The $5800 bottle of booze

According to recent media accounts “The State Department is looking into the whereabouts of a $5,800 bottle of Japanese whiskey that was gifted to former Secretary of State Mike Pompeo, according to State Department filings in the federal register. The government of Japan gifted the whiskey to Pompeo in 2019, the document says. But it is unclear if Pompeo himself received the whiskey or if a staff  accepted it. Pompeo said Thursday that he never received the bottle of whiskey and that he had ‘no idea’” it was missing, nor what happened to the gift.”

Time will tell what happened here – or maybe not. My best guess is that he did get the bottle – for the presumably simple reason that none of his subordinates would want to risk hiding it from him.

In the meantime this is a good occasion  to revisit the  COI fraught area of gifts and entertainment.

Consider these two two items.

First, there is the issue of double standards.  I once asked students in an executive MBA ethics class if they thought that their employer organizations should have restrictive policies on gift receiving.  Nearly all said that such policies were unnecessary – as the students were certain that they would not be corrupted by receipt of gifts from suppliers or customers.  I then asked if the school should allow teachers to receive gifts and entertainment from students. As you can imagine, the response was very different.

Note that double standards aren’t always a bad thing. But they often are.

Second, there is the argument that the recipient wouldn’t sell himself for  relatively small amounts of money or goods  This issue was raised several years ago in a particularly grim way (as described in this article in MarketWatch) by a study which “found that both deaths from opioid overdose and opioid prescriptions rose in areas of the country where physicians received more opioid-related marketing from pharmaceutical companies, such as consulting fees and free meals,…”

Another study “showed that the receipt of a single industry-sponsored meal, with a mean value of less than $20, was associated with prescription of the promoted brand-name drug at significantly higher rates to Medicare beneficiaries.”

Note that while these studies took place in the life sciences area they are potentially relevant to promoting compliance in conflicts/gifts in industries of all kind.

Finally, a study by Julian Zlatev and Todd Rogers  contributed in a potentially important way to our knowledge of what makes giving gifts and providing entertainment effective    (Returnable Reciprocity: When Optional Gifts Increase Compliance, Harvard Faculty Research Working Paper Series  They found – somewhat surprisingly – that providing the recipient with an opportunity to return a gift increased the likelihood that she would respond positively to whatever the giver was seeking to have her do.

This is a phenomenon they call “returnable reciprocity” and it may work by triggering feelings of guilt in recipients who  have the opportunity to but do not return the gift.

None of this proves Pompeo’s guilt in the whiskey affair.  But it suggests that the affair might be seen as part of a larger tawdry picture.