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“What Is A Gift”: The Senate’s Rules and Obama’s House Deal

Tuesday, March 11, 2008  |  posted by Hugh Hewitt

As the accumulation of daily posts at Rezkorama shows, the interest in the Rezko trial is building, and Senator Obama has already come up twice in the proceedings.

But the key to Obama-Rezko is unlikely to be the subject of direct testimony –the house deal.

Before exploring anything to do with the pricing of the house and the lot next door –purchases by the Obamas and Mrs. Rezko respectively– understand that at the time of the transaction, Barack Obama was subject to the rules of the Senate, which are extensive on the subject of gifts. The rules also define “gift” quite broadly:


The word ”gift” is defined broadly and includes any ”item having monetary value.” Specifically, paragraph 2(b)(1) of the Rule states:

[T]he term ”gift” means any gratuity, favor, discount, entertainment, hospitality, loan,forbearance, or other item having monetary value. The term includes gifts of services, training, transportation, lodging, and meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.

Having defined the gift, here’s the prohibition:

Most recently, the Senate Gifts Rule was revised by Senate Resolution 158, 104th Congress, effective January 1, 1996. A 1994 Report of the Senate Committee on Governmental Affairs (S. Rpt. No. 103-255, 103d Cong., 2d Sess.) offers insight into the purposes behind changes to the Rule effectuated by Senate Resolution 158. The current Rule places significant new restrictions on the ability of Senate Members, officers, and employees to accept gifts.

Senate Rule 35.1(a) sets forth the basic rule on accepting gifts. It states:

(1) No Member, officer, or employee of the Senate shall knowingly accept a gift except as provided in this rule.

(2) A Member, officer, or employee may accept a gift (other than cash or cash equivalent) which the Member, officer, or employee reasonably and in good faith believes to have a value of less than $50, and a cumulative value from one source during a calendar year of less than $100. No gift with a value below $10 shall count toward the $100 annual limit. No formal recordkeeping is required by this paragraph, but a Member, officer, or employee shall make a good faith effort to comply with this paragraph.

The figure of $50 (which is actually a dollar limit of $49.99) applies to each gift received,unless the gift falls under an exception. The figure of $100 (which is actually a dollar limit of $99.99) applies to the aggregate value of all non-exempt gifts received from a single source during a calendar year. Thus, the value of all non-exempt gifts from a single source in a calendar year must be tallied. Any gift worth less than $10 is excluded under Rule 35.1(a)(2) and does not count towards the $99.99 total. Once the tally reaches $99.99, all further non-exempt gifts from that source in that year must be declined.

There are 23 exceptions to the gifts rule –and none of them go to real estate transactions designed to allow a senator to buy a house bigger than his budget permits by splitting the house and the vacant lot next door into two parcels and having Mrs. Rezko buy the empty lot.

Does that look like a gift to you? Does it feel like a “favor” done for an important man by a political fixer?

Byron York and I discussed this yesterday, and I suggested Byron pose the question on one of the Team Clinton calls: If the Clinton folks want the press to focus on the Rezko trial –and they do– why hasn’t Mrs. Clinton filed a complaint in the Senate Ethics Committee against Obama for receipt of a prohibited gift?

Everyone who recalls buying their first home and hunting for the down payment or getting some help from mom or dad knows what happened here –the Obamas got a favor from the Rezkos. Now Rezko is in the dock and his finances very murky, leading to the question of who really did the favor for Barack Obama.

Perhaps some staffer in the Senate will send me some insight into their member’s reaction to such a deal: Routine avoidance of a near-complete prohibition on gifts, or a complaint waiting to be drafted?

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