House Committee on Government Reform, Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs

An Embarrassment of Riches: Gifts to U.S. Presidents

In this moment of heightened public confidence in government, the presidential gift process offers the potential for staggering embarrassment and diminished accountability. The current fragmented process for logging, valuing, and managing gifts to the president defies bureaucratic logic, and appears designed more to frustrate accountability than enhance it. One could not design a more unwieldy system if one started out to do so.

If the volume of gifts to the president is any indication, Americans are a very generous people. Presidents and their First Ladies receive thousands of gifts each year, from large to small, from domestic to gifts from heads of state. Any gift not from a foreign official must be logged by the White House Gift Unit and managed by one of several domestic agencies, while gifts from foreign officials are managed by the State Department. Gifts are managed under the Foreign Gifts and Decorations Act of 1966, the Presidential Records Act of 1978, and subsequent amendments to both, while disclosure of gifts accepted by the president or First Lady must be disclosed on the Standard Form 278 created under the 1978 Ethics in Government Act and its subsequent amendments. Under the Code of Federal Regulations, these disclosures must identify the source and describe each gift, and estimate the value of any gift or gifts from the same source that aggregate to more than $260 in value.

My goal today is not to inventory the confusion embedded in the contemporary process. I believe that H.R. 1081 would make a valuable contribution toward rationalizing the current system, and wholeheartedly endorse its passage. Rather, my purpose today is to briefly discuss the importance of reform as part of maintaining public trust in democratic institutions.

Simply put, trust is the greatest gift that any president could receive from the American public. It is priceless to democracy and an essential resource for effective leadership, but is all too easily squandered by the smallest of acts. Sadly, Americans appear willing to believe the worst about our political leaders and public servants today. Despite a surge in confidence in all political institutions following the tragedies of September 11, Americans remain highly skeptical about the basic motivations of their leaders and institutions:

  • Although the number of Americans who said they had a very or somewhat favorable opinion of the federal government increased from 50 percent in July, 2001, to 78 percent in October, the number who also said that the federal government's biggest problem was inefficiency remained virtually unchanged after September 11. Sixty-one percent of Americans said the federal government has the right priorities but runs programs inefficiently in July, compared to 63 percent in October.

  • Although the number of Americans who said they had a very or somewhat favorable opinion of presidential appointees such as Defense Secretary Donald Rumsfeld increased from 60 percent in July, 2001, to 79 percent in October, the 80 percent of Americans strongly or somewhat agreed that political considerations still play too large a role in the selection process, down just one percentage point from July. Fifty-three percent of Americans also said that financial contributions people make to a presidential campaign play a very big role in the appointments process, down only four percent points from July.

  • Finally, although the number of Americans who had a very or somewhat favorable opinion of federal government workers increased from 69 percent in July, 2001, to 76 percent in October, the number who also said that federal employees are motivated primary by job security, salary and benefits, and a security paycheck was basically unchanged over the period.

My point here is not to celebrate the underlying skepticism of the American public toward their political leaders and institutions. Some level of distrust is healthy in any democracy, but the contemporary levels of underlying distrust in the United States are far beyond healthy. Americans appear ready to believe the worst about virtually everything government does. They believe that presidential appointments can be bought for a pittance, for example. When asked how much a person needs to contribute to a campaign to be considered for an appointment, 44 percent of Americans estimated that it would take a donation greater than $10,000, 10 percent said between $5,000 and $10,000, and one quarter said it would take for less than $5,000. Nearly a fifth (18 percent) said it would take less than $1,000.

There are many ways to address this lingering disquiet about trust in government, not the least of which is passage of campaign finance reform later this week, and release of at least some information on the members of the National Energy Policy Development Group. Both would reassure Americans that both branches values public trust at the highest possible levels.

It is also important to restructure the presidential gifts process, which violates every principle of government in the sunshine. At best, the current system encourages Americans to believe the worst about their leaders; at worst, it creates the unmistakable appearance that gifts are not gifts at all, but rather down payments or "quid" for "pro quos."

It may well be that Americans are so jaded about politics today that there is no such thing as a gift today. Given the polling data outlined above, my hunch is that the vast majority of Americans would strongly or somewhat agree that most presidential gifts are given as more than tokens of esteem. Such data might well suggest that Congress should ban domestic gifts altogether. Just as many in Congress argue that soft money is so highly corruptible that it must be banned, perhaps we must conclude the same about gifts. Luckily, Congress doubled the president's salary last year to $400,000, which would cushion at least some of the pain of such ban. In theory, the president can buy his own birthday presents.

Such a ban would reflect a sad embrace of contemporary cynicism. Have things gotten so bad that the president cannot accept a box of cookies from the Girl Scouts or a t-shirt from the Kiwanis Club without raising public suspicions? Put another way, is the subcommittee's report about an isolated case of greed or is the system so egregiously flawed that it encourages presidents to become greedy?

My sense is that it is too early to advocate a complete ban on domestic gifts. We ought to try the reform embedded in H.R. 1081 first. And we ought to do so in the search for simple, easily accessible information on the following questions that sum to the sine qua non of a clean, fully accessible system:

  1. Who is giving the gift?
  2. The public has a perfect right to know who is giving gifts to the White House. Just as we ask campaign contributors and transition volunteers to identify themselves to the public, we should continue to ask gift-givers to identify themselves by name.

  3. What is the gift?
  4. The public also has a right to know what was given to the president, be it a consumable such as food or flower, or a durable good such as a chair, fishing rod, or automobile. (President Lincoln received two suits of clothing, President Wilson accepted a White House limousine, First Lady Jacqueline Kennedy left the White House with several tables late sold at auction for more than $150,000, President Reagan accepted a $2.5 million house in Bel Air, President George H.W. Bush accepted 39 fishing rods.)

  5. What is the value of the gift? Although the value of a gift is always in the eye of the beholder, the beholder should be above reproach. Unfortunately, current law appears to reward beholders who happen to be in the president's employ to under-value gifts. To the extent possible, valuation should be independent, consistent, and based on a clearly transparent methodology.
  6. When is the gift given?
  7. Even though I oppose the notion of an outright ban on domestic gifts, I do believe that there is merit in prohibiting gift-taking during certain periods—e.g., during the transition period in the second term of a presidency. Ironically, every detail of a president's transition into office is subject to scrutiny, including the donation of in-kind assistance to the president-elect. Outgoing presidents have too much to do by way of preparing their move out of office, often with key staff already gone. Without being too clever by half, one could argue that a ban on gifts in the entire last year of a two-year term would be to the incumbent's advantage.

  8. How is the gift given
  9. ? Again, the public has a right to know the nature of the transaction involved in the gift giving. It is one thing to send a president a gift through the mail; quite another to give the gift to the president in a face-to-face exchange in the Oval Office. The implied value of a $260 gift given through the former is quite different from the latter. I have no policy recommendations here, but do note the issue.

  10. Why is the gift given?
  11. This is the most difficult question of all to answer. Ideally, all gifts are given to express affection and respect for the president. In reality, the bigger the gift, the more the appearance of a potential quid pro quo. One way to cure the appearance problem is to simply place a ban or automatic return on all domestic gifts valued above $1,000.

Whether it establishes a new system to require full public disclosure of all of these questions, Congress cannot ignore the problems raised by this subcommittee's investigation. One is tempted to rewrite the Mastercard commercials of late. Tiffany vase: $150. Olympic hockey tickets: $250. Trust in the presidency retained through full disclosure and tracking of all presidential gifts: Priceless.