Supreme Court Kicks Gratuity Enforcement to the States

In a landmark end-of-term decision, the United States Supreme Court significantly narrowed a federal statute criminalizing gifts provided to reward a public servant for an official act. The Court’s holding in Snyder v. United States effectively prevents federal prosecution of state and local government officials who accept gratuities and those who provide them. Instead, the Court determined, this conduct must be regulated by state and local governments.  

Snyder involved the application of 18 U.S.C. § 666. This federal criminal statute prohibits, in relevant part, any federal, state or local government official from corruptly soliciting or accepting anything of value from a person that is intended to influence or reward the official in connection with government business or a transaction valued at $5,000 or more. The statute imposes criminal liability both on the gift giver and the recipient public official. Violators may face imprisonment of up to 10 years. 

Federal prosecutors charged James Snyder, the former mayor of Portage, Indiana, with violating the statute by accepting an illegal gratuity. While Snyder was mayor in 2013, Portage awarded a local company two purchase contracts valued at $1.1 million to obtain five garbage trucks for the city. The following year, the winning company gave Snyder a $13,000 check. At trial, prosecutors presented evidence that Snyder’s friend, who he had put in charge of the city’s bidding process, crafted bid specifications to favor the company over other bidders. Although Snyder claimed the $13,000 payment was for unrelated consulting services, employees testified at trial that Snyder never provided the company with such services. A federal jury convicted Snyder of accepting an illegal gratuity in violation of 18 U.S.C. § 666. Unlike a bribe – which typically involves a gift or payment made pursuant to an agreement before an official act occurs – a gratuity is a gift provided as a reward after an official act is performed. 

Following an unsuccessful challenge before the U.S. Court of Appeals for the Seventh Circuit, Snyder appealed his conviction to the Supreme Court. His lawyers argued that 18 U.S.C. § 666 criminalizes bribes but not gratuities offered or accepted for prior acts. A majority of the Court agreed, holding that the statute’s text, legislative history and federalism principles render Section 666 a bribery statute only. While a separate federal statute prohibits federal officials from accepting gratuities, 18 U.S.C. § 666 cannot, as currently written, be used to criminalize gratuities provided to or received by state and local officials. Writing for the majority, Justice Kavanaugh reasoned that state and local governments are better suited to regulate interactions between state and local officials and their constituents. 

Notably, Snyder does not permit state and local officials to accept gifts from private sources as a reward or “thank you” for acts undertaken in their official capacities. Nearly all states and numerous localities impose their own restrictions on gifts to public officials. Many of these laws prohibit even gifts of little value and do not require a corrupt or improper intent on the part of the gift giver. The Court’s decision in Snyder may very well prompt state and local governments to strengthen their own gratuity laws. The case could also motivate state and local prosecutors to more vigorously enforce existing gift prohibitions. Moreover, as the Court noted in its opinion, Congress could amend 18 U.S.C. § 666 to expressly prohibit gratuities to state and local officials. Although this federal statute has been partially de-fanged for now, do not take solace. Bribes made to federal, state and local officials and gratuities provided to federal officials remain criminal under federal law. 

The Akin political law team will continue to monitor legal developments concerning federal, state and local ethics laws. We are available to develop compliance programs that adapt to an evolving regulatory landscape and implement industry standard best practices. Please do not hesitate to contact us with questions.