C. Interstate or Foreign Commerce, Element Three

A pattern of racketeering activity under RICO must affect interstate or foreign commerce. After Congress enacted RICO, some courts held that the enterprise itself, rather than the predicate crimes, must affect interstate or foreign commerce. Many courts now apply a much less stringent standard that merely requires an enterprise's predicate acts to have a de minimis impact on interstate or foreign commerce. This low threshold allows the government to satisfy the interstate and foreign commerce element of RICO quite easily in cases that involve criminal street gangs.

Some courts have raised concerns about whether applying this less stringent standard to organizations that are predominantly noneconomic in nature, such as criminal street gangs, exceeds the bounds of the commerce clause of the U.S. Constitution. In Waucaush v. United States, the Sixth Circuit held that a prosecutor could not press RICO charges against members of a criminal street gang that engaged in violent, but noneconomic, activity. The court held that RICO could only be used within the bounds of the commerce clause to target a noneconomic organization when its activities substantially affected interstate commerce.

Not all courts, however, have shared these concerns. In United States v. Nascimento, the First Circuit explicitly rejected the Sixth Circuit's reasoning in Waucaush and upheld the de minimis standard as applied to criminal street gangs that engage in violent noneconomic activity. The court reasoned that the Sixth Circuit did not apply the canons of statutory construction appropriately when it interpreted the term "affect" as requiring a substantial effect on interstate or foreign commerce in cases involving noneconomic enterprises. Due to this circuit split, the issue of whether the government must show that the racketeering activities of a noneconomic enterprise substantially affect interstate commerce remains unresolved.