Oregon Law Commission Government Ethics Work Group Oregon Law Commission Government Ethics Work Group Summary of Recommended Changes Summary of Recommended Changes to Oregon Government Ethics Laws Presented to the 2007 Oregon Legislative Assembly * Summary reflects Commission’s recommendations through December 20, 2006 meeting

2 Why do we have government ethics laws? Public office is a public trust As a safeguard for that trust, the people require all public officials to adhere to the code of ethics. ORS Note: When Code of Judicial Conduct conflicts with Code of Ethics, Code of Judicial Conduct takes precedence.

3 Overview of Oregon Government Ethics Law Enacted by voters in 1974; substantial revisions recommended for 2007 by Oregon Law Commission Found in ORS Chapter 244 Exceptions: Administrative Rules are in OAR Ch. 199 Lobbying Laws are in ORS Ch. 171 Campaign Finance Laws are in ORS Ch. 260 Laws generally prohibit use of office for financial gain Laws require annual filing of statements of economic interest & quarterly filing of other financial interest reports Laws generally require disclosure of conflicts of interest & disqualification from actions when there is a conflict Laws provide procedure for enforcement of violations of government ethics laws Laws provide sanctions for violations

4 Definitions Public Official ORS (15): Any person serving the State or its political subdivisions or any other public body (e.g. local government) as an ELECTED OFFICIAL, APPOINTED OFFICIAL, EMPLOYEE, AGENT or VOLUNTEER (includes elected, non-elected, paid & unpaid) Legislative or administrative Interest ORS (10): An economic interest distinct from that of the general public that is in a bill, resolution, regulation, proposal or other matter that is subject to the action or vote of the public official acting in their official capacity Relative ORS (16): Spouse, children (including step-children), siblings, spouses of sibling, spouses of step- children, half-siblings, spouses of half-siblings, step parents, domestic partners (parents of domestic partners), parents (including in-laws). Member of Household ORS (12): Any person who resides with the public official (previously only included relatives)

5 FINANCIAL GAIN GENERAL RULE Using or attempting to use position or office to obtain financial gain that would not otherwise be available, but for the position or office, is prohibited ORS (1) Avoidance of financial detriment is also “financial gain” Use of equipment/resources owned by government for personal purposes is prohibited by this provision »Examples: vehicles, tools, equipment, computers, government employee discounts, storage of personal items on government property

6 Nepotism General Rules –A public official may not appoint, employ, or promote, a relative to a position with the public body in which the public official serves (likewise, official may not fire, discharge, of demote) NOTE: A public body may hire a relative of a public official so long as the public official does not participate in the hiring decision –A public official may not directly supervise a relative (a public body may develop its own rules to govern supervision) Exceptions –Legislative Assembly: members may appoint, employ, or promote relatives (this exception acts in conjunction with a recommendation to the Legislative Assembly to establish rules regarding the employment of relatives) –Unpaid Volunteers: public officials may appoint, employ, or promote relatives who act as unpaid volunteers Note: Currently, the GSPC prosecutes nepotism cases as prohibitions against financial gain under ORS The work group adopted a draft specifically dealing with nepotism in order to provide clarity and consistency. The substantive rules remain mostly unchanged.

7 Financial Gain: Subsequent Employment/Contract Gain/Client Representation & Advice No public official shall solicit or receive any pledge or promise of future employment based on an understanding that such public official’s vote, official action or judgment would be influenced thereby No public official shall solicit or receive any pledge or promise of future employment from any person who is involved in a matter in which the official personally and substantially is participating Legislators may not receive money for lobbying for one session after they leave office Public official may not receive any direct beneficial financial interest in a public contract authorized by the public official or governing body of which the public official was a member, for 2 years, unless the public official didn’t participate Public official may not represent a client for a fee before governing body of public body of which public official is a member; may not provide to client for a fee, advice relating to influencing public body served by the official (consulting fee)

8 Subsequent Employment Continued The following persons have further regulations regarding subsequent employment (subsequent lobbying restrictions, restrictions on private employment, subsequent appearance restrictions) ORS  Public Utility Commissioners  Director of DCBS  Administrator of the Div. of Finance & Corporate Securities  Administrator of the Insurance Div.  Administrator of the Oregon Liquor Control Commission  Director of the Oregon State Lottery  Deputy Attorney General & assistant attorney generals  State Treasurer & Chief Deputy State Treasurer  Public officials who have invested public funds as part of their official duties  Dept. of State police persons who have worked with tribal gaming or lottery matters

9 Financial Gain: Confidential Information No public official shall use confidential information gained in the course of the official position to further the personal gain of any person A person who has ceased to be a public official may not use confidential information to further the personal gain of any person

10 Financial Gain Prohibition Exceptions ORS –Official compensation package as determined by the public body (could include cell phone, etc.) –Reimbursement of Expenses –Unsolicited awards for professional achievement or for any business that the official or relative is associated –Honoraria ** –Gifts ** –Legal Expense Trust Fund contributions

11 Financial Gain Exception: Honoraria Public Officials (and relatives or members of official’s household) may NOT receive honoraria (payment for services, including speeches or other services) if the honoraria are solicited or received in connection with the official duties of the public official. Note: Public officials may receive honoraria for services performed in relation to a private profession, occupation, avocation or expertise. Exception:  Certificate, plaque, commemorative token or other item with a value of less than $50

12 Honoraria Current LimitCurrent Reporting Requirements No limits except legislators PO: SEI filers report > $50 Lobbyist/entity: > $73 itemized; aggregate amount 2x: even years 3x: odd years Recommended Limit Recommended Reporting Requirements Prohibits honoraria for PO except de minimis (<$50); Exception for higher education, private profession, occupation, avocation, or expertise: no limits PO: SEI filers report >$15 if money award; quarterly reports Lobbyist/entity: >$15 if money award itemized; aggregate amount; quarterly reports

13 Financial Gain Exception: GIFT Gift: something of economic value given to a public official (or relative or member of the household) without valuable consideration, which is not extended to others who are not public officials General Rule : Public officials may receive gifts from any person except from a person who could reasonably be known to have a legislative or administrative interest in the government entity in which the official holds a position or over which the official exercise any authority. From such latter persons: single gift: $100 and aggregate for year: $250. Gifts to a public official’s relatives and members of household count towards these limits. Note: Each adult public official will have their own gift limit exemption with these dollar limits.

14 GIFT Exceptions “Gift” does NOT include the following: –Campaign contributions ** –Gifts from relatives and members of the household –Food, lodging, travel, and registration fees when participating in an event bearing a relationship to the public official’s office and when the official participates in an official capacity. Participation requires registration or appearing on the agenda of the event as a presenter. ** –Food & beverage, if consumed by the public official (or relatives) in the presence of the purchaser or provider** –Continuing professional education registration fees –Membership dues in professional organizations –Publications for use in public official’s official capacity Note: Entertainment will be treated as gifts subject to value limits. **

15 Use of Candidate and Principal Campaign Contributions New Approach to Campaign Contributions: they are in trust and they are NOT the candidate’s money– but rather the committee’s moneys to use Contributions may be: 1) used to support the nomination or election of the candidate 2) used to purchase campaign treasurer-related insurance 3) used to pay fines imposed by the Secretary of State for campaign finance violations (civil) Contributions may NOT be: 1) used for personal use 2) transferred to any other candidate or political committee 3) used to defray expenses incurred once in office 4) used to pay money awards, judgments or civil penalties except for non-criminal campaign finance violation fines 5) used to pay membership dues unless integrally related to election or duties as public official NOTE: A recommendation to increase Legislative Assembly’s budget to pay for reasonable expenses (staff, computers, paper, travel, mailing, copying, etc.) is tied to recommendation of restrictions on use of campaign contributions

16 Campaign Contributions of Other Political Committees (Not candidate or principal campaign committees) Contributions may not be: 1) converted to any personal use 2) used to defray expenses of a public official 3) used to pay money awards, judgments or civil penalties except for non-criminal campaign finance violation fines 4) used to pay membership dues unless integrally related to election or duties of a public official

17 Leftover Campaign Contributions When candidate or principal campaign committee is discontinued, money only may be distributed to: 1) charitable organization or charitable corporation except religious organizations 2) political committee of any political party (state, or local) 3) caucus political committee 4) Property and Supplies Stores Account of legislature (if committee was for legislator(s))

18 Treasurer for Candidate or Principal Campaign Committee Candidate and principal campaign committees must appoint a treasurer. The treasurer may not be the candidate unless: 1) < $2000 combined contribution and expenditures; OR 2) candidate uses only personal funds to fund campaign

19 Gifts Current LimitCurrent Reporting Requirements $100 max per source per year (covers public officials & relatives) PO: no report Lobbyist/entity: >73 itemized; aggregate amount of gifts 2x: even years; 3x: odd years Recommended Limit Recommended Reporting Requirements $100 value max for gift $250 max per source per year (gifts to public official’s relatives, and members of household count towards limits) PO: SEI filers itemize gifts valued > $15; quarterly reports Lobbyist/entity: itemize >$15; aggregate amount of gifts; quarterly reports; notify PO of value

20 Food, Lodging, Travel Current LimitCurrent Reporting Requirements Unlimited if “participating in an event which bears a relationship to the public official’s office and when appearing in an official capacity” PO: SEI filers report >$148 annually Lobbyist/entity: >$73 itemized; aggregate amount 2x: even years 3x: odd years Recommended LimitRecommended Reporting Requirements Clarified to also clearly cover registration fees of event. Unlimited if public official “participates in official capacity at even that bears a relationship to the public official’s office;” participate means “registered as attending the even or appears on the agenda of the event as a presenter” PO: SEI filers itemize if value >$75; quarterly reports Lobbyist/entity: itemize >$75; aggregate amount; quarterly reports; notify PO of value

21 Food and Beverage Consumed in Presence Current LimitCurrent Reporting Requirements Unlimited for public official and relatives PO: no report Lobbyist/entity: >$73 itemized; aggregate amount 2x: even years 3x: odd years Recommended Limit Recommended Reporting Requirements Unlimited for public official, relatives, and members of household PO: no report Lobbyist/entity: >$75 itemized; aggregate amount; quarterly reports

22 Entertainment Current LimitCurrent Reporting Requirements Must be experienced by public official or public official’s relative in presence of purchaser $100 max per single event; $250 max per source per year PO: no report Lobbyist/entity: >$73 itemized; aggregate amount 2x: even years 3x: odd years Recommended Limit Recommended Reporting Requirements Entertainment is a gift (see gift recommendations) Entertainment is a gift (see gift recommendations)

23 Reporting: Statements of Economic Interest (SEI) * Officials listed in ORS must file a statement of economic interest (all cities and counties now covered) * Annual report must be filed with GSPC on or before April 15 each year (different timelines for candidates) Information required in statement of economic interest (with respect to official and members of household): Listing of positions as officer or director of a business Listing of all names under which the person does business Listing of the 5 largest sources of income received during the preceding calendar year, including address and description (note: percentage of income questions deleted) Listing of names of public official or candidate’s relatives and members of household > 18

24 Reporting: Statements of Economic Interest (SEI) Continued… Listing of all real property located within the geographic boundaries of the governmental entity in which the official has authority Each business, address, and description of nature, in which the official (or household member) has had a personal, beneficial interest, or investment (including stocks & securities) >$1000 if the business has “legislative or administrative interest” in the governmental entity over which the official has authority Debts >$1000 owed to individual or business with “legislative or administrative interest” in the governmental entity over which the official has authority Each person for whom the official has performed services for a fee > $1000 if source has a “legislative or administrative interest” in the governmental entity over which the public official has authority Names of any compensated lobbyists who are associated with a business with which the official (or household member) is associated Note: Treasurer’s office staff has some additional reporting requirements ORS

25 Reporting: Quarterly Reports SEI Filers must also filing a quarterly report with the following information: Listing of name, nature and business address of persons paying food, lodging, travel expenses and registration fees > $75, when official participated in an event bearing a relationship to official’s office and when participating in official capacity Sources of income >$1000 to official (or member of household) if from an individual or business with “legislative or administrative interest” in the governmental entity over which the official has authority Listing of payer & date for any honoraria received by official or member of household that is valued >$15 Gifts itemized with value >$15 Note: May amend all reports for 30 days after filing deadline without sanction.

26 Value of Reportable Items Persons who provide a public official with food, lodging, registration fees or travel should notify public official in writing with the amount of the expenses within 10 days after the expenses were incurred Persons who make a gift to a public official, candidate, or relative (that must be listed in an SEI) should notify the public official, candidate or relative in writing of the value of the gift within 5 days of giving the gift Public officials shall make a good faith estimate of the value of reportable items when the value is not disclosed, i.e. regardless of whether a person failed to provided required written notice of the value

27 Conflicts of Interest Actual Conflict of Interest ORS (1) Any action, decision, or recommendation by a public official in official capacity, the effect of which WOULD be to the private pecuniary gain or detriment of the official, relative, or business of official or relative Potential Conflict of Interest ORS (14) Any action, decision, or recommendation by a public official in official capacity, the effect of which COULD be to the private pecuniary gain or detriment of the official, relative, or business of official or relative Note: there are a couple exceptions regarding memberships, actions affecting a class of persons, etc.

28 Conflict of Interest General Rules Disclosure and disqualification requirements vary depending on the type of public official and the type of conflict (actual or potential) ORS  Members of the Legislative Assembly: Potential Conflict: Must announce pursuant to house rules before taking action (need not disqualify) Actual Conflict: Must announce pursuant to house rules and may not participate in discussion or debate in committee or on floor and may not vote unless allowed by house rules  Judges: Must be removed from case giving rise to the actual or potential conflict of interest or advise parties of the nature of the conflict  Elected public officials and appointed public officials on a board or commission (does not include Legislative Assembly members and Judges) : Potential Conflict: Must announce publicly before taking action (need not disqualify) Actual Conflict: Must announce publicly and refrain from participation, including voting Exception for elected public officials: When public official’s vote is necessary to meet requirement of a minimum number of votes to take official action

29 Conflict of Interest General Rules continued...  All other public officials (not provided for above): Must notify in writing the person who appointed the official to office of the nature of the actual or potential conflict of interest and request the appointing authority to dispose of the matter. The appointing authority shall designate an alternate to dispose of the matter within a reasonable time. (shall disqualify)  General exceptions (applies to all public official except judges): If an actual conflict arises out of membership in a non-profit organization the public official must disclose as required, but may participate in the decision. Ownership of a mutual fund does not create an actual or potential conflict of interest with respect to each stock that is part of the mutual fund.  When a public official gives notice of a conflict, the conflict must be recorded in the official records of the public body ORS

30 Additional Disqualification Rules Disclosure and disqualification requirements vary depending on the type of public official for actions that may be significantly influenced by the following: 1)a financial interest personal to the official, relative or business with which the person is associated 2)an individualized personal bias for or against an identified or identifiable person whom the person knows to be a direct object of the action Members of the Legislative Assembly Must announce the nature of the potential interest or bias and refrain from participation in discussion or debate; may not vote in committee but may vote on the floor Elected Public Official or Appointed Public Official on a Board or Commission Must announce the nature of the potential interest or bias and refrain from participating in discussion or debate; may not vote on the issue unless official’s vote is necessary to meet a requirement of a minimum number of votes to take official action All Other Public Officials Must notify in writing person who appointed/hired official and that person must dispose of the matter

31 Government Standards and Practices Commission (GSPC) 7 members: ORS –3 Governor’s appointments (max of 2 from same major political party) –4 Governor’s appointments with recommendation by the leadership of the Democratic and Republican parties in each house of the Legislative Assembly GSPC Commissioners generally can not hold another public office at the same time 4 year term (can not be renewed unless first term was to fill an unexpired term) Commission elects own chair and vice chair person Quorum of four required; no final decision without a majority of members Commissioners entitled to $30/day & travel expenses ORS

32 GSPC Duties Provides online reporting forms and provides public access to all filed reports Prepares, publishes, updates, and distributes a manual on government ethics explaining requirements of Chapter 244 Prepares and presents a program of continuing education for public officials and lobbyists Conducts accuracy audits on a sample of all reports submitted to the GSPC Enforces ethics laws by addressing complaints and initiating own actions, including necessary investigations Engages in necessary and required rulemaking Provides advisory opinions

33 GSPC Rulemaking & Opinion Authority Rulemaking: The GSPC has broad rulemaking authority for Chapter 244 (regarding ethics laws for public officials) and Chapter 171 (regarding ethics laws for lobbyists to adopt rules necessary to carry our its duties. ORS Annual rulemaking on reoccurring topics and topics of broad interest. State agencies and state-wide organizations may also submit policies for review and approval. If approved by the GSPC, GSPC may not sanction. Written Commission Advisory Opinions Issued by GSPC upon approval of a majority of GSPC Commissioners Can be issued upon written request or upon the GSPC’s own motion Commission shall respond to written requests generally within 60 days (extension available for additional 60 days) Opinion may be based on real or hypothetical facts or circumstances Advisory opinions have precedential effect (no liability for action or transaction carried out according to opinion) Written Staff Advisory Opinions Issued by Executive Director Can be issued upon the written request of any person Executive Director shall respond to written requests generally within 30 days Written staff advisory opinions shall be designated as such Commission or a court shall consider whether actions that may be subject to ethics law penalties were taken in reliance on a staff advisory opinion Opinion may be based on real or hypothetical facts or circumstances Staff Advice Issued by Executive Director Can be issued upon written or oral request of any person Commission or court may consider reliance on staff advice before issuing any penalty

34 GSPC Enforcement Process When deciding whether to proceed, GSPC must consider public interest and prior and likely future sanctions Note: Recommend moving investigative function away from GSPC and placing with Office of Controller if such office is created. Preliminary Review Phase (confidential) Unless stipulated by GSPC and public official, or there is a criminal investigation pending, or there is a court order, this phase shall not exceed 135 days. ORS Exception to 135 days: When complaint is filed against candidate for elected office and the election is within 61 days (candidate can choose to proceed or delay proceeding until after the election) STEPS: 1.Signed complaint or GSPC instigated action (followed by GSPC motion) 2.Notice to public official of action 3.Commission meetings as necessary 4.GSPC may seek, solicit, and obtain information, administer oaths and take depositions necessary to determine whether there is cause 5.Executive Director shall prepare a statement of facts determined during the phase, including legal citations and relevant authority (reviewed by legal counsel to the GSPC) and present statement to GSPC 6.GSPC conducts deliberations in executive session 7.At the conclusion of the preliminary review phase, the GSPC can: dismiss complaint or rescind GSPC’s own motion or find cause to investigate Note: GSPC shall not inquire or investigate any complaint or action that occurred more than 4 years ago (Statute of Limitations)

35 Investigatory Phase ORS Phase is open to the public. (Note: Unless stipulated by GSPC and public official, or there is a criminal investigation pending, or there is a court order, this phase shall not exceed 180 days (from finding of cause to beginning of any contested case proceeding))  GSPC may require additional information, administer oaths, take depositions, and issue subpoenas to compel attendance of witnesses and production of information during investigatory phase  At the close of the Investigatory Phase, GSPC may take an order to:  Dismiss (with or without comment)  Continue investigation (not to exceed 30 days)  Move to a contested case proceeding (GSPC determines information is sufficient to make a preliminary finding of violation of a statute(s) within GSPC’s jurisdiction) or the GSPC may refile the case in Marion County Circuit Court  Seek a negotiated settlement (stipulated final order)  Report findings of any inquiry or investigation to public official, appointing authority (if applicable), the Attorney General (if state official), the district attorney (if local official), the Commission on Judicial Fitness and Disability (if judge)  Take other appropriate action  If there is a contested case proceeding, hearings related to charge of violations must be held before an administrative law judge (procedure for a contested case under APA). If GSPC does not delegate final order authority to the ALJ, the public official may opt to require the GSPC to refile in Marion County Circuit Court.

36 Legal Counsel Issues Attorney General’s office represents GSPC ORS (7) –Exception: GSPC may retain legal counsel if inappropriate and contrary to the public interest for AG to represent because of a conflict of interest The Attorney General shall NOT represent any state public official before the GSPC ORS (8) Public official who prevails in a contested case hearing shall be awarded reasonable attorney fees Public official may establish a legal expense trust fund on the official’s behalf to accept contributions for legal expenses (exception to financial gain rule) to defend certain matters brought by the government

37 Sanctions for Government Ethics Violations Civil penalty ORS Letter of reprimand up to $5000 maximum penalty Note: Recommendation that GSPC also adopt rules regarding appropriate fines, providing guidance akin to a matrix Up to $25,000 for subsequent employment violations listed in ORS Forfeiture ORS In addition to civil penalty, forfeit twice the amount of any financial benefit realized from ethics violation

38 Sanctions Continued... Failure to file statement of economic interest: ORS and –$10 each day late for the first 14 days, $50 each day late thereafter, $5000 max –Salary withheld –Barred from exercise of official duties –Candidates– removed from ballot or refusal to issue certificate of nomination or election Criminal: Finding of false swearing of statement of economic interest is a Class A misdemeanor Finding of violation by GSPC constitutes prima facie evidence of unfitness where removal is authorized by other law GSPC must notify a public body where a public official serves if the public official is found to violate the ethics laws

39 Other Remedies No decision or action of a public official, board or commission on which the official serves or agency by which the official is employed, shall be voided by any court solely by reason of failure of the official to disclose an actual or potential conflict of interest ORS If a public official acted when disqualified to do so, the act remains valid if: the government body reaffirms the act or decision or the official’s act was solely a vote in a collective decision and the vote was unnecessary for the decision or the act was permitted by the rule of necessity

40 GSPC Funding Recommends that the Legislative Assembly adequately fund the underfunded GSPC See example listing the needs of the GSPC, represented by an estimated need of approximately 6 FTEs See Non-Statutory recommendations that recommend funding for a trainer, an online searchable database (with opinions, SEIs, lobbyist reports), and online filing of reports Establish a separate Fund (from General Fund dollars) to fund the GSPC and make continuous appropriations to the GSPC. Provide funding for a publicly accessible and searchable online database for GSPC opinions, GSPC staff opinions, educational sources, SEIs, lobbyist/lobbyist entity reports Provide funding for a full-time trainer

41 Lobbyist Regulations  GSPC has jurisdiction only over lobbyists who lobby legislative or executive officials regarding a legislative matter  Lobbyist laws found in ORS Ch. 171 & OAR Ch. 199  Lobbyists must register with the GSPC for each group or organization they represent (clarification of 24 hour and $100 rules) List of those exempted from registering as a lobbyist expanded to include deputy chief of staff and legal counsel for the Governor; chief of staff to the Treasurer; and Oregon Law Commissioners and staff  Lobbyists must file quarterly expense statements with the GSPC, reporting:  Total amount of moneys expended for the purpose of lobbying for food, refreshments, and entertainment  Itemized information for any expenditure made for the purpose of lobbying in excess of $75  Itemized information on gifts exceeding $15 given for the purpose of lobbying  Entities that employ lobbyists must file quarterly expense statements with the GSPC, reporting:  Payments made to individual lobbyists or lobbying firms and direct expenditures and reimbursements (itemized by lobbyist or lobbying entity, if there are multiple lobbyists or lobbying entities)  Itemized information for any expenditure made for the purpose of lobbying in excess of $75  Itemized information on gifts exceeding $15 given for the purpose of lobbying  Must provide timely notice to public official or candidate of value of certain items  Lobbyists prohibited conduct rules found at ORS  Available sanctions: civil sanction with a maximum of $5000, notice to Legislative Assembly; late filing fines of $10 per day and then $50 per day after 14 days

Oregon Law Commission Government Ethics Work Group Recommendations Overview THEEND