Not So Suave: the Problem with RICO Laws

Jol A. Silversmith, Perspective (January 1994)

On June 17, 1989, pro-life protesters blocked access to an abortion clinic in West Hartford, Connecticut. Police arrested some of the protesters and restored access to the clinic. The story is familiar - but here it had a different ending. The town filed suit against the protesters under a law known as the RICO (Racketeer Influenced and Corrupt Organization) Act. West Hartford charged that the tactics of the protesters amounted to extortion and that they should be criminally liable as "racketeers." Among the defendants were leaders of Operation Rescue who had not even been present at the protest and John Spear, a writer for the Orange County Post. Spear's sole contribution to the "conspiracy" was writing an editorial condemning the brutal handling of the protesters by the police.

West Hartford ultimately lost its case, but on January 24 the the Supreme Court ruled unanimously that, by the letter of the RICO law, anti-abortion protests may qualify as "racketeer influenced and corrupt." Whether such protests are protected by the First Amendment will be decided in another case later this term. Given the Court's close attention to this issue, one must wonder what is at stake in this conflict.

The federal RICO statute is a part of the 1970 Organized Crime Control Act. The act sought to strip organized crime of the protection and profits it received through the infiltration of legitimate businesses. The act permits criminal prosecution and civil suits against groups and organizations that engage in a "pattern of racketeering activity" in order to acquire or maintain a business "enterprise." The terms of the law were broad, but were thought necessary to accomplish its purpose. In January, 1970, while testifying on the bill, Lawrence Speiser, legislative director of the American Civil Liberties Union (ACLU), endorsed the government's efforts to control crime but warned that there was "a serious danger that the government's zeal in the pursuit of organized crime may result in a pervasive undermining of important civil liberties... to the detriment of us all."

There are several aspects of the act that are left open to interpretation. The term "enterprise" is so vague as to encompass almost any grouping of individuals, even after efforts by the Supreme Court to narrow its application. The meaning of a "pattern of racketeering" is similarly ambiguous. RICO is now used in almost every area of business affairs and law, from securities and banking to landlord-tenant disputes, from discontented utility customers to intra-church spats. Rulings by the Supreme Court have so far found all of these uses of RICO constitutional. In the 1985 case Sedima v. Imrex, the Supreme Court indicated that these uses of RICO were clearly beyond the original intent of Congress.

Proposed solutions for the overuse of RICO have included abolition of the law, imposition of a requirement of prior criminal conviction for civil suits, limitation of its application to cases involving financial gain, an increase in the amount of proof required, elimination of the pejorative label "racketeer," and the narrowing of the availability of the triple damages that have been a lure for civil RICO suits. But no reform effort has yet been successful; indeed, no federal racketeering law has ever been repealed.

In addition, the constitutionality of RICO has never been directly challenged. Perhaps frustrated by their inability to respond to act on more limited grounds, Justice Scalia, joined by Kennedy, O'Connor, and Rehnquist, almost called for such a challenge in a concurring opinion in the 1989 case H.J. Inc. v. Northwestern Bell Telephone Co.: "No constitutional challenge to this law has been raised in the present case, and so that issue is not before us. That the highest Court in the land has been unable to derive from this statute anything more than today's meager guidance bodes ill for the day when the challenge is presented."

In the meantime, the use of RICO has continued to expand. Between 1970 and 1985 there were only 300 civil RICO decisions, and the Department of Justice prosecuted only 300 criminal RICO cases between 1970 and 1980. Now, 125 criminal RICO cases are now filed on average per year. In 1986, 614 civil RICO suits were filed; 957 were filed in 1988; the average is now well over a thousand per year.

Consumer activists such as Ralph Nader have championed RICO, arguing that it is useful for suits against unscrupulous businesses. But RICO has been a near "total failure" in stopping the infiltration of legitimate businesses. Very few such criminal cases have been brought to trial, and most of the defendants (i.e., motorcycle gangs) were still not the originally intended targets of the law. Most criminal uses of RICO are also redundant. Other laws exist to punish government corruption and white-collar crime for example; RICO merely enhances their penalties.

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