Conspiracy

Federal conspiracy statutes were first passed in 1909. Under 18 U.S.C.A. § 371, it is a crime to commit an offense against or to defraud the United States or any agency of the United States. If the crime actually committed is a felony, the punishment is a fine of not more than $10,000 or five years' imprisonment, or both. Under 18 U.S.C.A. § 372, it is a crime to conspire to impede or injure a federal law enforcement officer.

The U.S. Congress has made specific conspiracies illegal through a variety of statutes. For example, conspiracy to murder federal or foreign officials is prohibited by 18 U.S.C.A. § 1117, a freestanding statute. Conspiracy to kidnap is contained in subsection C of 18 U.S.C.A. § 1201, the federal kidnapping statute. Other federal statutes prohibit conspiracies to assassinate the president, the vice president, and their successors; assassinate the director or deputy director of the CENTRAL INTELLIGENCE AGENCY (CIA); assassinate or kidnap a Supreme Court justice; interfere with commerce and trade; violate computer laws; launder money; obstruct state or local regulation of gambling; injure property of the federal government; tamper with consumer products; gather, transmit, lose, remove, or destroy national defense information or materials; incite sailors to mutiny; engage in prohibited practices regarding radio broadcasts or game show contests; defraud the TENNESSEE VALLEY AUTHORITY; violate or interfere with VOTING RIGHTS; and sexually exploit children.

Conspiracy cases are often infamous for their ambition and breadth. The assassination of President ABRAHAM LINCOLN in 1865 by John Wilkes Booth was a product of a conspiracy between Booth and several supporters of the defunct Confederacy. In the early 1950s, the U.S. Congress conducted numerous hearings on Communist conspiracies against the United States. In the mid-1970s, several White House aides were indicted on charges of conspiracy in connection with the 1972 burglary of the offices of the Democratic National Committee in the Watergate Hotel, in Washington, D.C.

In November 1986, a Lebanese weekly, Al-Shiraa, reported that the U.S. government had secretly sold military weapons to so-called moderate factions in Iran. In exchange for the arms sales, according to Al-Shiraa, the moderate Iranians would work to secure the release of U.S. citizens held hostage in Lebanon. Thus began an investigation into a conspiracy that became popularly known as the IRAN-CONTRA AFFAIR.

Congressional investigations that followed the Al-Shiraa article revealed a covert "enterprise" connected with the arms sales. The operation, staffed by private citizens and funded by private monies, had diverted profits from the sale of the weapons to the Contras, a loosely knit military force in Honduras that sought to overthrow the socialist Sandinista government in Nicaragua.

Congressional investigations in the spring of 1987 revealed that the enterprise had been supervised by U.S. NATIONAL SECURITY COUNCIL (NSC) staff. The NSC, created by the National Security Act of 1947 (61 Stat. 496 [50 U.S.C.A. §§ 402]) and amended by the National Security Act Amendments of 1949 (63 Stat. 579 [50 U.S.C.A. § 401 et seq.]), existed to advise the president with respect to the INTEGRATION of domestic, foreign, and military policies relating to national security.

One of the many problems presented by the enterprise was its apparent violation of the Boland amendments to a series of appropriations bills. These bills were established in the early 1980s to prevent any "agency or entity of the United States involved in intelligence activities" from spending funds available to it "to support military or paramilitary operations in Nicaragua" (133 Cong. Rec. H4982-87 [daily ed. June 15, 1987]). The covert arms sales also violated procedural and substantive requirements of the Arms Export Control Act of 1976 (Pub. L. No. 90-629, 82 Stat. 1320 [22 U.S.C.A. §§ 2751–2796c (1989 Supp.)]). Moreover, the executive branch's failure to notify Congress of the covert arms sales flouted the reporting provisions of the 1980 Intelligence Oversight Act (Pub. L. No. 96-450, tit. IV, § 407(b)(1), 94 Stat. 1981 [50 U.S.C.A. § 413 (1982)]).

In 1987, Lawrence Walsh, a former AMERICAN BAR ASSOCIATION president and former federal judge, was assigned by the U.S. Court of Appeals for the District of Columbia Circuit, Independent Counsel Division, to investigate the Contra-funding scheme. In March 1988, Walsh charged Richard Secord, Albert Hakim, Oliver North, and John Poindexter with conspiracy to obstruct the U.S. government. North and Poindexter had worked for the NSC.

As in all conspiracy cases, an important goal of the prosecution was to determine who was involved in the agreement. A major issue in the Iran-Contra investigation was to determine precisely who in the EXECUTIVE BRANCH authorized or was aware of the arms diversions and, specifically, whether the president had knowledge of the unlawful activities.

In the legal battles that ensued over access to information in connection with the prosecutions, Walsh faced challenges by the RONALD REAGAN and GEORGE H. W. BUSH administrations, the JUSTICE DEPARTMENT, intelligence agencies, and lawyers for the accused. Ultimately, the White House refused to relinquish classified information crucial to the prosecutions, and Walsh was forced to drop all conspiracy charges. The Iran-Contra Affair resulted in criminal convictions of several persons directly connected with the Reagan administration, but Walsh was never able to link the president to a conspiracy to obstruct the U.S. government.

In another conspiracy case, Patricia Caldwell, a bookkeeper with the Northwest Community Exchange (NCE), was charged with conspiracy to defraud the United States because she refused to provide to the IRS certain account information it requested regarding NCE customers. The NCE was one of a number of warehouse banks, which promised their customers that they would not reveal account information to third parties, including the INTERNAL REVENUE SERVICE (IRS). As a result, the IRS shut down the warehouse banks, and it charged several customers and employees with conspiracy to defraud the United States. A jury convicted Caldwell of conspiring to defraud the United States, in violation of 18 U.S.C.A. § 371.

The Ninth Circuit Court of Appeals reversed Caldwell's conspiracy conviction (United States v. Caldwell, 989 F.2d 1056 [1993]). The government had argued that people have a duty to conduct their business affairs so as to not impair or impede the collection of revenue by the IRS. The majority opinion, written by Judge Alex Kozinski, rejected this interpretation of 18 U.S.C.A. § 371 and held that to defraud the government, a person had to act deceitfully or dishonestly. To allow otherwise would create an oppressive theory of criminal conspiracy. The court observed that under the government's theory, "a husband who asks his wife to buy him a radar detector would be a felon … because their actions would obstruct the government function of catching speeders." According to the court, Congress did not intend to make a federal crime out of actions that merely make "the government's job more difficult."

The jury in Caldwell's case had not been instructed that it had to find that Caldwell agreed to obstruct the IRS's tax-collecting functions by deceitful or dishonest means. This failure to inform the jury about an essential element of conspiracy constituted reversible error, and Caldwell's conviction was overturned.