On June 26, 2024, the Supreme Court announced its decision in Snyder v. U.S.1 The Court held a gratuity paid to a state official does not violate federal bribery law, 18 U.S.C. § 666(a)(1)(B) (“Section 666”). The Court’s ruling impacts state and local public officials, and private citizens and businesses who deal with state officials. Snyder also creates arguments to defend against alleged violations of other federal bribery laws.
James Snyder is the former mayor of Portage, Indiana. Under Snyder’s administration, Portage awarded contracts to a truck company to purchase trash trucks for $1,100,000 in 2013. In 2014, the truck company with which the City contracted sent Snyder $13,000. Federal prosecutors suspected the payment was a bribe in exchange for the trash truck contracts. Snyder explained that the payment was for consulting services, not an official action.
Federal prosecutors indicted Snyder for bribery in violation of Section 666.2 Under Section 666, it is unlawful for a state, local, or tribal official to “corruptly solicit[] or demand[] for the benefit of any person, or accept[] or agree[] to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more.”3 The jury convicted Snyder of accepting an illegal gratuity under Section 666.
Gratuities are not bribes. A bribe requires “that the official have a corrupt state of mind and accept (or agree to accept) the payment intending to be influenced in [an] official act.”4 In contrast, a gratuity comes after an official act, like parents providing “an end-of-year gift basket to their child’s public school teacher.”5 The Snyder Court held that a gratuity does not violate Section 666: “[a]lthough a gratuity . . . may be unethical or illegal under federal, state, or local laws, the gratuity does not violate” Section 666.6
The Court’s limitation on Section 666 prosecutions shifts focus to the states. Many states already regulate gratuities,7 including Ohio8 and Kentucky. For example, Kentucky law9 prohibits a legislator from knowingly accepting compensation or gifts from any source other than payments authorized from the General Assembly (i.e., the legislator’s salary); violation is a Class A misdemeanor. Still, state prosecutions of anti-gratuity laws can be rare. Only two courts have ever cited this Kentucky statute, and both are federal courts relating to the same civil case.10 State prosecutors could increase investigations into violations of state anti-gratuity laws to compensate for the Government’s inability to prosecute gratuities under Section 666. Federal investigators will continue to investigate conduct pre-dating official action. The result is potentially increased coordination between state and federal investigators which could create dual-investigation issues.
Expanded state and local anti-gratuity laws and investigations will impact the private sector. Many existing statutes punish the person providing the gratuity, not just the official receiving it. Private individuals and entities who commonly interact with public officials – including government contractors, lobbyists, and activists – must invest in compliance efforts with existing and new anti-gratuity laws. In other words, think twice before sending that thank-you gift basket.
Snyder created arguments against alleged violations of federal bribery laws other than Section 666. For example, the Foreign Corrupt Practices Act (“FCPA”) prohibits certain persons and entities from “corruptly” paying, promising to pay, or authorizing payment of “any money, or offer, gift, promise to give, or authorization of the giving of anything of value” to a foreign official to “influence” the foreign official “in order to assist [the person] in obtaining or retaining business for or with, or directing business to, any person.”11 Few gratuity-theory prosecutions under the FCPA exist.12 Snyder draws a bright line as to Section 666, not the FCPA; but if the FCPA is a “bribery statute” as Section 666 is, then Snyder could be expanded to prohibit gratuity-theory prosecutions under the FCPA as well.13 A similar argument exists for alleged violations of the Travel Act, which generally prohibits interstate travel to carry on “unlawful activity,” which includes violation of a state’s “bribery” laws.14
Snyder foreclosed gratuity-theory prosecutions under Section 666. Instead, Snyder endorsed state and local governments’ efforts to legislate and investigate violations of state anti-gratuity laws. Businesses and individuals interacting with state officials should invest in compliance programs to avoid unwanted investigation or prosecution. Snyder leaves arguments open about the scope of other federal bribery laws, like the FCPA. As always, comprehensive compliance policies and programs guard against investigations and prosecutions for these types of offenses.
Sandlin is a Managing Associate in Thompson Hine LLP’s White-Collar Criminal Defense and Investigations. He defends clients against criminal prosecutions of all kinds and develops, implements, and investigates compliance programs.
1 No. 23-108, 603 U.S. ___ (2024) (“Snyder”).
2 Federal prosecutors charged Snyder with violating other provisions of 18 U.S.C. § 666, but Snyder only analyzed 18 U.S.C. § 666(a)(1)(B).
3 Section 666 also requires that the state, local, or tribal official’s government or organization receives at least $10,000 from federal programs annually. See 18 U.S.C. 666(b).
4 Snyder, slip op. p. 8.
5 Id. at p. 2.
6 Id. at p. 16.
7 See id. at pp. 2-3 (collecting statutes from various states and localities).
8 See Gifts and Other Things of Value, Ohio Ethics Commission (https://ethics.ohio.gov/education/factsheets/GiftsandOtherThingsofValue.pdf); see also R.C. 102.01, et seq.
9 See K.R.S. 6.751(1).
10 See Schickel v. Dilger, Case No. 2:15-cv-155, 2017 U.S. Dist. LEXIS 86555, *21, 2017 WL 2464998 (E.D. Ky. June 6, 2017); see also Schickel v. Dilger, 925 F.3d 858, 881 (6th Cir. 2019) (reversing the District Court’s holding that KRS 6.751(2) is unconstitutionally vague).
11 15 U.S.C. § 78dd-1.
12 See, e.g., U.S. v. Seng, 934 F.3d 110, 116 (2d Cir. 2019) (affirming a conviction under the FCPA for gratuities and bribes).
13 See Snyder, slip op. p. 7 (describing Section 666 as “a bribery statute and not a gratuities statute”).
14 18 U.S.C. § 1952.