April 16, 2007

Governor Spitzer Signs Ethics Reform Bill

Making good on campaign promises, Governor Eliot Spitzer signed an omnibus ethics reform bill on March 26, 2007 known as the Public Employee Ethics Reform Act of 2007. The Act contains reforms to the ethical standards that public officials must observe, and notably, the legislation creates a Public Integrity Commission, which will replace the State Ethics Commission and the New York Temporary State Commission on Lobbying. The legislation, with some exceptions, will take effect on April 25, 2007. Read more for a brief overview of the new legislation. Public Integrity Commission The State Ethics Commission and the New York Temporary State Commission on Lobbying will be combined to create the Public Integrity Commission (hereinafter “PIC”). The PIC will consist of 13 members, with 7 members appointed by the Governor and 6 members to be appointed by the Governor upon nomination from each of the following individuals: 1) State Comptroller; 2) Attorney General; and 3) the four legislative leaders. The Chair of the 13-member PIC will be appointed by the Governor. The PIC will have jurisdiction over state-wide elected officials and candidates for state-wide elected office, state officers and employees, political party chairs, lobbyists and lobbyist clients. In other words, the PIC will have jurisdiction over all those who were subject to the jurisdiction of the State Ethics Commission and the Lobbying Commission. The PIC will come into existence 180 days after enactment. Legislative Ethics Commission The legislation replaces the Legislative Ethics Committee (comprised of eight members of the Legislature) with a Legislative Ethics Commission (hereinafter “LEC”). The LEC will consist of nine members, five of whom may not be current or former members of the legislature, legislative employees, candidates for legislature, political party chairs, and lobbyists. The LEC will have broad power to investigate wrongdoing by members of the legislature and legislative employees and is obligated to accept referrals from the PIC regarding potential violations by public officials subject to the LEC’s jurisdiction. The legislation also mandates that the LEC issue an annual report on its activities, including enforcement actions, to the Governor and Legislature. Gifts The legislation eliminates a provision of the State ethics laws that allows gifts of up to $75 to State officials, employees and legislators under circumstances that could imply intent to influence official conduct. Now, the law prohibits all such gifts having more than a nominal value. The legislation also prohibits lobbyists and their clients from giving – and public officials from accepting – gifts of more than nominal value to public officials and their immediate families, including most travel, lodging and other expenses. The law also prohibits a public official from permitting a third party to receive, accept or solicit a gift from a lobbyist under circumstances where it is reasonable to infer the gift was intended to influence the official (e.g. official agrees to allow lobbyist to make a gift to a charity in the official’s name). Honoraria The law bans all honoraria paid to state-wide elected officials, agency heads and legislators, except that legislators may accept honoraria for speeches on topics unrelated to their public office. Nepotism The legislation prohibits any state-wide elected official, state officers or employees, and members of the legislature and legislative employees from participating in any decision affecting relatives relating to: 1) employment; 2) state contracting involving the payment of more than $1,000; and 3) investment of public funds. A “relative” is defined as any person living in the same household or who is a direct descendant of the individual’s grandparents or a spouse of a such descendant. Revolving Door The legislation prohibits former legislative employee from directly lobbying the legislature for two years, effective December 31, 2008. The legislation also prohibits any former officer or employee appointed by the Executive Chamber from appearing or practicing before any state agency for two years after their departure. Taxpayer-Financed Advertisements The legislation codifies Governor Spitzer’s Executive Order prohibiting state or local officials and employees from appearing in taxpayer-funded advertisements. Specifically, the provision prohibits elected government officials and candidates for elected local, state or federal office from appearing in taxpayer-funded advertisements or promotions (including public or community service announcements) in any print or electronic media, and prohibits the use of taxpayer money to pay for such appearances. Additionally, any person who violates this provision shall be subject to a civil penalty between $1,000 and $5,000, pursuant to civil action brought by the Attorney General. Lobbyist Definitions & Disclosure The legislation expands the definition of public official so as to require lobbyists and their clients to report lobbying of unpaid per diem members of state boards, commissions and councils, as well as per diem members and directors of public authorities, public benefit corporations and commissions. This provision becomes effective on December 31, 2007. Rather than requiring bi-monthly reports from lobbyists and semi-annual reports from clients who actually expend, receive, or incur in excess of $5,000 in reportable compensation and expenses during the year, the legislation now changes this requirement to lobbyists and clients who “reasonably anticipate” their compensation or expenditures to exceed $5,000 during the year. The new law will require lobbyist organizations to list the names, addresses and telephone numbers of any officers or employees who engage in lobbying or who are employed in the organization’s divisions that engages in lobbying. This provision became effective on April 1, 2007. The new law will require filing a grant lobbying report with the PIC disclosing the lobbyist’s efforts to obtain grants, loans, and agreements involving the disbursement of public money over $15,000. This provision becomes effective on January 1, 2008. Penalties The legislation increases the current $10,000 maximum civil penalty for violations of the ethics laws to $40,000, plus restitution of any associated gain. The law also authorizes the imposition of civil penalties (up to $10,000 plus such restitution) for certain ethics violations. The legislation also increases penalties for violating the Lobbying Law and authorizes the suspension of lobbyists who repeatedly violate the law. Note: The original form of this article appeared in the April 16, 2007 Genova, Burns & Vernoia Corporate Political Activity Law Update.

Tag: New York State