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Gifts from Organizations That Are Not Restricted Sources, But . . .
Thursday, May 17th, 2012
Robert Wechsler
I want to revisit a situation I mentioned a few days ago in a
post about ethics reform. Common Cause Rhode Island was
recommending a reform to deal with the situation where gifts are
made to officials by an organization that is not an "interested
party" (and therefore not subject to the gift ban) because it does
not do business with or lobby, and is not regulated, by the state,
or by a local government, but may have members or supporters who do
business or are regulated and/or that effectively, although not
legally, lobby officials.
This is a loophole in gift provisions that, like the City Ethics Model Code's, apply only to "interested parties" or "restricted sources." Sizeable gifts from organizations funded by those seeking something from government officials effectively allows both gifts from those restricted sources and allows for an end run around campaign contribution limitations.
The two organizations CCRI had in mind were (1) the American Legislative Exchange Council (ALEC), an organization supported by large corporations and donors that drafts model legislation and engages in what it calls "nonpartisan public-private partnership," and (2) the Senate Presidents' Forum, an association of elected officials that, although it has no website, holds, according to an article this January on the WPRI television website, educational events with corporate sponsors in such places as Key West and Buenos Aires.
CCRI is calling for disclosure of gifts from such organizations, to see how frequent and large they are. It wants to require disclosure of gifts that are given to an official "because of his or her position" rather than because she is a family member or friend. I generally don't like this sort of language, because so often an official will say that a person is a friend, and just happens to do business with the government. But with respect to organizations, that is not a problem. It is clear that both of these organizations make gifts to officials solely because they are officials.
Such gifts could be prohibited instead of disclosed. If the organization's conferences are so valuable, the government should pay for one or more officials to attend. If the government cannot afford it, then the official is in the same position as the many government ethics professionals whose officials have refused to pay for them to attend COGEL conferences (which are in places like Nashville and Columbus in December), and who have therefore paid their own way.
Another approach to this situation is to prohibit gifts from any organization that raises money from individuals or entities that do business with or lobby the government. The problem with this approach is that nonprofit organizations are not required to disclose their contributors.
One way to deal with this obstacle is to create a presumption that any organization is funded by such entities and individuals, and thereby place the burden of proof on the official. If she wants to accept a gift from such an organization, she must provide sufficient evidence to the ethics commission that none of its major contributors (a minimum contribution amount could be set) do business with or lobby the government. If the organization does not want to disclose this information to the ethics commission, then it cannot make gifts to officials in that government organization. In other words, each organization cannot have secrecy and make gifts. It has to choose.
A secondary issue here is that elected officials often sit on the board or fundraising committee of such organizations, placing them in a position to raise funds from restricted sources, even if they do not take gifts directly from them or from the organization. This allows the official to use her position to pressure companies and individuals to make gifts to the organization, which helps the official's position in it and, often, her power regionally or nationally. Better that associations be fully funded by the governments whose officials are its members.
Robert Wechsler
Director of Research-Retired, City Ethics
203-859-1959
This is a loophole in gift provisions that, like the City Ethics Model Code's, apply only to "interested parties" or "restricted sources." Sizeable gifts from organizations funded by those seeking something from government officials effectively allows both gifts from those restricted sources and allows for an end run around campaign contribution limitations.
The two organizations CCRI had in mind were (1) the American Legislative Exchange Council (ALEC), an organization supported by large corporations and donors that drafts model legislation and engages in what it calls "nonpartisan public-private partnership," and (2) the Senate Presidents' Forum, an association of elected officials that, although it has no website, holds, according to an article this January on the WPRI television website, educational events with corporate sponsors in such places as Key West and Buenos Aires.
CCRI is calling for disclosure of gifts from such organizations, to see how frequent and large they are. It wants to require disclosure of gifts that are given to an official "because of his or her position" rather than because she is a family member or friend. I generally don't like this sort of language, because so often an official will say that a person is a friend, and just happens to do business with the government. But with respect to organizations, that is not a problem. It is clear that both of these organizations make gifts to officials solely because they are officials.
Such gifts could be prohibited instead of disclosed. If the organization's conferences are so valuable, the government should pay for one or more officials to attend. If the government cannot afford it, then the official is in the same position as the many government ethics professionals whose officials have refused to pay for them to attend COGEL conferences (which are in places like Nashville and Columbus in December), and who have therefore paid their own way.
Another approach to this situation is to prohibit gifts from any organization that raises money from individuals or entities that do business with or lobby the government. The problem with this approach is that nonprofit organizations are not required to disclose their contributors.
One way to deal with this obstacle is to create a presumption that any organization is funded by such entities and individuals, and thereby place the burden of proof on the official. If she wants to accept a gift from such an organization, she must provide sufficient evidence to the ethics commission that none of its major contributors (a minimum contribution amount could be set) do business with or lobby the government. If the organization does not want to disclose this information to the ethics commission, then it cannot make gifts to officials in that government organization. In other words, each organization cannot have secrecy and make gifts. It has to choose.
A secondary issue here is that elected officials often sit on the board or fundraising committee of such organizations, placing them in a position to raise funds from restricted sources, even if they do not take gifts directly from them or from the organization. This allows the official to use her position to pressure companies and individuals to make gifts to the organization, which helps the official's position in it and, often, her power regionally or nationally. Better that associations be fully funded by the governments whose officials are its members.
Robert Wechsler
Director of Research-Retired, City Ethics
203-859-1959
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