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Regulatory: Take me out to the ball game? Think twice

Companies looking to give gifts to politicians or government employees face stiff restrictions

Every business—large and small—knows the value of maintaining good relations with the members of Congress who represent its state and legislative district and those who serve on committees with jurisdiction over its industry. Similarly, businesses seek to maintain cordial relations with those in the executive branch of the federal government charged with regulating their industries. How better to enhance these relationships than with tickets to the big game or a sold-out concert?

Those contemplating extending such invitations, however, need to beware of gift rules and restrictions applicable to members of Congress or to their staffers, and similar rules that govern the offering, giving, or acceptance of gifts by federal officials and employees of the executive branch. The rules are particularly restrictive for registered lobbyists, lobbying firms and for companies that employ them. Legislation enacted in 2007 makes the violation of such rules by lobbyists and those employing them a crime punishable by substantial fines and even prison time.  

Another exception exists for gifts given or received based on personal friendship, but those seeking to invoke this exception must be able to demonstrate a long-term relationship with the recipient, reciprocal exchanges of gifts of roughly equal value and that the gift was not given solely due to the legislative or executive branch employee’s official position. For those seeking to use this exception, the donor cannot request or obtain reimbursement by an employer.

The legislative branch gift rules permit the giving or acceptance of gifts from one source of less than $50 on one occasion and less than $100 from one source on multiple occasions in a calendar year, although registered lobbyists, lobbying firms and entities employing lobbyists may not take advantage of this exception.

Lobbyists, lobbying firms and entities employing lobbyists are required to report twice yearly on political contributions, certify that the person or firm has read and is familiar with Congressional gift and travel rules and has not knowingly violated those rules. Prior to the enactment of the Honest Leadership and Open Government Act (HLOGA) in 2007, the federal Lobbying Disclosure Act provided for a civil penalty of up to $50,000 for a knowing failure to comply with provisions of the law. See 2 U.S.C. § 1606.

HLOGA has increased the maximum civil penalty for knowing failure to comply with the act's provisions to $200,000, and imposes criminal penalties of up to five years imprisonment, fines under Title 18 or both. See 2 U.S.C. § 1606, as amended by the HLOGA, Pub. L. No. 110-81, § 211(a),121 Stat. 749 (2007).

Contributing Author

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Paul M. Honigberg

Paul Honigberg is a partner in Blank Rome’s litigation practice. He has more than 30 years of experience litigating a variety of complex civil cases...

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