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Subpart B - Gifts from Outside Sources

a. General standards (Section 2635.202).

Question: You deal officially with a contractor whom you otherwise do not know. The contractor invites your supervisor and you to dinner at a hotel on Pennsylvania Avenue, a block from the White House. The contractor does not invite anyone else. The cost of each meal is valued at $21. May the supervisor and you accept the offer?

Answer: No. The Standards prohibit an employee from accepting a gift that exceeds the $20 exception at Section 2635.204(a) if the gift is offered either: (a) from a prohibited source; or (b) because of the official position of the employee. Both reasons apply to you. (You may not offer to pay the additional $1. The $20 rule is NOT a “Federal $20 discount.”)

Question: What if the dinner in the above question costs less than $20?

Answer: If the invitation was simply for dinner to discuss business, you may accept the invitation. That is the purpose of the $20 exception. However, since you and your supervisor have been singled out by the contractor for the invitation, you may determine that it is prudent either to decline the invitation or to pay for your own meal. You should consider the sensitivity of the matter on which you are dealing with the contractor.

Question: When is a gift given because of an employee's official position?

Answer: If the gift would not have been offered or given if you held some other position, or if it is offered or given because you work where you work and/or have your duties in the Agency. The formal definition is at 5 CFR § 2635.203(e).

Question: You are an agricultural program specialist/researcher. An agricultural cooperative that has business dealings with the Department invites you to participate in an all-expense paid tour of the farms and processing facilities of the members of the cooperative. It does not matter to the cooperative whether you participate in a private capacity or on official time. May you accept the invitation?

Answer: Personal Acceptance: No, if you are traveling in your private capacity. This is not a “widely attended gathering” under Section 2635.204(g)(2) since the cooperative is a single entity, with a singular perspective, rather than a large and diverse group representing a variety of perspectives; and the offer does not meet any other exclusion or exception that would permit you personally to accept.

Agency Acceptance: No, if your Agency is accepting the travel on your behalf.

(i) The proposed travel does not meet the “meeting or similar function” definition of the regulatory authority for accepting travel and expenses for travel from non-federal sources. 41 C.F.R. § 304-1.2(c)(3).
(ii) Since the agricultural cooperative is a prohibited source, your Agency may not use the Secretary’s gift acceptance authority to accept the gift of travel. DR 5200-3, Gift Acceptance Policy, dated 4/18/03.

Note that, if the agricultural cooperative were not a prohibited source, you still could not accept the travel because the gift is offered to you because of your official position. Section 2635.202(a)(2).

b. Definitions (Section 2635.203).

Question: What is a gift?

Answer: Anything that has monetary value which you obtain for less than "market value," including services, might become a gift. The gift might be tangible or intangible. For example, an automobile or forgiveness of debt owed on a car each can be a gift. Free hotel lodging can be a gift. See the formal definition at 5 CFR § 2635.203(b).

Question: What is a prohibited source?

Answer: The Standards define a prohibited sources as any "person" (see 5 CFR § 2635.203(d)) who:

  1. Is seeking official action by the employee's Agency;
  2. Does business or seeks to do business with the employee's Agency;
  3. Conducts activities regulated by the employee's Agency;
  4. Has interests that may be substantially affected by performance or nonperformance of the employee's official duties; or
  5. Is an organization a majority of whose members are described in (1) through (4) above.

Note that only (4) relates to the performance or nonperformance of the employee. The emphasis otherwise is on the relationship of the source to the Agency of the employee. For the purposes of this rule, "Agency" means USDA, as a whole.

c. Exceptions (Section 2635.204).

Question: An agricultural news organization that is a prohibited source sponsors a seminar to be attended by approximately 1,000 persons from Government, industry, and the vendor community. The seminar therefore qualifies as a "widely attended gathering." You are invited to participate on a panel on the first day of the seminar, and the sponsor tells you that you can stay the whole first day, partaking in a nice buffet lunch, without paying an attendance fee. Your supervisor authorizes you to participate on the panel. May you accept the day's attendance?

Answer: Yes. The day's free attendance is not a gift, but a customary and necessary part of your performance of the official assignment. In fact, the event does not have to be a "widely attended gathering." The key is that you are assigned to speak.

Question: It is the same seminar in the question above. You are not invited to participate as a speaker, a panel member, or in any other capacity. The sponsor of the event instead offers you free attendance for the entire seminar. The ticket to the seminar includes dinner on a riverboat. May you attend? If you attend, may you go to dinner on the riverboat?

Answer: If an ethics advisor with appropriate delegated authority determines in writing that your attendance is in the interest of the Agency because it will further Agency programs and operations, you may accept the offer of free attendance from the sponsor of the event. Yes, you can go to dinner on the riverboat because all attendees pay for the dinner in their attendance fee. (Note: Stricter, additional rules apply when the offer for free attendance comes from a non-sponsor.) In contrast to the answer immediately above, this offer of free attendance truly is a gift to you.

Question: You are an ARS manager, and you make a presentation to students and faculty at a university that receives grants from your Agency. In appreciation, the university gives you a paperweight valued at $15. May you keep the paperweight?

Answer: Yes. The value of the gift is less than $20. The prohibitions on acceptance of gifts from outside sources do not apply to gifts valued at $20 or less.

Question: Florida experienced numerous, severe forest fires in the past year. A movie company doing business in Florida has offered family tickets to the company's theme park to anyone who helped fight the fires. Department employees were among the firefighters. May they accept the tickets?

Answer: Yes. Membership in the group of recipients (firefighters) is not tied to Government employment.

d. Proper disposition of prohibited gifts (Section 2635.205).

Question: I have received a prohibited gift. What am I expected to do?

Answer: This issue is covered specifically at 5 CFR § 2635.205. Briefly stated, in most cases you give it back to the donor or pay the donor market value for the item. If the gift is perishable (a crate of oranges, for example), it may be given to a charity, shared among all employees of your office, or destroyed. You must pay the donor for gifts of entertainment or other intangible favors, services or benefits.

Question: The gift I received for the December holidays was a carton of four bottles of quality Scotch whiskey. How does that fit with the rule you cited above?

Answer: If you want to keep the whiskey, you pay market value. Check the adds in the newspaper or visit a store to see how much it costs. You may return the whiskey, or you may pour it down the drain. Carefully document what you do. If you destroy the whiskey, have a witness sign a statement that he/she watched as the product — all the product — went down the drain. Distribution to charity is an option under the regulation; but, as alcohol consumption is not permitted at work, the option of sharing it with all employees is not available.