The Public Official’s Quick and Clean Guide to Gift Rules and Regulations
By Ruben Duran, The Ethics Advisor
As a public official in California, whether elected or appointed, volunteer or employee, you need to be aware of the rules regarding your receipt and reporting of gifts, as well as the traps for the unwary that can lead to trouble. There are things to do to avoid being the subject of headlines we see from time-to-time that decry the “floor seats at the playoff game” or the “lavish meals and entertainment” that some public officials receive in California.
So, here are the top ten pointers to remember when it comes to receiving and accepting gifts:
10 – It’s not illegal to accept (most) gifts in California. As long as you comply with the reporting requirements, keep within the limits and avoid prohibited gifts, you can stay within the bounds of the law. Of course, just because you can accept a gift does not necessarily mean you should. The decision whether to accept a gift is a personal one that each public official must make in light of their own circumstances, any special local policies or rules and the expectations and standards of your constituents.
9. A gift can be almost anything. It doesn’t have to be a present tied with a bow. In fact, it usually isn’t. The legal definition of a gift is broad and will encompass essentially anything you get (whether products, services, loans, meals, etc.) for which you don’t pay market value. Watch out for: “free advice” from consultants or professionals and tickets or passes to events or entertainment (like concerts, golf or the spa).
8. A reportable gift can come from almost anyone. With exceptions for gifts received from family members and your public agency, anyone, whether an individual or a company, can give you a gift that might be reportable, or, depending on the value, prohibited. The trigger is if the source of the gift is someone whom you are required to identify on your Statement of Economic Interests (Form 700).
7. A gift to a member of your family can be a gift to you. This includes gifts to your spouse, dependent minor child and dependent adult child between the ages of 18 and 23 where certain, specific criteria are met. The FPPC regulation governing this scenario is very detailed and should be consulted if there is any question about whether a gift to a family member should be reported.
6. 50, 700, and 460 … the numbers matter. Gifts (whether a single gift or an accumulation of gifts over the applicable reporting period, typically a calendar year) of $50 or more must be reported on your Form 700 along with the name of the source of the gift. Additionally, the limit on gifts from a single source in a reporting year is $460 until December 31, 2016, when the FPPC will again make its biennial adjustment to that limit. In other words, it is generally illegal to accepts gifts valued (whether individually or cumulatively) over $460, and, if you do accepts such gifts, you are required to recuse yourself from voting on any item affecting the source of the gift, and disclose the reason for the recusal at the time of the vote.
5. Special rules apply to travel and lodging. This is one of the most complex areas of the law. Generally, transportation, lodging and meals paid for by your public agency when you are conducting official agency business are not considered gifts or income and are thus not reportable on your Form 700. Travel and lodging paid by third parties, however, might be considered either gifts or income depending on the circumstances, but are generally not subject to the $460 limitation. Again, this can be a tricky rule to interpret, but the FPPC regulations do offer guidance.
4. Gifts of tickets and passes to agencies are treated differently. If an individual or an entity gives tickets or passes to your agency for distribution by the agency (usually by the city manager, superintendent or other executive) and for public purposes, the value of such gifts are not reportable by you on your Form 700. Instead, the agency must report and file either a Form 801 or a Form 802 and make those reports available on its website.
3. Never condition a vote or official government action on receiving a gift. It is illegal to offer to vote for or against an agenda item, or to take or refrain from taking any governmental action (including influencing staff and other elected officials) in exchange for receiving a gift.
2. There are many exceptions built into the rules. For better or worse, the regulations governing gifts and reporting can be complex and confusing. But, they are written with an eye toward the realities of everyday life. For example, if you regularly engage in “reciprocal exchanges” with people (taking turns picking up the check at meals, for example) where the value of such exchanges over time is more-or-less equal, those amounts are exempt from reporting. Other common-sense examples include the exception for gifts that are returned to the donor within 30 days without being used; cash inheritances; gifts from family members as long as the family member is not acting as a conduit for another person in giving the gift; and disaster relief provided by a nonprofit.
And, the No. 1 thing to remember … 1. You’re not in this alone. Use the many resources available to you to ensure your receipt, acceptance, rejection (if necessary) and reporting of gifts is legal and accurate. Your local agency counsel is a good first resource to think about, but there are other tools you can use. For example, the Institute for Local Government has many resources available on its website with a few clicks. Conferences and workshops are offered at various times throughout the year. The League of California Cities, for example, will present a workshop on completing your Form 700 at its annual conference in San José Sept. 30 through Oct. 2.
About our blogger: Ruben Duran is a partner in Best Best & Krieger LLP’s Los Angeles office. He has counseled elected officials for nearly 17 years and offers training throughout California on good governance and ethics. A former city attorney, he is a regular speaker for the California Institute for Local Government and serves as the general counsel to the Oxnard Harbor District, which owns and operates the commercial Port of Hueneme.