Supreme Court Limits Reach of Federal Bribery Law Applied to State and Local Officials

The U.S. Supreme Court has issued a decision that could have broad implications for federal corruption statutes that are the subject of vigorous government enforcement, such as the Foreign Corrupt Practices Act (“FCPA”). The Supreme Court’s June 26, 2024 decision in Snyder v. United States¹ significantly limited the scope of a federal law criminalizing bribery by state and local officials, holding that “gratuities” or other things of value given to such officials after taking an official action do not constitute bribery under the statute. While the subject of that decision was a domestic bribery statute, its interpretation of what it means for a payment to a public official to be considered “corrupt” could affect the scope of other federal corruption statutes.

The Supreme Court reversed the Seventh Circuit’s decision affirming the conviction of the mayor of Portage, Indiana, for violating 18 U.S.C. § 666 (“Section 666”) by accepting US$13,000 from a local trucking company after the City of Portage had purchased five trash trucks from the company. The mayor claimed that the payment was for consulting services he performed on behalf of the company.

Section 666 prohibits state and local officials from “corruptly solicit[ing] or demand[ing] . . . or accept[ing] or agree[ing] to accept, anything of value . . . intending to be influenced or rewarded in connection with” an official act. 18 U.S.C. § 666(a)(1)(B). Before Snyder, a circuit split had emerged as to whether Section 666 criminalized the acceptance of gratuities (payments or gifts to a public official not intended to influence an official act and made after the official act for which the gratuity was exchanged) in addition to bribes (quid pro quo payments for the purpose of influencing an official act).

Justice Kavanaugh, writing for a 6-3 majority, settled that split by holding that Section 666 “prohibits state and local officials from accepting bribes that are promised or given before [an] official act,” but not from accepting “gratuities . . . as a token of appreciation after [an] official act.”

The majority reasoned that Section 666 did not prohibit the acceptance of gratuities for six reasons. First, the Court analyzed the statutory text of Section 666 and found that it resembled 18 U.S.C. § 201(b) (“Section 201(b)”), which prohibits federal (as opposed to state and local) officials from accepting bribes. Section 201(b) prohibits “corruptly” accepting payment in exchange for “‘being influenced’ in an official act.’” The Court found that Section 666 resembled Section 201(b) because the term “corruptly” established a mens rea requirement—i.e., officials can only be found guilty of bribery under Sections 666 and 201(b) if they intend to be influenced by the bribe (i.e., a quid pro quo). In contrast, the Court found that the federal gratuity statute, 18 U.S.C. § 201(c) (“Section 201(c)”), which does not include the term “corruptly,” did not require that the purpose of the gratuity be to influence an official act. The Court reasoned that Section 666, with its “corruptly” language and resulting mens rea requirement, is analogous to Section 201(b) rather than Section 201(c), and therefore should not be read to prohibit accepting and soliciting gratuities.

Second, the Court found that the statutory history of Section 666 suggested that it did not criminalize gratuities. The Court reasoned that, while Congress initially “borrowed language from” Section 201(c)—the federal gratuity statute—in drafting Section 666 in 1984, two years later, Congress revised Section 666 to “eliminate[] the gratuities language,” and therefore the Court must “respect Congress’s choice.”

Third, the Court looked at the statutory structure and noted that the Government failed to identify any provision in the U.S. Code “that prohibit[ed] bribes and gratuities in the same provision.” The Court reasoned that was because “bribery and gratuities are ‘two separate crimes’ with ‘two different sets of elements.’”

Fourth, the Court looked at the statutory punishments for bribery and gratuities and found that bribery is a “far more serious offense” with longer prison sentences. The Court reasoned that it would be “inexplicable” to criminalize both bribery and gratuities in Section 666 because (1) doing so would mete out the same punishments for crimes traditionally viewed as differing in seriousness and (2) such an interpretation would punish state and local officials who accept gratuities more than federal officials who accepted gratuities.

Fifth, the Court reasoned that interpreting Section 666 to prohibit gratuities would “significantly infringe on bedrock federalism principles,” given that state and local governments have “adopted a variety of approaches to regulating” gratuities.

Finally, the Court reasoned that principles of fair notice suggested that Section 666 did not cover gratuities. The Court wrote that the Government had failed to “identify any remotely clear lines” between innocuous gifts that would not be penalized under Section 666 and impermissible ones. The Court reasoned that, absent clear guidance, state and local officials would not know “what is acceptable and what is criminalized by the Federal Government.”

Implications

In addition to resolving the circuit split, the Supreme Court’s decision in Snyder may have broader implications for future judicial interpretation of similar anticorruption statutes. The FCPA, for example, prohibits “corruptly” paying or making promises to pay a foreign official for the purpose of “influencing” an official act or “securing any improper advantage.” 15 U.S.C. § 78dd-1. Given the majority’s focus on the term “corruptly” in Snyder, a court, if faced with a similar question of whether the FCPA criminalized gratuities, may rule that the inclusion of the term “corruptly” in the FCPA means that Congress did not intend to criminalize gratuities paid to or solicited by foreign officials.

Courts have compared the FCPA, Section 666, and Section 201 in various contexts. See SEC v. Jackson, 908 F. Supp. 2d 834, 850–51 (S.D. Tex. 2012) (analyzing pleading requirement of the FCPA by comparing to pleading standards under Section 201 and Section 666); United States v. Seng, 934 F.3d 110 (2d Cir. 2019) (analyzing differences in statutory language concerning object of bribe); United States v. Castle, 925 F.2d 831 (5th Cir. 1991) (comparing Section 201 and FCPA, and ultimately deciding that foreign officials cannot be prosecuted under the general conspiracy statute on the theory that they conspired to violate the FCPA). And the legislative history of the FCPA further shows that its contours are closely linked to those of Section 201(b). In the House Report commenting on the draft FCPA bill, the House of Representatives pointed to Section 201(b) in explaining the meaning of the term “corruptly,” as used in the FCPA. See H.R. Rep. No. 95-640, at 7–8 (1977).

After Snyder, courts interpreting the FCPA might hold that gratuities given to foreign officials would not be deemed criminal acts because they might not be considered “corrupt”—i.e., the intent of the payment was not to influence the foreign official. At the very least, Snyder opens a potential defense theory for individuals or companies facing an FCPA allegation.

The Snyder decision, however, likely will not affect DOJ’s expectations of corporate compliance programs. Furthermore, even though a gratuity may not be a criminal act under the FCPA, it is possible that foreign prosecutors might argue that the gratuity is a criminal act in another country with jurisdiction over the payment and actors.

O’Melveny’s White Collar Defense & Government Investigations Group is well positioned to discuss these issues and provide guidance in this area. The Group monitors developments in federal anticorruption law and the Department of Justice’s guidance concerning corporate compliance programs.

¹ Snyder v. United States, No. 23-108, 2024 WL 3165518 (U.S. June 26, 2024).

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Sharon M. Bunzel, an O’Melveny partner licensed to practice law in California; Matthew R. Cowan, an O’Melveny partner licensed to practice law in California; Jorge deNeve, an O’Melveny partner licensed to practice law in California; David N. Kelley, an O’Melveny partner licensed to practice law in Connecticut and New York; Rebecca Mermelstein, an O’Melveny partner licensed to practice law in New Jersey and New York; Greta L. Nightingale, an O’Melveny partner licensed to practice law in the District of Columbia; Steven J. Olson, an O’Melveny partner licensed to practice law in California; Mark A. Racanelli, an O’Melveny partner licensed to practice law in New York; Benjamin D. Singer, an O’Melveny partner licensed to practice law in the District of Columbia and New York; Andrew Churchill, an O’Melveny counsel licensed to practice law in New York; and Camila Tucker, an O'Melveny law clerk, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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