Preventive Law
Preventive Law Corner - Giveaways and Gifts: Sometimes it is best to look a gift horse in the mouth!
By Emily D. Newhouse - Schwartz & Eichelbaum P.C.
Sep 12, 2007, 08:31

Giveaways and Gifts:

Sometimes it is best to look a gift horse in the mouth!

At the end of this month, many of Texas’ best citizens will travel to Dallas for the annual TASA/TASB Convention.  The Convention provides school administrators and trustees with opportunities to learn from one another and to gather ideas to better their communities.  For many, convention-going also includes time to socialize with fellow trustees and district vendors.  Recent indictments against government officials, including some school officials, have given many cause to re-examine common convention past-times, like nice dinners with vendors and gifts given to convention attendees.  Are school officials in danger of being broadcasted while being hauled off to jail by the six o-clock news because their architect took them to one of Dallas’ fabulous steakhouses or because they accepted a gift without completely understanding the ramifications of the transaction?  For a quick refresher of the rules, keep reading.

Both state and federal law impose strict prohibitions on public officials accepting and offering gifts—the idea being to dissuade the public corruption that has become so rampant in our society.[1]    Bribery is the easy one.  Obviously, it is illegal to intentionally or knowingly offer or accept a benefit as consideration for the decision or vote of a public official.[2]  Everyone knows this, you say.  But did you know that there is no de minimus exception to the bribery statute?  Which means that any benefit—no matter how small—that is offered or exchanged in consideration for the decision or vote of a public official could be considered a bribe, which is a felony of the second degree.[3]  Of course, there must be some evidence that the benefit was offered or exchanged in consideration for said decision or vote, and to prosecute one for bribery, the statute requires that there be direct evidence of such an agreement (e.g., recording of the conversation, written agreement, or testimony of party).[4]  But the statute is clear—it does not matter how small a bribe is if it is done with the requisite intent.    

State penal code provisions also prohibit public servants from knowingly accepting, and any other person from knowingly offering, illegal gifts to public servants,[5] except under very specific delineated exceptions.  Specifically, state law provides that “[a] public servant who exercises discretion in connection with contracts, purchases, payments, claims, or other pecuniary transactions of government commits an offense if he solicits, accepts, or agrees to accept any benefit from a person the public servant knows is interested in or likely to become interested in any contract, purchase, payment, claim, or transaction involving the exercise of his discretion.”[6]  Put simply, any public employee who exercises discretion in a district monetary transaction is prohibited from soliciting, accepting, or agreeing to accept a benefit from a person he knows is interested or likely to become interested in the transaction.  This prohibition certainly covers superintendents and business managers, but could also include other district employees such as principals, athletic directors, and even teachers.  The key is whether the employee exercises discretion in connection with a district contract, purchase, payment, claim, or other pecuniary transaction and whether the benefit comes from a vendor or potential vendor. 

So, can I take that flashing pen that is being given away by the hundreds to everyone who walks by a booth at the TASA/TASB Convention?  Only if the value is less than $50 and you are not accepting it in exchange for giving the vendor business. For that matter, if all it takes to get your district’s business is a flashing pen or a squishy school bus, your district probably has larger concerns than this statute.

Of course, even an employee who exercises discretion in a district monetary transaction is not entirely prohibited from accepting gifts.  As we mentioned earlier, there are exceptions to the rule, including one for gifts less than $50 in value and one for entertainment accepted as a guest.[7]  However, the $50 rule-exception does not apply to cash or to negotiable instruments.[8]  Which means that if a vendor interested in or likely to become interested in a contract or purchase transaction with the district and the recipient knew that, a casual acceptance of a crisp $50 from said vendor has now escalated from a gift to a Class A misdemeanor (assuming the transaction was not covered by some other exception to the rule against acceptance of gifts).                             

What about the entertainment exception, you say?  Accepting a $50 bill is no different from accepting a $50 meal.  Or is it?  Don’t confuse the $50 rule-exception with the entertainment exception because they are entirely distinct.  Separate and apart from the $50 rule-exception, the entertainment exception provides that public servants may accept gifts of food, lodging, transportation, or entertainment if the gift is accepted as a guest.[9]  Which means that you may accept gifts of food, lodging, transportation, or entertainment from a vendor or potential vendor, regardless of value, as long as the vendor is with you at the time.  In other words, accepting a $50 steak isn’t going to get you into trouble, provided that the vendor is there with you when you eat it.  Accepting a $50 bill is a different story because it doesn’t qualify as food, lodging, transportation, or entertainment, but it isn’t covered by the $50 rule either, since that rule does not cover cash or negotiable instruments.

Bottom line is that you need to be extremely careful when accepting gifts from anyone who does or intends to do business with the district—especially when the gifts are in cash!  Make a quick call on that cell phone to your school attorney if you have any doubt!  And realize that all is not lost if you are offered an unsolicited gift that you cannot accept—you can donate the gift to a governmental entity or recognized charitable organization.[10] 

Finally, realize that the statutes discussed above are not the only statutes that govern transactions with public servants.  The tide has shifted; society has had its fill of public corruption, and people are not looking the other way anymore.   There are a whole host of statutes under both federal and state law that are simply beyond the scope of this article, and prosecutors are just waiting to pounce.  So if you want to stay out of jail, we recommend that you keep yourself apprised of current ethics laws and that you consult closely with your legal counsel before you accept the gift!                 

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