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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.