Who is Picking Up the Tab for Sunday Brunch?
I am a staff member of the House Appropriations Committee. After church last Sunday, my husband and I chatted with a married couple who are new to the area. They were both very nice, so we invited them to brunch at a diner where my husband and I go every week after church. When the check came, which was $65 for the four of us, the husband, Jason, insisted on paying, despite our objection. I noticed that he initially tried to use a corporate credit card but then switched because the diner only accepts cash. My question is this: I know that the new rules forbid accepting gifts from lobbyists and from companies that retain lobbyists. However, Jason is not a lobbyist, and I am not aware that the company Jason works for retains any lobbyists. I thought it would have been impolite to ask. Was it OK for Jason to pay?
[IMGCAP(1)]A: Before the recent amendments to the gift rule, Jason’s gesture would not have raised a problem. Under the old gift rule, it was permissible to accept gifts worth less than $50, regardless of the source. Because you and your husband’s share of the $65 brunch was presumably less than $50, you would have been in the clear.
However, the recent amendments change the analysis by eliminating the $50 exception for companies that retain lobbyists. Specifically, the new gift rule provides that, with some exceptions, you may not “knowingly accept a gift from … a private entity that retains or employs registered lobbyists.”
Your question raises the two trickiest aspects of the new rule regarding gifts from companies. The first is determining when a gift is “from” a company. The second is the relevance of a recipient’s knowledge about the source of a gift.
As to the first question, the gift is either from Jason personally, or it is from the company where he works. This is important because if the gift were from Jason personally, you wouldn’t need to worry about whether the company employs lobbyists. The new rule would still allow you to accept the gift, assuming Jason was not trying to evade the rule.
So who is the gift from? A recent ethics committee memorandum regarding the gift rule amendments states that a gift is from a company if it is paid for with company funds, such as a corporate credit card. Although Jason used his own money here, that was only after a failed attempt to use a corporate credit card. Therefore, it is possible that he later obtained reimbursement from the company, in which case the gift would have been from the company.
If the gift was from the company, the next question is the relevance of your knowledge of this fact, as well as whether the company “retains or employs” lobbyists. For example, what if the company paid for the gift but you didn’t know? In addition, while you say you are not aware that the company retains lobbyists, what if you’re wrong? Would that matter? Or does your lack of knowledge protect you from a violation?
The rule is not clear on these points, and the committee has not provided much guidance. Until it does so, one can only speculate about how it would interpret the rule.
It is possible, I suppose, that the committee might adopt the strictest interpretation of the rule. That is, a violation would exist anytime you accept a gift from a company that happens to employ or retain lobbyists, regardless of your knowledge of these facts. However, this would impose a strict duty of inquiry upon gift recipients. By accepting a gift, the recipient would be taking the chance that the source is not a company that retains or employs lobbyists. Therefore, before accepting a gift, the recipient would need to take all steps necessary to be certain that this is not the case.
Another consequence of the strictest approach is that it would highlight the ambiguity of the phrase “employ or retain” lobbyists. What does it mean for a company to “retain” a lobbyist? What if the company once retained lobbyists but recently stopped doing so? What if the company only retains lobbyists from time to time, as the need arises?
The strictest interpretation does seem at odds, however, with the language of the rule, which forbids Members and staff from “knowingly” accepting a gift from a company that retains lobbyists. So, to adopt this interpretation, the committee would have to conclude that “knowingly” applies to accepting the gift but does not apply to the fact that it is from a company that retains lobbyists. This seems unlikely.
On the other hand, a completely relaxed interpretation of the rule seems no more likely. Under such an interpretation, it would be a violation only if you clearly knew that the source of a gift was a company that employs or retains lobbyists. Great, but the problem is that Members and staff could avoid violations simply by keeping themselves in the dark. The House’s general requirement that Members and staff adhere to the spirit of the rules, as well as the committee’s recent instruction to avoid “narrow, technical readings” of the gift rule, both suggest that the committee will not adopt this interpretation either.
Ultimately, a sensible approach probably lies somewhere in the middle. On the one hand, recipients should not be strictly liable in situations in which they did not know that the gift was from a company that employs or retains lobbyists. After all, if a recipient is unaware that the source of a gift is a company with lobbyists, there is little risk that the company’s lobbyists will receive undue influence in exchange for the gift. On the other hand, Members should not be able to escape liability simply by keeping themselves ignorant of the fact that a company has lobbyists.
Where does this leave us regarding the brunch with Jason and his wife? It seems unlikely that the rule was designed to prohibit a brunch with new friends. However, given the ambiguity of the rule, one cannot be sure. The committee has recently advised that Members and staff should consult with the committee with questions before accepting any gift. Until the committee clarifies the new rule regarding gifts from companies, the safest course is to do as they say and take questions like yours to the committee.
C. Simon Davidson is an attorney in the Washington, D.C., office of McGuireWoods LLP. Readers should not treat his column as legal advice.