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Below is a condensed version of this topic; for complete guidance please refer to the House Ethics Manual, Chapter 2 on gifts.
When a Member, officer, or employee receives a gift that is not acceptable under the gift rule, and for which a gift rule waiver is not available, there are generally two options: pay the donor the “market value” of the gift, or return the gift to the donor. However, when the unacceptable gift is a perishable item, such as flowers or a fruit basket, the rule also provides the options of donating the item to charity or destroying it.
The gift rule provides that a Member, officer, or employee may accept “[a]nything for which the [official] pays the market value.” (House Rule 25, clause 5(a)(3)(A)). Generally, for the purpose of the gift rule, items are valued at their retail, rather than wholesale prices. Often an item may be priced differently at different stores. A gift may be valued at the lowest price at which the item is available to the general public.
The gift rule provides that a ticket to a sporting or entertainment event is “valued at the face value of the ticket or, in the case of a ticket without a face value, at the highest cost of a ticket with a face value for the event.” (House Rule 25, clause 5(a)(1)(B)(ii)). To address the issue of artificially low face values, the gift rule also provides that the “price printed on the ticket shall be deemed its face value only if it also is the price at which the issuer offers that ticket for sale to the public.” (Id.). Thus, for a ticket to a skybox or other private luxury box with no face value or an artificially low face value, the value of the ticket is the price of the highest individually-priced ticket for the event. Other methods of valuation, such as calculating a pro-rata, pro-event cost for a season ticket, are not permitted under the gift rule. The Committee should be contacted for advice on the value of tickets for an event for which individually priced tickets are not made available for sale to the public.60
For many sporting or entertainment events, especially those taking place in the Washington, D.C. or other major metropolitan areas, the value of a ticket may exceed $50. When the value equals or exceeds $50, the invitee must either decline the ticket or pay for the ticket according to the method set forth in the rule. In addition to paying the cost of any ticket(s), Members and staff must pay the market value of any other benefits that are accepted in connection with the event, including food, beverages, or parking that exceed the gift rule limits. If the ticket is from a lobbyist or private entity that retains or employs lobbyists, a Member or staff person may not accept free attendance, even if the ticket is valued under $50.
Under a policy established by the House Select Committee on Ethics, a ticket to a charity or political fundraising dinner is valued at the cost of the dinner, rather than the cost of the ticket to the purchaser.61
Membership in a club or other organization typically involves an initiation fee, periodic dues, and usage charges. An “honorary” membership usually involves a waiver or reduction in the normal fee or dues levied on members. For purposes of the gift rule, an honorary membership is valued at the total market price of the organization’s normal initiation fee, periodic dues, and usage charges. The value of an honorary membership to a Member or staff person is not diminished merely because the individual does not use the membership, or because the honorary membership does not carry voting rights or an equity interest.
Example 56. A Member is offered a complimentary membership in a health club. Normally, new members are assessed an initiation fee of $45 and annual dues of $500. The Member may not accept the membership.
The restrictions of the gift rule do not apply to anything that a Member, officer, or employee “does not use and promptly returns to the donor” (House Rule 25, clause 5(a)(3)(A)). The rule provides additional options only with regard to perishable items: “When it is not practicable to return a tangible item because it is perishable, the item may, at the discretion of the recipient, be given to an appropriate charity or destroyed” (id., clause 5(a)(6)). Thus, a perishable item may be donated to a local hospital, homeless shelter, religious organization, or other charity.
However, when a Member, officer, or employee receives a nonperishable gift that cannot be accepted under the gift rule, he or she has no choice but to return the item to the donor promptly. One wishing to return a gift by mail should consult with the Commission on Congressional Mailing Standards (the Franking Commission) to determine if the item is frankable. If the item is not frankable, it will be necessary to purchase postage stamps using the Members’ Representational Allowance in order to return it by mail.
60 The guidance set forth above applies to the valuation of tickets for purposes of the House gift rule. Members and staff should contact the Federal Election Commission for guidance regarding the valuation of tickets for campaign events.
61 Final Report of the Select Comm. on Ethics, H. Rep. 95-1837, 95th Cong., 2d Sess. 9.