Supreme Court Narrows Federal Bribery Statute That Applies to State and Local Officials

On June 26, 2024, the U.S. Supreme Court held 6-3 in Snyder v. United States that a federal statute, 18 U.S.C. § 666(a)(1)(B), does not criminalize “gratuities” to state and local officials—i.e., payments made to those officials after an official act as a reward or token of appreciation. To sustain a conviction under Section 666, federal prosecutors now must prove actual bribery, that is, a payment made or agreed to before an official act to influence a state or local official with respect to that future act. Snyder is the latest example in a series of Supreme Court decisions narrowing the application of federal statutes in criminal cases involving public officials.

Nevertheless, compliance officials should not let down their guard. Today’s gratuity could later be perceived by federal law enforcement as a bribe if that payment is followed by an official act. This risk is especially present in repeat-player business relationships—such as those involving contract renewals or extensions—between companies and public and publicly-funded entities, such as hospitals, universities and public works. Moreover, Snyder does not legalize all gratuities. Depending on the underlying facts, gratuities may still be criminal under other federal, state or local laws.

Compliance officials should therefore maintain and enforce risk-appropriate policies governing entertainment and other expenses incurred by employees in connection with public and publicly-funded entities, regularly audit those expenses and train employees, especially those engaged in sales, so that they are well-informed on what expenditures in furtherance of closing a deal are permitted under federal, state and local law.

The Snyder Decision

In Snyder, the defendant, the former mayor of Portage, Indiana, was convicted in federal district court of violating Section 666(a)(1)(B) based on his acceptance of a $13,000 payment from the owners of a local truck company several months after the city contracted with that company to purchase over one million dollars’ worth of garbage trucks. The U.S. Court of Appeals for the 7th Circuit affirmed the conviction, but the Supreme Court reversed on the ground that Section 666 is a bribery statute and not a gratuities statute.

Writing for the Court’s majority, Justice Kavanaugh relied on the text of Section 666, its statutory history, statutory structure, statutory punishments and the principles of federalism and fair notice. The majority relied heavily on a distinction in language between Section 666 and the federal bribery and gratuities statute, Section 201, and the extreme difference in punishment between the two statutes if the majority accepted the government’s argument. Specifically, Section 201 contains two distinct provisions that separately prohibit bribes and gratuities, whereas Section 666 contains only one provision, with respect to which the government argued Congress had prohibited both bribes and gratuities. The Supreme Court rejected the government’s reading of Section 666 as a “two-for-one bribery-and-gratuities statute,” in part because such a statute would be “highly unusual, if not unique.” Further, the majority pointed out the potential extraordinary reach of Section 666(a)(1)(B) if it were read to criminalize gratuities, noting it could cover holiday tips to mail carriers, gift baskets for teachers and commemorative apparel for municipal spokespeople, and subject the recipients of those items to harsh penalties. The majority reiterated that when it comes to interpreting the scope of a criminal statute, the Court cannot rely “on the assumption that the Government will use [that statute] responsibly.” Ultimately, the Court’s decision leaves it to state and local officials to regulate gifts to public officials that are made or received without an expectation of a quid pro quo.

In a concurring opinion, Justice Gorsuch invoked the rule of lenity and opined that it should be deployed because “any fair reader of this statute would be left with a reasonable doubt about whether it covers the defendant’s charged conduct.” Former Justice Antonin Scalia is often cited as having revitalized the rule of lenity, the ancient and venerable rule directing judges to construe ambiguous penal statutes narrowly. Justice Gorsuch’s concurrence underscores that this rule is still very much alive. Defendants in future cases will continue to have a strong basis for arguing that they should not “be held accountable for a violation of a statute whose commands are uncertain.”¹ 

In sum, the Snyder decision underscores the critical role of timing in establishing violations of Section 666. Prosecutors must now prove that the corrupt intent to pay an official, or to receive payment, existed before an official act. The Court emphasized that “the timing of the agreement is the key, not the timing of the payment.” According to the Court, Section 666 is violated when state and local officials either accept upfront payment, or agree to a future reward, for a future official act. Conversely, state and local officials do not violate Section 666 if they take an official act before any payment or reward is agreed upon or given.² Snyder limits prosecutable offenses to those where state and local officials are influenced before taking an official act, regardless of whether payment occurs later, as is typical with a gratuity.

Snyder’s Place in the Anticorruption Landscape

Snyder is one of several cases decided in the last 15 years that limit the reach of the federal government’s anticorruption laws. Previous cases have substantially restricted the scope of the “honest services fraud statute” as applied to bribery or kickback charges (Skilling v. United States³); constricted the definition of an “official act,” thereby narrowing the legal definition of public corruption (McDonnell v. United States⁴); reversed wire fraud convictions of two former New Jersey public officials (Kelly v. United States⁵); and narrowly construed the federal wire fraud statute (Ciminelli v. United States⁶). These cases were all flashpoints in ongoing disputes, both legal and political, over the flow of money from the private sector to government officials. Two of the cases, McDonnell and Kelly, involved prosecutions of office holders at the state or local level, and Ciminelli involved allegations arising from a development initiative supported by New York’s former governor.

Key Takeaways

• State and local authorities may fill the gap. State and local authorities have often relied on relatively well-resourced federal prosecutors and agencies, such as the Federal Bureau of Investigation, to bring cases involving complex and politically-charged allegations of unlawful gratuities, even when those allegations could support charging potential violations of state and local laws. Because deferring to a federal prosecution is no longer an option after Snyder, there may be an uptick in state and local prosecutions related to gratuities.
• Variability in local regulations. The decentralized approach to gratuity regulations could mean that what is acceptable and legal in one state, county or municipality may be illegal in another. Compliance officials will need to be vigilant of these regulatory variations and ensure that the company’s employees are, too.
• Frequency and size of gratuities. Because prosecutors could potentially argue that the frequency and size of gratuities evidence corrupt intent, especially in repeat-player business relationships, compliance officials should closely monitor employees’ gifting to the same state and local official(s).
• Additional compliance considerations. Because charging bribery of state and local officials in violation of Section 666 remains an arrow in federal prosecutors’ quivers, compliance officials may need to implement more rigorous documentation and reporting practices for any interactions involving gifts or payments to public officials. Compliance officials should reevaluate and possibly tighten their gift-giving policies to ensure compliance with federal, state and local laws. It is crucial to ensure that all gifts and recognitions are clearly documented and not tied to any expectation of influence or reward for future transactions.

^{1 United States v. Santos, 553 U.S. 507, 514 (2008).}

^{2 “A state or local official can violate §666 when he accepts an up-front payment for a future official act or agrees to a future reward for a future official act,” whereas “a state or local official does not violate §666 if the official has taken the official act before any reward is agreed to, much less given.” Snyder v. United States, 603 U.S. ___ (2024).}

^{3 561 U.S. 358 (2010).}

^{4 579 U.S. 550 (2016).}

^{5 590 U.S. 391 (2020).}

^{6 598 U.S. 306 (2023).}