Of course, most government contractors know that it's a bad idea to give golf clubs to the government official responsible for their performance evaluations and then request a glowing evaluation and refer to the golf clubs in the same email. Nonetheless, the Eighth Circuit Court of Appeals' decision in U.S. v. Hoffmann, No. 06-4007 (Feb. 25, 2009), affirming the conviction of a company Vice President for doing just that, is an excellent example of how to make almost every mistake that can arise in a gratuities case.
Mistake No. 1: "Clever" Emails
Virtually all of the evidence against Russell Hoffmann, a Vice President at Surdex Corporation—which provided aerial photography and mapping services to the Army Corps of Engineers—for providing gratuities to the agency official responsible for Surdex's performance ratings, William Schwening, came from emails between Hoffmann and Schwening. Over a three-year period, Hoffmann gave Schwening four gifts worth in total between $5000 and $10,000, most notably a Titleist driver and a three-wood. Hoffmann's emails to Schwening in that time period used a not so subtle (and in retrospect for both, not so amusing) approach of putting in quotes or all capital letters words that meant the opposite of what he actually intended. For example, in an email attaching a previous outstanding performance rating, Hoffmann wrote:
Now that our contract is over, can we get another [performance] rating from you? . . . . The comments are exactly the same as last time so please read them and decide if you want to change anything. . . . I guess outstanding is still the highest they will allow you to go and that is fine with me. I don't want to influence you whatesoever [sic] in your evaluation (you know I would NEVER do that) but if you could do this sometime soon and let me know what you are rating us I would certainly appreciate it. I owe you one (or more)
Later, Hoffmann sent a reminder to Schwening, once again placing ironic emphasis that turned out to be damning:
The second word [sic] file are the remarks "you" made for our first . . . contract. You may want to revise these comments or if you want, we can take a stab at it . . . . Then you can "edit" the before submitting into the . . . system.
After the second email and after receiving an email from Schwening, inquiring, among other things, "no clubs yet??," Hoffmann ordered and had sent to Schwening the two golf clubs. Much later, when Schwening still had not completed the performance rating, Hoffmann sent yet another email referring to Surdex's need for the evaluation and reminding Schwening of the gift of the golf clubs:
With the St. Louis Corps announcement coming out it sure would be nice to have our last [contract's] evaluation in the . . . system. Oh, by the way, how is your golf game since you got those new woods?
This last email made one of the most difficult things for a prosecutor to prove in a gratuities case much easier. In particular, to demonstrate an illegal gratuity, the government must prove a link between the thing of value given to the public official and "an official act for or because of which it was given." In other words, the government must show that the giver intended to reward a past action or encourage some specific future official action by the recipient. Here, by asking for the evaluation and referencing the gift of golf clubs in the next sentence, Hoffmann tied the link up in a bow for the prosecutor.
Mistake No. 2: "He's My Friend"
Like many defendants accused of providing gratuities to a government official with whom they have interacted regularly, Hoffmann tried to take advantage of an exception to the prohibition on giving things of value to a government official based on a personal friendship between the giver and the recipient. In particular, Office of Government Ethics guidance provides that a government employee "may accept a gift given under circumstances which make it clear that the gift is motivated by a . . . personal friendship rather than the position of the employee." But the first piece of evidence prosecutors look at when someone raises that defense is who paid for the gift. Of course, Hoffmann did not pay for the clubs personally, and the court made short shrift of this argument:
Hoffmann testified at trial that he bought the clubs "to treat a friend" and was not motivated by a desire to get anything from Schwening. However, Hoffmann viewed the gift as a company expense, and purchased the clubs with Surdex's corporate credit card.
Mistake No. 3: "But I Never Got What I Wanted"
Hoffmann also tried the often used defense that the recipient never actually performed the official act that the government alleged was the reason for the gift. Schwening never actually got around to completing the performance evaluation for Surdex and, indeed, never even committed to doing so. The court ruled that what Schwening ultimately did or did not do was irrelevant. What mattered is that Hoffmann's gift could be viewed as an attempt to induce Schwening to issue a favorable performance review for Surdex:
A reasonable juror could conclude that Hoffmann gave the clubs intending to induce future performance. . . . The email [asking for a performance evaluation and adding "Oh, by the way, how is your golf game since you got those new woods?"] could be viewed as a reminder of the gift to prod Schwening to take action.
So U.S. v. Hoffmann reminds us that you are not doing your government counterparts any favor by providing them with things of value. Surdex, Hoffmann and Schwening would have been much better off if no one had given any gifts to anyone.