent of the cases fall under this category. Overall however, percent of the cases involved the operation of wholly criminal enterprises, while in 60 percent the enterprises alleged to have been conducted through a pattern of racketeering were formal or "legitimate" entities such as businesses (28%), government agencies (19%), and labor unions (Lynch 1987a 733). (It was unclear before the U.S. v. Turkette decision in 1981 whether an illegitimate enterprise could itself be subject to RICO prosecution unless ties to a legitimate enterprise could be demonstrated. Individuals associated for entirely illegitimate purposes can now constitute a RICO enterprise.) Business fraud constituted the most frequently stated predicate (34 times) followed by narcotics (26 times) and police corruption (18 times) (Lynch 1987a 735). No other predicates were employed more than 15 times. The complaint against RlCO's overuse in fairly ordinary business fraud cases is validated by Lynch (1987a 748).

Perhaps the most novel and paradoxical use of RICO has been against government agencies themselves (Hoffman 1989). Implicit in RlCO's language is that a governmental agency could be tainted or corrupted by contacts with enterprise criminality, although a government department is not the sort of thing in which one may acquire an interest or invest the proceeds of racketeering (Lynch 1987a 699). Seventy-one of the 236 cases cited by Lynch (1987a 735) involve government corruption. RICO has, in effect, federalized state and local government corruption. (Bribery of a state or local official is not a federal crime. Only one RICO case has involved bribery of a federal official, which is a federal crime with a stiff penalty [Lynch 1 987a 743j.) RlCO's impact in this area was largely an unforeseen occurrence in 1970 while the legislation was being drafted, and represents another example of how the federal government can sometimes use backdoor approaches to increase its criminal jurisdiction. In this case, however, most would agree that local corruption is a serious problem requiring outside prosecution. The practice is equivalent to Congress appointing a special prosecutor to investigate an offense committed by a federal executive branch member.

DISCUSSION/SUMMARY

In this discussion only three points will be focused on, the first theoretical and the latter substantive. First, what implications does this case study have for the sociology of law? Second, has RICO had an impact on stopping organized crime? Finally, is there any possibility that the liberal use of RICO will be abated?

We are witnessing a major change in American criminal law which criminologists and sociologists of law have been quite slow to recognize. The distinction between civil and criminal law continues to blur. RICO is only one example. More and more criminal defendants are finding themselves subject to separate tort actions by their victims. The increased use of restitution as a criminal punishment represents a compromise between criminal and civil sanctions. Criminologists and sociologists of law need to do considerable research on the potential long term consequences of these changes.

In addition, the sociology of law has had little to say about the expansion of law. Not only has RICO blurred criminal/civil law distinctions, it has increased federal power over local and state law enforcement. Finally, RICO has placed considerable additional discretion into the hands of federal prosecutors. In reality, RICO represents an example of discretionary regulation (Cotterrell 1984 172) or what Max Weber referred to as substantive legal rationality (Kronman 1983 76). However, in this case discretionary regulation does not soften the effect of the application of rigid legal rules, and in fact, RICO has had the opposite effect. Allowing prosecutors considerable discretion in whether to tack on additional criminal/civil penalties results in a legal system that appears to defendants and analysts alike as arbitrary.

This essay began by raising the question posed in Little Caesar about the attempt to eliminate organized crime through traditional law enforcement methods. Even in 1931 it was understood that going after members of organized crime one by one would not be effective. We have transposed that question by asking whether a liberally constructed piece of legislation, similar to conspiracy law but using the new tactic of enterprise forfeiture, could be effectively employed in the battle against organized crime. Could RICO spell the end for Rico? The conclusion that would have to be drawn at this point is, not yet. In fact, the percentage of RICO cases that involve traditional racketeering has been shrinking dramatically. Certainly the use of forfeiture has not made a significant impact on the country's drug importation problem despite the claims that it offers a final solution to international drug trafficking by taking the money out of the business (Kurisky 1988). Illicit narcotics are much more plentiful in our society today than in 1970, as indicated by record drug seizures and falling street level prices. This is not the end of Rico!

Although RICO was perceived by the (falsely or otherwise) to be aimed at organized crime, its impact, as we have seen, has been much broader.

If virtually any criminal federation can be a RICO enterprise, and almost any two criminal acts can be a pattern of racketeering activity, then potential RICO liability exists whenever more than one person engages in more than one crime...RICO has swallowed the penal code. (Lynch 1987a 713)

Even that definition is inadequate, as in some cases one person acting alone can be, charged and one crime (if it violates both state and federal statutes) considered sufficient show a racketeering pattern.

The expansive use of RICO has led us to ask another set of questions: could RICO survive judicial review, complaints generated by its use against legitimate businesses and corporations, and attacks by civil libertarians? RICO has apparently survived all three assaults. RICO is probably here to stay because a majority of the public want the types of crimes RICO has been handling to be prosecuted. These are criminals the public believes should be convicted. If RICO is not consistent with conventional standards of what a penal statute ought to look like, and RICO trials de not follow traditional conceptions of criminal procedure, then it is our preconceived notions which are about to change, because RICO appears immune to judicial or legislation reform at this time (Lynch 1987b 972). Politicians concerned about being perceived as soft on crime are not about to disarm RICO. The current non-activist Supreme Court not see its role as overturning or rewriting legislation passed by Congress, particularly when that legislation was intended to be liberally construed. Civil libertarians have been successful in proving RICO constitutionally suspect. This is not the end of RICO, but probably only the beginning!