Senate Bill 671, the controversial measure that would allow state officials and employees to solicit or accept gifts of tickets to charitable fundraising events was re-referred this week to the House Judiciary Committee, allowing it to stay alive for the time being. The bill originally had a double referral to JUD and Legislative Management, which required meeting an internal deadline for approval by the first committee and referral to the second. Now that it has a single referral to Judiciary, the committee only has to meet the April 8 Second Decking deadline.
My own view is that there are several principal problems with the exemption for nonprofit fundraising events proposed House draft of SB 671.
1. It allows solicitation of gifts. Many codes are restricted to unsolicited gifts.
2. The donor does not have to be the sponsor of the charitable event. Most codes with similar exemptions require the gift to come directly from the charitable sponsor of the fundraising event.
3. It defines “charitable entity” to include nonprofit advocacy groups in addition to charitable 501(c)(3) organizations under the federal tax code. This extends the exemption to many organizations for which lobbying is a central purpose. That isn’t necessarily a bad thing. Should Common Cause, the ACLU, or the Grassroot Institute be able to invite legislators to their events? Is there a public purpose involved? I happen to think so, and would extend that to other political events as well. But it’s an issue that needs further discussion and debate.
4. It fails to limit the type of charitable fundraising events that could be attended, or to explicitly require a “public purpose”. Federal rules, for example, allow an elected official to attend a reception or dinner where there is an opportunity to interact with constituents, which is considered a public purpose, but would not allow acceptance of tickets to a football game where the benefit would be enjoyed only by the recipient.
5. The bill fails to distinguish between legislators and other state employees. In my opinion, a legislator’s job entails much more public accessibility that can be seen as justifying participation in community events. The right to petition public officials implies the right to interact with them directly.
6. Even with all of the above, a dollar limit on the value of a gift, and aggregate value of all gifts from a single source, would be desirable. A “bright line” value for acceptable gifts, whether $25 or some other amount, should also be considered, keeping in mind that the $25 guideline used by the State Ethics Commission for “tokens of Aloha” would be far higher today if indexed for inflation.
7. Finallly, annual disclosure is insufficient to provide a realistic check on abuses of any gift law.
But even if these problems are resolved, it would be a mistake to rush such an amendment due to the complex interactions between different parts of the ethics law.
In any case, here are some additional resources for those interested in digging further into the problem of crafting a clear and more easily enforceable policy regarding solicitation or acceptance of gifts by public officials.
The National Conference of State Legislatures has a variety of available material on ethics issues, including a table summarizing gift laws in the 50 states.
It is not uncommon to find exemptions for gifts of tickets to charitable events like that contained in SB 671, but typically these must come directly from the charitable entity and not from any third party. The logic here is likely that there are relatively strict IRS guidelines limiting lobbying by 501(c)(3) charitable organizations which limit the risk of allowing such gifts.
This brief comparison appeared in a 2002 NCSL briefing paper:
Three Common Types of Gift Restrictions.
States agree that giving and receiving gifts is prohibited if they influence official action. From that point on states differ in the details. Gift restriction statutes generally can be grouped into three categories: zero tolerance laws, bright line test laws, and states using disclosure and discernment instead of restrictions.
Zero Tolerance Laws.
Massachusetts, Wisconsin, and South Carolina are considered “no cup of coffee states.” In these states, a lobbyist cannot give a legislator anything, including a cup of coffee. Wisconsin was the first state to adopt a zero tolerance rule. Enacted in the 1950s, Wisconsin prohibits all gifts to legislators unless also provided to the general public. All three states allow gifts from non-lobbyists under certain circumstances.About a quarter of states restrict gifts of any monetary value, but with exceptions such as food and beverages, which take them out of the strict no-cup-of-coffee category. Minnesota comes close to being a no-cup-of-coffee state, the only exception being food and beverages at an event where a legislator gives a speech and or answers questions.
Bright Line Test Laws.
The largest number of states, almost half, specifies a monetary limit on gifts to legislators. These states employ a “bright line test,” and allow gifts up to a statute-established level. Iowa, otherwise a zero tolerance state, creates a bright line exemption of $3 a day limit for gifts and food and beverages. In Texas, the line is drawn at $500. The remaining states lie somewhere in between these limits.Disclosure Laws.
Some states focus on disclosure instead of restrictions. Mississippi and Alabama are examples of “report everything” states. Lobbyists can give most anything of value, but it must be reported. Such reporting can affect behavior. In Kentucky, a zero tolerance state, a lobbyist may spend $100 per year for food and beverages for legislators and the amount spent and name of the legislator is reported. Because of legislators’ reluctance to accept food and beverages, in 2001, lobbyists reported spending only $25 for food and beverages for legislators.
CityEthics.org has a model municipal ethics code that includes a section on gifts. There’s also an excellent list of links to other ethics resources available online.
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What about disclosure of employment earning sources, as with the current Nestor Garcia scandal? Nestor Garcia has $60,000 part-time job funded mostly by rail supporters.
OK, maybe it’s a bit simplistic but the zero tolerance, “no cup of coffee” approach works just fine for me. Everything else is subject to weasel wording and we’ve had enough of that demonstrated already. YMMV.
If I get the chance to make a recommendation, Ian, or draft accordingly, I’m using this as my crib sheet!
One can only hope that pigs really do fly.
Even with theses suggestions, however, I am still bothered by the lack of a level playing field. Jane and John Q. Public can’t generally afford to send $25 gifts to multiple legislators, multiple times during session or the balance of the year. Of course, we now know that money is speech but it’s more than that: it’s volume and repetition and most people can’t be heard often enough or speak loudly enough to compete with the speech of deep pocket interests.
So, better, but not best. Practical, but not ideal.
Isn’t anyone bothered by the broad definition of charitable entity in the proposed HD1?
“Charitable entity” means an entity that has received recognition of tax exempt status under section 501(c) of the Internal Revenue Code or recognition as a nonprofit corporation under chapter 414D.
They’ve left off the numeral 3 and now it includes everything in 501(c), and it’s lots broader than what most people think of as a charity. Also, no specification of whether the Hawaii nonprofit corporation needs to be domestic. HRS 414D includes foreign and domestic.
Thanks for the NCSL link to the summary of state laws, Ian. I do think this law needs to be revisited and reasonably modernized. When I look at some of the states, I see some reasonable (I’ll just keep saying ‘reasonable’ until it resonates) approaches across the states (I also see things that make me go WOW!) But I just cant understand why it seems we are reinventing the wheel as we go about this.
All that said, it might work in favor of legislators try to heed the current law, as written and now interpreted, lets say for a year? A sort-of pilot project on themselves of what it feels like to diet and cleanse themselves of all things even remotely ethically questionable? With that perspective and perhaps even actual data collected of what they can or cant live without or what the impact is or is not to their involvement in community engagements, then hopefully they can better piece together a ‘reasonable’ update to the law with a more solid base to argue from than their seemingly current ‘because we want our freebies’ position.
Maybe, just maybe, this could also turn into the larger public discussion of how these legislators really are no longer ‘part-time’, and should be acknowledged and compensated appropriately to, in fact, be able to afford the broad spectrum of events that they are so often invited to participate in throughout the year. Ive long thought all the griping about their measly salary increase has been very silly. Personally, I got no problem upping their salaries across the board to even $65-$70K, especially if they in turn are willing to pay for their own tickets to these events. But these poor guys and gals, this is a hard discussion to have with a very hardened and skeptical public, isnt it? Just look at how all the bloggers have jumped on their okoles as they merely attempt to work through this. I just think some sort of actual data sure would help them out here. I hear a ‘Be it Resolved that the Legislature shall…” for legislative management committees in what Im suggesting.
BTW, I thought this line in our own Gifts exceptions is pretty funny, per the NCSL site:
“Gifts from a spouse, fiancé, fiancée, any relative within four degrees of consanguinity or the spouse, fiancé, or fiancée of such a relative. A gift from any such person is a reportable gift if the person is acting as an agent or intermediary for any person not covered by this paragraph”
Four degrees? So its Ok to take gifts from your mothers cousin’s auntie-in-law hanai kid from your uncle’s cousin. Or something like that? So Hawaii!!
Ian, you might want to address how the Nestor Garcia scandal is being suppressed by Hawaii’s news monopoly, whereas it is getting a full hearing in the alternative press. It’s not just an issue of ethics and maintaining journalistic integrity in the face of the status quo. There is also the issue of how the press is evolving. Is the alternative press, like this website, eventually going to become more popular among the educated part of the public as a result of constricted coverage in the mainstream media? What will be the effect of technological and generational change, as electronic media become more available and cheaper for all and as the older generation make way for the new.