Federal Gift Prohibition Applies to Most Local Governments

I came across a decision in Patty Salkin's Law of the Land blog today involving a federal statute that allows federal prosecution of those who give gifts to local officials in amounts greater than $5,000. Proof of bribery is not necessary, but evidence needs to be shown that the gift was given "with intent to influence or reward." This is somewhere between a gift provision in an ethics code and a bribery provision in a criminal code. The local government must have received federal funding, but this is true of most local governments, especially the larger ones. 18 U.S.C §666(a)(2) reads as follows:

(a) Whoever, if the circumstance described in subsection (b) of this section exists ...

(2) corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State, local or Indian tribal government, or any agency thereof, in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more; shall be fined under this title, imprisoned not more than 10 years, or both.

(b) The circumstance referred to in subsection (a) of this section is that the organization, government, or agency receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance.

The decision in U.S. v Boender,  2011 WL 3634163 (C.A.7 (Ill.) 8/19/2011), involves a fairly typical case. A developer who wants a Chicago alderman to support his rezoning application has a contractor paint the alderman's house and replace a number of his windows. There is no proof of bribery, which would be required under 18 U.S.C. §201(b), but the court finds "that the government was not required to establish a specific quid pro quo of money in exchange for a legislative act."

This is a good statute to know about in jurisdictions where there is no independent ethics program or where the gift provision requires a quid pro quo. It is also a good statute to know about when drafting an ethics code, because when officials push for the gift provision to require a quid pro quo, someone should say that the federal government can prosecute for less than this and, therefore, the ethics code should require even less evidence.

An ethics code gift provision should set a higher standard than criminal laws (with lower penalties and lower costs) and prevent bribery (which is extremely hard to prove) as well as the appearance of influence and pay-to-play by prohibiting the giving of gifts to officials above a very low amount, without the need to prove intent or show evidence of a specific quid pro quo.

Robert Wechsler
Director of Research-Retired, City Ethics

203-859-1959