Borrowing Integrity in the United States: Federal Prosecution of State and Local Corruption

In recent posts I described how developing nations bedeviled by endemic corruption have “borrowed” integrity by contracting out the inspection of imports, the management of public finances, and even the investigation of grand corruption cases to private firms or international agencies.  But it is not just poorer countries where corruption is so ingrained that government must turn to outsiders for help.  The leaders of Mississippi, New York, Louisiana, the City of Chicago, and other state, county, and municipal governments have done so as well.  History and politics have created conditions in these jurisdictions where local officials have been unable to effectively control bribery, nepotism, bid rigging, and other corruption crimes.  Either the police won’t investigate or the prosecutors won’t charge or the courts won’t convict.

Beginning in the nineteen seventies, governors, mayors, and other local officials have either sought, or acquiesced in, help from the federal government.  Agents of the Federal Bureau of Investigation examine allegations of corruption by state and local public servants, the United States Attorney for the region, a Presidential appointee, prosecutes the cases developed by the FBI, and they are heard in a federal district court presided over by a judge named by a President.  Although the U.S. Attorney and the judge may have ties to the area where the case has arisen, neither they nor the FBI agents, nor the assistant prosecutors that actually handle the cases, are beholden to local interests.  Not only are they free to pursue cases whatever the local political implications, they often win kudos from their superiors in Washington for nailing a corrupt local official.

Federalizing the investigation and prosecution of state and local corruption has not been without its critics, however, though the criticism has died away for a quintessential American reason.

The reason: federalization has worked.  As a Mississippi newspaper quoted by historian Ronald Kessler in his 1993 history of the FBI said when endorsing federal corruption prosecutions, “if it weren’t for the federal law agencies, Mississippi’s future would to some extent be in the hands of a pack of rascals.” And a large number of rascals among state and local public servants there seems to be.  The latest Justice Department figures show that some 6,200 governors, mayors, judges, state legislators, city council members, and career public servants have either been convicted or pled guilty to one or more corruption crimes over the 1994 to 2013 period with 119 state and 334 local officials convicted or pleading in 2013 alone, the latest year for which data is available.  The “bigger fish” include governors of 13 states – Alabama, Arizona, Arkansas, Connecticut, Illinois (four different ones, the U.S. record), Louisiana, Maryland, Missouri, Rhode Island, North Carolina, Tennessee, Virginia, and West Virginia;  and the leaders of state senates or houses of representatives from 11 states – California, Kentucky, Massachusetts, Missouri, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, South Carolina, and Tennessee.  (This data along with a list of “lesser” officials nabbed by the federal government – state comptrollers, tax agency heads, mayors, state legislators, judges, and the like – is drawn from a Wikipedia entry that its author notes is incomplete.)

Although there had always been a few prosecutions of state and local officials by the federal government, principally for stealing money from federal programs, the drive to root corruption out of state and local governments began in earnest in the mid-nineteen seventies.  Law enforcement officials, awakened by the Watergate Scandal to how corruption can threaten the very foundations of democratic government, made the investigation and prosecution of state and local officials for corruption a priority.  The success of “Abscam,” an FBI undercover operation in the late nineteen seventies that resulted in the convictions of six members of the United States House of Representatives, one United States Senator, one member of the New Jersey State Senate, members of the Philadelphia City Council, the Mayor of Camden, New Jersey, an inspector for the United States Immigration and Naturalization Service, and the 2013 movie American Hustle gave the drive impetus.  It showed not only the value of undercover operations designed to lure corrupt officials into incriminating themselves in corrupt acts but that the public, elected leaders, and the judiciary were willing to tolerate the use of such tactics in the name of cleansing the body politic of corruption, even if it meant faking criminal cases to catch corrupt judges.

The stepped up federal effort has not been without its critics.  One complaint derives from the idea of federalism found, or at least to the critics found, in the U.S. Constitution.  These critics argue that the under the Constitutional allocation of powers between the federal and state governments, the federal government exceeds its limited and defined powers when it prosecutes local crimes — no matter how heinous.  A second objection is more pragmatic.  By taking over the prosecution of local corruption crime, the federal government retards the development of state and local investigation and prosecution.  Had the federal government not usurped the role of state and local government, this claim runs, pressure from the citizenry would have led them to develop the capacity and will to pursue local forms of corruption.   While both objections were once fiercely advanced in American law journals, both critiques have waned in recent years as the string of convictions has continued unabated.

A more subtle critique emerges from recent research by James Alt and David Dreyer-Lassen.  They find that the more resources the federal government devotes to prosecuting corruption by state and local officials, the more convictions it secures.  At first this may seem unsurprising.  After all, shouldn’t more effort to investigate and prosecute corruption crime produce more convictions?  But if more resources were allocated to state and local corruption, at some point one would expect a proportional decline in the number of prosecutions as state and local official tempted to take a bribe or engage in other corrupt acts declined to do so because they feared punishment.  But that deterrent effect apparently has yet to register; there are still not enough prosecutions that corrupt or would-be corrupt officials fear getting caught enough to stop their illegal activities.  What the Alt and Dreyer-Lassen findings show is that if the federal government is serious about eradicating state and local corruption, it needs to devote more effort to the cause.

2 thoughts on “Borrowing Integrity in the United States: Federal Prosecution of State and Local Corruption

  1. Very nice overview of this important feature of anticorruption enforcement in the U.S. A few comments/observations:

    1) I can’t stop myself from pointing out the connection between your post here and our mini-debate last week about whether there are useful lessons to be gleaned from the anticorruption experiences of Hong Kong and Singapore. Your point in this post was precisely the argument I was making in the earlier post about why the success of HK and Singapore is all the more remarkable given that they are single municipalities without any external enforcer, equivalent to the federal government, to come and clean them up. (Unless, of course, you make the argument that in Hong Kong the British Governor-General was effectively an external actor. And perhaps, much as we like democracy, in both these countries it was the undemocratic, concentrated power of a committed leadership that made action possible.)

    2) You framed the post with reference to other examples of “borrowing integrity,” some of which (as in Guatemala) involve international interventions. But as both of us have argued elsewhere (for example, in criticizing the “International Anticorruption Court” proposal), domestic federalism in anticorruption enforcement is not always a good analogy for international action. I wonder if you have further thoughts on whether or to what extent the US domestic experience you describe has relevance to international anticorruption efforts, or simply to anticorruption efforts in smaller countries without a federal structure?

    3) Do you have a sense of whether the federal enforcement that started in the 1970s effected a significant change in the political culture of many of these states and localities, or have the feds just managed to snare a larger portion of the corrupt actors? Have we moved (as the economists would say) to a “new equilibrium” with substantially lower corruption? Or have we at best achieved a modest decrease in corruption consistent with a garden-variety marginal increase in deterrence? And how would we know?

    • Glad you liked the piece. While the story of federal prosecution of state and local officials is well-known among a certain community in the U.S., I suspect those concerned about corruption in developing countries know little about it.

      On your comments/questions —

      1) On Hong Kong and Singapore, it is sometimes overlooked when discussing Hong Kong’s success that at the time the anticorruption drive was launched it was a British colony. British police and prosecutors were sent from London to help in the clean-up under the watchful eye of the Governor-General. So yes, the Hong Kong story begins with borrowed integrity although it continues after the hand-over to the PRC. On Singapore, as you suggested in your post, I think if we look under the hood we will find that some areas are corruption-free and others not and the differences are explained by what serves the ruling interests.

      2) I think the lesson from the borrowing experiences is be careful what you borrow. Guatemala and Liberia both trusted their fate to capable, motivated, honest international public servants. In both cases they were lucky – the first head of the Guatemala impunity commission and the World Bank staff member that oversaw GEMAP in Liberia were both up to the task. Background conditions in both were favorable too. In both the international community was united; there wasn’t the undercutting of the mission that can happen when different agencies or different governments disagree about what should be done and pursue different policies. In addition, the missions were clearly defined and narrow in both cases.

      In the U.S. federal law enforcement personnel are generally quite capable. By many measures the FBI is the premier police force in the world, and the responsibility, power, and future career prospects that comes with being a federal prosecutor attracts highly talented young law grads. Like in Guatemala and Liberia the mission, bringing cases against corrupt state and local officials is well-defined and narrow, and the wide-spread consensus on the mission means no one is undercutting their work.

      3) There isn’t the kind of data at hand to answer your questions definitively. The best we have is the Alt/ Dreyer-Lassen study which suggests we are just snaring more corrupt actors rather than dampening the ardor of public officials to engage in corrupt acts. It might be the case that there are shifts in the pool of corrupt public officials thanks to the federal effort – fewer judges say and more low level staff. This seems to be the case in Chicago in the wake of two major undercover operations in the early nineteen eighties that resulted in the convictions of a number of judges for corruption. I have found no subsequent federal prosecutions of a judge and only one disciplinary action since for corruption. On the other hand, there appears to be a steady stream of convictions of state and local officials for corruption.

      If indeed federal prosecutions have put an end to corruption among Chicago judges, that result would be consistent with the learning on deterrence. More educated individuals are very good at calculating the chances of getting caught. Given the size of the FBI public corruption unit assigned to the Chicago office and the vigor with which the U.S. Attorney’s office there pursues public corruption cases, one would think that any judge tempted to take a bribe would think twice and decline the offer. On the other hand, lesser educated staff less attuned to the federal enforcement effort may still have their hands out.

      One sign that federal prosecution has produced a change in local corruption levels would be if state and local prosecutors were pursuing more (any?) cases. One would like to think that as the feds “cleaned” up the system, state and local agencies would step in to keep it that way. Again some evidence from Chicago. There are now a slew of inspectors general for different agencies. But this is an area to pursue, perhaps for one whose “research focuses on the application of positive political theory to public law, particularly in the areas of administrative procedure, anti-corruption, judicial institutions, and separation of powers.”

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