ADVISORY OPINION (01-07)

Guidance to State Agencies Regarding Gift Restrictions When The Funds Will Be Used To Provide "Official" Transportation For State officers Or Employees

References: RCW 42.52.010(10), RCW 42.52.140, RCW 42.52.150, and RCW 42.52.160(1). EEB Advisory Opinions 96-01, 96-05; 98-01; 00-05; 00-06.

ISSUES

1. The Ethics in Public Service Act limits the receipt of gifts by state officers or employees. Does a state agency violate the gift limitations if it receives funds, which will be used to off-set the cost of "official" travel by agency officers and employees, from a person it regulates or a person who contracts, or seeks to contract, with the state agency?

2. If a state agency receives funds from a regulated person or a person who contracts with or seeks to contract with the agency, what guidelines or polices should state agencies adopt before accepting such funds?

OPINION

1. No. In EEB Advisory Opinion 96-01, the Board advised that RCW 42.52.140-.150 gift limits do not apply to gifts to the state or its agencies. In general this is true even if the source of the gift to the state agency may include persons regulated by the agency or those who contract, or seek to contract, with the state agency. In reaching its conclusion, however, the Board has serious concerns about the appearance of a state agency receiving gifts from a person regulated by the agency or a person who contracts, or seeks to contract, with the agency.

2. The Board provides policy guidelines that address the appearance that gifts are made to influence pending agency decisions, potential violations of the gift limitations, and the potential misuse of funds received for the purpose of providing "official" travel.

BACKGROUND

RCW 43.03.050 provides that official travel by all state officers and employees will be conducted under regulations adopted by the Office of Financial Management (OFM). OFM travel regulations are promulgated by OFM but are no longer incorporated in the WAC. Nevertheless, non-compliance with the regulations would violate RCW 42.03.050. Chapter 10.20.60 of the OFM travel regulations, effective October 1, 2001, provides that:

Agencies are to develop internal policies and procedures when employee travel expenses are to be reimbursed by a person or a non-state entity. State travelers are not to be reimbursed more than the actual expenses of travel except for meals which can be reimbursed on an allowance basis as listed in Schedule A (PDF file), Schedule B, or Schedule C. Ethical issues should also be considered when developing the internal policy for non-state reimbursement for travel. Further information on ethical issues may be obtained from the Executive Ethics Board.

Since this new provision to the OFM travel regulations took effect, several state agencies have contacted Board staff seeking guidance. This opinion addresses this request and is applicable to all state agencies.

ANALYSIS

This advisory opinion does not address all potential issues that could arise under RCW 42.52 with regard to travel paid for by non-state persons. The board provides this summary of the Board's previous advice in response to OFM's recently amended travel policy.

RCW 42.52.010(10) defines gift to mean "anything of economic value for which no consideration is given". Gift, however, does not include:

(d) Payments by a governmental or nongovernmental entity of reasonable expenses incurred in connection with a speech, presentation, appearance, or trade mission made in an official capacity. As used in this subsection, "reasonable expenses" are limited to travel, lodging, and subsistence expenses incurred the day before through the day after the event;

(f) Payment of enrollment and course fees and reasonable travel expenses attributable to attending seminars and educational programs sponsored by a bona fide nonprofit professional, educational, or trade association, or charitable institution. …

 

RCW 42.52.140 provides:

No state officer or state employee may receive, accept, take, seek, or solicit, directly or indirectly, any thing of economic value as a gift, gratuity, or favor from a person if it could be reasonably expected that the gift, gratuity, or favor would influence the vote, action, or judgment of the officer or employee, or be considered as part of a reward for action or inaction.

RCW 42.52.150 provides in part:

(1) No state officer or state employee may accept gifts, other than those specified in subsections (2) and (5) of this section, with an aggregate value in excess of fifty dollars from a single source in a calendar year or a single gift from multiple sources with a value in excess of fifty dollars. . . .

. . .

(4) Notwithstanding subsections (2) and (5) of this section, a state officer or state employee of a regulatory agency . . . who participates in those regulatory . . . matters may receive, accept, take, or seek, directly or indirectly, only the following items from a person regulated by the agency or from a person who seeks to provide goods or services to the agency:

. . .

(g) Those items excluded from the definition of gift in RCW 42.52.010 except:

(i) Payments by a governmental or nongovernmental entity of reasonable expenses incurred in connection with a speech, presentation, appearance, or trade mission made in an official capacity;

(ii) Payment for seminars and educational programs sponsored by a bona fide nonprofit professional, educational, or trade association, or charitable institution[.]

 

1. State agencies may accept reimbursement of official travel costs from non-state entities.

In EEB Advisory Opinion 96-01, the Board advised that RCW 42.52.140-.150 gift limits do not apply to gifts to the state or its agencies. The Board further advised that the source of the gift to the state agency may include persons regulated by the agency. In reaching its conclusion, however, the Board expressed serious concerns about the appearance of a regulatory agency receiving a gift from a person regulated by the agency.

Based on that opinion, the Board advises that under RCW 42.52, agencies may develop policies that allow for travel reimbursements from persons regulated by the agency or those who seek to conduct business with the agency. Nevertheless, the Board recommends that state agencies adopt guidelines which ensure that any gift accepted by the state agency is not directly related to, or does not have the appearance of an intent to influence, an official state action.

Determining whether a gift, is related to, or has the appearance of an intent to influence, an impending agency action requires balancing a number of factors. Among those are: (1) whether the pending state agency selection process involves significant discretion or is objective; (2) the proximity of a gift to a specific agency action; (3) whether the state decision-maker in the impending action knows the donor's identity and the size of the gift; (4) the potential value to the donor of the pending state action; and (5) whether the gift broadly benefits the state agency or is narrowly tailored to benefit specific agency employees, or group of employees.

2. Special rules apply to gifts of travel.

As noted above in EEB Advisory Opinion 96-01, the Board advised that RCW 42.52.140-.150 gift limits do not apply to gifts to the state or its agencies. The Board further advised that "if the gift is given to the agency and the agency uses the gift to conduct agency training, there is no technical violation of RCW 42.52.150(4)(g)(ii)."

In EEB Advisory Opinion 00-05, the Board advised that "a potential ethics issue (under RCW 42.52.110) can arise, however, if the person who provides gifts or funds to a state agency designates or otherwise directs that a certain employee or group of employees be the recipient or beneficiary of the gift or funds." The Board further advised that "if … the agency determines award and eligibility criteria, selects the state employees who are qualified to receive such awards, and provides cash awards under its own statutory authority," a violation would not occur.

 

Like a personal cash award, travel reimbursement is a payment that can benefit not only the agency, but also the employee personally. Therefore, travel payments can influence, or have the appearance of influencing, individual state decision-makers. For example, RCW 42.52.140(4) provides that state officers and employees who regulate or contract may not accept travel from certain persons. Therefore, the Board finds that accepting a donation of reimbursement for state travel differs significantly from the gifts contemplated in EEB Advisory Opinion 96-01. Accordingly, the Board advises that if the non-state donor of a reimbursement for state travel designates which state employees can use the funds, then that "donation to the agency" would be an indirect gift to the state officer and employee whose travel is reimbursed by those funds. Indirect gifts are subject to the RCW 42.52.140-.150 limitations or may be considered outside compensation subject to the provisions of RCW 42.52.110.

On the other hand, if the agency determines who will travel with the donated money, there is no indirect gift, with the following exception. Because travel expenses can be of benefit both to the agency and the employee personally, state officers or employees who are subject to RCW 42.52.150(4) limitations, i.e., those who have the authority to regulate or contract with the donor, are prohibited from traveling with funds donated by persons regulated by a state agency or persons who contract, or seek to contract, with a state agency.

3. The expenditure of funds provided by non-state persons to reimburse for official travel is subject to RCW 42.52.160(1) and OFM Travel Rules.

RCW 42.52.160(1) prohibits a state officer or employee from using money under the officer’s or employee’s official control for private gain. RCW 42.52.160 provides, in part:

(1) No state officer or state employee may employ or use any person, money, or property under the officer’s or employee’s official control or direction, or in his or her official custody, for the private benefit or gain of the officer, employee, or another.

In addition, OFM travel regulations chapter 10.20.60 prohibits the use of reimbursed funds for "more than the actual expenses of travel except for meals which can be reimbursed on an allowance basis." Accordingly, the Board advises that using funds, which were provided by non-state persons to reimburse for official travel, may not be used to pay for additional or unreasonable expenses, such as payment for hotel rooms that exceed OFM rules or travel by a spouse or family member. Such use of money under the state officer or employee’s official control could violate RCW 42.52.160(1).

 

In EEB Advisory Opinion 00-06, however, the Board advised that under the circumstances described in RCW 42.52.010(10)(d) a state employee may accept payment of travel expenses from a non-governmental entity for himself, herself, and a spouse. The Board assumed that the employee who receives the award and travel was not subject to gift limitations, under RCW 42.52.150(4). Unlike the issues discussed in this opinion, the outside person provided the travel directly to the state employee so that he could attend an award presentation to which any award recipient’s spouse was invited.

Upon review, the Board clarifies its advice in EEB Advisory Opinion 00-06, and now advises that the payment of travel expenses for an accompanying invited guest, by a non-governmental entity directly to the employee is considered "reasonable" when the invited guest is traveling with the state officer or employee for a bona-fide business purpose. Factors which indicate a bona-fide business purpose include, but are not limited to: (1) official correspondence requesting that an invited guest, make the trip; (2) the invited guest, is required to attend official functions, given assignments in advance, or make presentations at official functions; (3) the invited guest, performs required services, such as acting as representative of the state or the state agency in a substantial manner.

The Board’s advisory opinion is based on the general facts as stated above. The Board does not investigate the facts. Please be aware that modification of the facts, or knowledge of more specific facts or circumstances, might cause the Board to reach a different conclusion. In addition, Board advisory opinions are narrowly drawn to interpret the Ethics in Public Service Act. They do not address whether the proposed action is prudent, good public policy or effective management practice.

Approved by the Executive Ethics Board, this Fourteenth Day of December 2001.

 

 

___________________________________

Brian R. Malarky

Executive Director