Ethics: Advisory Opinion No. 1995-10

Advisory Opinion No. 1995-10
Advisory Opinion No. 1995-10

Gifts Provided By A Registrant To State Employee
Participants In A Program Offered By The Office
Of The Treasurer

The Office of the Treasurer has issued a Request for Proposal (RFP) to banks and other financial institutions in connection with a campaign to increase participation by State employees in the direct deposit of pay program.  Specifically, the RFP asks for both on-going incentives, such as reduced fees, additional services, and loan discounts, as well as a one-time incentive such a sweepstakes prize.  Given that all the recipients will be state employees, Shawmut Bank, a registered lobbyist, has asked whether the gift limits contained in the Code of Ethics for Lobbyists apply to the offered incentives.

State Treasurer Christopher B. Burnham has stated that this program provides many benefits to the State including reduced bank fees, streamlined bank account reconciliation activities, enhanced work production on pay days, and enhanced certainty of cash projections.  He estimates that a doubling of the current participation rate in the program could result in annual benefits of up to $300,000 to the State of Connecticut.

Conn. Gen. Stat. 1-97(a) prohibits a registrant or anyone acting on behalf of a registrant from knowingly giving any state employee or public official gifts that amount to fifty dollars or more in any calendar year.  Discounts or promotional items available to the general public, however, are exempt from the definition of gift.  See Conn. Gen. Stat. 1-91(g)(7).  Shawmut Bank has stated that the on-going incentives will be the same as those which they offer to employees of any employer which participates in a direct deposit of pay program.

Therefore, the 1-91(g)(7) exemption applies to these on-going incentives, and the registrant does not need to track their values for purposes of the Code’s gift limitation.

With regard to the sweepstakes prize which is to be provided as a one-time incentive, Shawmut Bank contemplates awarding airline tickets to the winner of a drawing.   It is unsure how to value these tickets, since they are purchased in conjunction with hotel packages.  This prize is not typically offered to participants in a direct deposit pay program.

Since the Office of the Treasurer is requesting that such prizes be offered to State employees on its behalf in order to encourage participation in the State’s direct deposit program, the awarding of this prize will help accomplish the State’s goal.  The prohibition on gifts of fifty dollars or more contained in 1-97(a) does not apply to gifts for the personal use or benefit of state employees or public officials which are provided to the state or executive agencies when such gifts facilitate the execution of state action or functions.  See Conn. Gen. Stat. 1-91(g)(5) and Regulations of Conn. State Agencies 1-92-51.  Therefore, under the Code of Ethics for Lobbyists, this one-time incentive may also be provided by a registrant.

Advisory Opinion No. 94-19, 56 Conn. L.J. No. 12, p. 7C (September 24, 1994) ruled that, in general, gifts to the state are expenses in furtherance of lobbying which must be disclosed by a registrant on its financial reports.  That Opinion provides that this is necessary unless the “activity is clearly personal and unrelated to any lobbying purpose.”  Id.  It notes that this exception will rarely be allowed for a business entity.  This is, however, the rare occasion when reporting of a gift to the state by a business entity is not necessary.  The provision of the gift, in this matter, is not offered to foster goodwill or any other purpose in furtherance of lobbying.  Rather, it is required by the specifications in the RFP drafted by the Office of the Treasurer and is a necessary element in obtaining the state contract in question.  Consequently, the registrant does not need to quantify, for purposes of the reporting requirements of the Code of Ethics for Lobbyists, the value of the contemplated sweepstakes prize.

By order of the Commission,

David Nassef

Content Last Modified on 9/7/2005 8:01:11 AM