Ethics: Advisory Opinion No. 1998-5

Advisory Opinion No. 1998-5
Advisory Opinion No. 1998-5

Application Of The Codes Of Ethics To Benefits Provided To An
Employee/Spouse Of A Public Official By A Lobbyist/Employer

Conn. Gen. Stat. 1-79(e) and 1-91(g), as amended by Secs. 1 and 6 of June 18 Special Session Public Act No. 97-6, establish certain new exceptions to the Ethics Codes’ definition of "Gift", including: "Anything of value provided by an employer of (A) a public official, (B) a state employee, or (C) a spouse of a public official or state employee, to such official, employee or spouse, provided such benefits are customarily and ordinarily provided to others in similar circumstances…." Id. at (15).

The original purpose of the exception in question, as reflected in discussions between Legislative Leaders and attorneys for the State Ethics Commission, conducted at the time of the provision’s enactment, was to allow a public official to attend events (e.g., annual holiday party) to which he or she was invited by reason of his or her spouse’s employment, even if the employer was a registered lobbyist (e.g., insurance company, union, law firm, etc.) In essence, the General Assembly determined that it was unnecessary, and unfair, to apply the Codes’ extremely restrictive gift and entertainment provisions to occasions which were unrelated to lobbying; and which, in fact, the public official was expected to attend by virtue of the spouse’s employment.

This business purpose rationale is reflected in both the language of the provision and in the legislative history. Specifically, the Senate Chairperson of the Government Administration and Elections Committee, Gary LeBeau, in explaining this provision, stated: "…that’s kind of a practical interpretation of what I see here, so that the reasonable and regular and customary types of things that people do in the real world would be allowed…." Senate Debate on Bill No. 8005 at p. ____ (June 23, 1997).

The Commission has now been asked whether the "Gift" exception in question would apply to the following hypothetical activity: the spouse of a public official is a member of a private law firm. The firm represents a client (e.g., a bank) regarding various commercial matters. The bank is also a registered lobbyist in Connecticut. As part of its ordinary and customary business practice, the bank, from time to time, hosts those members of the law firm who work on its behalf (e.g., business lunch, golf outing at which business is discussed, etc.)

This hypothetical activity falls squarely within the business purpose intent of the "Gift" exception in question; i.e., the activity is unrelated to lobbying and the spouse/attorney is expected to participate by virtue of his or her job responsibilities with the law firm. Additionally, the events meet the ordinary and customary test, as set forth in the statutory provision. It remains to be determined, however, whether the benefits can be construed as being provided by the spouse/attorney’s "employer", as that term is used in the statute.

A conclusion that the client bank falls within the parameters of the term "employer", for purposes of The Codes Of Ethics, would not be inconsistent with prior Commission interpretations. (See, e.g., Commission Regulations stating that "employment", as used in Conn. Gen. Stat. 1-84(b) regarding outside employment and as used in Conn. Gen. Stat. 1-84b(f) regarding post-state employment, encompasses independent contractor relationships such as the one under review. Regulations of Conn. State Agencies Secs. 1-81-14 and 1-81-38.) Such a conclusion is, however, not required in this instance.

Rather, adherence to a prior line of Commission Advisory Opinions provides a sufficient, and, in fact, a preferable, resolution to the issue at hand. Specifically, in Advisory Opinion No. 83-3, the Commission held that a state employee who served as an elected officer of a professional association which was registered as a lobbyist could accept benefits (e.g., attendance at association convention) routinely conferred on such officials. In essence, the Commission held that such benefits were not gifts, and not reportable expenditures, since the individual’s work as an association officer served as full consideration for the benefits conferred. Thereby, satisfying the Code requirement that a gift has not been given if consideration of equal or greater value is given in return. Conn. Gen. Stat. 1-79(e) and 1-91(g). State Ethics Commission Advisory Opinion No. 83-3, 44 Conn. L.J. No. 35, p. 5B (March 1, 1983). Additionally, in Advisory Opinion No. 92-19, the Commission extended the holding of A.O. No. 83-3 to apply to the spouse of a state employee who received benefits (e.g., annual corporate dinner, annual outing, etc.) from her lobbyist corporation employer. The Commission again based its reasoning on the fact that the employee’s work was in consideration for the benefits, and added cautionary language that such benefits must be customary and must be conferred on all those employees in similar positions. State Ethics Commission Advisory Opinion No. 92-19, 54 Conn. L.J. No. 14, p. 9C (October 6, 1992).

The Commission hereby extends the reasoning of A.O. Nos. 83-3 and 92-19 to apply when, as in the matter under review, the benefits in question are conferred by a client of the employee’s firm, as long as the essential criteria (i.e., underlying business purpose; sufficient consideration; ordinary and customary benefit; and provided to similarly situated individuals) are present.

In summary, ordinary and customary meals and entertainment, provided by a client of a lobbyist/employer in the course of business to an employee/spouse of a public official, and in return for which the employee provides full consideration by virtue of his or her work, are not subject to the gift restrictions or reporting requirements of The Codes Of Ethics.

By order of the Commission,

Stanley Burdick
Chairperson



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