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VIRGINIA’S CONFLICT OF VIRGINIA’S CONFLICT OF INTEREST AND ETHICS LAWSINTEREST AND ETHICS LAWS

VIRGINIA SHERIFF’S ASSOCIATION

New Sheriff’s Orientation Program

December 2, 2015

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IMPORTANT NOTE

The contents of this presentation are intended for general information only and should not be construed or relied upon as legal advice nor as a legal opinion on any specific facts or circumstances.

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General ThemesGeneral Themes

• The Sheriff is a public official – always on duty.

• Any funds Sheriff handles carry the presumption they are public funds.

• Any money coming into Sheriff’s custody, other than paycheck or personal funds = assumption Sheriff is fiduciary custodian and holding for someone else.

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General ThemesGeneral Themes

• Ignorance of the law is no defense – especially for government officials.

• The cover-up is almost always worse than the original problem.

• If it doesn’t seem right or feel right – don’t do it!

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ETHICS REFORM ETHICS REFORM LEGISLATIONLEGISLATION

• Several national surveys prior to 2014 Session of the General Assembly gave Virginia an “F” rating on ethics.

• Historically relied on “transparency and disclosure.” – Each elected official is required to file an annual

disclosure statement – accessible by public.

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ETHICS REFORM ETHICS REFORM LEGISLATIONLEGISLATION

• Heightened scrutiny for all those subject to disclosure requirements under the Conflict of Interest Acts.

• Reform legislation passed this year made substantive changes to 2014 legislation.

• Effective date of January 1, 2016.

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ETHICS ADVISORY ETHICS ADVISORY COUNCILCOUNCIL

On November 1, 2015, the Virginia Conflict of Interest and Ethics Advisory Council (Council) assumed responsibilities concerning the State and Local Conflict of Interests Act

Statements of Economic Interest and Financial Disclosure forms will be submitted through their website: http://ethics.dls.virginia.gov/

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ETHICS ADVISORY ETHICS ADVISORY COUNCILCOUNCIL

• Executive Director:– Chris Piper– [email protected]

• Staff Attorney:– Rebekah Stefanski

[email protected]

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2015 Changes2015 ChangesTOPIC CURRENT LAW NEW LAW

Gifts May not solicit, accept, or receive a single gift or combination of gifts with an aggregate value in excess of $250 from certain persons or entities.

Cap applies only to tangible gifts.

No cap for intangible gifts.

Aggregate cap of $100 for soliciting, accepting, or receiving gifts from certain persons or entities.

“Tangible” vs. “Intangible” distinction removed

De Minimus gifts (less than $20) do NOT count toward aggregate cap (i.e. could give $19 for 365 days – DO NOT RECOMMEND!!)

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2015 Changes2015 Changes

TOPIC CURRENT LAW NEW LAW

Gifts (cont’d) May not solicit, accept, or receive a single gift or combination of gifts with an aggregate value in excess of $250 from certain persons or entities.

Cap applies only to tangible gifts.

No cap for intangible gifts.

Exceptions:

Food & beverages at widely attended event

Travel approved by Council

Gifts from personal friends

Gifts from foreign dignitaries

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TOPIC CURRENT LAW NEW LAW

“Personal Friend”

(Johnny Williams Loophole)

A person, organization, or business who is a party to or is seeking to become a party to a contract with the Commonwealth cannot be included in the definition of personal friend for legislators.

Legislator cannot solicit, accept, or receive gifts from such a person in excess of gift cap

No change

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Widely Attended Event

“Super Bowl Fix”

No definition Modeled after Congressional rules:

Event where 25 persons have been invited to attend or there is a reasonable expectation that at least 25 persons will attend the event and the event is open to individuals (i) who share a common interest, (ii) who are members of a public, civic, charitable, or professional organization, (iii) who are from a particular industry or profession, or (iv) who represent persons interested in a particular issue.

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Widely Attended Event - Gifts

No definition Adds entertainment and cost of admission to what a person may accept at a Widely Attended Event in excess of the Gift limit

Requires – gifts received must be associated with the event (i.e. CANT HAND OUT MONEY!)

Counts against gift cap

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Travel Disclosure No definition Excludes 4 types of travel from “gift” (no approval required)

Disclosed pursuant to Campaign Finance Disclosure Act

Provided to facilitate legislator’s attendance at Session, committee or commission, or national conf. approved by Rules Comm.

Related to official meeting of commission, etc. to which person appointed or elected or member via employment

Paid for by U.S., any state, or any political subdivision of a state

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Ethics Council 15 Member Council

Staffing through Division of Legislative Services (DLS)

4 year staggered terms

9 Member Council

Same

Same

Former judges may now be considered

DLS employs Executive Director

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Ethics Council - Duties

Review filed forms for completeness

Compare disclosures contained in lobbyist filings

Request amendments to ensure completeness or correct errors as needed

Council requests to complete forms made in writing and prescribe time to file completed form

Issue formal opinions and informal advice

Accept and review any statement received from a filer disputing the receipt by such filer of a gift that has been disclosed on the form filed by

a lobbyist

Review requests for approval for gifts and other “things” with value over $100

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Local Filing File disclosure forms with Council beginning with the December 15, 2015 filing

Prior to this date, filings made with local clerk of governing body or school board

Ensures local officers and employees DO NOT have to file December 15, 2015 filing with Council

Necessary amendment due to delayed effective date of Act(time permitted for Council to get up to speed on Act and e-filing)

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Local Filing (Cont’d) File disclosure forms with Council beginning with the December 15, 2015 filing

Prior to this date, filings made with local clerk of governing body or school board

Beginning July 1, 2016, Council will post disclosure forms to searchable public database maintained on Council’s official website

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HOW DOES THIS EFFECT HOW DOES THIS EFFECT SHERIFFS?SHERIFFS?

• 2 Acts governing “conflict of interest”• Only 1 applicable here – State and Local

Government Conflict of Interest Act: – Applies to all state and local government officers and

employees except members of the General Assembly.– Constitutional Officers (Sheriffs) = Local Officers under the

Act.– 2014 and 2015 changes apply. See Va. Code § 2.2-3116

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CONFLICT OF INTERESTS CONFLICT OF INTERESTS The BasicsThe Basics

• Act covers actual conflicts – not appearances of conflict.

• Puts the burden on official to analyze each contemplated action.

• Covers: – “generally prohibited and unlawful conduct”– “personal interests in a contract”– “personal interests in a transaction”

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CONFLICT OF INTERESTSCONFLICT OF INTERESTS

• Prohibited and Unlawful Conduct includes:– Extortion– Bribery– Insider trading – Anti-honoraria– Anti-gift– Anti-revolving door

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• Personal Interest in a Contract:– Interest in a contract with a governmental agency,

whether due to his being a party to the contract or due to a personal interest in a business that is a party to the contract.

– Applies to official and immediate family.• Immediate family means a spouse and any PERSON

who lives at home and who is a dependent of the official.

– Certain exceptions enumerated in Va. Code.

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• Personal Interest in a Transaction:– Generally, “personal interest in a transaction” applies to a

personal interest of official or immediate family in any matter considered by his agency.

– Applies to property or business which is the subject of a transaction before the agency, OR

– Which may realize direct or indirect benefit or detriment as a result of agency action.

– If so – disqualify, no closed meetings, no discussions.

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STATEMENT OF ECONOMIC STATEMENT OF ECONOMIC INTERESTINTEREST

• Annual disclosure– Semi-annual eff. December 15, 2015 (June 15 and

December 15 filing dates thereafter)

• “Best knowledge, information and belief” at time of filing.

• Notarization standard removed by 2012 changes.

• Has effect of law – codified in §2.2-3117.

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• Selected Categories:• Personal Liabilities (Schedule B)

– Report Debts in excess of $5,000in excess of $5,000– 2014 Reform – threshold decreased from $10,000– Remember to include debts of immediate family

members as well.

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• Selected Categories:• Securities (Schedule C)

– Report securities in excess of $5,000in excess of $5,000– 2014 Reform – threshold decreased from $10,000– Looks at aggregateaggregate of officer andand immediate family

members.

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• Selected Categories:• Payments for Talks, Meetings, Publications

(Schedule D)– Officer only.– Lodging, transportation, money, or any other thing

of value with combined value of $100. • For single talk or presentation, or • Attendance at educational meeting • Official capacity

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GIFTSGIFTS

• WHEN ANALYZING ASK:– 1. Is it a Gift?– 2. Does it count against the gift cap?– 3. Do I need to disclose (answer – almost

always yes)

• Analyze each question separately and in the proper sequence

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GIFTSGIFTS

• Does NOTNOT include:• 1. Printed informational or promotional material;

• 2. A gift that is not used and, no later than 60 days after receipt, is returned to the donor or delivered to a charitable organization and is not claimed as a charitable contribution for federal income tax purposes;

• 3. A gift of a value of $50 or less;

• 4. Any offer of a ticket, coupon, or other admission or pass unless the ticket, coupon, admission, or pass is used;

• 5. Any food or beverages provided to an individual at an event at which the individual is performing official duties related to his public service;

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GIFTSGIFTS

• Does NOTNOT include:• 6. Any food and beverages received at or registration or attendance

fees waived for any event at which the individual is a featured speaker, presenter, or lecturer;

• 7. An unsolicited award of appreciation or recognition in the form of a plaque, trophy, wall memento, or similar item that is given in recognition of public, civic, charitable, or professional service;

• 8. Any gift from an individual's spouse, child, uncle, aunt, niece, nephew, or first cousin; a person to whom the donee is engaged to be married; the donee's or his spouse's parent, grandparent, grandchild, brother, sister, step-parent, step-grandparent, step-grandchild, step-brother, or step-sister; or the donee's brother's or sister's spouse;

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GIFTSGIFTS

• Does NOTNOT include:• 9. Travel provided to facilitate attendance by a legislator at a regular or

special session of the General Assembly, a meeting of a legislative committee or commission, or a national conference where attendance is approved by the House or Senate Committee on Rules; or

• 10. Travel related to an official meeting of the Commonwealth, its political subdivisions, or any board, commission, authority, or other entity, or any charitable organization established pursuant to § 501(c)(3) of the Internal Revenue Code affiliated with such entity, to which such person has been appointed or elected or is a member by virtue of his office or employment.

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GIFTSGIFTS

• Must list each source over past 12 months:– Any one gift w/ value exceeding $50– Entertainment at single event where avg. value

per person is $50– Gifts, etc. w/ aggregate of more than $50

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GIFTSGIFTS

• § 2.2-3116. Disclosure by certain constitutional officers.– “These officers shall be subject to the prohibition

on certain gifts set forth in subsection B of § 2.2-3103.1.

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GIFTSGIFTS

• Check local laws - • The governing body of a locality “may adopt an

ordinance setting a monetary limit on the acceptance of any gift by” its officials “and requiring the disclosure by such … [officials] of the receipt of any gift.” § 2.2-3104.2.

• Such an ordinance supplements but does not supersede the provisions of the State and Local Government Conflict of Interests Act. § 2.2-3100.

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• Penalty for Non-Compliance:– Untimely filing = civil penalty of $250

• Council notifies Attorney General, who collects penalty

– Any person who knowingly and intentionally makes a false statement of a material fact on the Statement of Economic Interests

• Guilty of a Class 5 felony • Civil penalty in amount equal to money/thing received (money/thing

forfeited)

– Any person who knowingly files the form inaccurately may also be dismissed from office or employment

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• Penalty for Non-Compliance:– Negligent violations –

• Recision of contract involved• Forfeiture of any gain realized by official

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BRIBERYBRIBERY

• Violations of § 2.2-3100, et seq. do not preclude prosecution for violation of criminal laws, including bribery.

• Do not constitute defense to any such prosecution.

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BRIBERYBRIBERY

– Va. Code § 18.2-447 – Generally, offering:

• a benefit as consideration for or to obtain or influence the recipient's decision, opinion, recommendation, vote or other exercise of discretion as a public servant or party official.

– Bribery is commonly understood to be a quid pro quid pro quoquo for favorable treatment.

• Gift / gratuity violation does not require a formal “this for that” understanding.

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BRIBERYBRIBERY

– Criminal – Class 4 Felony – Max. imprisonment 2-10 years; max. fine

$100,000

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CAUTIONARY TALESCAUTIONARY TALES

• Sheriff convicted of 2 felony counts of bribery: – Misappropriated more than $20,000 in

asset forfeiture funds.– Used funds to bribe police officers.– Voted out of office.

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CAUTIONARY TALESCAUTIONARY TALES

• Sheriff’s Office Sergeant indicted on Federal conspiracy and bribery charges: – Accepted cash payments from bondsman on

weekly basis.– Made false statements.– Accepted gift card in exchange for assisting on

bond release.

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MOVING FORWARDMOVING FORWARD

• CANNOT legislate honesty, integrity, and morality.

• Ultimately it comes down to the personal standards of the individual.

• Will always be abhorrent behavior that violates standards.

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FINAL THOUGHTSFINAL THOUGHTS

• Don’t get too comfortable.• Conduct detailed review of disclosure forms

moving forward: – ensure compliance with new important definitions

and thresholds for disclosure.

• Disclose, disclose, disclose and it will almost be a complete inoculation.

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KAUFMAN & CANOLESChristopher T. Page

757.259.3847

[email protected]

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