The United States Federal government has placed extensive and severe restrictions on providing gifts or gratuities to U.S. government employees. Various statutes impose criminal penalties on any entity that uses gifts to influence a government employee. Such gifts can also result in cancellation of a government contract, and suspension or debarment of the government contractor under the Federal Acquisition Regulations ("FAR"). There are also regulations that restrict the gifts that U.S. government employees are allowed to receive from prohibited sources (which often includes government contractors such as National), even when the gifts are not directly intended to influence the employee's official conduct. Although these regulations do not expressly apply to private organizations or individuals, offering such gifts could subject the private party to debarment or suspension from future government contract work under the FAR.
II. PROHOBITED GIFTS RESULTING IN CRIMINAL PROSECUTION
The "Bribery Statute," 18 USC section 201(b), makes it a felony to offer anything of value to a U.S. employee to influence his or her official conduct. The determination of "value" is based on the subjective belief of the recipient, not on actual, objective value. See U.S. v. Williams, 705 F.2d 603 (2d Cir. 1983). This prohibition applies if an item of value, no matter how small, is offered in an attempt to influence a specific future action of a public official. See U.S. v. Brewster, 506 F.2d 62 (D.C. Cir. 1974). The "Gratuity Statute," 18 USC section 201(c), is very similar, but criminalizes offering such an item in connection with a specific official act, even if not offered in exchange for the act. See U.S. v. Sun Diamond Growers of Cal., 119 S.Ct. 1402 (1999). The "Dual Compensation Statute," 18 USC section 209(a), criminalizes providing anything of value to a public official as compensation for services rendered as a public employee, even if not in connection with a specific official act.
In summary, gifts to officials that could result in criminal prosecution include:
- An item or service of any value offered in exchange for an official act;
- An item or service of any value offered in connection with an official act; and
- An item or service of any value offered as compensation for the official's services as a public employee.
III. PROHIBITED GIFTS RESULTING IN SUSPENSION OR DEBARMENT
In addition to criminal penalties, the gifts described above can also result in civil penalties for a government contractor such as National Air Cargo. The FAR requires the insertion of a clause into almost every federal contract that provides for cancellation of the contract and suspension or debarment of a government contractor, if the contractor or its employees offer anything of value to a U.S. government employee with the intent of obtaining favorable treatment in relation to a government contract. See FAR 3.202, FAR 3.204(c); FAR 52.203-3.
Other regulations also severely restrict the gifts that government employees may accept, regardless of influence on their official conduct. See 5 CFR §2635.201, et seq. Generally, U.S. employees may not accept anything of value from a prohibited source that is given because of their official position. 5 CFR §2635.202(a). A "prohibited source" includes any entity whose interests may be affected by the public employee, and usually includes a government contractor that does any business with the public employee's agency. 5 CFR §2635.203(d). There are a few specific exceptions to this statute, but they are severely limited. See 5 CFR §§ 2635.203(b); 2635.204. Although these regulations do not expressly apply to a private entity, a government contractor could face suspension or debarment on the ground that offering a gratuity prohibited by agency standards of employee conduct indicates a lack of "business integrity or business honesty" or "affects the present responsibility" of the contractor involved. See FAR 9.406-2(a)(4) and (c); FAR 9.407-2(a)(5) and (c).
Accounting for all possible exceptions, gifts to U.S. government employees (because of their official position) that could result in suspension or debarment of National Air Cargo, as well as cancellation of a government contract, include:
- An item or service of any value offered with the intent of obtaining favorable treatment in relation to a government contract;
- Any item or service (including entertainment) that exceeds $20 in value, unless otherwise allowed by a specific exception (see below);
- Any series of items or services that in aggregate exceed $50 in market value in a calendar year;
- Any cash or investment interests, regardless of value;
- Any item or service for sale at below market value;
- Any meal or food offered in a domestic area, beyond modest refreshments such as coffee or donuts, unless otherwise allowed by a specific exception (see below);
- Any meal or food offered in a foreign area, beyond modest refreshments, unless it does not exceed U.S. State Department's per diem allowance, and it is not offered by a foreign government, and it is at an event in connection with the official's public duties, and a foreign entity is participating in the event;
- Any opportunity or benefit that is not available to the general public, or at least a substantial class of individuals such as all government employees or military personnel;
- Any travel, subsistence or related expenses, unless authorized pursuant to 31 USC §1353 (allowing certain travel services in relation to the U.S. employee's official functions);
- Attendance at any conference or event, including meals offered at the event, unless it is widely attended, and the official is either a speaker, presenter or panel participant, or the event will further the programs or operations of the employee's agency, and more than 100 people are expected, and the market value of attendance is $335 or less; and
- Any gifts in connection with political activities, unless specifically permitted by the Hatch Act Reform Amendments, 5 USC §7323, or otherwise allowed under the exceptions above.
Of course, even if the gratuity is technically excluded from the prohibitions outlined above, it can still result in criminal penalties if it is offered to influence official conduct, as described in the preceding section.
It is illegal under almost any circumstances to give anything of value to U.S. employees because of their official position, and the limited exceptions that do exist are specific and circumscribed. To avoid criminal prosecution, or suspension or debarment from future government contract work, it is best to refrain from providing any gratuities beyond a simple cup of coffee or perhaps a nominal memento such as a pen or plaque, unless you have consulted with legal counsel. And under no condition should any gift be offered to a U.S. employee in an attempt to influence his or her official action in any way.