History of Public Corruption

This article describes select laws and cases relevant to public corruption with a focus on the State of Illinois. While public corruption can entail a broad range of inappropriate activity, including conflict of interest transactions, embezzlement, and abuses of power generally, this article focuses primarily on public corruption in the context of private parties dealing with public officials, and more specifically, private parties providing things of value to public officials. There have been significant developments and clarifications in the United States in the case law around providing things of value to public officials, specifically as it relates to drawing distinctions in illegality between gratuities on the one hand and quid pro quo bribery on the other. In general, however, the laws in the United States and Illinois forbid a private individual or company, including the agents, employees or others acting on their behalf, from providing, offering or promising to provide anything of value to a public official or other individual, directly or indirectly, for the purpose of influencing or rewarding that public official in connection with any official actions being taken or contemplated by that official. In that sense, the rules are not too dissimilar from proscriptions in the Foreign Corrupt Practices Act (FCPA), which as a general matter forbids providing things of value to foreign government officials with the corrupt intent to obtain or retain business or influence the official acts of that person. This article, however, addresses only domestic public corruption statutes in the United States, and not the FCPA, despite the analogous conduct addressed. The article begins with a summary of several past public corruption prosecutions in Illinois, then provides information on selected federal and state of Illinois public corruption statutes, and last describes recent related developments in the United States Supreme Court case law.

Public Corruption in Illinois

There is a long record of public corruption prosecutions in Illinois involving federal, state, and municipal officials. For example, several past Illinois governors have been convicted of federal crimes involving public corruption charges, as follows.

• In 2008, then-Governor Rod Blagojevich was arrested and charged with wire fraud and racketeering. The charges related to Blagojevich’s alleged widespread influence peddling, which involved directing lucrative state business contracts to companies and appointing individuals to government positions in exchange for campaign contributions. Blagojevich was also charged with soliciting personal benefits in exchange for an appointment to former President Barack Obama’s then-empty Senate seat. In 2011, Blagojevich was convicted at trial of 17 of 24 counts of the charges against him and was sentenced to 14 years in prison.
• In 2003, former Governor and Illinois Secretary of State George Ryan was indicted for racketeering, mail fraud and conspiring to use the resources of the State of Illinois for his personal benefit. The charges related to Ryan’s diversion of Secretary of State resources to benefit his campaign activities and his performance of official acts in exchange for campaign benefits. In 2006, Ryan was convicted and sentenced to six and a half years in prison.
• In 1973, former Governor Otto Kerner was convicted on four counts of mail fraud related to bribes he received while serving as Governor. The charges related to Kerner’s receipt of stock options in exchange for granting the owner of the Chicago area’s Arlington Park race track favourable racing dates. He was sentenced to three years in prison and fined USD50,000.

Additionally, and relatedly, several federal and state investigations have resulted in significant prosecutions of public corruption in Illinois, as follows.

• In the 1980s, various federal and state agencies conducted a joint investigation known as Operation Greylord, which targeted widespread corruption in the Cook County (which includes the City of Chicago) judiciary. Cook County judges and officials were accused of fixing cases in exchange for bribes. Operation Greylord resulted in over 90 officials being indicted for public corruption.
• In the 1990s, the FBI conducted an investigation known as Operation Silver Shovel, which targeted Chicago aldermen, a type of city official, and accused them of bribery and money laundering in connection with construction contracts. The allegations included that construction businesses paid aldermen to allow them to illegally dump construction debris. As a result of Operation Silver Shovel, six Chicago aldermen were indicted.
• In the 2000s, the US Attorney for the Northern District of Illinois conducted an investigation known as Operation Board Games, which targeted fraud and pay-to-play activity. Fifteen individuals were indicted during that investigation, including then-Governor Rod Blagojevich, mentioned above.

Some additional recent examples of public corruption prosecutions in Illinois include the 2020 guilty plea of former Illinois Senator Martin Sandoval for accepting bribes from a red light traffic camera company in exchange for blocking harmful legislation; the 2021 guilty plea of Illinois State Representative Luis Arroyo for accepting bribes from a gaming company in exchange for promoting legislation; and the 2023 conviction of Chicago’s longest-serving City Council Member, Edward Burke, for using his official position to solicit work for his private law firm and other personal benefits.

High-Level Overview of Select Federal Statutes Criminalising Public Corruption

Various federal statutes prohibit making improper payments to federal officials. Congress has established two separate provisions prohibiting acceptance of bribes for an official act under 18 U.S.C. § 201(b) and acceptance of gratuities in connection with an official act under § 201(c). The bribery provision, § 201(b), criminalises “corruptly” giving or offering anything of value to any public official with the intent to influence an official act. The penalty is a fine or imprisonment of not more than 15 years, or both. The gratuities provision, § 201(c), criminalises giving or promising “anything of value to any public official, for or because of any official act performed or to be performed by such public official”. The penalty is a fine or imprisonment of not more than two years, or both.

Another federal criminal statute often used to prosecute improper interactions with state or local officials, 18 U.S.C. § 666, criminalises corruptly giving, offering or agreeing to provide a thing of value to another person – that is, with the intent to influence an agent of the government in connection with any business, transaction or series of transactions involving the government – when the government is the recipient of federal funds. The penalty is a fine or imprisonment for not more than ten years, or both. This statute has been used frequently against individuals who make payments to, or provide work for, public officials for the purpose of influencing their official actions. Various business dealings – some of which may otherwise appear legitimate – run afoul of this prohibition when done with the intent to corruptly influence official action. A payor’s intent to influence official action triggers criminal liability, regardless of whether the public official received the payment or otherwise had the requisite intent to be influenced. For example, in United States v Whiteagle, the Seventh Circuit held that it “was not necessary for the government to prove... that [the official] actually received the bribes [under § 666(a)(2)]”. 759 F.3d 734, 753 (7th Cir. 2014). Further, in United States v McClain, the United States District Court for the Northern District of Illinois held that there “does not have to be proof that the agent of local government received the illegal gratuity with requisite intent, only that the person attempting to provide the illegal gratuity ‘corruptly gives, offers, or agrees to give’ a thing of value”. 2022 WL 488944, at *3 (N.D. Ill. Feb. 17, 2022). The honest services statute, 18 U.S.C. § 1346, also forbids individuals and entities from engaging in a “scheme or artifice to defraud” to deprive citizens of the “intangible right of honest service”, including from their public officials, whether through bribery or kickbacks.

It is worth emphasising that the aforementioned federal statutes prohibit providing things of value to any other person, regardless of whether that person is a public official (or the public official being influenced), so long as the payor intends for the payment (or its offer or promise) to influence a public official to take official action. In Whiteagle, the Seventh Circuit affirmed the defendant’s conviction involving corrupt solicitation of a job for a legislator’s relative. Similarly, in United States v Jefferson, the court upheld a § 201 bribery conviction where payments were made to a company controlled by a public official’s wife. 674 F.3d 332, 341-42 (4th Cir. 2012).

High-Level Overview of Select Illinois Statutes Criminalising Public Corruption

Illinois state law also prohibits the making of improper payments to public officials. For example, 720 ILCS § 5/33-1(a) prohibits individuals from (1) “promis[ing] or tender[ing]... any property or personal advantage” to a public officer or employee; (2) doing so with “the intent to influence the performance of any act related to the employment or function” of that officer or employee; and (3) doing so where the officer or employee is “not authorized by law to accept” that property or personal advantage.

Other provisions of Illinois law prohibit “official misconduct” by public officials, including 720 ILCS § 5/33-3, which states, in pertinent part, that a public officer or employee commits misconduct when he or she commits any of the listed acts in his or her official capacity, including “[s]olicit[ing] or knowingly accept[ing] for the performance of any act a fee or reward which he knows is not authorized by law”.

Additionally, Illinois state law imposes criminal penalties on state and local officers for soliciting or receiving contributions (as defined in the Illinois Election Code) from persons engaged in business or activity over which the official has regulatory authority (720 ILCS § 5/33-3.1). Any engagement with local public officials that could be viewed as improperly attempting or conspiring to violate those provisions of Illinois law could similarly subject the actor to criminal liability (720 ILCS § 5/8-2).

As with the federal prohibitions set forth above, a payment to induce an official “to perform a duty that defendant was legally entitled to have performed” can still qualify as a bribe under state law. For example, in People v Lumsargis, an Illinois appellate court upheld a bribery and official misconduct conviction of a defendant who promised a steak dinner to a police officer to induce the officer to ticket his ex-girlfriend, even though the bribe essentially induced the police officer to do his job. People v Lumsargis, 2017 IL App (4th) 170157-U. Further, in In re Fleischman, the court held that although the petitioner’s payments to tax court officials only served to “encourage [officials] to read the files... as they were legally required to do, petitioner’s actions are no less bribery, because petitioner intended ‘to influence the performance of [an] act related to the employment or function of [a] public officer.’” 135 Ill. 2d 488, 496 (1990).

As with federal law, Illinois law makes clear that liability hinges on the intent of the payor rather than whether the improper payment achieves its intended effect. In Lumsargis, even though police did not ultimately ticket the defendant’s ex-girlfriend, the promise of dinner was still considered a bribe because “defendant had a quid pro quo in mind”.

Supreme Court Developments

Over the past decade, the United States Supreme Court has issued rulings in multiple cases that, taken together, narrowed the legal interpretation of what can be criminalised as public corruption under statutes commonly used to prosecute public corruption, including by clarifying what can be considered an “official act”, how the federal fraud statutes must be interpreted and how the law distinguishes quid pro quo bribery from gratuities provided to a public official after an official act has occurred, among other clarifications in the law.

Briefly, in 2016, the Supreme Court reversed the conviction of the 71st Governor of Virginia, Bob McDonnell, and in doing so issued an opinion that limited the statutory definition of “bribery” by clarifying the meaning of an “official act” under the applicable statute, 18 U.S.C. § 201(b). McDonnell was accused and convicted of promoting a private businessman’s interests through the use of public resources, in exchange for multiple personal benefits to the governor and his wife (who was also convicted). On appeal, the Supreme Court had to determine whether the Governor’s proven acts constituted “official acts” within the meaning of the statute. The Supreme Court reversed the federal bribery conviction of McDonnell, finding that prosecutors had not proven that the favours he did for a businessman who provided him with more than USD175,000 worth of gifts, cash, and loans were “official acts” under the federal bribery statute. Specifically, the Supreme Court noted that “official acts” did not, without more, include setting up meetings, making calls to other public officials or hosting events and parties at the governor’s mansion. Instead, an “official act” is something akin to a more formal exercise of government power, for example making a decision before a committee or hearing.

In 2020, the Supreme Court further limited what can be prosecuted under the federal wire fraud and federal programme fraud statutes in a prominent public corruption case, clarifying that those fraud-based theories of prosecution must involve an intent to deprive another of money or property. In Kelly v United States, 590 U.S. 391 (2020), the Supreme Court reversed the convictions (under 18 U.S.C. § 1343 and 18 U.S.C. § 666(a)(1)(A)) in the “Bridgegate” scandal, including the conviction of a senior aide to New Jersey Governor Chris Christie, which involved the several-day shutdown of certain traffic lanes on the George Washington Bridge into Manhattan as “political payback” against a New Jersey mayor. The Supreme Court stated that, although the conduct involved “deception, corruption, [and] abuse of power… the federal fraud statutes at issue do not criminalize all such conduct”. The Court held that because the conduct at issue in the Bridgegate scheme did not involve deprivation of traditional property interests, that is, an intent to obtain money or property, they did not violate the applicable federal fraud statutes.

Most recently, in June 2024, the Supreme Court issued a notable decision that narrowed how federal prosecutors can use 18 U.S.C. § 666 to prosecute public corruption of government officials. In Snyder v United States, the Supreme Court overturned the conviction of former Portage, Indiana mayor, James Snyder for soliciting and accepting USD13,000 in violation of 18 U.S.C § 666(a)(1)(B). Snyder was convicted of accepting the payment in connection with the city’s purchase of garbage trucks from Great Lakes Peterbilt (GLPB), a trucking company owned by Robert and Stephen Buha.

In 2013, the City of Portage’s Board of Works and Public Safety, which consisted of Snyder and two of his appointees, awarded two contracts to GLPB worth a combined USD1.125 million. Snyder appointed his long-time friend, Randy Reeder, to oversee the public bidding process for both of the contracts. At trial, the government presented evidence that Reeder tailored the first of the two bids to favour GLPB as it related to truck model and delivery turnaround. As a result, GLPB won the first bid. Shortly thereafter, GLPB approached Reeder and offered to sell the city an unused 2012 model truck that had been on GLPB’s lot for two years. Snyder first tried to have the city purchase the truck outright but was advised by a city attorney that the cost of the truck warranted a public bidding process. Reeder testified at trial that the second bid was tailored to account for the existing truck GLPB had offered to sell. As a result, GLPB won the second bid.

Robert Buha testified that following the award of the second bid, Snyder visited the dealership and asked for USD15,000 to pay off a tax debt and cover his holiday expenses. Instead, the Buha brothers paid Snyder USD13,000 up front for supposed consulting services that Snyder intended to provide. GLPB’s controller testified that Robert Buha told him they were paying Snyder for his influence, not his consulting service. Additionally, other GLPB employees testified that Snyder never performed consulting services for the company. Snyder was convicted by a federal jury in March 2019 for violations of 18 U.S.C. § 666.

On appeal at the Seventh Circuit, Snyder argued that 18 U.S.C. §666 only criminalised bribes, not gratuities, and that the USD13,000 payment from the Buha brothers was a gratuity. Under federal law, bribes are characterised as payments made to a public official before (or tied to) an official act, while gratuities are characterised as payments made to a public official after an official act (so long as there is an absence of a promise to pay in advance of and in connection with the official act). The Seventh Circuit affirmed Snyder’s conviction, reasoning that the language of §666 was broad enough to apply to both bribes and gratuities. The Seventh Circuit’s position in Snyder was consistent with prior Seventh Circuit precedent examining the same issue, as well as precedent from the Second, Sixth, Eighth, and Eleventh Circuits. On appeal, Snyder argued that contrary decisions by the First and Fifth Circuits warranted that the Seventh Circuit reconsider its precedent. The Seventh Circuit declined.

The United States Supreme Court resolved the circuit split and reversed the lower courts’ decision finding that §666 only criminalises bribes and not gratuities received after the fact, relying on the statutory text, legislative history, and principles of federalism and fair notice in reaching the decision. The Supreme Court reasoned that the text of §666 was modelled after the bribery provision for federal officials in 18 U.S.C. §201(b), not the gratuity provision for federal officials in 18 U.S.C. §201(c), and that to read §666 to apply to both bribes and gratuities would result, among other things, in inconsistent and harsher punishments for state and local officials, as opposed to federal officials. For instance, if §666 were to apply to both bribes and gratuities, that would result in state and local officials being subject to up to ten years’ imprisonment for receiving a gratuity while federal officials would only be subject to up to two years’ imprisonment for receiving an identical gratuity. Recall that in the public corruption statutes cited above, 18 U.S.C. §201 applies only to federal officials, while §666 applies to recipients of federal funds, often state and local officials.

Additionally, the Supreme Court explained that unlike the statute governing gratuities provided to federal employees (18 U.S.C. §201(c)), §666 has no associated guidance for courts to follow when enforcing it. The Office of Government Ethics has comprehensive and detailed regulatory guidelines specifying what gifts are allowed and prohibited for federal officials (5 CFR §2635), whereas no such guidelines exist for state and local officials. The Supreme Court reasoned that if it were to adopt the government’s interpretation of § 666, there would be no lines separating an innocuous gratuity from a criminal gratuity. Examples the Supreme Court provided included giving a USD100 Dunkin’ Donuts gift card to a trash collector or giving a USD200 Nike gift card to a county commissioner who voted to fund new school athletic facilities. Under the government’s interpretation, both could be considered criminal and subject the recipients to up to ten years in federal prison. The Supreme Court disagreed with such an approach.

Moving Forward

While cases involving § 666’s gratuities prohibition will be remanded in the aftermath of the Supreme Court’s decision in Snyder, § 666 (and other corruption statutes) remain viable and continue to prohibit giving, offering, or promising to provide things of value for the benefit of public officials intending to influence any official actions by those officials. As noted, § 666 prohibits officials from accepting bribes that are promised or given before the official act, but gratuities provided after the official act are no longer federal violations under § 666 following Snyder, and rather are left to state and local governments to regulate. Considering the prohibitions identified in this article, the varying approaches and tools that authorities can use to enforce public corruption laws at the federal and state levels, and the fact that public corruption is an enforcement area that is a regular priority of US law enforcement, companies and individuals should take great care in their interactions with public officials, including ensuring that appropriate safeguards are in place to prevent against even the appearance of improper interactions, whether directly or indirectly through other parties.