Racketeer Influenced and Corrupt Organizations (RICO) Act of 1970
The Racketeer Influenced and Corrupt Organizations (RICO) Act, enacted in 1970, was designed to combat organized crime's infiltration of legitimate businesses. It aimed to address challenges in eradicating Mafia influence in sectors such as gambling and labor unions by allowing federal prosecutors to target patterns of criminal behavior involving racketeering activities. RICO requires at least two instances of illegal activity to establish a pattern, covering crimes like drug trafficking, extortion, and gambling. Penalties for violations can include imprisonment, fines, and asset forfeiture.
The statute also permits civil suits, enabling victims of racketeering to seek damages that can be tripled if successful, which has led to both effective prosecution of organized crime and criticism concerning its broad application. Some argue that it has led to frivolous lawsuits against legitimate businesses over minor infractions, while others express concern that it might restrict social activism by targeting organizations engaged in peaceful protest. Despite such critiques, RICO has been credited with significantly diminishing organized crime's influence in the United States since its inception, maintaining its relevance through various legal challenges.
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Racketeer Influenced and Corrupt Organizations (RICO) Act of 1970
Identification U.S. federal legislation
Date Signed on October 15, 1970
Because of the growing power of organized crime, Congress enacted the RICO statute in order to limit the Mafia’s influence on legitimate businesses. American courts, however, wound up applying the RICO statute in unexpected ways.
The Racketeer Influenced and Corrupt Organizations (RICO) Act was intended to shield legitimate businesses from infiltration by organized crime. RICO was a federal response to the difficulties of rooting the Mafia out of established business enterprises, such as legalized gambling or labor unions. Using the Constitution’s power to regulate interstate commerce, the statute defined violations of the law when a person or organization used racketeer-generated income to acquire influence in a business engaging in interstate commerce. Such activity included investing money in the targeted business, using racketeering to gain influence or control over a business, or using the business as a cover for other racketeering activity.
Crimes targeted by federal prosecutors using the RICO statute included such traditional organized crime activities as drug trafficking, gambling, and extortion. Single cases of such illegal activity did not qualify as a RICO violation. Rather, at least two instances of illegal activity had to take place in order to establish a pattern of behavior. If convicted, violators faced imprisonment, fines, and loss of assets gained from the illegal activity.
Bolstered by the success of the federal RICO statute in containing organized crime, most states enacted their own RICO laws for local crimes that did not cross state lines. In addition to federal cases, victims of racketeering could apply the statute to civil suits. If successful, plaintiffs in civil RICO cases could claim damages up to three times the damage suffered, plus any legal costs.
However, the penalties available in civil suits caused a major change in the application of the RICO statute. Large business concerns became the target of RICO litigation. Because of the broad definition of the statute, legitimate businesses guilty of only minor violations, such as contract violations or defective products, often faced civil RICO suits by unhappy plaintiffs. Moreover, the amount of financial compensation of three times the perceived damage was often greater than the award in typical negligence lawsuits, and critics of the RICO statutes complained that it created frivolous litigation. Other plaintiffs applied RICO against organizations engaged in social activism, such as antiabortion groups, and critics feared that the loose definition of RICO could lead to the restriction of social organization and protest.
Famous Cases
There have been many cases that have cited RICO since it was passed. Though the act was passed to fight Mafia influence, many other cases have involved big business or other organizations. One of the most famous racketeering cases did involve a mob boss. James "Whitey" Bulger, former boss of Boston's Winter Hill Gang, was indicted in 1995 on RICO violations charges. He fled and was at large until he was caught in 2011. He had been added to the FBI's Ten Most Wanted List in 1999. He was sentenced to serve two life sentences for many counts of racketeering, eleven counts of murder, and a number of other charges.
In 2015, the US Department of Justice (DOJ) issued a series of indictments for a landmark RICO case. In May 2015, the DOJ indicted nine officials in the Fédération Internationale de Football Association, the international soccer federation better known as FIFA, and five sports executives on counts of racketeering, money laundering, and wire fraud. In December 2015, the DOJ named more officials in the case. The charges involved schemes for officials to take bribes for media rights, for countries to host upcoming tournaments, and so on. The case was landmark for its international reach and because it exposed the corruption at the heart of the most powerful international sports organization.
Impact
The RICO law was an effective tool against organized crime, as evidenced by the decline of the Mafia’s influence after the 1970’s. The broad application of the law generated critics, but the RICO statute withstood numerous Supreme Court challenges.
Bibliography
Holmes, Cameron H. Drafting a State RICO Statute: A Comparative Analysis of Five Statutes. Washington, D.C.: National Association of Attorney Generals, 1990.
Murphy, Shelley, and Milton J. Valencia. "Bulger Sentenced, Escorted from Sight." Boston Globe. Boston Globe Media Partners, 14 Nov. 2013. Web. 19 Apr. 2016.
Joseph, Gregory P. Civil RICO: A Definitive Guide. New York: American Bar Association, 2000.
Rakoff, Jed S., and Harold W. Goldstein. RICO: Civil and Criminal Law and Strategy. New York: Law Journals Seminar-Press, 2000.
Voreacos, David, et al. "U.S. FIFA Probe Expands as Top Officials in Americas Charged." Bloomberg. Bloomberg, 3 Dec. 2015. Web. 19 Apr. 2016.