Federal Gift Prohibition Applies to Most Local Governments
I came across a decision in Patty Salkin's <a href="http://lawoftheland.wordpress.com/2011/09/14/7th-circuit-holds-develope…; target="”_blank”">Law
of the Land blog today</a> 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:<ul>
(a) Whoever, if the circumstance described in subsection (b) of this
section exists ...
<br>
<br>
(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.<br>
<br>
(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.</ul>
The decision in <a href="http://www.ca7.uscourts.gov/tmp/B01FFU1J.pdf" target="”_blank”">U.S. v Boender</a>,
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."<br>
<br>
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.<br>
<br>
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.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
203-859-1959