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LEGAL MEMORANDUM No LEGAL MEMORANDUM No. 208 | JULY 12, 2017 Reorganizing the Federal Administrative State: The Disutility of Criminal Investigative Programs at Federal Regulatory Agencies Paul J. Larkin, Jr. Abstract President Donald Trump has directed federal agencies and has in- Key Points vited the public to suggest ways to reorganize the federal government to make it more effective and efficient. One possibility is to reorganize n Today, more than 30 federal at least part of federal law enforcement. Numerous federal regula- agencies are authorized to inves- tory agencies have criminal investigative divisions. Congress and the tigate crimes, execute search warrants, serve subpoenas, make President should consider consolidating those programs and transfer- arrests, and carry firearms. ring them to a traditional federal law enforcement agency. The FBI is n a possible home for those agents, but the U.S. Marshals Service may Each agency has a criminal investigative division with sworn have certain advantages that the FBI does not possess, including the federal law enforcement officers possibility of a less costly transition. Either agency would make a more even though the parent agency’s suitable home for investigative programs currently housed in admin- principal function is to regulate istrative agencies. some aspect of the economy or contemporary life. That assign- Introduction ment creates a problem. Large American cities—such as New York City, Chicago, and n The law enforcement and regula- Los Angeles—have municipal police departments as their principal tory cultures are markedly differ- criminal investigative authorities. The federal government, by con- ent, and attempting to cram the trast, does not have a national police force. Instead, there is “a diz- former into an agency character- zying array” of federal investigative agencies, some of which have ized by the latter hampers effec- tive law enforcement. It dilutes limited, specialized investigative authority.1 More than 30 federal the ability of a law enforcement agencies are authorized to investigate crimes, execute search war- division to accomplish its mission 2 rants, serve subpoenas, make arrests, and carry firearms. Some of by housing it in an organization these agencies—such as the Federal Bureau of Investigation (FBI), that is not designed to support U.S. Secret Service (Secret Service or USSS), and U.S. Marshal’s the specialized mission of federal Service (USMS)—are well known.3 A few—such as the National criminal investigators. Park Service, U.S. Coast Guard, U.S. Forest Service, and U.S. Post- n Accordingly, Congress and the al Service—are fairly well known, especially by people who live in President should reexamine the placement of federal criminal investigative units within regula- This paper, in its entirety, can be found at http://report.heritage.org/lm208 tory agencies and reassign the The Heritage Foundation members of those units to a tra- 214 Massachusetts Avenue, NE Washington, DC 20002 ditional federal law enforcement (202) 546-4400 | heritage.org agency. Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress. LEGAL MEMORANDUM | NO. 208 JULY 12, 2017 western states, which have a large number of size- Early in the 20th century, the question arose able federal parks and forestlands.4 Others—such as whether only Congress has the authority to define the Environmental Protection Agency (EPA) Office the elements of a federal offense. The Supreme Court of Criminal Enforcement, Forensics, and Training of the United Sates could have ruled that the power (OCEFT)—are largely unknown.5 to define federal crimes is a prerogative of Congress Each agency has a criminal investigative division that it cannot delegate to administrative agencies. with sworn federal law enforcement officers even After all, in 1812, the Court held in United States v. though the parent agency’s principal function is to Hudson & Goodwin that the federal courts lack the regulate some aspect of the economy or contempo- authority to create “common law crimes” because rary life. That assignment creates a problem. The only Congress can define a federal offense.10 It would law enforcement and regulatory cultures are mark- have been only a small step to apply the rationale of edly different, and attempting to cram the former that case to an executive branch agency and decide into an agency characterized by the latter hampers that the President also may not define a federal effective law enforcement. It dilutes the ability of a offense. Nonetheless, the Court declined the oppor- law enforcement division to accomplish its mission tunity.11 In United States v. Grimaud,12 the Court held by housing it in an organization that is not designed that Congress may delegate law-creating power to to support the specialized mission of federal crimi- an agency by enabling it to promulgate regulations nal investigators. Accordingly, Congress and the and that an agency may use that authority to define President should reexamine the placement of fed- conduct punishable as a crime.13 eral criminal investigative units within regulatory The Grimaud decision was flatly inconsistent agencies and reassign the members of those units to with Madisonian separation-of-powers principles. a traditional federal law enforcement agency.6 Under Hudson & Goodwin, Congress cannot share its power to define a federal offense with the judiciary Use of the Criminal Law as a Regulatory because it is a congressional prerogative. Yet Gri- Tool maud ruled that Congress may empower the execu- Beginning in the mid-19th century, legislatures tive to create federal offenses. James Madison would concluded that industrialization and urbanization have grimaced at the concept of a shared prerogative. had generated widespread harms that no tort sys- He would have been particularly aghast at the notion tem could adequately recompense. That belief led that the executive branch, which was intentional- legislators to use the criminal law to enforce regula- ly and textually limited to enforcing the law, could tory programs by creating what came to be known also make unlawful the very conduct that it would as “regulatory offenses” or “public welfare offenses.” later enforce. Reconciling Grimaud with Hudson & Initially, the category of those crimes was small, lim- Goodwin is no easy task. One decision or the other ited to building code offenses, traffic violations, and seems wrong. sundry other comparable low-level infractions.7 But Despite its analytical weaknesses, Grimaud the list of strict liability offenses grew over time. remains “good law” today. The Supreme Court has Today, the corpus of regulatory offenses is consider- shown no inclination to reconsider and overturn it. ably larger than anyone initially envisioned.8 The result has been that federal agencies have taken The creation of administrative agencies to imple- full advantage of that new power. Grimaud erased ment regulatory programs also added a new feature any hope of building a dam that could have held back to the category of federal offenses: crimes defined by administrative criminal lawmaking, and the leg- regulations. That phenomenon was not the inevita- islative and executive branches have combined to ble consequence of creating administrative agencies establish a sub-statutory criminal code. Some com- or authorizing them to promulgate regulations. Arti- mentators have estimated that the Code of Federal cles I, II, and III of the Constitution strongly imply Regulations contains hundreds of thousands of reg- that the legislative, executive, and judicial powers ulations that serve as a tripwire for criminal liabil- can be exercised only by the particular branch to ity.14 The result is that individuals and businesses, which they are assigned.9 The law did not work out large or small, must be aware of not only the penal that way, however, and regulatory agencies today code, but also books of federal rules that can occupy have considerable lawmaking authority. multiple shelves in any law library.15 2 LEGAL MEMORANDUM | NO. 208 JULY 12, 2017 Criminal Investigative Programs at Second, and closely related, is the need for special- Federal Regulatory Agencies ized and focused legal training on the meaning of the Congress could have tasked the traditional law various regulatory statutes and rules that undergird enforcement agencies with the responsibility to regulatory crimes. Here, too, the relevant offens- investigate regulatory offenses. By and large, how- es may use abstruse concepts that an attorney can ever, it has not done so.16 Instead, Congress created learn only with the specialized training and expe- numerous investigative agencies as components of rience that comes with practicing law in a specific the administrative agencies that are responsible for regulatory field. Only the general counsel’s office at promulgating the underlying rules that now carry a particular agency may have attorneys who are suf- criminal penalties. According to a 2006 report by the ficiently versed in the relevant statutes and regula- Government Accountability Office, approximately tions to be able to help federal investigators identi- 25,000 sworn officers are spread over numerous fy what must be proved to establish an offense. For administrative agencies, commissions, or special- that reason, too, it therefore makes sense to combine purpose entitles. Some of those components consist investigators
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