Gifts from National and State Associations

Many of the most difficult situations in government ethics involve relationships that are not direct. For example, situations where the company that provides a benefit does not do business with the local government, but is owned by someone who owns another company that does do business with or have an interest in legislation before the local government (click here for a recent example). Technically, the company giving the benefit is not an "interested person" or whatever such a relationship is called in the relevant ethics code.

An interesting indirect relationship arose in a case in Rhode Island which was decided this week, according to an article in the Providence Journal. A complaint was filed with the state ethics commission (which has jurisdiction over both state and local officials) against the state's attorney general for a plane ticket he was given to go to a conference by the National Cable and Telecommunications Association (NCTA).

The commission dismissed the complaint, because the NCTA does not have official business in the state and does not lobby in the state, even though the AG's office does apparently regulate at least one NCTA member company and even though the AG is expected to run for governor next year. Here is the RI definition of "interested person" (Regulation 6-14-5009(c) of the Code of Ethics):

a person or a representative of a person or business that has a direct financial interest in a decision that the person subject to the Code of Ethics is authorized to make, or to participate in the making of, as part of his or her official duties.

In general, it is best to add "or indirect" after "direct" in ethics codes. The City Ethics Model Code language is:

[a person or entity that] has received or sought a financial benefit, directly or through a relationship with another person or entity, from the city within the previous three years, or intends to seek a financial benefit in the future.

The AG said of the complaint, filed by the Republican Party chair, “This frivolous tactic never had even the thinnest veneer of merit."

The commission's vice-chair had a more constructive view of the situation. “Is this a loophole? I don’t know. It raises questions about the rules governing national trade associations that we should look at.”

Every national association and, for the purpose of local government ethics, state association should be included as an "interested person," because such associations represent members who are interested persons, who do business with state and local governments nationwide. There's no reason why an association would give a benefit to an official if it had not even an indirect interest. If it was simply being charitable, it could have given the money to the government itself (but even that would raises questions). At least it would not put the official in a position where he would have to decide whether to follow the letter or the spirit of the law.

In my opinion, an AG should always follow the spirit of the law when it applies to him. As the top law enforcement official, he or she should always err on the side of caution, and set an example for everyone else. But from the way this AG responded, it does not appear that setting an example is a high priority for him.

Robert Wechsler
Director of Research-Retired, City Ethics

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