“The Government’s interpretation of the statute would create traps for unwary state and local officials.”– Justice Kavanaugh writing for the majority in Snyder v. United StatesOn June 26, 2024, the U.S. Supreme Court issued an opinion in a public corruption case that could have a lasting impact on how the U.S. Government prosecutes corruption and procurement fraud cases involving state and local officials. In Snyder v. United States, the Supreme Court overturned the criminal conviction of James Snyder, the former Mayor of Portage, Indiana, for taking an illegal gratuity payment under 18 U.S.C. § 666(a)(1)(B).1 This statute prohibits certain state and local employees from corruptly accepting a payment intended to “influence[] or reward[]” an official act.2 The Supreme Court held that 18 U.S.C. § 666 (“§ 666”) only applies to the bribery of state or local officials and does not include gratuities paid to an official as a reward for past official actions.3While the Supreme Court’s decision was narrow, it may have a major impact on procurement fraud prosecutions and investigations that may follow from projects related to the 2021 Infrastructure Investment and Jobs Act. Snyder clearly eliminates one tool available to federal prosecutors; however, this case only concerned local contracts and a local official. What remains unclear is whether Snyder applies when state and local officials are directly administering federal dollars.I. 18 U.S.C. § 666The statute at the center of Snyder is § 666. Section 666(a)(1)(B) makes it, inter alia, a crime for any state or local official that corruptly solicit

Those counts involved what was described as “logrolling”: The defendant asked for a cabinet appointment in exchange for appointing a particular person to the United States Senate, for example. A proposal to trade one public act for another is not the same as swapping an official act for a private payment.United States v. Hawkins, 777 F.3d 880 (7th Cir. 2015)Though 18 U.S.C. § 666 covers both bribes and gratuities, in order to violate § 1346, the payment must amount to a bribe, not a gratuity.United States v. Fernandez, 722 F.3d 1 (1st Cir. 2013)In this lengthy discussion of the elements of a § 666 offense, the First Circuit concludes that a §666 prosecution requires proof of a bribe, not just a gratuity.

In Snyder v. United States, the Supreme Court of the United States could redefine the legal boundaries regarding federal bribery as it prepares to answer whether the primary federal bribery statute, 18 U.S.C. § 666, criminalizes gratuity payments to officials in recognition of actions the official had previously taken, absent any quid pro quo agreements to take those actions. This client alert provides an overview of the case and its potential landscape changes, including potential changes if the Supreme Court determines gratuities without a quid pro quo agreement do not violate 18 U.S.C. § 666.Snyder v. United States James Snyder, former mayor of Portage, Indiana, was convicted under 18 U.S.C. § 666 for accepting $13,000 in connection with contracts awarded through the city’s bidding process for garbage truck acquisitions after having previously helped a local corporation secure lucrative city contracts, Mr. Snyder was alleged to have shown up at the garbage company unannounced requesting payment for “consulting” work that was never fully performed. In response, the company sent him a $13,000 payment check the next day.The conviction was affirmed by the Seventh Circuit, and a petition for writ

On June 26, 2024, the U.S. Supreme Court held 6-3 in Snyder v. United States that a federal statute, 18U.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 d

TakeawayWho would have thought politicians can work for tips? Well, that is what Portage, Indiana Mayor Jim Snyder argued (more or less) before the Supreme Court last month, when he sought to overturn his conviction under 18 U.S.C. § 666 on the grounds that the law prohibits bribery, but not gratuities, involving state and local officials. If observers of the April 15, 2024, oral arguments are correct, Mayor Snyder is likely to prevail in yet another decision by the Supreme Court narrowing the scope of public corruption laws. And a decision in his favor may resonate beyond the sphere of public officials.The FactsIn late 2012, and in late 2013, Mayor Snyder, on behalf of Portage, purchased two garbage trucks through a public bidding process. The contracts, totaling more than $1.1 million, were awarded to Great Lakes Peterbilt (GLPB). Snyder put a friend in charge of the bidding process, who tailored the specifications in both procurements to make them easy for GLPB to meet. Moreover, Snyder had been in contact with GLPB’s owners during the bidding process. Approximately two weeks after the second contract was awarded, GLPB paid Snyder $13,000, supposedly for consulting services that Snyder was to provide, although Snyd

Key TakeawaysOn June 26, 2024, the Supreme Court handed down a controversial decision in Snyder v. United States that will likely have major ripple effects on the anti-corruption landscape. In a 6-3 decision, the Supreme Court held that 18 U.S.C. § 666 only criminalizes bribes received in exchange for official acts. The Court held that the statute does not apply to “gratuities” or gifts – such as gift cards or lunches – given for past acts, absent a quid pro quo agreement between the payor and the official.The Court explained that “[b]ribes” are “payments made or agreed to before an official act” to influence the official to carry out “that future official act.” By contrast, “gratuities” are payments made “after an official act,” “with no agreement beforehand,” and “are not the same as bribes before the official act.” Having made that distinction about what separates “bribes” from “gratuities,” the Court said that “American law generally treats bribes as inherently corrupt and unlawful . . . [b]ut the law’s treatment of gratuities is more nuanced.”In this article, we discuss the specifics of the Court’s ruling and practical tips companies should keep in mind in the wake of this decision.BackgroundIn 2012 and 2013, while James Snyder

In Snyder v. United States, the Supreme Court of the United States held that it is not a federal crime for state and local officials to accept gratuities under 18 U.S.C. § 666. In so doing, the Court overturned the decision of the US Court of Appeals for the Seventh Circuit and resolved a split among the First, Second, Fifth, Sixth, Seventh and Eighth Circuits.The majority opinion in Snyder, penned by Justice Brett Kavanaugh, used text-based principles of statutory interpretation, legislative history and notions of fairness to conclude that Congress only intended for 18 U.S.C. § 666 to criminalize the acceptance of bribes, not gratuities. According to the Court, bribes are payments to public officials made with the purpose of influencing that official before they act. Gratuities, on the other hand, are payments made to a public official after they act as a form of reward or token of appreciation.The Court’s holding in Snyder is relatively narrow. The majority opinion does not affect 18 U.S.C. § 201(b) or (c), which prohibit federal officials from accepting bribes or gratuities. The opinion also does not affect any state or local laws that may independently

rtook official acts – assisting in awarding municipal contracts – to benefit the contractor and whether the after-the-fact payments were criminalized by 18 U.S.C. § 666.18 U.S.C. §666(a)(1)(B) prohibits a state official from "corruptly solicit[ing] or demand[ing] for the benefit of any person, or accept[ing] or agree[ing] 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." In Snyder, overruling a theory used by prosecutors for decades, the Supreme Court held that this statute only prohibits forward-looking "bribes," not gratuities offered and accepted for past official acts. The six-justice majority, in an opinion written by Justice Kavanaugh (and joined by Chief Justice Roberts and Justices Thomas, Alito, Gorsuch, and Barrett) rested its decision on six separate bases, including the text of 18 U.S.C. § 666 (Section 666), the legislative history of that statute, its statutory structure, the punishments provided in that statute, federalism concerns, and a lack of fair notice. Among other things, the Court was persuaded that Section 666 was not intended to criminalize gratuities by comparing and contrasting it to 18 U.S.C. § 201 (which criminalizes both bribery and gratuities directed to federal officials). For instance, the use of the word "corruptly" in Section 666 is mirrored in the bribery provision of 18 U.S.C. § 201 (and, conversely, is not included in the 18 U.S.C. § 201's separate gratuity provision). Similarly, the Court held the fact that Section 666 does not have a separate gratuity provision – which distinguishes it from 18 U.S.C. § 201 – further supports its position that it was not intended to criminalize gratuities. Likewise, the Court pointed to the strong punishment contained in Section 666 (ten-year maximum sentence) as being much closer to the 15-year maximum sentence co

On June 26, 2024, the U.S. Supreme Court decided Snyder v. United States, No. 23-108, holding that federal statute 18 U. S. C. § 666, which makes it a crime for most state and local officials to “corruptly” solicit, accept, or agree to accept “anything of value” “intending to be influenced or rewarded in connection with” any official business or transaction worth $5,000 or more, does not prohibit covered officials from accepting gratuities given based on their past acts.While James Snyder was the mayor of Portage, Indiana, the city awarded two contracts to, and purchased $1.1 million in trash trucks from, local trucking company Great Lakes Peterbilt. The following year, Peterbilt cut a $13,000 check to Snyder. Snyder said that the payment was for his consulting services as a contractor for Peterbilt. But the federal government charged Snyder with accepting an illegal gratuity in violation of § 666(a)(1)(B). A federal jury ultimately convicted Snyder, and the district court sentenced him to one year and nine months in prison. The Seventh Circuit affirmed.The Supreme Court reversed and remanded, holding that § 666 cr

ed the False Claims Act by providing free business tools to oncology centers as an incentive to purchase drugs. The whistleblower argued this constituted a kickback scheme and challenged the Second Circuit’s interpretation that to prove a violation of 42 U.S.C. § 1320a-7b(b) — the AKS — a defendant must “willfully” know that their conduct is illegal. The U.S. Court of Appeals for the Second Circuit upheld the lower court’s dismissal of the claims. The court ruled that a violation of the AKS requires proof that the defendant had knowledge of the illegality of their actions, thereby affirming a higher threshold for establishing willfulness.The Court also recently limited the scope of another federal corruption statute designed to aid in the prosecution of corruption crimes. On June 26, 2024, the Supreme Court limited the scope of a federal corruption statute used to prosecute state and local officials in schemes involving federal programs or funds. In Snyder v. U.S., the Court held that 18 U.S.C. § 666 (“Section 666”) only criminalizes bribery, not ex post facto gratuities, for state and local officials. The ruling substantially narrowed the range of prosecutable conduct in federal cases involving alleged corruption at the state and local level. The Government prosecuted James Snyder, the mayor of the City of Portage, Indiana (the “City”), for accepting gratuities from a trucking company. According to the indictment, Snyder received $13,000 from the truck company after the City awarded it two contracts to purchase trucks. Snyder claimed the $13,000 was for consulting services, but the Government believed that the payment was in fact a gratuity for the two contracts. The Government prosecuted Snyder on a gratuities theory under Section 666.In overturning Snyder’s conviction, the Justices resolved a circuit split as to whether the statute prohibits gratuities as well as bribes. The Court reasoned that neither the statute’s text, statutory history, structure, statutory punishments, fed