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.

See story: Watchdog wants investigation of Nikki Haley’s private jet flights to SC

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).

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.

So if we start valuing things in the way this watchdog group is demanding, then what happens if a politician meets Warren Buffet? The market value for eating lunch with Warren Buffet is $650,000. If Buffet would have invited Halley out for lunch, would Halley have to declare a $650,000 gift?

  • I'm voting to close this question as off-topic because it is only tangentially about the law Oct 10, 2018 at 17:20
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    At the risk of stating the obvious, if the utility of a private plane ride was the same than that of a first class ticket, nobody would have private planes or ride on them. Value as a function of utility is highly subjective and as such it is not used as a serious measurement: "Yes that is a Picasso hanging there, but since I do not understand modern art let's value it the same than $10 Spice Girls poster"; "See the $300.000 Ferrari that a donor gave me, since I do not drive fast I will value it at slighty less than a Ford Bronco (there is less place for groceries)"
    – SJuan76
    Oct 10, 2018 at 18:06
  • @SJuan76 the painting and the cars are silly examples. The recipient can turn around and sell those at the FMV. A private plane ride cannot be sold, would not have been bought, and didn't cost anything to give. I am looking for a better reason as to the what the proper valuation should be Oct 10, 2018 at 18:17

1 Answer 1


I think you're working off some false premises here.

  1. 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.

    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.

  2. 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.

    Because the Buffet lunch was purchased at a charitable 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.

That of course still leaves the question of what FMV actually is for a lunch with Warren Buffet.

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    But even if it's not 650K, certainly the FMV for lunch with Buffet is very expensive Oct 10, 2018 at 17:20
  • For the average investor, I think that's correct. For a high-ranking government official, I'm not sure that's correct.
    – bdb484
    Oct 10, 2018 at 17:26
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    But high-ranking government officials are also average investors, are they not? They can easily use the content of their conversation for their own personal finances as well Oct 10, 2018 at 18:19
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    I don't think those meetings are spent providing the officials with hot market tips. If either side is using those conversations to figure out how to invest, it's probably Buffett.
    – bdb484
    Oct 10, 2018 at 23:31

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