RICO Reform: How Much Is Needed?

RICO reform has been one of the most time-consuming and difficult issues in the 101st Congress. The House Subcommittee on Crime has held three full-day hearings on RICO reform, listening to testimony from a vast array of witnesses on both sides of the reform issue, and several in the middle. From a personal perspective, hardly a day has passed in the last nine months that I have not had a meeting, a discussion with a House colleague, or a staff session on the subject of RICO reform.At the outset I should mention that I do not have a magic silver bullet for this extremely complicated statute and the numerous controversies it has engendered. RICO contains more than forty federal felonies as predicate offenses, and nine generic state statutes. The large number of predicate offenses, combined with such nebulous terms as enterprise, and pattern of racketeering activity, leaves many ob-servers wondering whether RICO eventually will sustain a constitutional attack. Indeed, Justice Antonin Scalia virtually asked for such a challenge in his recent concurring opinion in H.J. Inc. v. Northwestern Bell Telephone Co. , when he stated: 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\u27s meager guidance bodes ill for the day when that challenge is presented. Combined with this invitation, there is a long list of prominent organizations that have petitioned Congress to amend civil RICO. They include: The American Bar Association, National Association of Manufacturers, American Civil Liberties Union, United States Chamber of Commerce, AFL-CIO, American Institute of Certified Public Accountants, Securities Industry Association, American Bankers Association, Independent Bankers Association of America, Future Industries Association, American Council of Life Insurance, Credit Union National Association, Grocery Manufacturers of America, National Automobile Dealers Association, State Farm Insurance Companies, Alliance of American Insurers, and The American Financial Services Association. At the same time, there is impressive opposition to drastic change in civil RICO. This opposition includes such organizations as: The Public Citizen-Congress Watch, The United States Public Interest Research Group, National Association of Attorneys\u27 General, National District Attorneys Association, National Association of Insurance Commissioners, and The North American Securities Administration Association.Even these organizations, however, concede that some changes may be appropriate. During my presentation I will outline my views of RICO; offer some specific comments on the mail and wire fraud predicates and the role they play in the problems experienced with RICO, on both the criminal and civil sides; make some general observations about the statute; and comment on the status of the reform efforts before Congress. At the end of my presentation I will outline my thoughts on resolving some of the existing problems, as well as my commitment to pursue answers to future problems

The dollars and sense of bank consolidation

For nearly two decades banks in the United States have consolidated in record numbers--in terms of both frequency and the size of the merging institutions. Rhoades (1996) hypothesizes that the main motivators were increased potential for geographic expansion created by changes in state laws regulating branching and a more favorable antitrust climate. To look for evidence of economic incentives to exploit these improved opportunities for consolidation, the authors examine how consolidation affects expected profit, the riskiness of profit, profit efficiency, market value, market-value efficiencies, and the risk of insolvency. Their estimates of expected profit, profit risk, and profit efficiency are based on a structural model of leveraged portfolio production that was estimated for a sample of highest-level U.S. bank holding companies in Hughes, Lang, Mester, and Moon (1996). Here, the authors also estimate two additional measures that gauge efficiency in terms of the market values of assets and of equity. Their findings suggest that the economic benefits of consolidation are strongest for those banks engaged in interstate expansion and, in particular, interstate expansion that diversifies banks' macroeconomic risk. Not only do these banks experience clear gains in their financial performance, but society also benefits from the enhanced bank safety that follows from this type of consolidation.Bank mergers

Development of a Portable Bird Detection Radar for Airports

The development of a prototype portable bird detection radar for airports and airfields will be presented. This prototype radar is currently being developed under a partnership between the U.S. Air Force and the FAA, and is being funded under the U.S. Air Force Dual Use Science and Technology (DUST) program. Overview of the program will be given, and detailed specifications of the radar unit, and planned tests at a commercial airport will be presented. Future Plans for an integration of this type of radar into a real-time airport bird strike advisory system will be presented as well

Recovering Risky Technologies Using the Almost Ideal Demand System: An Application to U.S. Banking

We argue for a shift in the focus of modeling production from the traditional assumptions of profit maximization and cost minimization to a more general assumption of managerial utility maximization that can incorporate risk incentives into the analysis of production and recover value-maximizing technologies. We show how this shift can be implemented using the Almost Ideal Demand System. In addition, we suggest a more general way of measuring efficiency that can incorporate a concern for the market value of firms' assets and equity and identify value-maximizing firms. This shift in focus bridges the gap between the risk-incentives literature in banking that ignores the microeconomics of production and the production literature that ignores the relationship between production decisions and risk.