Don’t Gift Wrap an Ethical Problem

by Allan Rubin, Vice President, Marketing

A FederalNewsRadio.com article posted today includes a very timely (and clear) reminder of the guidelines for giving gifts to federal employees. Holiday gifts are no exception, and in fact, they represent a dangerous time for what could be well-meaning contractors who don’t pay attention to the rules.

For those who need a brief refresher on what government employees can and cannot accept, the article references this blog post by John P. Mahoney, a partner at Tully Rinckey PLLC. Mahoney states:

“As a general rule of thumb, federal employees should refrain from accepting gifts from people who are considered “prohibited sources” or who want to give them something solely because their official position. A prohibited source, as defined by 5 CFR § 2635.203(d), is someone whose gift could create pose a conflict of interest if accepted, namely anyone who:

1. wants the employee’s agency to do something;
2. has an existing or desired business with the employee’s agency;
3. is regulated by the employee’s agency;
4. could be impacted by the work the employee conducts; or
5. is a member of an organization whose members are largely refrained from giving the gift to the employee for the above-stated reasons.

Under 5 CFR § 2635.204(a), federal employees can generally accept unsolicited gifts with a market value of up to $20 per giver, per occasion. However, employees must keep track of how much someone gives them on separate occasions over the year, because the aggregate market value of gift they are permitted to accept cannot exceed $50 annually. Additionally, there are exemptions for gifts between employees who also have family relationship or personal friendship.”

If you’re reading this, there’s a pretty good chance you and/or your company fall under the definition of “prohibited source” as listed above. So, with all Scrooge puns aside, be careful what you give this holiday season. Check out the blog post for more on possible exceptions as well as pitfalls to avoid.