Political Law Compliance: Gifts to Government Officials
In the United States, gifts to government officials are subject to strict limitations and prohibitions. Violations can lead to severe consequences for parties on both sides of the transaction, and this means that government contractors, lobbyists, government officials, and others need to be careful to avoid costly mistakes.
Under federal law, there are strict rules regarding gifts to government officials. These laws also apply to gifts to Members of Congress, judges, and other employees of the executive, legislative, and judicial branches. Lobbyists, government contractors, contract bidders, and other private individuals and companies must all be careful to comply, and government officials and employees need to maintain strict compliance as well.
What are the consequences of non-compliance? Depending on the parties and circumstances involved, disciplinary measures, civil enforcement, and criminal prosecution are all possibilities. Allegations of accepting unlawful gifts can cause significant harm to government officials’ and employees’ public reputations as well; and, for those who need to run for reelection, you can be certain that any transgressions will not be forgotten. Government contractors (and prospective government contractors) can lose their eligibility to compete for bids, and lobbyists and others can similarly face bans from doing business with the federal government or on federal government premises.
Our Lawyers Represent Government Officials and Private Parties Regarding Gift Compliance
On its face, accepting a gift should not be a big deal. There is nothing inherently wrong with accepting a gift, and many – if not most – gifts are made without ulterior motives. Unfortunately, history has shown that gifts to government officials can present threats to our democracy; and, when a gift turns into a bribe, this is not something that will be tolerated – nor should it.
At Oberheiden P.C., we represent government officials and private parties with regard to gift compliance under federal law. Our lawyers are intimately familiar with the laws that apply, the court rulings interpreting those laws, and the practices that will (and won’t) get individuals and businesses into trouble. Several of our lawyers previously served in senior positions within the federal government, including positions as federal prosecutors appointed by President Obama and President Trump.
Due to concerns about bad actors in the private and public sectors, all gifts to government officials and employees are subject to scrutiny, and gifts will often be heavily scrutinized for any possible appearances of impropriety. Our attorneys can help you make the right decisions proactively, and we can help you implement internal protocols and procedures that are designed to prevent unlawful gifts from being made or accepted by employees, and to catch potential issues before they result in federal inquiries.
Federal Laws and Rules that Apply to Gifts to Government Officials
There are several federal laws and rules that apply to gifts made to (and accepted by) government officials. At Oberheiden P.C., we help our clients comply with all applicable sources of authority by providing customized recommendations that are specific to our clients’ operations, risks, and needs. By way of example, the following are just a few of the numerous sources of federal authority that need to be considered when deciding whether a gift to a government official or employee is permissible:
1. 5 U.S.C. Section 7353(a) (Gifts to Federal Employees)
5 U.S.C. Section 7353(a) is the primary federal statute that prohibits government personnel from accepting unlawful gifts. In pertinent part, the statute states:
“Except as permitted by subsection (b), no Member of Congress or officer or employee of the executive, legislative, or judicial branch shall solicit or accept anything of value from a person—(1) seeking official action from, doing business with, or (in the case of executive branch officers and employees) conducting activities regulated by, the individual’s employing entity; or (2) whose interests may be substantially affected by the performance or nonperformance of the individual’s official duties.”
Subsection (b) provides limited exceptions for circumstances in which: (i) a gift has been authorized by a government official’s or employee’s supervising ethics office; (ii) a gift is accepted on behalf of the United States or a U.S. agency, “in accordance with statutory authority;” or, (iii) an individual who is assigned to a government agency also receives pay and benefits from a private sector organization as an employee.
What constitutes a “gift” for purposes of 5 U.S.C. Section 7353(a)? The statute applies to “anything of value.” This includes monetary and other direct gifts of all kinds, as well as meals, travel, access to facilities and benefits, and just about anything else that does not qualify as a lawful contribution to a government official’s or employee’s reelection campaign.
2. 18 U.S.C. Section 201 (Bribery of Public Officials and Witnesses)
18 U.S.C. Section 201 is a criminal statute that applies to private individuals and businesses as well as federal government officials and employees. With regard to private individuals and businesses, 18 U.S.C. Section 201(b) allows for criminal prosecution of anyone who:
“[D]irectly or indirectly, corruptly gives, offers or promises anything of value to any public official or person who has been selected to be a public official, or offers or promises any public official or any person who has been selected to be a public official to give anything of value to any other person or entity, with intent—(A) to influence any official act; or (B) to influence such public official or person who has been selected to be a public official to commit or aid in committing, or collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or (C) to induce such public official or such person who has been selected to be a public official to do or omit to do any act in violation of the lawful duty of such official or person . . . .”
With regard to government officials and employees, 18 U.S.C. Section 201(c) imposes criminal penalties for anyone who:
“[D]irectly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in return for: (A) being influenced in the performance of any official act; (B) being influenced to commit or aid in committing, or to collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or (C) being induced to do or omit to do any act in violation of the official duty of such official or person . . . .”
As you can see, Section 201(b) and Section 201(c) are essentially mirror images of one another. As a result, if an unlawful gift is made or received, both the person making the unlawful gift and the government official or employee who accepts the gift can face criminal prosecution in federal district court.
3. Section 3.1003 of the U.S. General Services Administration (GSA) Contractor Code of Business Ethics and Conduct
The Contractor Code of Business Ethics and Conduct (the “Contractor Code”) is a set of binding rules that applies to all contractors that do business with the federal government. Among its numerous provisions, in Section 3.1003 the Contractor Code provides that:
“[A] contractor may be suspended and/or debarred for knowing failure by a principal to timely disclose to the Government, in connection with the award, performance, or closeout of a Government contract performed by the contractor or a subcontract awarded thereunder, credible evidence of a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations . . . .”
This language encompasses unlawful bribes in violation of 18 U.S.C. Section 201(b), but it is by no means exclusive to transactions that can be characterized as bribes. As a result, government contractors must have a clear understanding of all of the relevant prohibitions, and they must adopt compliance policies and procedures that are designed specifically to prevent violations of Section 3.1003 of the Contractor Code and the laws to which it applies.
4. House Rule 25 and Senate Rule 35 (Gifts from Lobbyists)
U.S. House and Senate rules prohibit Members of Congress from accepting gifts from lobbyists. These rules establish certain categories of “acceptable gifts,” though these categories are fairly limited. Lobbyists must comply with the rules of the House and Senate as well, and lobbyists who offer prohibited gifts can face loss of registration in addition to the possibility of civil or criminal prosecution.
How We Help Our Clients Comply with the Federal Restrictions on Gifts to Government Officials
In order to help our clients avoid violating these laws and rules (among others), we provide comprehensive compliance representation which we tailor specifically to each client’s business or position within the federal government. We ensure that our clients have a clear understanding of the relevant prohibitions, and we draft compliance policies and procedures that clearly explain what is and isn’t permissible. We also conduct internal trainings for our clients, and we provide compliance advice and representation on an ongoing basis as well.
Some examples of the services we provide to our clients include:
- Identification of all relevant laws and regulations
- Development of internal compliance policies and procedures regarding gifts
- Training and implementation of compliance policies and procedures regarding gifts
- Evaluation of proposed gifts and transactions
- Ongoing advice and representation regarding federal gift compliance
Speak with a Federal Political Law Compliance Attorney at Oberheiden P.C.
If you would like to speak with one of our attorneys about our firm’s compliance services for federal contractors, lobbyists, or government officials and employees, we encourage you to get in touch. To schedule a complimentary consultation, please call 888-680-1745 or contact us online today.