In brief
On June 26, 2024, in Snyder v. United States, the Supreme Court, in a 6-3 decision authored by Justice Kavanaugh, significantly limited the federal statute criminalizing gratuities in state and local jurisdictions. Snyder, a mayor, awarded a USD 1.3 million contract and received a USD 13,000 payment from the benefiting company. The Supreme Court ruled that the relevant statute, Title 18 section 666, applies only to bribes paid or promised before an official act, not after-the-fact gratuities. The dissent, led by Justice Jackson, criticized this narrow interpretation. Post-Snyder, the government must provide stronger evidence of a corrupt agreement made before the official act, affecting future prosecutions and potentially influencing Foreign Corrupt Practices Act (FCPA) cases.
In more detail
On June 26, 2024, in Snyder v. United States, a 6-3 opinion written by Justice Kavanaugh, the United States Supreme Court significantly curtailed the federal statute criminalizing bribes and other “corrupt” payments to state and local officials. Snyder, a mayor of a small town in Indiana, awarded a USD 1.3 million contract to a local truck dealership to purchase three garbage trucks and subsequently received a USD 13,000 payment from that dealership which the government said was a corrupt and unlawful reward for having the contract steered to the company in the first place.
Snyder was convicted under Title 18 section 666, which makes it a crime for a state or local official to “‘corruptly solicit, accept, or agree to accept anything of value from any person intending to be influenced or rewarded.” The conviction was upheld by the 7th Circuit. The Supreme Court reversed the conviction, holding that section 666 applied solely to “bribes that are promised or given before an official act,” not giving what the Court characterized instead as an after-the-fact “gratuity” given at a later time. The dissent, written by Justice Jackson, criticized the majority’s narrow reading of section 666 as an “absurd and atextual reading of the statute…only today’s Court could love,” and inconsistent with the facts at trial laying out what appeared to be a “rigged” bidding process.
The majority and dissent opinions seemed to be talking about two different cases. To the majority, an after-the-fact payment of USD 13,000 to the mayor by the truck dealership was a “gratuity,” and as written by the majority, section 666 “is a bribery statute and not a gratuities statute” and to expand it to criminalize gratuities “would significantly infringe on bedrock federalism principles.” To the dissent, it was the reward to the mayor from an extensively corrupted bidding process engineered by the mayor. While the dissent argues that the language of section 666 clearly applies to after-the-fact gratuities, or “rewards,” for corrupt acts, the majority held that there must be evidence of an agreement before the act for a defendant to have exposure under this statute.
What is clear from the Snyder decision is that the government, in cases involving alleged bribery by local and state officials, will now have to work harder and gather convincing evidence to establish, beyond a reasonable doubt, a corrupt agreement and offer to the government official prior to the official action taken. It may mean cases that would have been prosecuted pre-Snyder may be left to state and local authorities; or, that the government will pull the levers it can to develop this evidence, including by applying increasing pressure on cooperating witnesses or digging deeper to gather more convincing evidence of the corrupt agreement — documentary or otherwise — to establish when it was entered.
It would be wrong, however, to believe Snyder provides a complete safe harbor. To the extent that the government can prove a corrupt state of mind prior to payment, even an after-the-fact payment may transform a “gratuity” into a “bribe” prosecutable under section 666. It is also unclear what impact, if any, the Snyder decision may have on other statutes dealing with bribes and payment to government officials, such as the Foreign Corrupt Practices Act. That will be the subject of a later note by Baker McKenzie. However, one immediate observation we have is that Snyder will drive prosecutors to focus on developing evidence of a corrupt agreement existing before the taking of the official act by the government official. This requirement exists in the text of the FCPA and Snyder will likely serve to further articulate that requirement in FCPA investigations. As a result, we also expect that in assessing the thoroughness of any internal investigation into potential FCPA matters, prosecutors will expect companies to have conducted a searching review into whether such an agreement existed, and when it was made. For today, at least, the holding can perhaps be best understood as another in a long line of recent Supreme Court opinions purposefully limiting expansive readings of federal statutes in state and local public corruption cases.
Author
Cyrus Vance
Cyrus Vance Jr. has earned a well-deserved international reputation as a trial attorney with a proven track record in high-stake litigation and global investigations. As the Co-Chair of Baker McKenzie's North America Government Enforcement Practice, Cyrus is well-known for his expertise in white collar criminal investigations, complex civil and criminal litigation, sanctions enforcement, compliance and cybersecurity. With over three decades of experience in both public and private sector, Cyrus provides invaluable guidance to clients navigating cross-border investigations, enforcement matters, and cybersecurity incidents.
Prior to joining the Firm, Cyrus served three consecutive four-year terms as Manhattan District Attorney, overseeing a team of over 600 prosecutors. He handled landmark criminal prosecutions, including the successful litigation before the U.S. Supreme Court in Trump v. Vance and the conviction of Harvey Weinstein on two felony sex crimes. He also managed more than 100,000 cases annually, including complex white collar and business crimes both domestically and internationally. Cyrus regularly collaborated with regulatory and crime-fighting partners such as the City of London Police, Paris Prosecutors' Office, Singapore Attorney General, Europol and Interpol, and is known for his ability to build and manage teams collaboratively across borders and agencies.
As Global Chair of the Cybersecurity Practice at Baker McKenzie, Cyrus is at the forefront of cybersecurity law. He co-founded New York City's Cyber Critical Infrastructure Task Force, establishing one of the first public-private partnerships dedicated to mitigating cyber risks on critical infrastructure. Cyrus also founded the Global Cyber Alliance (GCA), a global non-profit consortium providing expert guidance on cyber risks and prevention to members worldwide.
Cyrus is a Fellow of the American College of Trial Lawyers and a sought-after speaker and author. He has testified numerous times before the US Senate and House Intelligence and Judiciary Committees, among others, as well as state and city agencies, on issues ranging from global terrorism, white collar crime, cybercrime, sex trafficking, corporate transparency and gun violence, demonstrating the breadth of his credibility and expertise in the legal field. Throughout his career, Cyrus has been a vocal advocate on justice issues, amplifying his dedication to promoting fairness and the rule of law.
By leveraging his extensive experience and successful track record, Cyrus effectively guides clients through high-profile cases and complex legal matters. His strategic approach, coupled with his deep understanding of global investigations and cybersecurity, makes him a trusted advisor in today's evolving legal landscape.
Author
Elizabeth Roper
Elizabeth (Liz) Roper is a partner in Baker McKenzie's North America Litigation and Global Dispute Resolution Practice, specializing in investigations, data security, and white collar defense. Liz advises clients on cybersecurity compliance, incident response, government investigations, internal investigations, and criminal defense matters. With over 15 years of experience in the Manhattan District Attorney's Office, including over four years as Bureau Chief of the Cybercrime and Identity Theft Bureau (CITB), Liz pairs deep investigative experience with expertise in new technologies and electronic evidence, including digital forensics, mobile device data, network forensics, and blockchain analysis.
Liz has obtained the International Association of Privacy Professionals (IAPP) Certified Information Privacy Professional/United States (CIPP/US) certification.
Liz has directed investigations into network intrusions, hacking, ransomware attacks, intellectual property theft, cyber-enabled financial frauds, payment card fraud, money laundering, "dark web" trafficking, and the theft and illicit use of cryptocurrencies. She has also handled matters involving corruption and official misconduct. Liz leverages her experience to assist clients facing investigations from government agencies, both in the U.S. and abroad, and advises clients on their most sensitive internal investigations. Liz has strong relationships with law enforcement and regulatory agencies, making her a trusted advisor when clients face government inquiries.
Liz is an accomplished trial attorney with extensive experience conducting hearings and trials. In addition to her trial work, Liz has a strong background in appellate litigation, having argued before New York State's Appellate Division and Court of Appeals. Notably, Liz secured a trial conviction and two unanimous appellate decisions in a trade secrets case involving an employee's theft of highly confidential source code for a high-frequency trading platform.
Liz offers specialized advice to clients in white-collar criminal defense matters and has represented clients in cases with U.S. Attorney's Offices for the Eastern District of New York, the Southern District of New York, and the District of New Jersey, among others. Clients depend on Liz for her strategic thinking, extensive experience, and calm demeanor in these critically important moments.
Liz provides clients with strategic counsel to manage cyber risks and respond effectively to incidents, including investigations stemming from cybersecurity events. She offers comprehensive breach response support and advises on cybersecurity regulations across various jurisdictions, helping multinational companies expand into new markets. Liz has successfully assisted clients in responding to significant cybersecurity incidents, such as ransomware attacks, and has extensive experience overseeing data review and advising on communication strategies. She holds a CIPP/US certification from the IAPP.
