Minutes of the April 16, 2003
United States Sentencing Commission
Chair Murphy called the meeting to order at 9:54 a.m. in the Commissioners Conference Room. The following Commissioners and staff participated in the meeting:
Diana E. Murphy, Chair
Ruben Castillo, Vice Chair
William K. Sessions, III, Vice Chair
John R. Steer, Vice Chair
Michael E. O’Neill, Commissioner
Eric H. Jaso, Ex Officio Commissioner
Timothy B. McGrath, Staff Director
Charles Tetzlaff, General Counsel
Judith Sheon, Special Counsel
Chair Murphy began by welcoming guests and reporting on the status of the annual amendment cycle. May 1 is the date by which the Commission must send its guideline amendments to Congress, which means many votes are usually taken in April but this year a number of amendments were promulgated at its March 26, 2003, public meeting. This meeting will focus on four areas of proposed amendments: corporate fraud, manslaughter, cybercrime, and immigration.
Chair Murphy reported that at the end of this month the Commission will begin planning its agenda for the coming year. She added that portions of the agenda already have been set. For example, final reports from the Commission’s two ad hoc advisory groups — one considering Native American issues as they relate to the sentencing guidelines, and the other studying the guidelines for sentencing organizations — are expected in early October. Chair Murphy noted that the audience may well be familiar with the PROTECT Act and stated that the Commission already has begun to think about what it must do on an emergency basis under that Act. She added that the drafting staff already has been working on conforming the guidelines to parts of the Act that require action forthwith.
Chair Murphy reported that the Commission, in conjunction with the Federal Bar Association, will be hosting its annual national seminar on the guidelines on May 28-30, 2003, in Miami.
Chair Murphy stated that there has been no new word on the confirmation process for the President’s two nominees to the Commission, Michael Horowitz and Judge Ricardo Hinojosa. She stated that the Commission needs its full voting membership.
Chair Murphy stated that the next item on the agenda was approval of the March 26, 2003, public meeting minutes. She noted that a typographical error had been corrected. Vice Chair Castillo moved to approve the minutes as corrected. Seconded by Vice Chair Steer. The minutes for March 26, 2003, were approved unanimously.
Chair Murphy stated that in January, the Commission had promulgated emergency amendments as a result of the Sarbanes Oxley Act. The Commission announced then that it would continue to consider the issues and would consider a proposed permanent amendment related to corporate fraud in April. She asked General Counsel Charles Tetzlaff to review the provisions in the proposed permanent amendment.
General Counsel Tetzlaff stated that the proposed amendment (1) repromulgates as a permanent amendment the temporary, emergency amendment (effective January 25, 2003) implementing directives to the Commission contained in the Sarbanes Oxley Act of 2002; and (2) makes other related changes to several guidelines. General Counsel Tetzlaff stated that the Corporate Fraud Policy Development Team was headed by Ken Cohen and staffed by Theresa Cooney, Paula Desio, Alan Dorhoffer, Lisa Klem, Janeen Gaffney, and Courtney Semisch. He thanked the team for its hard work on the proposed amendment.
General Counsel Tetzlaff described the proposed amendment. The proposed amendment modifies §2B1.1 to provide alternative base offense levels of (1) level 7, if the offense of conviction carries a statutory maximum term of imprisonment of 20 years or more; or (2) level 6, otherwise.
The proposed amendment repromulgates the two additional levels at the upper end of the loss table, level 28 for loss amounts of $200 million and level 30 for loss amounts of $400 million. These new levels became effective with the promulgation of the emergency amendment in January 2003.
The proposed amendment expands the victims table in §2B1.1(b)(2). The victims table previously had provided two level enhancements if the offense involved more than ten but less than 50 victims, or was committed through mass-marketing, or a four level enhancement if the offense involved 50 or more victims. In response to a congressional directive, the proposed amendment provides an additional two levels, for a total of six levels, if the offense involved 250 or more victims.
Currently, subsection (b)(12)(B) provides a four level enhancement and a minimum offense level of 24 if the offense substantially jeopardized the safety and soundness of a financial institution. In response to directives, the proposed amendment expands the scope of this enhancement by providing two additional bases. The first basis applies to offenses that substantially endanger the solvency or financial security of an organization that, at any time during the offense, was a publicly traded company or had 1,000 or more employees. This basis of the enhancement is based on a presumption that if the offense endangered the solvency or financial security of an organization that was a publicly traded company, or had 1,000 or more employees, the offense similarly affected a substantial number of individual victims. As a result, the court is not required to determine whether the offense endangered the solvency or financial security of each individual victim. The second alternative basis applies to offenses that substantially endangered the solvency or financial security of 100 or more victims, regardless of whether a publicly traded company or other organization was affected by the offense.
The proposed amendment differs from the temporary emergency amendment by providing that the cumulative adjustment from application of both the number of victims enhancement and the enhancement for endangering the financial security of a substantial number of victims shall not exceed eight levels, except for application of the minimum offense level of 24. This limitation is provided to account for the overlapping nature of these factors in some cases. General Counsel Tetzlaff stated that this also presents the only retroactivity issue for the Commission’s consideration.
This proposed amendment expands the scope of the emergency amendment’s four level enhancement applicable to fraud offenses committed by officers and directors of publicly traded corporations by adding registered brokers and dealers and investment advisers in securities law cases, and by adding officers and directors of a futures commission merchant and similar persons in commodities law cases. This enhancement would be in lieu of the abuse of position of trust enhancement.
The proposed amendment increases the base offense level in §2J1.2 (Obstruction of Justice) from level 12 to level 14. The proposed amendment adds a new two level enhancement to §2J1.2 that applies if the offense (1) involved the destruction, alteration, or fabrication of a substantial number of records, documents, or tangible objects; (2) involved the selection of any essential or especially probative record, document, or tangible object to destroy or alter; or (3) was otherwise extensive in scope, planning, or preparation. The enhancement also applies to electronic records, documents, and communications. The proposed amendment provides an application note that encourages an upward departure if an obstruction of justice case involves an act of extreme violence.
The proposed amendment also increases the base offense level in §2J1.3 (Perjury) to level 14 in order to conform to the same increase provided in §2J1.2 (Obstruction of Justice).
The proposed amendment addresses new offenses created by the Act by referencing them to specific guidelines as well as by adding some cross references.
General Counsel Tetzlaff stated that a motion would be in order to repromulgate the temporary emergency amendment as modified with an effective date of November 1, 2003, and to authorize staff to make technical and conforming changes.
Vice Chair Steer moved to repromulgate the temporary emergency corporate fraud amendment as modified. Vice Chair Sessions seconded the motion.
Vice Chair Castillo stated that the Commission has spent much of this amendment cycle being responsive to Congress and this responsiveness has been the hallmark of the three and a half years that he has served on the Commission. He stated that he would like to apologize to the Commission and his fellow judges, however, for his failing to communicate more effectively with Congress. Vice Chair Castillo stated that he believed the provisions in the PROTECT Act and Representative Feeney's amendment regarding sentencing reform result from a failure in communication. Vice Chair Castillo said that some of the issues in the PROTECT Act were familiar to the Commission, while others had never been discussed with the Commission. Vice Chair Castillo noted that every time this Commission has considered penalties for sexual offenses, the penalties have been increased. Vice Chair Castillo remarked that he and the Commission agree that departure rates need to be studied. For this reason, the Commission has undertaken an in depth review of departure rates. He added that there is a lot to be learned not only about regional differences among judges, but also about prosecutorial variations. Vice Chair Castillo commented that the prosecutorial reporting requirements contained in the PROTECT Act indicate to him that the Department of Justice has admitted its difficulty in ensuring uniform practices among prosecutors.
Vice Chair Castillo remarked that he hopes members of Congress do not lose sight of the importance of the judicial function. He stated that every day, individual defendants are sentenced by individual judges, totaling 60,000 sentencings a year. Vice Chair Castillo expressed the inherent difficulties in attempting to police every individual judge who undertakes the essential task of sentencing. Instead, he hopes that Congress will realize that the Commission has been working diligently to achieve consistent judicial support of the federal sentencing guidelines and the guideline system as a whole. Vice Chair Castillo stated that he has given speeches and written on this very subject. He acknowledged that the guideline system is not popular with all members of the judiciary, nor is it popular within the circle of his own ethnic community which has a high incarceration rate. Vice Chair Castillo stated that despite this opposition, he is a strong believer in the sentencing guidelines.
Vice Chair Castillo stated as the Commission seeks to convince judges of the importance of the guidelines, the Commission battles for the hearts and minds of federal judges, but this battle cannot be won by the sword. Rather, it must be won through reasoned judgment and policy development by the Commission. He believes that in the past three and a half years, the Commission has made great strides in that direction and that more judges support the guideline system than ever before because this Commission has worked to target precisely specific offenses. Vice Chair Castillo suggested that over time, the departure rate would be reduced considerably as more judges support the guidelines system. He said that he is personally committed to reducing the departure rate in white collar crime and sex offenses in particular.
Regarding the motion to repromulgate the proposed emergency corporate fraud amendment, as modified, Vice Chair Castillo stated that on April 11, 2003, Senator Biden published his legislative history for the Sarbanes Oxley Act. He noted that until now, he had taken the strong position that the Sarbanes Oxley Act was not intended to target low level offenders. Vice Chair Castillo stated that Senator Biden makes clear that the Act indeed was intended to target low level offenders. Senator Biden stated that "[t]he increased sentences, while meant to punish the most egregious offenders more severely, are also intended to raise sentences at the lower end of the sentencing guidelines." Legislative History of Title IX of the Sarbanes-Oxley Act of 2002 (H.R. 3763) 108th Cong., 149 Cong. Rec. S5325 (Apr. 11, 2003) (statement of Senator Biden).
Vice Chair Castillo stated that he wholeheartedly recognizes Congress’s predominance in setting penalties and that this compromise to raise the base offense level for offenses with a statutory maximum term of imprisonment of 20 years or more targets specific offenders and significantly limits judicial discretion in the area of white collar crime. He added that although he supports the compromise, he would have preferred further study to determine the impact of the 2001 economic crime amendments before making this kind of change. Vice Chair Castillo specifically thanked fellow commissioners and the Department of Justice for their work in bringing about this compromise.
Vice Chair Castillo concluded by stating that it is crucial not to lose sight of the importance of the judicial function. For this reason, he stated that he is deeply disappointed that Congress has decided to limit the number of federal judges that may serve on the Sentencing Commission. Vice Chair Castillo stated that it is important that criminal justice issues not be the subject of a total political, partisan process. He added that, in his view, life tenured judicial officers play an important role as Commission appointees. Vice Chair Castillo stated that he personally promises to pursue a better dialogue with Congress.
Vice Chair Sessions remarked on the proposed amendment. He stated that because it is a compromise, there are mixed feelings about the proposal. Vice Chair Sessions stated that the Commission has learned a lot through this process, and he hopes that one of the primary lessons from this process is that the commissioners continue to listen to each other and the arguments that each is making, and try to resolve whatever differences they might have. Vice Chair Sessions said that the Commission compromised on the issue of low level fraud defendants. He added that they arrived at a compromise that is acceptable to the commissioners as well as the Department of Justice, despite some reservations on all sides. Vice Chair Sessions stated that perhaps this is the best way to make public policy.
Vice Chair Sessions noted that Senator Biden’s comments in the Congressional Record make clear that when Congress increased the statutory maximum penalties for wire and mail fraud, it also intended that there be an increase in the base offense level for low level fraud defendants. Vice Chair Sessions said that he finds it particularly interesting that Congress was interested in an increase in the base offense level for fraud, rather than an increase in the loss amounts. He added that the Commission very carefully and closely responds to Congressional directives, and that is what this compromise accomplishes.
Vice Chair Sessions stated that the Commission also is responding to other entities within the criminal justice system, in particular the Probation Officers Advisory Group (POAG). Several months ago, the POAG indicated that the base offense level for fraud might be too low, but that it was concerned about any potential impact on theft offenders. Vice Chair Sessions stated that the prison impact study for this proposed amendment demonstrates that, because of the 20 year statutory maximum threshold for a base offense level of seven, the impact on theft offenders is minimal. He said that the impact on fraud offenders is much more dramatic, affecting 50 - 55 percent of all fraud offenders.
Vice Chair Sessions mentioned that the Commission previously had discussed changes to the loss table. He stated that if the loss table were changed, then fraud offenses would not be the only offenses impacted; rather, a change to the loss table would impact all the various offenses that are linked to the loss table at §2B1.1. Vice Chair Sessions added that there is therefore no rational basis for changing the loss table. He said that, in his view, the proposed compromise amendment is very positive from a public policy perspective.
Vice Chair Sessions stated that from a broader perspective, this proposed amendment represents an assault on judicial discretion because it changes the number of defendants who fall into Zone A, B, or C. He added that he, like Vice Chair Castillo, believes strongly in giving judges reasonable discretion. Vice Chair Sessions noted that the Commission is tasked with reviewing departures because Congress believes that the downward departure rate is too high. He suggested that judges depart from the guidelines because they are seeking to impart justice for individual defendants who have individual factual scenarios. Vice Chair Sessions said that the more discretion is limited, the more judges depart because it is hard for them to sentence an individual defendant to a sentence they believe is unjust.
Vice Chair Sessions expressed his hope that in studying departures the Commission will find a solution within the guidelines system such that the participants are given sufficient leeway that upward or downward departures are not necessary to arrive at a just sentence. He believes this would reduce the frequency of departures.
Vice Chair Steer stated that he would comment on two important issues arising from the modified proposal. First, regarding the interaction between the victim table and the enhancement for jeopardizing the solvency or financial security of either a publicly traded company, or one that has 1000 or more employees, or 100 or more individual victims, Vice Chair Steer believes that the Commission viewed these enhancements as targeting two separate and distinct harms, both of which were the subject of separate directives. Vice Chair Steer stated that the modified proposal demonstrates the value of having public input between action on an emergency amendment and the promulgation of a permanent amendment. Many persons commented during that period that while the enhancements target separate harms, in reality there is a high likelihood that there would be an interaction between the two and arguably some overlap. Vice Chair Steer indicated that while he does not necessarily subscribe to that view, the Commission recognized these concerns. Thus, the proposal has been modified such that when a defendant is subject to the multiple victim enhancement and the enhancement for jeopardizing the financial security of various entities, the appropriate total increase in punishment is eight levels, rather than the previous possibility of a ten level increase.
Second, regarding the increase to the base offense level, Vice Chair Steer stated that although he would have preferred some change to the loss table, he is pleased to support the compromise. He believes that it is the minimum the Commission should enact in order to comply more fully with the Sarbanes Oxley Act and congressional intent, as indicated by the increased statutory maximum terms of imprisonment for mail and wire fraud and for the related inchoate offenses, conspiracy and attempt, and with the general directives to the Sentencing Commission. Vice Chair Steer noted that this is further supported by Senator Biden’s statement in the legislative history.
Regarding the issue of judicial discretion and departures, Vice Chair Steer observed that there appears to be a difference in view between some members of the judiciary and the Congress as to what judicial discretion is all about. Vice Chair Steer stated that, in his view, Congress sees the Sentencing Reform Act as a way of allowing judicial discretion within prescribed policy constraints. He believes the PROTECT Act indicates that Congress believes it is the ultimate arbiter of sentencing policy, and Congress does not have a high tolerance for judges who use their discretion to carry out counter policy. Vice Chair Steer said that he believes that Congress sees discretion within the prescribed guideline ranges as a way for judges to account for various factors and individualize sentences, or to prescribe a different sentence when departure expressly is allowed for mitigating or aggravating circumstances. Vice Chair Steer stated that he does not think Congress sees discretion as a proper way for judges to express their policy difference with Congress as to what constitutes a just punishment.
Vice Chair Steer noted the likelihood that there will continue to be back and forth on this issue. Historically, this country has seen times of zero discretion and times when judges were allowed a range of discretion. He cited 19 U.S.C. § 924(c) as an example when judges have no discretion in sentencing.
Vice Chair Steer concluded by stating that he looks forward to working with his colleagues on the departure study and responding to the directives set forth in the PROTECT Act. He also commended his fellow commissioners for their cooperation in reaching this proposed compromise amendment.
Commissioner O’Neill stated that he supports the proposed amendment because of the efforts of Vice Chair Sessions and Ex Officio Commissioner Jaso to reach a compromise. Commissioner O’Neill stated that this is the minimum the Commission can do to be responsive to the congressional directives in the Sarbanes Oxley Act. Although he supports the proposed amendment, he has certain reservations. The Sentencing Commission contributes solid empirical research into penalty provisions and the effects on the criminal justice system. In 2001, after a symposium on white collar crime held at George Mason University School of Law and after years of study and debate with Congress and the Department of Justice, the Commission promulgated comprehensive amendments to the fraud and theft guidelines. Through considerable study, review of academic literature, and social science research, the Commission promulgated the Economic Crime Package because it believed the amendments would best achieve the purposes of sentencing set forth by Congress by exacting just punishment and deterring future criminal conduct through both specific and general deterrence. Commissioner O’Neill stated that in the course of studying white collar crime, the Commission determined that with respect to low level offenders, the likelihood of recidivism was not dependent on time spent in prison. Rather, the mere fact of conviction and loss of social and professional status provided sufficient deterrence to prevent low level fraudsters from becoming repeat offenders. On the other hand, the Commission also determined that penalties for high level fraud offenders needed to be increased to reflect the seriousness of those types of crimes. Commissioner O’Neill noted that shortly after the Economic Crime Package was adopted, high profile white collar crimes such as the Enron and WorldCom cases spurred Congress to action. He stated that while Congress was aware of the Commission’s good work in 2001, it believed that penalties for white collar crime needed to be increased for low and high level offenders. Commissioner O’Neill remarked that although he supported increased sentences for high level fraud offenders, he had not supported consolidating the fraud and theft loss tables. He stated that the Commission would have appreciated having had an opportunity to assess the impact of the Economic Crime Package amendments.
Commissioner O’Neill stated that one of the primary purposes behind the Sentencing Reform Act was Congress’s recognition that white collar offenders ought to be treated like blue collar offenders, receiving significant prison time for serious offenses. He stated that immediately after the adoption of the Act the number of fraudsters appeared to increase despite the reality of certain punishment. Commissioner O’Neill added that more recently, the number of fraud cases appears to have dropped or leveled off. Thus, in his view, the need for the Sarbanes Oxley Act is not readily apparent from an empirical standpoint. Commissioner O’Neill noted that whether or not he supported the increase in penalties, it was Congress’s decision to make, and he believes that Congress clearly intended to raise fraud penalties across the board. He noted that Congress held hearings, heard from constituents, and conferred with the Department of Justice before reaching this conclusion. For this reason, Commissioner O’Neill was willing to support either the Department of Justice’s original proposal or Vice Chair Steer’s proposal.
With regard to judicial discretion in sentencing, Commissioner O’Neill stated that he believes reasonable minds can disagree as to the respective roles of the Sentencing Commission, Congress, and the judiciary in sentencing. Historically the power of judges has been to state what the law is in individual cases while Congress’s role has been to set sentencing policy and identify the range of penalties for various types of criminal behavior. Commissioner O’Neill stated that the genius of the American common law system has been to allow judges and juries flexibility in sentencing individual defendants. He noted that the Sentencing Commission’s organic legislation incorporates this flexibility. There is a natural tension between what judges do in individual cases and what Congress does in setting broad sentencing policy. He stated that this tension leads to healthy debate and that it is important to consider and assess the philosophical underpinnings of sentencing and the Commission’s role in the process.
Ex Officio Commissioner Jaso stated that he is pleased the Commission has arrived at a solution to implement the directives of the Sarbanes Oxley Act. He said that as Vice Chair Sessions indicated, the Department of Justice supports the proposal with some reservations and he shares those expressed by Vice Chair Steer and Commissioner O’Neill. Ex Officio Commissioner Jaso stated that he believes this proposed compromise amendment represents the least that can be done to be responsive to Congress.
Ex Officio Commissioner Jaso commented on how the Commission reached this point. He noted that Congress substantially increased the statutory maximum terms of imprisonment for key fraud statutes, from five to 20 years for mail and wire fraud, and to 25 years for securities fraud. These statutory increases were enacted with general directives, demonstrating Congress’s traditional deference to the Commission’s ability to craft appropriate guidelines and incorporate congressional directives into the Guidelines Manual. Ex Officio Commissioner Jaso stated that these general directives were insufficient for some members of the Commission. He stated that the Department of Justice had a fair amount of concern that the emergency amendment passed in January 2003 was not fully responsive to congressional intent. This is why Senator Biden entered legislative history into the Congressional Record, specifically noting that Congress was aware of the Economic Crime Package of 2001 and that it intended for fraud penalties to be increased at both the low and high ends. He remarked that the document refutes the argument that even when Congress increases statutory penalties, as long as the guidelines permit the penalty in some circumstances to reach the statutory maximum, there is no need to increase the guideline penalties. Ex Officio Commissioner Jaso noted that Senator Biden praised the Commission’s work on the Economic Crime Package as a step in the right direction and the Department of Justice shares this view. He stated that Senator Biden then indicated, among other things, that an increase in the base offense level for fraud would be appropriate.
Ex Officio Commissioner Jaso noted that the proposed compromise amendment increases the base offense level for offenses with a 20 year statutory maximum term of imprisonment. He stated that while he understands the rational for carving out theft offenses, the Commission itself decided to consolidate the fraud and theft loss tables in an effort to simplify operation of the guidelines. Ex Officio Commissioner Jaso stated that the proposed amendment appropriately targets the offenses about which Congress was concerned in the Sarbanes Oxley Act.
The Department of Justice had noted an increasing incidence of downward departures in white collar cases and presented this to Congress. Ex Officio Commissioner Jaso remarked that the Commission and Congress can raise penalties, but if judges depart then the increased penalties have no impact. Ex Officio Commissioner Jaso stated that the proposed compromise amendment, coupled with the provisions in the PROTECT Act and the work the Commission will undertake to limit departures, will serve to further the important goal of increasing punishment for white collar and fraud offenses. He thanked the staff for promptly, professionally, and thoroughly working on the various Commission proposals that were put forward during the process of considering corporate fraud and accountability.
With regard to the PROTECT Act, Ex Officio Commissioner Jaso stated that he does not subscribe to the view that there had not been enough time to review the legislation or that Congress was uninformed about the ramifications of the legislation. The Act harkens back to the Koon decision’s interpretation of the Sentencing Reform Act, holding that it is the province of the Commission to review the appropriateness of downward departures from a policy perspective. Ex Officio Commissioner Jaso stated that he does not believe the Commission has fulfilled that mission to monitor and respond to inappropriate departures and departure rates. He added that in some instances the Commission has incorporated specific grounds for departure, either as encouraged, discouraged, or forbidden grounds, but that some have been ill-advised such as that for aberrant behavior. He added that even some discouraged grounds for departure are frequently invoked by judges. Ex Officio Commissioner Jaso stated that it was therefore incumbent upon Congress to address the Koon decision and change the standard of review for departures. He remarked that this has been decried as an assault on the federal judiciary. He said that virtually every other decision by district courts is reviewable de novo; thus, it is not unusual for appellate courts to review departure decisions in the same manner. Ex Officio Commissioner Jaso stated that the PROTECT Act simply puts into effect the Supreme Court’s decision in Koon that the Commission must ensure that discouraged departure grounds are infrequently invoked.
Chair Murphy took the floor to indicate that remarks at this stage of the meeting should be focused on the pending motion which is to promulgate the proposed amendment on corporate fraud. To be sure, several commissioners had mentioned the PROTECT Act in their remarks but she asked Ex Officio Commissioner Jaso to consider reserving any remaining comments about the Act until after the vote on the pending motion. Ex Officio Commissioner Jaso agreed.
Chair Murphy stated that this Commission has been working on white collar crime issues since the beginning of its term in November 1999 and this was reflected in the 2001 Economic Crime Package and its creation of an ad hoc advisory group in January 2002 to study the guidelines used to sentence organizations and other organizations. She said that the Commission has been in the forefront in dealing with white collar and corporate crime issues. Chair Murphy stated that in passing the Sarbanes Oxley Act, Congress indicated a great concern about high profile corporate and other white collar fraud, and the Commission has been working very hard to respond to the Act within the short time provided by Congress. The Commission passed an emergency amendment in January 2003 and, at that time, indicated that it would continue to work on the issues before promulgating a permanent amendment. Chair Murphy stated that this proposed amendment reflects that additional work and the Commission’s responsiveness to Congress.
Chair Murphy asked Staff Director McGrath to take a roll call vote on the pending motion. All voting commissioners voted yes.
The motion to promulgate the proposed amendment pertaining to corporate fraud, effective November 1, 2003, and to authorize staff to make technical and conforming changes passed unanimously.
General Counsel Tetzlaff stated that under the Commission’s Rules of Practice and Procedure, the Commission is required to consider retroactivity issues contemporaneously with the passage of an amendment. He noted that the provision in the corporate fraud amendment at §2B1.1(b)(12)(C) provides that cumulative adjustments resulting from the multiple victims enhancement and the enhancement for endangering the financial solvency of various entities will be limited to eight levels. General Counsel Tetzlaff stated that this raises the issue as to whether the Commission has any desire to make this provision retroactive.
Chair Murphy noted that the issue of retroactivity failed for lack of a motion.
General Counsel Tetzlaff thanked Lisa Klem, Courtney Semisch, and Janeen Gaffney for their hard work on the proposed cybercrime amendment. He stated that this proposed amendment responds to the Cyber Security Enhancement Act of 2002, set forth in § 225 of the Homeland Security Act. The Act directs the Commission to review and, if appropriate, amend the guidelines and policy statements applicable to persons convicted of an offense under 18 U.S.C. § 1030, which is a comprehensive statute addressing fraud through the use of computers. The Commission was directed by Congress to ensure that the guidelines reflect the serious nature and the growing incidence of computer offenses and the need to provide an effective deterrent and appropriate punishment. Congress further required the Commission to consider eight specific factors in the course of its review.
In response to the directive, the proposed amendment makes several changes to §§2B1.1, 2B2.3 and 2B3.2, guidelines to which 18 U.S.C. § 1030 offenses are referred. In addition, the proposed amendment references 18 U.S.C. § 2701 to §2B1.1 in Appendix A. Offenses under 18 U.S.C. § 2701 deal with the unlawful access to stored communications such as voice mail and email. These offenses were previously misdemeanors, but the Homeland Security Act both expanded the scope of the statute and increased the penalties. Because the offense conduct is related to fraud, theft, and property damage, 18 U.S.C. § 2701 offenses are being referred to §2B1.1.
The proposed amendment to §2B1.1 adopts a construct addressing a number of the specific factors that Congress directed the Commission to consider in a multi-faceted specific offense characteristic. These enhancements are tiered based on offense seriousness and would not be applied cumulatively because the more serious enhancement frequently will encompass the behavior relevant to a lesser enhancement. Hence a section 1030 offense involving a computer system used to maintain a critical infrastructure or used by a government entity in furtherance of the administration of justice, national defense, or national security, or an offense involving an intent to obtain personal information, would be subject to a two level enhancement. A second facet provides for a four level enhancement for section 1030 offenses if the offense involved conduct connoting a malicious intent by intentionally or recklessly causing damage. A third facet provides for a six level enhancement, with a floor of 24 levels, if the offense caused a substantial disruption of a critical infrastructure, as defined in the guideline. There is an encouraged upward departure provided if the disruption to a critical infrastructure is so substantial as to have a debilitating impact on national security, national economic security, national public health or safety. There is also an expanded upward departure provision for any section 1030 offense involving damage to a protected computer that results in death. A number of these same factors are added to §2B2.3 (Trespass), to which one subsection of 18 U.S.C. § 1030 is referenced, and to §2B3.2 (Extortion), to which another subsection of 18 U.S.C. § 1030 is referenced.
General Counsel Tetzlaff stated that a motion would be in order to promulgate the proposed amendment, with an effective date of November 1, 2003, and to authorize staff to make technical and conforming changes.
Vice Chair Castillo moved to promulgate the proposed amendment and to authorize staff to make technical and conforming changes. Seconded by Vice Chair Sessions.
Vice Chair Castillo thanked the team for its hard work, stating that this is another example of staff’s work in a very complicated area in a short time period of time and of the Commission being fully responsive to Congress. Vice Chair Steer stated that he concurs with Vice Chair Castillo. He also thanked the Computer Crime and Intellectual Property Section of the Department of Justice for its cooperation, expertise, and assistance with the proposed amendment. Vice Chair Steer stated that the Commission had received particularly helpful public comment on this issue, and he expressed his gratitude to those who contributed to the debate.
Chair Murphy stated that this is an area where the Commission had special concerns about the kinds of damage that can result from certain computer offenses.
Ex Officio Commissioner Jaso stated that this proposed amendment is another example of one of the many areas where the Department of Justice and Sentencing Commission work cooperatively on a complex and serious area of criminal activity. He noted that the Department and Congress are very focused on these types of crimes, including the use of computers to invade spheres of privacy and burglarize private information. Ex Officio Commissioner Jaso remarked that he believes the Commission has accomplished an excellent result with the proposed amendment. He thanked Commission staff and members of the Department for their fine work in this area, specifically noting the excellent legal advice and coordination by Jonathan Wroblewski.
Commissioner O’Neill also thanked members of the Department of Justice and Commission staff for their work in an area of grave concern to the government as well as the American public. He hopes this proposed amendment will have a deterrent effect in making potential wrongdoers aware that if they engage in behavior that affects critical infrastructures or targets protected information, they will be prosecuted and will face appropriately harsh punishments.
The motion to promulgate the proposed amendment pertaining to cybercrime, effective November 1, 2003, and to authorize staff to make technical and conforming changes passed unanimously.
General Counsel Tetzlaff thanked Pam Barron, Grace Chung Becker, Kevin Blackwell, and Judy Sheon for their work on the proposed involuntary manslaughter amendment. He noted that this proposed amendment is a continuation of the Commission’s work over the past several years to ensure that the guidelines provide appropriate penalties for offenses involving involuntary manslaughter. In 1994, Congress increased the statutory maximum term of imprisonment for involuntary manslaughter offenses from three years’ to six years’ imprisonment. Studies have shown that the heartland of involuntary manslaughter offenses involves vehicular homicide and that these offenses are punished more severely by many of the states. The Commission further examined both voluntary and involuntary manslaughter offenses in 1997, and in 1998 sent a report to Congress and a letter recommending that the statutory maximum penalty for voluntary manslaughter offenses be increased to permit the Commission to make changes that would maintain proportionality based on offense severity. Congress has not acted on this recommendation with respect to voluntary manslaughter.
Recently the Commission has received recommendations from Congress, the Department of Justice, and the Commission’s Ad Hoc Advisory Group on Native American Sentencing Issues that it proceed to amend the guidelines for involuntary manslaughter to increase the base offense levels. This proposed amendment increases the base offense level for reckless involuntary manslaughter by four levels (from level 14 to level 18). This proposed amendment also increases the base offense level for criminally negligent involuntary manslaughter by two levels (from level 10 to level 12).
General Counsel Tetzlaff stated that in the event there is interest in considering additional enhancements, particularly for conduct involving driving while under the influence of drugs or alcohol, this can be addressed during the next amendment cycle. The Commission is precluded at this time from considering additional enhancements due to notice issues.
General Counsel Tetzlaff stated that a motion would be in order to promulgate the proposed amendment, with an effective date of November 1, 2003, and to authorize staff to make technical and conforming changes.
Commissioner O’Neill moved to promulgate the amendment. Seconded by Vice Chair Castillo.
Chair Murphy stated that the Commission recently received a letter from Senators Feinstein, Hatch, Kyl and Reid expressing their concern about this issue. Additionally, the Commission has received other communications from the field about problems with the involuntary manslaughter guideline. She stated that the Commission is responding to those particular concerns.
Vice Chair Castillo thanked Chair Murphy for her action in convening the Ad Hoc Advisory Group on Native American Sentencing Issues because having the group in place and receiving its input allowed the Commission to take fast action in this area. He noted that the Commission received the Senators' letter about the manslaughter issue on October 23, 2002, and the Commission is acting on it in April of 2003. Vice Chair Castillo stated that this reflects ideal responsiveness. Vice Chair Castillo said that he is happy to support the proposed amendment.
The motion to promulgate the proposed involuntary manslaughter amendment, effective November 1, 2003, and to authorize staff to make technical and conforming changes passed unanimously.
General Counsel Tetzlaff thanked Pam Montgomery, Alan Dorhoffer, Kristen Rogers, Rusty Buress, Jean Gabriel, and Kealin Culbreath for their work on the proposed amendment. He noted that the training staff was particularly involved in this proposed amendment because of their close work with the field in identifying the need for clarifying changes. General Counsel Tetzlaff stated that the proposed amendment adds definitions and clarifies the operation of the guideline based upon a review of relevant case law and issues raised by judges, lawyers, and probation officers who use the guidelines. This amendment adds definitions with respect to "alien smuggling","child pornography", and "human trafficking" offenses; clarifies the meaning of "crime of violence"; adds commentary to clarify how revocations of probation, parole, or supervised release and indeterminate sentences should be treated for purposes of determining the term of imprisonment imposed; and adds language prohibiting the use of juvenile adjudications under this guideline.
General Counsel Tetzlaff stated that a motion would be in order to promulgate the proposed amendment with an effective date of November 1, 2003, and to authorize staff to make technical and conforming changes.
Vice Chair Steer moved to promulgate the amendment. Seconded by Vice Chair Sessions.
Vice Chair Steer stated that he is pleased to be a strong advocate of this amendment. He noted that the Commission had made changes to the immigration guideline in 2001. While most of these changes were well received, the Commission learned of some problems with the operation of this guideline. Thus the Commission is making definitional changes that are primarily nonsubstantive in order to clarify the operation of the guideline. Vice Chair Steer thanked staff for their work with the field and making the Commission aware of the need for clarifying terminology. He stated that while the proposed amendment is not entirely satisfactory to some persons with a strong interest in the area, he believes it is a decided improvement that will help application of the guideline. With respect to the drug offenses and the interaction of the definitions for crime of violence and aggravated felony, Vice Chair Steer stated that he is willing to join his colleagues in working to bring additional clarity to this area.
Vice Chair Sessions also thanked the staff for their great work on the proposed amendment. He noted that the proposed changes are nonsubstantive in nature but will help the operation of the guideline. While other more substantive changes were discussed, the Commission determined that it should seek additional input from the field. Vice Chair Sessions stated that he encourages the Commission to continue looking into this guideline so that it may address substantive issues relatively quickly.
The motion to promulgate the proposed immigration amendment, effective November 1, 2003, and to authorize staff to make technical and conforming changes passed unanimously.
Further Comments on PROTECT Act
Chair Murphy apologized for earlier needing to return the discussion to the pending motion on the corporate fraud amendment. Regarding the PROTECT Act, Chair Murphy remarked that while commissioners may have expressed differences of opinion, the Commission accepts the legislation as law and will implement the provisions of the Act as it would with any congressional directives.
Ex Officio Commissioner Jaso stated that Chair Murphy need not apologize; she presides over the Commission meetings and understandably wanted to stay on track. He stated that he would like to address some of the recent criticisms voiced by the media that the PROTECT Act is an assault by the Department of Justice and Attorney General upon the judiciary and the Sentencing Commission. Ex Officio Commissioner Jaso stated that this conclusion could not be further from the truth. He noted that the concern about downward departures originated with the Koon decision and the prior administration. Ex Officio Commissioner Jaso remarked that senatorial hearings were held in 2000 before Senator Thurmond; the issue then was hashed out at great length after carefully studying trends and departure rates. He stated that the departure trends have since continued, and he believes that very few people take issue with the underlying numbers. Ex Officio Commissioner Jaso stated that whether a 20 percent departure rate is high or low is a matter of opinion, but that the rate seems to be a problem for members of Congress. He noted that Congress had compromised on the proposed Koon "fix" by applying it strictly to sex crimes.
Ex Officio Commissioner Jaso stated that the Department of Justice has raised the departure issue for a number of years, and he is very pleased that the Commission is reviewing the issue. He stated that he is confident that the Commission will take a critical look at the incidence of departures, and the Department looks forward to cooperating with the Commission in this effort. Ex Officio Commissioner Jaso noted that the Department is working to clean its own house with respect to departures and "fast track" programs at the border that tend to facilitate deportation for illegal immigrants who violate other laws. He noted that these policies and other internal Department policies are being reviewed, and a report to Congress is due within 90 days of the Act becoming law. Ex Officio Commissioner Jaso concluded by stating that the Department will do its part with regard to internal charging and litigation policies and with regard to continued cooperation with the Sentencing Commission on this very important issue.
Hearing no additional commissioner comments, Chair Murphy thanked guests and members of the public for attending and adjourned the meeting at 11:25 a.m.