Will STOCK Act Expand Federal Gratuities Law?
Q: I am a Senate staffer with a question about the STOCK Act. I have a friend who is an attorney, and he said that one of the biggest consequences of the act is a possible expansion of the law forbidding Members and staffers from accepting gratuities from constituents. I know that this has been a tricky area for Members and staffers in the past, and we have always been very careful in our office in handling gifts from constituents. Is the gratuities law expanding?
A: Last week, by a 417-2 vote, the House approved a bill widely known as the STOCK Act. As the bill wound its way through Congress, much of the media coverage focused on the bill’s ban of “insider trading” by Members and staffers. This is understandable, given its name: the Stop Trading on Congressional Knowledge Act. Less attention has been received by some key amendments made to the bill in the Senate before it was sent to the House.
Those amendments, authored by Senate Judiciary Chairman Patrick Leahy (D-Vt.) and Sen. John Cornyn (R-Texas), would significantly affect several key anti-corruption laws, including the one you mention, the law prohibiting “gratuities.” To understand the proposed changes requires a little legal history.
The so-called gratuities law is, in fact, a subsection of the statute banning bribes, which never actually mentions the word “gratuity.” The subsection that has come to be known as the gratuities law prohibits giving “anything of value” to a public official “for or because of any official act performed or to be performed by such public official.” In short, you can’t tell a Member: “Thanks for your vote on that very helpful legislation. Here’s $50,000.”
The Supreme Court clarified the scope of this law in an important 1999 decision called U.S. v. Sun-Diamond Growers of California. A lower court had convicted Sun-Diamond Growers of California of violating the gratuities law for making several gifts to the secretary of Agriculture even though no link had been established between the gifts and an official act. Sun-Diamond appealed, arguing that the court had wrongly concluded that all that is required for a conviction under the gratuities law is that a gift be given because of the recipient’s official position. The prosecution responded that the statute should apply wherever a gift is “motivated, at least in part, by the recipient’s capacity to exercise governmental power or influence in the donor’s favor.”
In a unanimous decision, the Supreme Court sided with Sun-Diamond, ruling that the gratuities law, on its face, applies to gifts given for or because of some official act. Therefore, the law does not apply to gifts that are given on the basis of the recipient’s position, even if the donor is hoping to establish good will with the recipient that might affect future official acts.
The Supreme Court noted that “peculiar results” would flow if the law were interpreted so broadly as to criminalize gifts given on the basis of the recipients’ position. For example, the court said, the statute would then criminalize token gifts such as the replica jerseys given to the president by championship sports teams each year during ceremonial White House visits. The court stated a statute “that can linguistically be interpreted to be either a meat axe or a scalpel should reasonably be taken to be the latter.”
After the Sun-Diamond decision, reform groups immediately began lobbying Congress to respond. They urged Congress to revise the gratuities law to make it a crime for someone to give a gift on the basis of the recipient’s official position. Those efforts never made much progress until this year, when the Senate passed a version of the STOCK Act with the amendments expanding the gratuities law.
Specifically, the amendments would make it a crime to give a gift worth $1,000 or more “for or because of … the [recipient’s] official position.” This means that for prosecutors to obtain a conviction under the law, they would no longer need to establish a link between a gift and some specific official act.
The amendments do include an exception for actions taken “as provided by law, for the proper discharge of official duty, or by rule or regulation.” The amendments define “rule or regulation” in this context to include rules and regulations governing the acceptance of gifts and campaign contributions. This appears to mean that gifts made in accordance with Congressional gift rules and campaign finance regulations would, by definition, not be violations of the gratuities law.
As it turns out, the version of the bill passed by the House did not include the amendments expanding the gratuities law, meaning their fate is now up in the air. While some consider the amendments to be as good as dead, Leahy has urged that they be considered in conference, where House and Senate negotiators will work to resolve the differences between the two versions of legislation.
To return to your question, it remains unclear whether the gratuities law will expand. But, whatever the fate of the proposed amendments, Members and staffers certainly have plenty of other reasons not to accept gifts, and constituents have plenty of reasons not to give them. As you are no doubt aware, the House and Senate gift rules greatly restrict gifts to Members and staffers. And, the Honest Leadership and Open Government Act of 2007 makes it a crime for lobbyists to knowingly make a gift that violates those rules.
So, while the gratuities law might not expand, this is no reason for Members and staffers to be any less careful about gifts from constituents. Continue to proceed with care.
C. Simon Davidson is a partner with the law firm McGuireWoods. Click here to submit questions. Readers should not treat his column as legal advice. Questions do not create an attorney-client relationship.