Monday, July 13, 2009

Receipt of Gifts, Transportation, etc. From The Pennsylvania State Ethics Commission

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RECEIPT OF GIFTS, TRANSPORTATION, LODGING OR
HOSPITALITY BY PUBLIC OFFICIALS AND PUBLIC EMPLOYEES


With the holidays approaching, it is useful to review the restrictions and requirements of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101 et seq. (“Ethics Act”), regarding the receipt of gifts, transportation, lodging or hospitality by public officials and public employees. Particularly during the holidays, public officials and public employees may find themselves in the position of being offered gifts, transportation, lodging or hospitality (also generically referred to herein as “items”) by individuals or entities they regulate, vendors, or professional service providers. Such items may have minimal value or significant value. Although the Ethics Act does not prohibit the receipt of “no-strings-attached” items (see, Cooper, Opinion 92-009), public officials and public employees should consider any ramifications under the Ethics Act before receiving them.

First, depending upon the value of the item(s) received, the public official or public employee may be required to disclose his receipt of such item(s) on his Statement of Financial Interests, which is a public record. An important step in determining whether disclosure is required is the proper categorization of
what was received. There are two categories for disclosure, specifically “gifts” and “transportation and lodging or hospitality received in connection with public office or employment” (see, 65 Pa.C.S. §§ 1105(b)(6)-(7)). Proper categorization is important because the thresholds for disclosure for these categories are different, as detailed below.

The Ethics Act uses the same definitions for the terms “gift” and “hospitality” that are used in Pennsylvania’s Lobbying Disclosure Law (see, 65 Pa.C.S. §§ 1102, 13A03). The definitions are as follows:

"Gift." Anything which is received without consideration of equal or greater value. The term shall not include a political contribution otherwise reportable as required by law or a commercially reasonable loan made in the ordinary course of business. The term shall not include hospitality, transportation or lodging.

"Hospitality." Includes all of the following:
(1) Meals.
(2) Beverages.
(3) Recreation and entertainment.

The term shall not include gifts, transportation or lodging. 65 Pa.C.S. § 13A03.

The above definitions make the reporting categories mutually exclusive, so that any given item may only be considered to fall within one of the reporting categories.

After properly categorizing the item(s) received, the public official/public employee must determine whether the value of the item(s) received from any given source will require disclosure.

For any given source, gift(s) valued in the aggregate at $250 or more must be disclosed on the Statement of Financial Interests filed by the public official/public employee. 65 Pa.C.S. § 1105(b)(6). Such disclosure must include the name and address of the source, the amount of the gift or gifts, and the circumstances of each gift. If the gift(s) from a given source do not meet the aggregate threshold of $250 in value, they need not be disclosed. (Also, gift(s) received from a family member or friend need not be disclosed when the circumstances make it clear that the motivation for the action was a personal or family relationship. However, for purposes of this exception, the term “friend” does not include a registered lobbyist or an employee of a registered lobbyist.)

Similarly, for any given source, the name and address of the source and the amount of any payment for or reimbursement of actual expenses for transportation, lodging or hospitality received in connection with public office or employment must be disclosed on the Statement of Financial Interests if such expenses exceed $650 in an aggregate amount per year. (The disclosure requirement does not apply to expenses reimbursed by a governmental body or by an organization or association of public officials or employees of political subdivisions which the public official or employee serves in an official capacity.)

In addition to considering the financial disclosure requirements of the Ethics Act, a public official/public employee should also consider whether the receipt of item(s) may result in a conflict of interest. Item(s) received by a public official/public employee may form the basis for a violation of Section 1103(a) of the
Ethics Act (pertaining to conflicts of interest) if the public official/public employee takes action in furtherance of the interests of the donor. While the receipt of an item of de minimis (insignificant) value would not, in and of itself, create a conflict of interest as to action involving the donor (see, e.g., Stieh,
Advice 93-503), the decision as to whether a conflict of interest is presented by the receipt of item(s) is determined on a case-by-case basis.

Generally, when a public official or public employee has received item(s) that would form the basis for a conflict of interest under the Ethics Act, the public official/public employee must abstain from acting in matters pertaining to the donor. In the event of a voting conflict, the public official/public employee
must abstain and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act, 65 Pa.C.S. §1103(j).

Item(s) received by a public official/public employee may also form the basis for a violation of Section 1103(b) or Section 1103(c) of the Ethics Act (pertaining to improper influence) if there is an understanding that the vote, official action or judgment of the public official/public employee will be influenced thereby. See, e.g., Kasaback, Order 993; Helsel, Order 801; Volpe, Order 579-R; and Smith, Order 578-R.

Finally, it is noted that depending upon the position held, public officials and public employees might need to consider additional sources of ethics restrictions, such as the Governor’s Code of Conduct, municipal ethics restrictions, or agency policies. If another applicable source of ethics restrictions would prohibit the receipt of item(s) by a given public official or public employee, the Ethics Act would not operate to make the receipt of such item(s) permissible.

Public officials/public employees with questions may write to the State Ethics Commission at the following address for an advisory under the Ethics Act as to their own prospective (future) conduct: Pennsylvania State Ethics Commission, 309 Finance Building, P.O. Box 11470, Harrisburg, PA 17108-1470.

1 comment:

victor said...

its really nice thought thanks for sharing with us




___________________
victor
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