GIFTS

This Section deals with the acceptance of gifts by state and federal officials, Section VIII, Restrictions on Funds, offers guidance on the giving of gifts on behalf of the University.

A. State

A "gift" is defined in the Political Reform Act as any payment that confers a personal benefit on the recipient to the extent that consideration of equal or greater value is not received and includes a rebate or discount in the price of anything of value unless the rebate or discount is made in the regular course of business to members of the public without regard to official status.

The Act establishes two separate gift limits: the "gift limit" and the "lobbyist gift limit," which is also known as the "$10 gift rule."

1. The "Gift Limit."
The gift limit restricts the total amount of gifts that certain officials may receive from a single source during a calendar year. The source of gifts from the campuses and from employees working in their University capacity is the University. Each gift from any University source contributes to its $300.00 limit. At present, the limit is $300.00 In 2001, the amount of the limit will be adjusted to reflect changes in the Consumer Price Index.

The gift limit applies to elected state officials, candidates, specified individuals who manage public investments, and employees whose positions are listed in an agency's Conflict of Interest Code if the source of the gift must be reported on the official's Statement of Economic Interests.

The Act and regulations provide exceptions to the gift limit for certain types of gifts such as unused tickets, informational materials, personalized plaques, hospitality in a friend's home, tickets to campaign events, and some gifts of travel outside of California. A complete list of the exemptions as well as other information can be found in the Fact Sheet, Limitations and Restrictions on Gifts, Honoraria, Travel and Loans. A more comprehensive presentation of the gift provisions of the Act can be found in the University of California's Policy and Guideline Regarding Acceptance of Gifts and Gratuities by Employees under California's Political Reform Act.

There are two areas that are of interest to employees engaged in "lobbying" or advocacy.

a) Informational tours are exempt from the gift limit requirements. This exception is designed to allow entities to provide public officials with information about their operations. Materials such as books, reports, and pamphlets provided to an official that serve primarily to convey information and to assist the official in performing his or her official duties are exempt from the definition of gift. Tours, on-site demonstrations, and inspections of certain facilities or sites may be considered informational material.
Although a tour or demonstration itself may be exempt from the gift limits as "informational material," if the host provides transportation to a particular facility or site, the cost is generally considered a gift to the official(s). In limited situations, such as where there is no commercially available means of reaching the site, such travel may be exempt. Food and beverages served during a tour are gifts to the public official.

b) A co-sponsored event is a non-campaign event sponsored by a candidate or an elected official and another party. For example, an elected official might co-sponsor with the University or with various public and private entities a conference on international trade. Certain payments associated with these events, typically payments for the event that are made at the behest of the candidate or elected official, can be gifts or contributions to the official. The provision of space, food or anything of value might be considered a gift or a contribution. If you have questions about whether certain payments might be contributions or gifts to the elected official, you should consult the Office of the General Counsel.

2. The "Lobbyist Gift Limit."
The lobbyist gift limit restricts the making of gifts by lobbyists and lobbying firms that are registered to lobby an official or an official's agency. A University employee who would have had to register as lobbyist had it not been for the exemption set out in Government Code section 86300 shall not make gifts of more than ten dollars ($10.00) in a calendar month to an elected state officer or legislative official.

Such University employee may not pay more than $10.00 a month for an elected or legislative official's lunch or dinner. Nor may 2 such employees take an official to lunch and each pay $10.00 towards lunch for the official. A lobbyist may not pay any amount towards a gift for an official if the official will receive more than $10.00 in benefit.

A lobbyist may entertain an official in his or her home without regard to the $10.00 gift limit as long as: the lobbyist is not reimbursed by the University or anyone else; the lobbyist does not use the cost for entertaining the official as a tax deduction; and the lobbyist's pay is not contingent upon such home entertainment.

A lobbying firm is a business entity that is compensated and communicates directly with legislative or state agency officials to influence legislative or administrative actions on behalf of any client. In addition to registration and reporting, a lobbying firm is prohibited from making a gift or gifts totaling more than $10.00 in a calendar month to any state legislative official (including legislative employees) and to any official or employee of a state administrative agency the firm lobbies. The University is not a lobbying firm as defined by the Act and is not subject to the $10.00 gift limit. Only University employees who would have had to register as lobbyists had it not been for the exemption as described above are subject to the $10.00 gift limit.

References:

1. "Limitations and Restrictions on Gifts, Honoraria, Travel and Loans," published by the Fair Political Practices Commission [Attachment 7 - not currently available on-line]
2. University of California Policy and Guidelines Regarding Acceptance of Gifts and Gratuities By Employees Under California's Political Reform Act (December 1998) [Attachment 8]
3. University of California Administrative Fund Payments Guideline A-253-27, Appendix Section C. 3. Gifts, Contributions and Miscellaneous Expenditures, (March 31, 1996) [Attachment 9]
   

B. Federal

The House of Representatives and Senate rules governing the acceptance of gifts and other benefits cover their Members, officers and employees.

The House and Senate rules provide that a Member, officer or employee may accept a gift worth a value of $49.99 or less, subject to an annual limit from any one source of $99.99. Only items worth $10.00 or more are required to be aggregated; gifts with values under $10.00 do not count toward the aggregate limit. The value of the gift is its fair market value, not the cost to the donor or the wholesale cost.

The "source" is defined as both the individual paying for the gift and the organization with which he or she is affiliated. A member, officer or employee may accept a total of only $99.99 in meals and any other gifts from the University regardless of which campus or employee provides the gifts. If two individuals working for the University split the cost of the gift, the entire cost is counted against each individuals' and the University's annual limit. If a University employee and an employee from a different organization take, say, a Senator to lunch, the entire meal must be counted against the limit of one of the participants and his or her employer. The cost cannot be divided between the two individuals and their organizations.

There are exceptions to the gift restrictions under both the House and Senate rules:

• gifts based on personal friendship;
• personal hospitality;
• free attendance at "widely attended" functions connected to their official activities;
• free attendance at charity events;
• necessary travel and related expenses for participation in officially-connected activities;
• trophies, plaques or other commemorative items offered as part of a ceremonial presentation;
• constituency events;
• educational events;
• informational materials; and
• items of nominal value such as baseball caps and T-shirts.
  

With some exceptions for spouses, a gift to a family member is treated as a gift to the Member if it is given with the Member's knowledge and acquiescence, and the Member has reason to believe the gift was given because of his or her official position.

Executive branch employees are subject to restriction on the gifts that they may accept from sources outside the Government. Generally they may not accept gifts that are given because of their official positions or that come from certain interested sources ("prohibited sources") such as persons who:

• are seeking official action by the employee's agency;
• are doing or seeking to do business with the employee's agency;
• are regulated by the employee's agency; or
• have interests that may be substantially affected by performance or non-performance of the employee's official duties.

There are a number of exceptions to the ban on gifts from outside sources. These exceptions would allow the acceptance of gifts such as:

• gifts having an aggregate value of $20.00 or less per source per occasion, subject to an annual limit of $50.00 from a single source;
• modest items of food and refreshments offered other than part of a meal;
• gifts based on a personal relationship;
• free attendance at "widely attended" functions provided the attendance is in the interest of the agency;
• awards and honorary degrees;
• social invitations from persons other than prohibited sources; and
• items with little intrinsic value such as plaques, certificates, and trophies, which are intended solely for presentation.

These and other exceptions may be subject to limitations. For example, if an employee accepts an invitation from a person other than a prohibited source, he or she may accept food, refreshments and entertainment, not including travel or lodging at a social event attended by several persons where no fee is charged to any person in attendance.

The Office of General Counsel can assist you with the State and Federal rules, which are long and complex, and can advise on what consequences these rules might have when the University holds events attended by government officials.

References:

1. U.S. Senate, Standing Rules of the Senate, Rule XXXV, Gifts
2. U.S. House of Representatives, House Gift Rule, House Rule 26, clause 5 (106th Congress)
3. Title 5, Code of Federal Regulations, sections 2635.201-205