Gift Rules for Elected Officials and Government Employees

December 13, 2022  |  By: Avi D. Kelin, Esq.

Secret Santa, Pass the Parcel, White Elephant, Mystery Maccabee—whatever you call it, this is the season of gift giving. But private individuals, businesses, and elected officials need to think carefully before providing or accepting any gifts or other things of value this holiday season. New Jersey’s gift-and-ethics rules can restrict even such innocuous seeming items as gift baskets, meals, or entertainment—providing anything of value to an elected official or government employee can have important legal and compliance implications.

New Jersey is home to overlapping gift-and-ethics rules

Like other areas of the law, applicable law and the specific restrictions in New Jersey depends on the jurisdiction. There are separate gift-and-ethics rules depending on whether the recipient is an official or employee in the Executive Branch (with some positions covered by Executive Order), the Legislative Branch, the local level, or at public schools. Moreover, while the Local Government Ethics Law governs most county and municipal officials and employees, many municipalities have adopted their own local codes of ethics that are generally more stringent than the statewide statute. There are also special requirements for registered lobbyists in New Jersey.

These overlapping laws can create a confusing morass even for those who want to comply with the law.

It is therefore important to first understand who the potential recipient of a gift is, and what rules apply.

Case Study: Gift to municipal candidate

As mentioned above, many municipalities in New Jersey have adopted a local code of ethics, which vary in the stringency of their restrictions. Some municipalities have adopted a zero-tolerance policy on gifts to government employees and officials and, in those jurisdictions, the rule is simple—nothing of value may be provided to the government employee or official.

However, in the absence of a local code of ethics, the New Jersey Local Government Ethics Law sets forth gift rules for municipal employees and officials. The Local Government Ethics Law provides more flexibility than these zero-tolerance jurisdictions, but that also means that the legal analysis is necessarily more nuanced.

Under the Local Government Ethics Law, no “gift, favor, loan, political contribution, service, promise of future employment, or other thing of value” may be provided to a local government officer or employee if the gift was given “for the purpose of influencing him, directly or indirectly, in the discharge of his official duties.” A related provision of the law prohibits any local government officer or employee from acting in an official capacity in a scenario that “might reasonably be expected to impair his objectivity or independence of judgment.”

It is clear that buying a new luxury car for a mayor that just took official action to approve a real-estate development in town would be a scenario in which a reasonable observer would conclude that the mayor’s objectivity has been impaired. On the other end of the extreme, inviting a sibling to Thanksgiving dinner, when that sibling happens to be a School Board member in another county, would not cause a reasonable observer to conclude that anything untoward has happened. The tricky cases are the ones in the middle, where reasonable people can disagree. In those situations, the complete facts and circumstances will be crucial and guidance from an attorney or ethics liaison should be sought when necessary.

Last, even where a gift is permitted under the Local Government Ethics Law, there is a requirement to disclose any gift having an aggregate value exceeding $400 from a single source, excluding relatives. Different disclosure thresholds may apply depending on the recipient and whether a local code of ethics applies. We have advised clients to ensure that, before any gift worth more than $400 is given, both the giver and the recipient of a gift would be comfortable with a public disclosure.

Compliance Tip: The obligation for compliance falls on the elected official or employee, not the giver of the gift. Individuals who hold relationships with government officials generally do not want to cause a violation of the law, but ultimately it is the recipient’s responsibility to ensure that the gift can be received without violating any statute, regulation, or ordinance. Before providing anything of value to an elected official or government employee, the giver of the gift should confirm that the recipient is comfortable with receiving the gift. For covered recipients, there is an affirmative defense under certain New Jersey ethics laws for when the individual relied on the advice of counsel—it is therefore important for elected officials and government employees to seek in advance, and then rely upon, the guidance of appropriate counsel.

Avi D. Kelin, Esq. is Counsel at Genova Burns and specializes in Corporate Political Activity Law and Autonomous Vehicle Law. He can be reached via email here or call 973.533.0777.

An earlier version of this post appeared in InsiderNJ.

Tags: Genova Burns LLCCompliance CornerAvi D. KelinInsiderNJCorporate Political Activity LawLocal Government Ethics Law