New Federal Bribery Statute Brings Added Danger to Gift-Giving

By Villa, John K. | American Banker, November 30, 1984 | Go to article overview

New Federal Bribery Statute Brings Added Danger to Gift-Giving


Villa, John K., American Banker


On Oct. 12, the President signed a new crime control package that will cause a major restructuring of the federal criminal law processes. Buried deep in the 800-plus-page bill and virtually ignored by the financial community are several modifications to the federal criminal laws affecting banking that could have a significant impact on the operation of virtually all federally regulated financial institutions. Foremost among these amendments is the modification of the federal bank bribery statute to turn a routine business gift given to a banker into a very serious federal crime.

The federal criminal laws have included a bank bribery statute for many years, but the statute was narrowly drafted. In general terms, the prior version of the bribery statute prohibited an officer, director, employee, attorney, or agent of a federally insured bank and certain other financial institutions from receiving or agreeing to receive from any person or entity anything of value -- except as provided by law -- in exchange for procuring for any person or entity a loan or other extension of credit.

Violation of this statute was a misdemeanor, subject to fine up to $5,000, a period of imprisonment of up to one year, or both. The critical element in the old bribery statute was proof that the fee, commission, or other payment to the banker was for the purpose of obtaining a loan or other extension of credit. A gift made to a banker that could not be proven to be consideration for a particular loan was not a violation of the statute.

The literal terms of the new bribery statute have eliminated the necessity of showing that the banker received the payment in exchange for making a loan. By its terms, the new bribery statute prohibits the offer or receipt of anything of value to a banker "for or in connection with any transaction or business of [the bank]." A regulator or prosecutor could plausibly argue from the statute standing alone that any gift or service that a bank officer or employee receives from a customer, potential customer, supplier, landlord, or other entity that deals with the bank is "in connection with" the business of the bank and thereby violates this statute.

The statute contains a number of other changes that are significant, including an increase in the severity of the crime to a felony punishable by up to five years in prison and higher fines, a prohibition against the giving as well as the receiving of a bribe, and extension of the statute to virtually all banks, bank holding companies, savings and loan institutions, credit unions, small business investment companies, and various federal land banks, intermediate credit banks, and others.

At a recent conference on bank law enforcement, federal regulators and prosecutors began to focus on the problems created by the broad reach of this amendment, and there is some indication that they may adopt prosecutorial guidelines that would limit one aspect of the scope of the new statute.

Although it is premature to predict whether guidelines will emerge and, if so, precisely what they will be, the most likely approach would be for the Justice Department to decline prosecution of business gifts with values that are below a specified dollar minimum and that are not given in exchange for receiving favorable treatment from the bank.

The policy might also include a requirement that all gifts, commissions, fees, services rendered, or other things of value offered to or received by a banker be reported immediately to the financial institutions and, perhaps, that the institution retain such records for review by the bank examiners at the next examination. Such a policy would in some ways be comparable to the rules that now govern receipt of gifts by federal employees.

Apart from prosecutorial guidelines, there are several other means to address the potential problems of the apparently broad scope of the new bribery statute.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

New Federal Bribery Statute Brings Added Danger to Gift-Giving
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.