The Municipal Securities Rulemaking Board (MSRB) is seeking to create a rule limiting gifts to $100 for municipal advisors giving gifts to employees of entities engaged in municipal securities activities. The new rules for municipal advisors also would prohibit receiving reimbursement of entertainment expenses from the proceeds of an offering of municipal securities.

In a press release, MSRB Executive Director Lynnette Kelly said, “Restrictions on excessive gift-giving by municipal finance professionals are critical to ensuring that important state and local financing decisions are based on merit.” Comments on the new rules are being accepted through December 8, 2014.

Philadelphia passed ethics legislation providing a dollar limit on gifts during its March 20 meeting. The legislation prohibits all city officers and employees from receiving gifts worth more than $99 in a calendar year from any donor, and bans all cash gifts.

A number of exceptions are provided, including food and beverage at meetings and non-ticketed receptions.

The bill is expected to be signed by Mayor Nutter. Board of Ethics Executive Director Shane Creamer said the Board will begin working on new gift regulations once the bill is signed.

On February 7, the Senate Committee on Education reviewed testimony from the Hawaii State Ethics Commission regarding its concerns about SB 2423. Introduced in January, the bill authorizes the Department of Education to accept gifts or donations based on criteria established by the Board of Education. The commission maintains all state agencies and departments should be held to the same standards and codes of conduct; furthermore, it would be unnecessary and imprudent to allow the department to accept gifts contrary to the state ethics code.

SB 2423 also permits schools to participate in charitable fundraising activities in conjunction with 501(c)(3) tax-exempt organizations. Though perhaps well-intended, the bill is extremely broad and raises numerous concerns in terms of application and oversight.

During its testimony, the commission urged the committee to defer the bill until after the Commission has an opportunity to thoroughly consider the issues involved.

Kentucky could see updates to its legislative ethics code this session.

House Bill 3 would amend the state ethics code to include recommendations of the Legislative Ethics Commission, including:

• Establishing a “no cup of coffee” rule for gifts from lobbyists and employers to legislators;
• Creating a prohibition on lobbyists and employers paying for out-of-state travel for legislators;
• Including employers of legislative and executive branch lobbyists in the prohibition on campaign contributions during a regular legislative session;
• Requiring the reporting of advertising costs for advertising supporting or opposing legislation; and
• Including legislative candidates in the lobbyist gift prohibition.

The Legislative Ethics Commission has included those recommendations for a number of years in its report to the Legislative Research Commission. The existing ethics law was enacted in 1993.

The Virginia General Assembly may be taking steps toward substantive ethics reform in its upcoming session. Ethics bills have already been prefiled in anticipation of the session’s start on January 8, most notably Senate Bill 274, limiting gifts to officers and employees of the state and local governments to $100 per calendar year, and requiring disclosure of gifts to immediate family members.

Virginia does not currently limit the amount of gifts officials and employees may receive, and many called for reform after Gov. Bob McDonnell became embroiled in scandal after accepting thousands of dollars worth of gifts from Star Scientific CEO Jonnie Williams. Williams had also made gifts to McDonnell’s wife and daughters, prompting the addition of disclosure requirements to immediate family members.

Photo of the Virginia Capitol courtesy of Varmin on Wikimedia Commons.

The Chicago Board of Ethics recently posted two new publications on its website, both of which outline ethics restrictions for city officials.

The first addresses, among other things, general conflicts of interest, lobbying on behalf of others, financial interests in city contracts, financial disclosure requirements, gifts, revolving door provisions, and penalties for ethics violations.

The second addition is a publication delineating what city employees and officials may or may not do in terms of contracting with the city.

Both documents are intended to provide a basic understanding of ethics rules and are not deemed legal advice.

Effective January 1, 2014, new rules generally ban lobbyists from providing public officials with gifts valued at more than $75 or any tickets to games, concerts, and other recreational events. The ethics overhaul in House Bill 142 provides the state’s first legislative limitation on gifts to public officials.

Exceptions to the $75 limit include committee dinners, dinners for caucuses, and certain lobbyist-funded travel. The $75 cap is per occurrence and per lobbyist.

Although the bill was signed in May, 2013, lobbyists were permitted to provide unlimited gifts until the January 1 effective date.

The Philadelphia Board of Ethics staff has released a revised gift proposal following claims its initial proposed limits were too lax. The new suggested limits are a ban on gifts of more than $100, with a limit of $25 on cash gifts, per calendar year from any source not a family member of the recipient. The initial limits proposed were $200 per year, with a cap of $50 for cash gifts, resulting in outcry from watchdogs.

The new proposed limits were greeted with skepticism, however, because the provision allowing for cash gifts remained. Executive Director Shane Creamer insisted the Board cannot ban cash gifts altogether because the city code permits cash gifts, prompting the Board to decide on formally requesting the City Council to consider amending the code.

The suggested limits could drop yet again before the Board votes, as a number of Board members suggested a $50 annual limit was preferable. The Board could potentially vote on the rules at its January meeting.

City Council instructed the city’s lawyers to draft an ordinance increasing the gift limit to $150 for gifts provided by bidders, contractors, and other restricted sources. Currently, people doing business with the city can provide gifts to city officials valued at $100 or less per calendar year.

Recently, the Los Angeles Ethics Commission recommended curtailing gifts to city officials, hoping to boost public confidence in government. The commission’s recommendation would have extended the current ban on gifts from lobbyists to all people with a financial stake in city decisions.

Photo of the Los Angeles City Hall by Brion Vibber on Wikipedia.

The city Board of Ethics has proposed new gift regulations designed to clarify what is and is not permitted under the city code. The proposed limits would allow city officers and employees to accept gifts of up to $200 per year from a single source, including cash gifts up to $50. Currently, only gifts of substantial economic value given with the expectation of influencing the public official or employee are prohibited.

City watchdogs have criticized the proposed limits as being too lenient, but ethics board member Sanjuanita Gonzales suggested those limits could be subject to change after public input.

A hearing on the proposed regulations is scheduled for November 20.

Q. I will be attending the NCSL conference this summer.  Do regular gift limits on expenditures for public officials apply during this event?

A. The answer will vary depending upon whether you are paying for a private event or sponsoring a conference-affiliated event.  Taking a legislator to dinner, paying for cab fare or other transportation, or giving him or her a ticket to a ballgame are not considered part of the official conference agenda and normal gift limits will apply.  Also, for private events, the answer will depend upon whether you or your company are registered as a lobbyist or lobbyist employer.  In most instances, states have more stringent gift laws applicable to lobbyists and lobbyist principals.

Many states have gift limit exceptions specifically carved out for expenditures at national conferences to which all members of the legislature are invited. Further, State Night events at NCSL are considered part of the conference agenda; therefore, when national conference gift exceptions exist, they will apply.

Although a State Night sponsorship may be permissible, it is important to determine if and when the expenditure must be disclosed.  Know the reporting requirements before the event, because an attendee list may be required. The reporting implications range from simple aggregate disclosure to detailed reporting where the name of every legislator attending must be listed.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. My company is involved in an event where a meal and other gifts may be provided to public officials.  How do I know if this is permissible?

A. You must consider a number of issues any time you want to provide a gift to a public official.  In addition to consulting your company’s policies, you should answer the following questions:

• Is it a gift?  States often have exceptions to the definition of gift.  Arizona does not consider an expenditure for food, beverage, travel, or lodging to be a gift under state law.  A number of states do not consider things of value provided on the basis of a personal relationship or items of de minimis value to be gifts.
• Who is the giver?  Lobbyists are often subject to more stringent gift restrictions than non-lobbyists.  Florida prohibits any gifts from lobbyists to state officials and employees with very few exceptions.  However, if you are not registered as a lobbyist, you are permitted to give any gift if it is not given to influence any official action.  California imposes different gift limits; the limit is $10 or less per month for lobbyists and $440 or less per year for non-lobbyists.  Additional restrictions could apply if your company is a state contractor.  Connecticut does allow limited gifts from lobbyists and non-lobbyists.  However, state contractors must certify no gifts were made under certain circumstances.
• Who is the recipient?  The permissibility of a gift can depend on the branch of government or the seniority of the official or employee.  Maryland legislators may only accept food and beverage from lobbyists in very limited circumstances.  Executive branch officials may accept food and beverage if they are in the presence of the lobbyist. Delaware only restricts cabinet secretaries, division directors, and the governor’s professional staff from accepting gifts from lobbyists.

If you are anything less than 100% sure a gift is permissible, consult the state’s ethics agency.  Do not ask the official or employee involved!  He or she may not be familiar with the nuances of the state’s gift law.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

The Fair Political Practices Commission has released the first known government ethics app. A free smartphone app called Gift Tracker is available for Android 4.0 phones (coming soon for iPhones) to let state officials and employees record gifts received from restricted sources.

Features allow users to record and search gift donors and the balance of allowable gifts remaining. In other words, an official sitting down to a free meal can check his phone to determine whether he orders the salad or the steak.

Information and download of the app are available here.

Legislators have passed an ethics overhaul capping lobbyist gifts at $75 and eliminating a prior proposal to require lobbying registration for volunteer advocates. The House and Senate voted unanimously for House Bill 142 shortly before adjournment on Thursday, March 28, 2013.

This is the state’s first limitation on gifts to public officials. Exceptions to the $75 limit include committee dinners, dinners for caucuses, and certain lobbyist-funded travel. The $75 cap is per occurrence and per lobbyist.

There is no explicit limit on the number of gifts permitted. As part of the deal, volunteers will not have to register as lobbyists unless they are reimbursed $250 or more in expenses from an organization.

UPDATE: The bill will also remove the $300 lobbyist registration and renewal fee when it becomes effective on January 1, 2014, following approval by the Governor