The RICO Nexus Requirement: A “Flexible” Linkage

This Note argues that the RICO “nexus” requirement can be interpreted to limit effectively this overbroad use of RICO without emasculating the statute. The “nexus requirement” is generally described as defining the word “through” in section 1962(c), the provision of RICO that makes it illegal to “conduct or participate, directly or indirectly, in the conduct of [an] enterprise’s affairs through a pattern of racketeering activity.” This language establishes the necessity of proving a relationship between the enterprise and the racketeering. Once evidence of the alleged enterprise and the predicate racketeering acts has been submitted, the final element of proof must be that the racketeering and the enterprise are sufficiently related to justify a finding of a RICO violation. Thus, the “nexus” requirement presents the question of whether RICO should apply in any particular case in which the central elements of the offense can be shown. Unfortunately, section 1962(c) defines neither the nature of this relationship nor the degree of involvement necessary for it to exist.

This Note advocates an approach to the “nexus” requirement which focuses on the extent to which the defendant utilized the “organizational structure” of the enterprise. Rather than attempting to provide a rigid definition of utilization of organizational structure, it urges the factfinder to examine a series of factors which are indicative of enterprise exploitation. Part I of this Note analyzes the various judicial approaches to the nexus issue and argues that they are inadequate largely because of a reliance on rigid definitions. Part II provides an alternative approach by examining the language of section 1962(c), the legislative history of RICO and the ordinary conception of organizational crime to establish that the concern of RICO, and particularly the nexus requirement, is with racketeer utilization of organization or enterprise structure. The same material is used to elucidate a nonexhaustive list of indicia of utilization of the enterprise.