Via this ABC News report comes this letter from the seven Republican senators on the Senate Judiciary Committee. The letter asks AG Holder to appoint a special prosecutor to investigate the alleged deal to give Rep. Sestak a job last year in exchange for not challenging Sen. Specter in the Democratic primary for U.S. Senate in Pennsylvania.
I had heard a number of theories as to how this might be illegal, including arguments under bribery statutes. Following Dan Lowenstein’s general thinking on this subject (from his 1995 UCLA Law Review article on political bribery), I’ve always believed that exchanges of pure political benefits (such as endorsements) shouldn’t fall under the bribery laws–they should be reserved for the exchange of personal benefits (such as money for government action).
The Senators’ letter, however, claims violation of a different statute, 18 U.S.C. 600:

Whoever, directly or indirectly, promises any employment, position, compensation, contract, appointment, or other benefit, provided for or made possible in whole or in part by any Act of Congress, or any special consideration in obtaining any such benefit, to any person as consideration, favor, or reward for any political activity or for the support of or opposition to any candidate or any political party in connection with any general or special election to any political office, or in connection with any primary election or political convention or caucus held to select candidates for any political office, shall be fined under this title or imprisoned not more than one year, or both.

We don’t know enough facts about Sestak. (Was an explicit offer made? An offer of what? In exchange for what?) If there was no (direct or indirect) promise of employment, for example, this section would not apply. But even if there was a promise in exchange for dropping out, there are interesting statutory interpretation questions. Is dropping out “political activity”? If Sestak would have have been asked to drop out without endorsing Specter, it would not seem to fall under a “reward for …support to any candidate…to any political office.”
There is an interesting 1980 OLC opinion (4B U.S. Op. Off. Legal Counsel 454, 1980 WL 20941 (O.L.C.)) that a reader pointed me to. In that opinion, the OLC said, in relation to a program to recommend certain people with Democratic Party ties for census enumeration jobs, that “in our opinion, the only way s 600 might be violated in the program at hand is if people were promised employment or special consideration for employment as census enumerators as an enticement or reward for future political activity or support of a party or candidate; s 600 cannot be read to prohibit rewards for past political activity.” So under this interpretation, promised federal employment as a reward for future support for a candidate can violate the statute. But that seems ridiculously overbroad: think of all those people who work on federal campaigns, and then end up with jobs working for the victorious candidates.
So much here turns on (1) the facts and (2) the correct interpretation of the statute, and I don’t have enough information on either to form a firm opinion on this. Politically, however, I think Marc Ambinder is right that the Administration is going to need to address this soon.