July 22, 1976
Page 23336
Mr. HRUSKA. Mr. President, this is an amendment which seeks to establish a revolving fund for the purpose of supporting projects that will acquire stolen goods and property in an effort to disrupt illicit commerce in such stolen goods and stolen property.
In popular parlance, the operation which I have just described is called the "Sting," and it is the one which has created a method whereby there are operations which result in the arrest and, Mr. President, happily, in a high percentage of convictions and guilty pleas of thieves who use the fencing operation as a means of disposing of their ill-gotten and stolen articles.
The proceeds of such operations have so far been greater than the cost of the operation. The revolving fund is proposed to facilitate the creation of additional operations of that kind.
Mr. President, I took the precaution of writing to the chairman of the Senate Committee on the Budget to ascertain whether or not this proposal would in any way infringe or run contrary to the Budget and Impoundment Control Act of 1974.
I did this in the form of a letter dated July 7 and addressed to the senior Senator from Maine who is chairman of that committee on the Senate side.
In a letter dated July 21, 1976, Senator MUSKIE did respond favorably on the amendment saying that it was consistent with the Budget Act in all of its aspects.
Mr. President, I ask unanimous consent that the letter of July 7 directed to the Senator and his reply of July 21 be printed in the RECORD at this point.
There being no objection, the letters were ordered to be printed in the RECORD, as follows:
JULY 7, 1976.
Hon. EDMUND S. MUSKIE,
Chairman,
Senate Committee on the Budget,
Washington, D.C.
DEAR ED: When the Senate reconvenes on July 19, S. 2212, a bill to reauthorize the Law Enforcement Assistance Administration (LEAA), will be one of the first items of business.
I am considering an amendment to S. 2212 that would permit the establishment of a revolving fund within LEAA for the purpose of acquiring, and subsequently, disbursing the proceeds or income generated from the sale or use of stolen goods and property.
The amendment is prompted by the two anti-fencing operations which have been conducted recently in the Washington, D.C. area under the auspices of the FBI, the Metropolitan Police Department, and other federal and local law enforcement agencies. Both of these operations, now known as "Sting" and "Got You Again," were financed in large measure by LEAA. The amendment I am considering would permit LEAA, through proceeds acquired in the revolving fund, to assist other communities nationwide in setting up similar law enforcement operations.
Attached is the language of the amendment. Although an informed staff contact indicated approval of the amendment's conformity with the Budget and Impoundment Control Act, it would be appreciated if written verification could be provided to me prior to consideration of S. 2212 on the Senate floor.
With kind personal regards,
Sincerely,
ROMAN L. HRUSKA,
U.S. Senator.
SEC. 408. There is hereby established a revolving fund for the purpose of acquiring stolen goods and property to disrupt illicit commerce in such property. Notwithstanding any other provisions of law, title to such goods and property shall vest in an Administrator of the revolving fund and any income or royalties generated from such projects together with income generated from any sale or use of such property shall be paid into the revolving fund. The Administrator is authorized to make disbursements by appropriate means, including grants, from the fund and to accept gifts and bequests which shall be paid into the special account for the purposes of this section.
U.S. SENATE,
COMMITTEE ON THE BUDGET,
Washington, D.C.,
July 21, 1976.
Hon. ROMAN L. HRUSKA,
U.S. Senate,
Washington, D.C.
DEAR ROMAN: This is in response to your letter of July 7 inquiring whether an amendment to S. 2212, the bill to reauthorize the Law Enforcement Assistance Administration, is consistent with relevant provisions of the Congressional Budget and Impoundment Control Act.
You advise that the amendment is intended to authorize the LEAA to finance anti-fencing operations through a revolving fund established by the amendment. The revolving fund would be funded by income and royalties generated from other such anti-fencing projects, income generated from the sale or use of property obtained through such operations, and gifts and bequests. The operation of the fund would not be subject to the appropriations process.
I have asked the staff of the Budget Committee to examine this question. They have advised me that the amendment is not inconsistent with the Budget Act.
With regard to the Budget Act, the question presented by this amendment is whether the amendment constitutes "backdoor spending" in violation of Section 401 of the Budget Act. In general, Section 401 permits the creation of new spending authority only to the extent it is provided for in advance by appropriation acts. The purpose of the section is to discourage the creation of new federal obligations without a prior enactment pursuant to the appropriation process.
It is the opinion of the Budget Committee staff that the amendment you propose is not inconsistent with Section 401. Although the amendment would authorize the administrator of the revolving fund to receive and disburse funds generated in connection with certain anti-fencing operations, those amounts are not "new spending authority" in terms of Section 401. Rather, these amounts are accounted for in budgetary terms as "receipts" when they are received by the fund and "negative receipts" when they are expended from the fund.
One portion of the amendment does create new spending authority without an appropriation in advance. Specifically, part of the amendment authorizes the administrator to accept gifts and bequests to be paid into the fund. Gifts and bequests, in budgetary terms, are considered to be budget authority. However, such gifts and bequests are exempt from Section 401 by express provision of Section 401(d) (3).
I hope this advice clarifies the issue for you. Please let us know if we can be of any further assistance.
With best wishes, I am
Sincerely,
EDMUND S. MUSKIE.