You won't find any federal law specifically outlining what is known as "authorized criminality," but I can do one better for you. Here is the Bush Administration's FBI Undercover policy on "Participation in otherwise illegal activity by Undercover
Employees." Long story short, if they are going to break laws, approvals
need to be made, committees watching, etc.
"Except when authorized pursuant to these Guidelines, no undercover employee shall engage in any activity that would constitute a violation of Federal, state, or local law if engaged in by a private person acting without authorization. For
purposes of these Guidelines, such activity is referred to as otherwise illegal activity.
(1) Justification: No official shall recommend or approve
participation by an undercover employee in otherwise illegal activity unless the
participation is justified:
(a) to obtain information or evidence necessary for the
success of the
investigation and not reasonably available without
participation in the otherwise illegal activity;
(b) to establish or maintain credibility of a cover
(c) to prevent death or serious bodily injury.
(2) Minimization: The FBI shall take reasonable steps to
minimize the participation of an undercover employee in any otherwise illegal activity.
(3) Prohibitions: An undercover employee shall not:
(a) participate in any act of violence except in
(b) initiate or instigate any plan to commit criminal acts
except in accordance
with Section V (concerning avoidance of entrapment) below;
(c) participate in conduct which would constitute unlawful
investigative techniques (e.g., illegal wiretapping, illegal mail
openings, breaking and entering,or trespass amounting to an illegal search).
(4) Self-Defense: Nothing in these Guidelines prohibits an
undercover employee from taking reasonable measures of self-defense in an emergency to protect his or her own life or the lives of others against wrongful force. Such measures shall be reported to the appropriate Federal prosecutor and FBIHQ, who shall inform the Assistant Attorney General for the Criminal Division as soon as possible.
(a) The SAC must approve all undercover operations and
activities, including those which contemplate participation in otherwise illegal
activity. This approval shall constitute authorization of:
(i) otherwise illegal activity which is a misdemeanor or
similar minor crime under Federal, state, or local law;
(ii) consensual monitoring, even if a crime under local law;
(iii) the purchase of stolen or contraband goods;
(iv) the delivery or sale of stolen property which cannot be
traced to the rightful owner;
(v) the controlled delivery of drugs which will not enter
(vi) the payment of bribes which is not included in the
(vii) the making of false representations to third parties
in concealment of personal identity or the true ownership of a proprietary
(but not any statement under oath or the penalties of perjury, which must
be authorized pursuant to subparagraph (b) below); and
(viii) conducting no more than five money laundering
transactions, not to exceed a maximum aggregate amount of $1 million.
(b) Participation in otherwise illegal activity which is a
felony or its equivalent under Federal, state, orocal law and which is not
otherwise excepted under Section IV.C(2)(g) above, requires additional authorization by the Assistant Director after review by the Undercover Review Committee.
See Section IV.E.
(c) Participation in otherwise illegal activity which
involves a significant risk of violence or physical injury requires authorization by the Director, Deputy Director, or designated Executive Assistant Director after
review by the Undercover Review Committee. See Section IV.E.
(d) If an undercover employee believes it to be necessary
and appropriate under the standards set out in paragraph H(1) above, to
participate in otherwise illegal activity that was not foreseen or anticipated, every effort should be made to consult with the SAC, who shall seek emergency interim authority from the designated Assistant Director, and review by the Undercover Review Committee if possible, or, if necessary, may provide emergency authorization under paragraph I below. If consultation is impossible, and the undercover employee concludes that there is an immediate and grave threat to life, physical safety, or property, the undercover employee may participate in the otherwise illegal activity, so long as he does not take part in and makes every effort to prevent any act of violence. A report to the SAC shall be made as soon as possible, who shall submit a written report to FBIHQ, which shall promptly inform the Undercover Review Committee. A decision by an undercover employee to participate in otherwise illegal activity under this subsection may be retroactively authorized if appropriate.
(e) If an undercover operation results in violence in the
course of criminal activity, and an undercover employee, informant, or
cooperating witness has participated in any manner in the criminal activity, the SAC shall immediately inform the appropriate Federal prosecutor and FBIHQ, which shall inform the Assistant Attorney General in charge of the Criminal
Division as soon as possible."See question on Quora