ETHICS AND COMPLIANCE SCENARIO 3

THE DIFFERENCE BETWEEN A ‘GIFT’ AND A ‘BRIBE’

Question:

(a) Several times a year, office and warehouse personnel are sent “gifts” from vendors.

(b) What is the difference between a “gift” and a “bribe”?

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Answer:

(a) The answer to this item is not so ‘clear cut’. While a ‘gift’ may not rise to the level of a kickback, if the ‘gift’ was given with the intent of influencing the Contractor to use the vendor’s services on the federal contract in question - - it would then be illegal.

(b) While the words ‘gift’ and ‘bribe’ may seem rather ‘simple’ and obvious to most of us, in business – accepting one or the other (sometimes without even knowing it) - could cost a company millions.

The definition of ‘bribe’ and ‘gift’ is as follows:

Gift: Something of value given without the expectation of return Bribe: Something of value given with the hope of a future influence or benefit

Gifts and bribes can be money or actual items such as tickets to a sporting event, rounds of golf or meals.

When a ‘gift’ is given or accepted – regardless of the intention of the gift-giver - it can give the wrong impression and the ‘appearance’ that whatever has transpired is not on the ‘up and up’. In other words, what may have been an innocent gesture – could be interpreted as just the opposite and can blur the lines of integrity, fairness and trust.

Depending on whether you do business solely in the private sector, with state, local or federal governments or internationally – the importance of how your company chooses to manage this subject will prove important.

Gifts and Bribes and Doing Business with State, Local and Government Employees and Officials
In the context of contracting with the government, a ‘bribe’ is the offering, giving, receiving or soliciting something of value for the purpose of influencing the actions of an official in the discharge of his or her public or legal duties.

In general, a ‘gift’ is something given as a sign of friendship or appreciation. The government considers public service as a public trust and strictly limits what government employees can accept as a gift to avoid the appearance of impropriety while state agencies interpret the meaning of gifts differently.

Even though there are various ‘gift value limits’ set by various states (as well as the government) - do you think that such limits really matter in the heavily regulated environment that we operate in? CONSIDERATIONS FOR YOUR COMPANY

How Should Your Company Respond?

While there are a variety of cases that can be used for ethics training – in a recent ‘gifting’ case [Reference: U.S. vs. Hoffmann] where the government built a circumstantial case against a Vice President of Surdex Corporation who was later ‘convicted’ of violating the Federal Gratuities Statute for giving golf clubs to his contracting contact at the U.S. Army Corps of Engineers. In 2009, the case was appealed and Hoffmann’s conviction was upheld.

If Surdex Corporation had an Ethics Code which strictly prohibited gift giving of any kind - especially to a government counterpart - - this incident would never have happened.

How could your Company avoid what happened in the unfortunate case of Surdex Corporation and its Vice President?

Additional Considerations

1) Does your Company’s Ethics Code and Program provide policy and awareness that your employees could easily understand and follow concerning this issue?

2) Does your Company’s Ethics Program (through its Code, training and awareness) allow your employees to be aware of the serious issues (and after-effects) of giving or accepting gifts whether doing business with the government or doing business internationally?

3) What protective steps does your Company have in place to help its employees avoid this type of situation and make the right ethical decision?