There's nothing that says you *have*to* pass merits on once you have received them.  Theymos has stated that merits *may* decay over time (at a future date - presumably if the merits aren't forwarded on) I feel handing out 50 merits in one lump is lazy and shouldn't be allowed to occur.  I also feel merit sources should be audited and should be unable to hand merits out to other merit sources, or to like-minded gang-members.

If you look at the higher end recipients of merits almost all of their merits are gifted to them in clumps from co-gang members.