HomeMy WebLinkAbout02-15-12 Board of Ethics memo and materialsCity of Bozeman
City Attorney's Office
February 15, 2012
To: Bozeman Ethics Board
FR: Greg Sullivan, City Attorney
C: Aimee Kissel; Trisha Gowen; Chris Kukulski
Greg Sullivan, City Attorney
Tim Cooper, Staff Attorney
Susan L. Wordal, Staff Attorney
Kyla Murray, Staff Attorney
Ryan McCarty, Staff Attorney
Anna Saverud, Staff Attorney
RE: Ethics Code provisions implementing the Charter; proposal for addressing gifts and
discussion on post - employment activities in the City and State ethics codes
Charter on Ethics:
The Bozeman Charter (Sect. 7.01(a)) establishes specific ethical principles that are required to be
addressed "by Ordinance" (i.e. through the City's Code of Ethics). As a tool for your use in addressing
legislative changes I provide a list of each Charter principle required to be addressed in the Code of
Ethics. Within each principle I then provide a list of the Code provisions that I believe directly and
indirectly address that provision.
"The use of public office for private gain is prohibited. The Commission shall implement this
prohibition) by Ordinance the terms of which shall include but not be limited to: Acting in an official
capacity upon matters in which the official has a private financial interest clearly separate from that
of the general public; to the acceptance of gifts and other things of value; acting in a private
capacity on matters dealt with as a public official; the use of confidential information; in the
appearances by city officials before other city agencies on behalf of private interests. This
Ordinance shall include a statement of purpose and shall provide for reasonable public disclosure
and finances by officials with major decision making authority over monetary expenditures and
contractual and regulatory matters. "
Bozeman City Charter, Sect. 7.01(a).
1. The use of public office for private gain is prohibited.
a. 2.03.460 (Declaration of policy)
b. 2.03.490.D, F (Standards of Conduct)
c. 2.03.500 (Use of City resources)
Street YdWhPLP�fl North Rouse Phone: (406) 582 -2309
Mailing Address: P.O. Box 1230 Fax: (406) 582 -2302
Bozeman, Montana 59771 -1230 TDD: (406) 582 -2301
d. 2.03.520.A, B (Conflict of Interest)
e. 2.03.530.13 (Confidential Information)
f. 2.03.540 (Gifts, gratuities, favors)
g. 2.03.550 (Financial disclosure statement)
h. 2.03.560.A (Post - employment activities)
2. Acting in an official capacity upon matters in which the official has a private financial
interest clearly separate from that of the general public.
a. 2.03.460 (Declaration of policy)
b. 2.03.470.A (Definition offinancial interest and personal interest).
c. 2.03.490.A, B, D, F (Standards of Conduct)
d. 2.03.500 (Use of City resources)
e. 2.03.520.A, B, C, D (Conflict of Interest)
f. 2.03.530.A, B (Confidential information)
g. 2.03.540 (Gifts, gratuities, favors)
h. 2.03.550 (Financial disclosure statement)
i. 2.03.560.A (Post - employment activities)
3. The acceptance of gifts and other things of value.
a. 2.03.460 (Declaration of policy)
b. 2.03.540 (Gifts, gratuities, favors)
c. 2.03.500 (Use of City resources)
d. 2.03.490.A (Standards of Conduct)
4. Acting in a private capacity on matters dealt with as a public official.
a. 2.03.460 (Declaration of policy)
b. 2.03.490.A, B, D, E, F, G (Standards of Conduct)
c. 2.03.520.A (Conflict of Interest)
5. The use of confidential information.
a. 2.03.460 (Declaration of policy)
b. 2.03.530.A, B (Confidential information)
c. 2.03.490.A, B, F (Standards of Conduct)
6. The appearances by city officials before other city agencies on behalf of private interests.
a. 2.03.460 (Declaration of policy)
b. 2.03.520.A, B, C, D, E (Conflict of Interest)
c. 2.03.560. A (Post - employment activities)
d. 2.03.570 (Public notice required)
7. Statement of purpose.
a. 2.03.460 (Declaration of policy)
Page 2 of 6
S. Provide for reasonable public disclosure and finances by officials with major decision
making authority over monetary expenditures and contractual and regulatory matters.
a. 2.03.550 (Financial disclosure statement)
b. 2.03.560.A (Post - employment activities)
c. 2.03.570 (Public notice required)
Gifts:
The current Bozeman Municipal Code's gift provision states:
Sec. 2.03.540. - Gifts, gratuities and favors.
No official or employee shall accept a gift, gratuity, or favor from any person or entity, except as
authorized by law.
As requested during the last meeting, I provide the following options as you consider formulating a
legislative recommendation to the City Commission. The Board could consider the following (or a
combination of the following):
• No action. The result would be the BMC's prohibition on acceptance of gifts would remain.
• Repeal the Bozeman Municipal Code's gift provision.
o The result would be the gift provision in the Montanan Code Annotated (MCA) would
apply (see attached at 2 -2 -102 and 104, MCA). This approach may not fully comply with
the Charter requirement that the Code of Ethics address "the acceptance of gifts and other
things of value."
• The Board could, however, consider replacing the existing Code of Ethics
provision in place of a provision that states the acceptance of gifts and other
things of value by officials and employees [is subject to the limitations in state
law].
• Amend the prohibition to state a gift may be accepted "in compliance with" state law
rather than "as authorized by state law." I do not recommend this approach as it has the
potential to create confusion and would serve the same purpose as a repeal of the municipal code
provision in favor of state law (see above).
Sec. 2.03.540. - Gifts, gratuities and favors.
No official or employee shall accept a gift, gratuity, or favor from any person or
entity, except as in compliance with state law authorized by 1-mv.
• Clarify that a public recognition of service is not a gift.
Page 3 of 6
o The Board could consider defining certain contributions to city employees or officials as
other than gifts. For example, the Board could consider defining gift to mean other than
an award publically presented to an employee or official in recognition ofpublic service.
Please note this language mirrors Montana law at 2- 2- 102(3)(b)(ii), MCA. You could
also consider placing an upper dollar value on such a publicly granted gift. See below.
• Clarify that items provided to an employee or official which are incidental to attendance at
a public event are not gifts.
o The Board could consider defining gift to not include gratuities to officials or employees
F incidental to and in conjunction with a public event where the official or employee's
attendance is a airs in fulfillment of their official duties.
• A specific dollar amount could be used to help define "incidental."
• The Board could also consider the language adopted in Montana law at 2 -2-
102(3)(b)(ii) which excludes from the definition of "gift of substantial value"
certain "food and beverages consumed on the occasion when participation in a
charitable, civic, or community event bears a relationship to the public officer's or
public employee's office or employment or when the officer or employee is in
attendance in an official capacity." Please note that the above exception is for
"food and beverages" only.
• Address "intent" of the gift and /or the "value" of a gift.
o Currently, Montana law provides rules regarding gifts to public employees and official in
terms of purpose /intent of the gift and the dollar value of the gift. See the attached
statutes.
• 2 -2 -104, MCA, prohibits a public officer /employee from accepting a "gift of
substantial value" which "...would tend improperly to influence a reasonable person
in the person's position to depart from the faithful and impartial discharge of the
person's public duties; or that the person knows or a reasonable person in that
position should know under the circumstances is primarily for the purpose of
rewarding the person for official action taken."
• The key phrases in the first subsection are:
• "tend improperly to influence"
• "reasonable person in the person's position"
• "depart from the faithful and impartial discharge of the person's
public duties"
• The key phrases in the second subsection are:
• "person knows or a reasonable person in that position should
know"
• "under the circumstances"
• "primarily for the purpose of rewarding the person"
• "for official action taken"
Page 4 of 6
• The Board could consider addressing an upper limit on the value of a gift. Montana law
provides a benchmark of $50 as to whether a gift is of "substantial value." State law does
not prohibit gifts above $50 if the proscribed intent provisions are not violated. Also,
State law does not provide a temporal component to the rule (i.e. "within a year period ").
• You have previously discussed whether $50.00 would be an appropriate amount. I
suggest you continue that discussion in terms of changes to the cost of
goods /services over time and in relation to specific items which may most often
be given as a gift (tickets /meals /awards, etc.).
• Such a statement could read something along the lines of notwithstanding any
other provision of this division an official or employee may not accept a gift,
gratuity, favor, or award ofmore than $xx.xx.
• The Board could consider creating an outright prohibition on acceptance of a gift only
if the purpose of the gift is to improperly influence or reward: No employee or official
may accept a gift, gratuity, favor, or award of any kind if the gift, gratuity, favor, or
award is made for the purpose of improperly influencing the employee or official to
depart from the faithful and impartial discharge of employee's or official's public duties
or, except as provided in [award exception], is made to reward that employee or official
for official action taken.
• You also discussed a disclosure requirement. The Board could consider language in
the gift provision similar to that currently in 2.03.570 (public notice required [for post
employment activities]): Upon the acceptance of a gift, gratuity, or award pursuant to
[this section] the recipient shall file a disclosure statement with the Board of Ethics. Such
disclosure statement shall indicate the gift, its estimated value, the person or entity
making the gift, and the date of the gift. Such disclosure is a public record and shall be
made available to the public by posting on the City's external website.
Post - Employment Activities:
The current City post - employment activity provision is found at 2.03.560. Montana law addresses
similar but different principles at 2 -2 -201 and 2 -2 -202, MCA.
The main differences between the BMC and statutory provisions are:
• The City Code of Ethics has a 12 -month period for both officials and employees. There is no
statutory period related to contracts for officials in state law but state law does address a statutory
period of 6- months for employees. Montana law also has a 12 -month period for which an officer
or employee may not "obtain employment." See discussion below.
• The City prohibition is directed toward:
o "making any formal or informal appearance before, or negotiate[ing] with any decision
maker on any matter which was under the public servant's direct responsibility as a
public servant;" and
Page 5 of 6
o "act[ing] on behalf of any party other than the city in connection with any matter in
which the former public servant participated personally and substantially as a public
servant."
• The City Code of Ethics provides a means to avoid the local requirements for post - employment
activities upon notice. 2.03.570. State law does not provide a similar provision.
• The Montana statutes prevent "officials" and "employees" of the city from being "interested in"
a contract made by them in their official capacity or by any board... of which they are a member
if they are "directly involved in the contract."
• The Montana statute prevent "employees" from contracting with or being employed by an entity
that contracts with the with the state or any of its subdivision in "matters with which the former
employee was directly involved during employment."
• The Montana law provides a definition of "be interested in," "directly involved," and "former
employee."
• Montana law also prohibits an employee during the 12- months following employment from
obtaining employment "in which the officer or employee will take direct advantage, unavailable
to others, of matters with which the officer or employee was directly involved..." The
prohibition continues by making it clear these matters are specific rather than general and must
have been ones "that the officer or employee actively helped to formulate and applications,
claims, or contested cases in the consideration of which the officer or employee was an active
participant."
AS you can see, the "post employment activities" provisions in the City's Code of Ethics address similar
but different principles than the state law. The City provisions address "appearing before" or
"negotiating with" City decision makers while the Montana statutory provisions address
contracts /claims and employment in situations in which the former public servant could rely upon
specific information obtained while in service.
I have not formulated specific recommendations regarding the post - employment provisions of the City
Code of Ethics as I believe additional discussion may be helpful.
Page 6 of 6
Montana statutory gift provisions:
2 -2 -102. Definitions. As used in this part, the following definitions apply:
(3) (a) "Gift of substantial value" means a gift with a value of $50 or more for an
individual.
(b) The term does not include:
(i) a gift that is not used and that, within 30 days after receipt, is returned to the donor or
delivered to a charitable organization or the state and that is not claimed as a charitable
contribution for federal income tax purposes;
(ii) food and beverages consumed on the occasion when participation in a charitable, civic, or
community event bears a relationship to the public officer's or public employee's office or
employment or when the officer or employee is in attendance in an official capacity;
(iii) educational material directly related to official governmental duties;
(iv) an award publicly presented in recognition of public service; or
(v) educational activity that:
(A) does not place or appear to place the recipient under obligation;
(B) clearly serves the public good; and
(C) is not lavish or extravagant.
2 -2 -104. Rules of conduct for public officers, legislators, and public employees. (1) Proof of
commission of any act enumerated in this section is proof that the actor has breached the actor's
public duty. A public officer, legislator, or public employee may not:
(a) disclose or use confidential information acquired in the course of official duties in order to
further substantially the individual's personal economic interests; or
(b) accept a gift of substantial value or a substantial economic benefit tantamount to a gift:
(i) that would tend improperly to influence a reasonable person in the person's position to
depart from the faithful and impartial discharge of the person's public duties; or
(ii) that the person knows or that a reasonable person in that position should know under the
circumstances is primarily for the purpose of rewarding the person for official action taken.
(2) An economic benefit tantamount to a gift includes without limitation a loan at a rate of
interest substantially lower than the commercial rate then currently prevalent for similar loans
and compensation received for private services rendered at a rate substantially exceeding the fair
market value of the services. Campaign contributions reported as required by statute are not gifts
or economic benefits tantamount to gifts.
Montana statutory provisions related to "post employment activities"
2 -2 -201. Public officers, employees, and former employees not to have interest in
contracts. (1) Members of the legislature; state, county, cam, town, or township officers; or any
deputies or employees of an enumerated governmental enter may not be interested in any
contract made by them in their official capacity or by any body, agency, or board of which they
are members or employees if they are directly involved with the contract. A former employee
may not, within 6 months following the termination of employment, contract or be employed by
an employer who contracts with the state or any of its subdivisions involving matters with which
the former employee was directly involved during employment.
(2) In this section, the term:
(a) "be interested in" does not include holding a minority interest in a corporation;
(b) "contract" does not include:
(i) contracts awarded based on competitive procurement procedures conducted after the date
of employment termination;
(ii) merchandise sold to the highest bidder at public auctions;
(iii) investments or deposits in financial institutions that are in the business of loaning or
receiving money;
(iv) a contract with an interested party if, because of geographic restrictions, a local
government could not otherwise reasonably afford itself of the subject of the contract. It is
presumed that a local government could not otherwise reasonably afford itself of the subject of a
contract if the additional cost to the local government is greater than 10% of a contract with an
interested party or if the contract is for services that must be performed within a limited time
period and no other contractor can provide those services within that time period.
(c) "directly involved" means the person directly monitors a contract, extends or amends a
contract, audits a contractor, is responsible for conducting the procurement or for evaluating
proposals or vendor responsibility, or renders legal advice concerning the contract;
(d) "former employee" does not include a person whose employment with the state was
involuntarily terminated because of a reduction in force or other involuntary termination not
involving violation of the provisions of this chapter.
History: En. Sec. 1020, Pol. C. 1895; re -en. Sec. 368, Rev. C. 1907; re -en. Sec. 444, R.C.M. 1921; Cal. Pol. C.
Sec. 920; re -en. Sec. 444, R.C.M. 1935; amd. Sec. 1, Ch. 43, L. 1973; R.C.M. 1947, 59 -501; amd. Sec. 1, Ch. 377,
L. 1979; amd. Sec. 1, Ch. 458, L. 1981; amd. Sec. 1, Ch. 65, L. 1991; amd. Sec. 1, Ch. 322, L. 1993; amd. Sec. 1,
Ch. 181, L. 2001.
2 -2 -202. Public officers not to have interest in sales or purchases. State, county, town,
township, and city officers must not be purchasers at any sale or vendors at any purchase made
by them in their official capacity.
History: En. Sec. 1021, Pol. C. 1895; re -en. Sec. 369, Rev. C. 1907; re -en. Sec. 445, R.C.M. 1921; Cal. Pol. C.
Sec. 921; re -en. Sec. 445, R.C.M. 1935; R.C.M. 1947, 59 -502.
2 -2 -105. Ethical requirements for public officers and public employees. (1) The requirements
in this section are intended as rules of conduct, and violations constitute a breach of the public
trust and public duty of office or employment in state or local government.
(2) Except as provided in subsection (4), a public officer or public employee may not acquire
an interest in any business or undertaking that the officer or employee has reason to believe may
be directly and substantially affected to its economic benefit by official action to be taken by the
officer's or employee's agency.
(3) A public officer or public employee may not within 12 months following the voluntary
termination of office or employment, obtain employment in which the officer or employee will
take direct advantage, unavailable to others of matters with which the officer or employee was
directly involved during a term of office or during employment These matters are rules other
than rules of general application, that the officer or employee actively helped to formulate and
applications, claims, or contested cases in the consideration of which the officer or employee was
an active participant.
(4) When a public employee who is a member of a quasi-judicial board or commission or of a
board, commission, or committee with rulemaking authority is required to take official action on
a matter as to which the public employee has a conflict created by a personal or private interest
that would directly give rise to an appearance of impropriety as to the public employee's
influence, benefit, or detriment in regard to the matter, the public employee shall disclose the
interest creating the conflict prior to participating in the official action.
(5) A public officer or public employee may not perform an official act directly and
substantially affecting a business or other undertaking to its economic detriment when the officer
or employee has a substantial personal interest in a competing firm or undertaking.
History: En. 59 -1709 by Sec. 9, Ch. 569,L. 1977; R.C.M. 1947,59-1709; amd. Sec. 4, Ch. 562,L. 1995.