Ethics: 2007-11

ADVISORY OPINION 2007-11

 

Discounts on Dues and Seminar Fees Made Available to All Government Employees by Non-Restricted Donors

 

INTRODUCTION

 

The Citizen’s Ethics Advisory Board (“Board”) issues this advisory opinion at the request of Thomas R. Sullivan, Commissioner of the Connecticut Insurance Department (“Insurance Department”), who asks two questions: (1) whether certain professional organizations whose memberships include a small percentage of restricted donors are themselves considered restricted donors for purposes of the gift provisions of the Code of Ethics for Public Officials (“Code”); and (2) whether the Insurance Department may accept certain discounts made available by those professional organizations to all government employees.

 

BACKGROUND

 

            The following facts are relevant to this opinion.  All actuaries employed by the Insurance Department are members of the American Academy of Actuaries and either the Casualty Actuarial Society or the Society of Actuaries, each of which is a nationally recognized professional actuarial society.  Although these professional organizations are not restricted donors[1] for purposes of the Code’s gift provisions, some of their members are: roughly 17 percent of the members of the American Academy of Actuaries are either regulated by, doing business with, or seeking to do business with the Insurance Department; as are roughly 14 percent of the members of both the Casualty Actuarial Society and the Society of Actuaries.  Funding of these professional organizations stems primarily from their nationwide memberships.    

 

            Each professional organization offers discounted dues and/or seminar fees to federal, state, and municipal government employees.  (No other membership category is offered the discounts.)  For example, the dues structure of the American Academy of Actuaries waives 50 percent of the dues payable for actuaries employed by a government agency, and both the Casualty Actuarial Society and the Society of Actuaries offer these individuals discounted fees for society-sponsored educational seminars. 

 

QUESTIONS

 

            Because the Insurance Department pays its actuaries’ dues and seminar fees, Commissioner Sullivan asks (1) whether the three professional organizations are considered restricted donors for purposes of the Code’s gift provisions, and (2) whether the Insurance Department may accept discounts on dues and seminar fees made available by those professional organizations to all government employees.

 

ANALYSIS

 

            To answer Commissioner Sullivan’s first question, we turn to Advisory Opinion No. 2006-4, in which the Board addressed a similar question: whether a professional organization is deemed to be “doing business with or seeking to do business with” the Department of Public Works (“DPW”) by virtue of the fact that its membership includes individuals from companies that engage in such activity. 

 

            There, as here, the relevant provision was General Statutes § 1-84 (m), which prohibits a public official or state employee from knowingly accepting gifts from persons regulated by, doing business with, or seeking to do business with his or her department or agency.  The Board observed that, under a literal interpretation of that provision, a professional organization composed of persons doing business with or seeking to do business with DPW is not itself engaging in those activities with DPW.  In declining to adopt such a literal interpretation, the Board noted that it could be used by restricted donors (e.g., persons doing business with DPW) “as a way to avoid the gift ban . . . by . . . permitting them to make expenditures for the benefit of a public official or state employee by way of a pass-through entity.”  Instead, the Board adopted the following test:

 

for purposes of the gift ban in § 1-84 (m), if a professional organization’s membership essentially is a collection of persons doing business with or seeking to do business with DPW, and its funding stems mainly from those persons, then it is considered to be doing business with or seeking to do business with DPW—i.e., it is considered a [restricted] donor. 

 

            Here, although the membership of each professional actuarial society is made up of a small percentage of restricted donors—American Academy of Actuaries, 17 percent; Casualty Actuarial Society, 14 percent; and the Society of Actuaries, 14 percent—it can hardly be said that these national organizations are “essentially . . . a collection” of restricted donors.  Indeed, the overwhelming majority of each organization’s membership is made up of non-restricted donors: American Academy of Actuaries, 83 percent; Casualty Actuarial Society, 86 percent; and the Society of Actuaries, 86 percent.  Further, funding of these national organizations is drawn not solely from their restricted members, but rather from their nationwide memberships.  As such, based on the test set forth above, we conclude that the three professional organizations are not considered restricted donors for purposes of the gift ban in § 1-84 (m).[2]   

 

            That brings us to Commissioner Sullivan’s remaining question, namely, whether the Insurance Department may accept discounts on dues and seminar fees made available by the three professional organizations to all government employees.

 

            Having concluded that the three professional organizations are non-restricted donors and, by implication, not subject to the Code’s gift prohibitions, the only provision of even potential applicability is General Statutes § 1-84 (c), which prohibits a public official or state employee from using his or her office for personal financial gain.  This use-of-office provision has been interpreted as limiting to $100 per year benefits provided by a non-restricted donor to a public official or state employee by virtue of his or her state position.  See Advisory Opinion No. 2004-2 (“gifts given to a public official by donors not regulated under [the Code’s gift provisions], e.g., subordinates, political appointees and constituents, by virtue of the official’s public position must not exceed one hundred dollars per recipient per year”).  But this limitation applies exclusively to benefits given to a public official or state employee—not to benefits given to a state agency.  Thus, we conclude that the Insurance Department may accept discounts on dues and seminar fees made available by the three professional organizations to all government employees.

 

CONCLUSION

 

            It is the opinion of the Citizen’s Ethics Advisory Board that (1) the three professional organizations are not considered restricted donors for purposes of the Code’s gift provisions, and (2) the Insurance Department, which pays its actuaries’ dues and seminar fees, may accept the discounts made available by those professional organizations to all government employees.

 

By order of the Board,

 

 

 

Patricia T. Hendel

Chairperson

 

Dated 9/27/07

 



           

[1]Restricted donors include registered lobbyists and any persons the public official or state employee knows or has reason to know are (1) doing business with or seeking to do business with his or her department or agency, (2) engaged in activities directly regulated by such department or agency, or (3) prequalified under General Statutes § 4a-100.  See General Statutes §§ 1-84 (j) and (m).

 

[2]We qualify our conclusion by noting that it would be inappropriate, for example, for members of the professional organizations who are restricted donors to earmark their membership dues for a specific purpose that will directly benefit a Connecticut public official or state employee.  That is, restricted donors may not use the professional organizations as pass-through entities to funnel otherwise inappropriate gifts.



Content Last Modified on 9/28/2007 2:54:15 PM