Contracts in Excess of Specific Appropriation (18 U.S.C. § 435)
Under 18 U.S.C. § 435, it is a federal crime for an officer or employee of the United States to knowingly enter into a contract for a public building or improvement that exceeds the amount specifically appropriated by Congress for that purpose.
This statute enforces one of the Constitution's most fundamental principles: Congress alone controls federal spending.
When a federal official exceeds an appropriation, even with good intentions, criminal liability may follow.
A conviction under Section 435 can result in fines, up to one year in federal prison, or both, along with severe professional consequences such as job termination and loss of security clearance.
Your best hope of avoiding the worst outcomes is to work with one of our skilled California federal criminal defense attorneys. To schedule a consultation, call 818-781-1570 or contact us here.
What Is 18 U.S.C. § 435?
18 U.S.C. § 435 prohibits federal officers and employees from knowingly contracting for the construction, repair, furnishing, or improvement of public buildings in excess of the specific amount appropriated by Congress.
The law exists to prevent executive branch officials from binding the federal government to financial obligations that Congress has not authorized.
This statute operates alongside the Antideficiency Act (31 U.S.C. §§ 1341–1342, 1517), which broadly prohibits unauthorized obligations and expenditures of federal funds.
Who Can Be Charged Under 18 U.S.C. § 435?
Section 435 applies only to:
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Officers of the United States; and
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Employees of the federal government
Private contractors are not charged under this statute, though they may be witnesses in related investigations.
What Must Prosecutors Prove?
To secure a conviction under 18 U.S.C. § 435, federal prosecutors must establish all of the following elements beyond a reasonable doubt:
Elements of the Offense
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You were an officer or employee of the United States;
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You entered into a contract for:
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Construction,
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Repair,
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Furnishing, or
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A public improvement;
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The contract obligated the government to pay more than the specific amount appropriated by Congress for that project; and
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You acted knowingly, meaning you were aware of the funding limit and chose to exceed it.
Absent proof of knowledge, criminal liability does not attach.
Examples of Section 435 Violations
Example 1:
A federal agency director oversees a $5 million building renovation. The director signs a $2 million contract modification for nonessential upgrades, pushing total obligations to $7 million. Because the director knowingly exceeded the appropriation, Section 435 may apply.
Example 2:
A federal land manager signs a $12 million construction contract for a visitor center despite a $10 million appropriation, intending to reprogram funds later. The intent to “fix it later” does not negate criminal exposure.
What Are the Penalties for Violating 18 U.S.C. § 435?
A violation of Section 435 is a federal misdemeanor punishable by:
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Up to one year in federal prison;
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Fines of up to $250,000; or
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Both imprisonment and fines.
Collateral consequences often include:
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Termination of federal employment;
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Revocation of security clearances;
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Permanent reputational damage.
How Is Section 435 Different from the Antideficiency Act?
While the Antideficiency Act generally prohibits obligations beyond available funds, 18 U.S.C. § 435 specifically criminalizes contracting beyond specific appropriations for public buildings and improvements.
Section 435 adds criminal enforcement teeth to fiscal controls designed to preserve congressional authority.
Defenses to Charges Under 18 U.S.C. § 435
Being charged does not mean conviction is inevitable. Common defenses include:
Lack of Knowledge
The statute requires proof that the defendant acted knowingly. Honest reliance on inaccurate budget data or administrative error may negate intent.
Ambiguous Appropriation Language
If Congress authorized funds through a discretionary or lump-sum appropriation, the government may struggle to establish a clear spending ceiling.
Authorized Reprogramming
If funds were lawfully reprogrammed or transferred before contract execution, the obligation may have been permitted.
Not a Public Building or Improvement
Section 435 applies narrowly. Contracts for services, equipment, or operational expenses may fall outside the scope of the statute.
Speak With a Federal Criminal Defense Attorney
Investigations involving federal contracting and appropriations move quickly and often involve inspectors general, agency counsel, and the Department of Justice.
The federal criminal defense attorneys at Eisner Gorin LLP represent government officials and employees facing allegations of contracting violations and related fiscal crimes.
Call (818) 781-1570 or contact us online to schedule a confidential consultation.
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