As they should be IMHO. Introducing free into a business relationship of any kind is a good way to disappoint people without knowing why (e.g. "That was free last time, why did it cost this time" or "I felt disappointed at result X, why wasn't it free?").

That's interesting; I had no idea. How do they manage to make that illegal?

It's often illegal for government employees or agencies to accept certain kinds of 'gifts'. It definitely depends on how strictly they follow the rules.