finance bribery gift politics public-office
For a politician, is a lunch outing with Warren Buffet considered a $650,000 gift?
<p>There is a story in the news about Nikki Haley (now former US ambassador to the UN) taking trips in a friend's (and political supporter's) private jet.</p>

<p>See story: <strong><a href="https://www.postandcourier.com/politics/watchdog-wants-investigation-of-nikki-haley-s-private-jet-flights/article_d32bcbb0-cb2e-11e8-8c2a-076e4f7ad7a1.html" rel="nofollow noreferrer">Watchdog wants investigation of Nikki Haley’s private jet flights to SC</a></strong></p>

<p>According to the article, Haley declared these trips, but rather than declaring the true market value of a private plane ride from New York to South Carolina (~$24,000), she declared the value to be that of a first class flight on a commercial airline (~$3200).</p>

<p>This actually makes perfect sense to me. She didn't receive $24,000 of value. She can't sell the flight she got on eBay. All she got was a free trip, which saved her about $3200. So it seems reasonable to argue that the value of what she got was indeed about $3200.</p>

<p>So if we start valuing things in the way this watchdog group is demanding, then what happens if a politician meets Warren Buffet? <a href="https://www.cnbc.com/2018/05/25/3-things-two-men-learned-from-their-650000-lunch-with-warren-buffett.html" rel="nofollow noreferrer"><strong>The market value for eating lunch with Warren Buffet is $650,000</strong></a>. If Buffet would have invited Halley out for lunch, would Halley have to declare a $650,000 gift?</p>

<p>I think you're working off some false premises here.</p>
<ol>
<li><p>Whatever FMV is in the context of a meeting with Warren Buffet purchased by investors, it's probably different in the context of the U.S. Ambassador to the United Nations.</p>
<p>Buffett has little to gain from a meeting with people whose job he's been doing more successfully for half a century. He has more to gain from meeting with high-ranking government officials; this is why political donors frequently drop thousands of dollars to attend a dinner where such officials are speaking, even when there's only an off chance of so much as a handshake.</p>
</li>
<li><p>Assuming that a campaign-finance calculation of fair market value is roughly equivalent to that in the tax context, FMV for a lunch with Warren Buffett probably isn't $650,000.</p>
<p>Because the Buffet lunch was purchased at a <em>charitable</em> auction, tax law would generally recognize that the price paid was not necessarily an accurate reflection of FMV. Instead, it would acknowledge that some portion of the price -- the amount in excess of FMV -- was actually a charitable gift.</p>
</li>
</ol>
<p>That of course still leaves the question of what FMV actually is for a lunch with Warren Buffet.</p>
