Illegal gratuities and gifts: primer and reminder.

• Author: Fontana, Jim
• Position: Ethics Corner

As was reported in National Defense last month, the Army's Office of General Counsel reminded government executives about "the number one gift rule: Nothing requires a person to accept a gift--you may always decline."

Rejection of a gift sometimes is the wisest course. Indeed, many companies' policies prohibit offering anything of value to government employees. Yet, the complex interaction between businesses and their government customers sometimes requires independent judgment, particularly in policy areas and marketing activities.

Occasionally, a true "Washington scandal" casts clouds upon the industry and government. Typically, the scandal involves an exchange of favors, gifts, or some other prohibited business conduct. Recent scandals included allegations of prostitutes, extortion, and money laundering in the relationship between a Pentagon official and contractors.

Although rare, these events show that the defense industry must maintain vigilance in promoting ethical behavior. In this context, one error by one employee could be critical.

Sometimes misconduct arises because common business practices in the private sector may be illegal in government transactions. The rules governing these issues include criminal provisions of bribery and illegal gratuities, applicable Federal Acquisition Regulation (FAR) provisions, and government ethics regulations.

Under criminal law, bribery occurs when someone directly or indirectly gives, offers or promises anything of value to any public official with the intent to influence any official act. Essentially, a bribe requires a corrupt intent to influence an official--seeking a "quid pro quo"--but the official need not reciprocate to constitute a crime. The criminal illegal gratuity statute is violated when someone directly or indirectly gives, offers, or promises anything of value to a public official for or because of any official act. Unlike bribery, an illegal gratuity does not require a corrupt intent. The illegal gratuity statute prohibits rewards for past or future public acts.

The FAR conflict-of-interest provisions bar government employees from soliciting or accepting any gratuity, gift or item of value from a prohibited source. Those sources include anyone seeking business with the employee's agency, anyone conducting business regulated by the agency, or anyone with interests affected by an employee's official duties. Also, the FAR Gratuities Clause, found in most contracts and...