Quacking Like a Chicken – The Supreme Court’s Oxymoronic Reasoning in its Latest Corruption Case

In concluding that an anticorruption law does not cover gratuities, the United States Supreme Court concluded that the law … covers gratuities.

The opinion, in Snyder v. U.S., discusses whether the statute is meant to only prohibit bribes, which are typically viewed as improper quid pro quo exchanges, or also bans certain gratuities, which are “a reward for some future act that the public official will take (and may already have determined to take), or for a past act that he has already taken.”

In other words, a gratuity is a payment that does not need to actually influence the official. It just has to be connected to an action.

Prosecutors argued that the law includes gratuities because it prohibits being “rewarded” in connection with certain actions, and not just being “influenced” by a payment. Writing for the majority, Brett Kavanaugh instead reasoned that the prohibition on rewards is meant to clarify that a bribe could pass both before (to “influence”) or after (to “reward”) that reciprocal action. But to supplement his point, he describes a textbook example of a gratuity:

And think about the official who took a bribe before the official act but asserts as a defense that he would have taken the same act anyway and therefore was not “influenced” by the payment. To shut the door on that potential defense to a … bribery charge, Congress sensibly added the term “rewarded.”

Simply labelling this action as a bribe does not make it so, any more than calling a chicken a duck makes it a duck.

Justice Kavanaugh cites other factors in reaching his conclusion, most of which are easily countered in Justice Ketanji Brown Jackson’s (at times) stinging dissent. Those counterpoints – which include pointing out incorrect factual assumptions by Kavanaugh – have already been picked up in articles highlighting the flaws in the majority opinion.

But two areas where Justice Jackson’s dissent is not as complete – and where the prosecution’s oral arguments embarrassingly failed – concern federalism, and burritos.

The majority opinion argues that principles of federalism dictate that Congress could not have intended for the law at question – which covers state and local-level officials – to include gratuities because states have “differing” and “nuanced” approaches to regulating gratuities, and Congress would not so “lightly override” those approaches. But in reality, states and municipalities have a nearly universal approach to gratuities – they ban them. Where they differ is in the safe harbors they set, so that more innocent gifts are not swept up in criminal enforcements.

To say that these such approaches are differing and nuanced is akin to arguing that professional sports teams have a differing and nuanced approach to the concept of uniforms because they carry different colors or logos. The point is that they all wear uniforms.

The opinion also fusses over the risk of innocent gifts being swept up in the law, positing whether students could “take their college professor out to Chipotle for an end-of-term celebration” if the law covered gratuities. The prosecution and the dissent both argue that this is why the law only prohibits gratuities that are “corruptly” given or taken, but do not convincingly resolve the question of how to define when a payment or benefit is corrupt – they argue that something is corrupt in this context if it is “wrongful,” but that is painfully circular. (Moreover, the case they point to for this logic parses a secondary definition of “corrupt,” more akin to the way the hull of a boat or a computer’s hard drive can be “corrupted.”)

Instead, they should have drawn on Justice Antonin Scalia’s point in an earlier case that “the term ‘corruptly’ in criminal laws has a longstanding and well-accepted meaning” and involves an “advantage inconsistent with official duty and the rights of others.” As he clarified, “It includes bribery but is more comprehensive; because an act may be corruptly done though the advantage to be derived from it be not offered by another."

Anticorruption practitioners are well aware that, in the broader gift-giving context, there are rarely any express statutory limits on the cost of a client dinner, or the value of a holiday gift. Instead, the standard that many corporate compliance programs use is to gauge whether those gifts or hospitality are so frequent or so lavish that they could cause a reasonable observer to conclude that they could unduly influence the recipient.

In the course of my own career in the field, I have discussed this concept countless times with thousands of bankers, politicians, contractors, doctors, consultants, boat captains, service providers, and other employees from varying industries and walks of life. While we acknowledged that some scenarios were “gray,” it was almost always clear when something was acceptable, and when something was out of bounds. It is short-sighted for the U.S. Supreme Court to base an opinion on a fear that something unrealistic may happen.

And as for the gray areas – well, that is precisely what the court is supposed to parse out. Instead, it ducked the question – which looks like a chicken to me.

This is the first of the “Synder” series. Click here to view the second post.

Dave Lee

FCPA Compliance Consultant, TRACE