Gifts—State Department of Transportation Employees

Questions concerning the receipt of gifts or other valuable consideration have been considered by the NSPE Board of Ethical Review on several occasions. Providing or receiving a gift in the context of a business or professional relationship is a longstanding ethical issue because of the questions it raises concerning the motivation and intent and whether it is intended to influence the award of a contract, the manner in which the contractual relationship is administered, future considerations, or other factors.

One of the very first cases considered by the Board in this area was BER Case No. 60-9, where the Board considered three scenarios with the following results (all dollar figures have been adjusted for inflation):

Situation A – A consulting engineer who has done considerable work for a public body makes it a practice to take certain staff engineering employees of the agency to lunch or dinner three or four times a year, at an average cost of $25 (per person). He also makes it a practice to give certain members of the engineering staff Christmas presents at an average cost of $50 each.

• Determination in Situation A – The Board determined that occasional free luncheons or dinners and Christmas presents of relatively small value do not exceed the bounds of ethical behavior by the giver.

Situation B – Certain engineering employees of an industrial firm, who are in a position to recommend for or against the purchase of products used by the company, regularly receive cash gifts ranging from $100 to $500 from salesmen for particular products.

• Determination in Situation B – The Board determined that inasmuch as it does not appear that the employees performed any services for the cash gifts, and in view of their position of responsibility and trust to the employer, the receipt of such cash gifts immediately raises a doubt as to the integrity of the employees and leaves an impression that the intent is to influence their discretion in favor of the giver. Acceptance of cash gifts in such circumstances is an unethical act.

Situation C – Upon completion of a major engineering contract held by a consulting engineer, the chief engineer of the client who worked directly and intimately with the consultant receives a new automobile of the value of approximately $25,000 from the consultant with a letter stating that the gift is in appreciation of his close and friendly cooperation and assistance in the successful performance of the work.

• Determination in Situation C – The Board determined that it is unethical to offer such a gift.

In considering these three separate situations, the Board acknowledged that the question of when a gift is intended to or becomes an inducement to influence one’s impartial decision, as distinguished from an expression of friendship or a social custom, has remained a perplexing one over the years. The Board recognized that no blanket rule covering all situations exists. The size of the gift is usually a material factor, but must be related to the circumstances of the gift. It has been customary in the business world for friends and business associates to tender tokens of recognition or appreciation, and picking up the tab at a business luncheon or dinner is commonplace and well accepted in the mores of our society.

Recognizing the difficulties inherent in passing judgment on each instance, the Board noted that the NSPE Code of Ethics states, in substance, that an engineer may neither offer nor receive a gift that is intended to or will influence his independent professional judgment. However, the Board pointed out that the full application of this principle requires the impossible—that we read the state of mind of the donor or donee. Therefore, the Board sought to apply a criterion that reasonable men or women might infer from the circumstances; that the giving or acceptance of the benefit be a matter of good taste, and such that among reasonable men or women it might not be of a nature that raises suspicions of favoritism. Applying these general principles to the situations at hand, we think that an occasional free luncheon or dinner, or a Christmas or birthday present when there is a personal relationship is acceptable practice. On the other hand, cash payments to those in a position to influence decisions favorable or unfavorable to the donor are not in good taste and do immediately raise a suspicion that there is an ulterior motive. Likewise, a very expensive gift has a connotation of placing the recipient in a position of obligation.

Later in BER Case No. 79-8, the Board considered a case involving Engineer A, a principal in an engineering firm that had performed work for a local water district. Engineer A gave Engineer B, the executive director of the water district, a hunting rifle. This fact was later reported in the local newspaper, quoting other public officials in the community to the effect that it was improper for the executive director to keep the rifle in light of the relationship between the water district and Engineer A. One of the quoted officials commented that he did not object to small, personal gifts, but it was “inappropriate” to keep an “expensive” rifle, noting that the executive director had “considerable influence” in the award of contracts. The cost of the rifle was not given, but local engineers who raised the question from the standpoint of engineering ethics estimated its retail value in excess of $1,500 (dollar figure adjusted for inflation). In concluding that (1) it was not ethical for Engineer A to give a public official of an agency with whom he has had contractual relations a personal gift, as described, and that (2) it was not ethical for Engineer B to accept the gift of Engineer A, the Board, citing BER Case No. 60-9, noted the difficulty of knowing what was in the minds of the two engineers. However, the Board determined that the NSPE Code language must be read with the result being that both the giving and receiving of the rifle was ethically improper. Even giving both engineers the benefit of the doubt as to their intentions, the controlling factor is the impression created in the public mind. Using the criteria set forth in BER Case No. 60-9, the Board decided that it did not need to decide precisely whether a $1,500 gift is too much to qualify as a token gift; it is enough that it is well beyond a nominal expression of friendship or esteem, such as the kinds of token gifts described in the BER Case No. 60-9 criteria.

Using the earlier BER cases as a guideline for the Board’s consideration of the circumstances in the present case, the Board concludes that the situations described in Situations 1, 2, 3, and 4, without more, are not of a sufficient level to constitute an ethical violation. Situation 1 describes a very common situation that has long existed within our culture and within the general business community, whereby customers or clients are occasionally invited to sporting events or other entertainment events to enhance ongoing working relationships that may exist between the client and the services provider. Unless the event in question involves more than a nominal cost (e.g., expense paid trips to the Super Bowl), the Board is hesitant to conclude that such activities are strictly prohibited under the NSPE Code. Situations 2 and 3 are not unlike the situations described in BER Case No. 60-9 and, again, are intended to enhance ongoing working relationships that may exist between the client and the service provider or to celebrate mutually attained project achievements. Again, in the absence of some indication of some extravagance or excessiveness, the Board cannot condemn such events as constituting a violation of the NSPE Code of Ethics. Finally, Situation 4 relates to the hosting of a recreational event involving firm employees and other project participants that is presumably intended to strengthen working relations among the parties. Without more (e.g., extravagant or excessive costs associated with the event), and in line with earlier NSPE BER decisions, the Board is not inclined to conclude that a violation has occurred.

Having said that the situations described in 1, 2, 3, and 4 are not on their face a violation of the NSPE Code, the Board must also recognize that as an employee of the SDOT, Engineer A must be mindful of all applicable rules and regulations that would apply to SDOT employees and would ultimately govern. Engineer A clearly has an obligation to adhere to those rules and regulations, which may prohibit the receipt of such gifts. In addition, as a party contracting with SDOT, Engineer B and his firm may be barred from providing such gifts to SDOT employees. The Board’s opinion is in no way intended to offer an opinion or a judgment on the appropriateness or the applicability of such rules. However, in the context of this case, the Board does not believe there was any intent on the part of Engineer B to influence the judgment of Engineer A.