VIRGINIA’S CONFLICT OF
INTEREST AND ETHICS LAWS
2015 Amendments
VIRGINIA SHERIFF’S ASSOCIATION
SPRING MEETING
April 23, 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 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 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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Where do recent events leave us in the
Commonwealth?
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ETHICS REFORM
LEGISLATION
• 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
LEGISLATION
• New world – post-McDonnell.
• 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.
– July 1, 2015 for Ethics Council provisions
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2015 Changes
TOPIC
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.
Aggregate cap of $100 per
calendar year for
soliciting, accepting, or
receiving gifts from certain
persons or entities.
Cap applies only to
tangible gifts.
De Minimus gifts (less
than $20) do NOT count
toward aggregate cap (i.e.
could give $19 for 365
days)
No cap for intangible
gifts.
“Tangible” vs. “Intangible”
distinction removed
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2015 Changes
TOPIC
NEW LAW
Gifts (cont’d)
Exceptions:
Food & beverages at widely
attended event
Travel approved by Council
Gifts from personal friends
Gifts from foreign dignitaries
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2015 Changes
TOPIC
NEW LAW
Gifts (cont’d)
Return of Gifts = no violation of
Act if:
i)
ii)
the gift is not used and the gift or its
equivalent in money is returned to
donor or delivered to a charitable
organization within a reasonable period
of time upon the discovery of the value
of the gift and is not claimed as a
charitable contribution for federal
income tax purposes or
consideration is given for value of the
gift within a reasonable period of time
upon the discovery of the value of the
gift provided such consideration
reduces the value of the gift to an
amount not in excess of $100
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2015 Changes
TOPIC
CURRENT LAW
“Personal Friend”
A person, organization, or No change
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.
(Johnny Williams
Loophole)
NEW LAW
Legislator cannot solicit,
accept, or receive gifts
from such a person in
excess of gift cap
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2015 Changes
TOPIC
CURRENT LAW
NEW LAW
“Immediate Family”
a spouse and (ii) any
child who resides in the
same household as the
officer or employee and
who is a dependent of
the officer or employee.
a spouse and (ii)
any child other
person who resides in
the same household as
the officer or employee
and who is a
dependent of the officer
or employee.
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2015 Changes
TOPIC
CURRENT LAW
NEW LAW
Widely Attended Event No definition
Modeled after Congressional rules:
“Super Bowl Fix”
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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2015 Changes
TOPIC
CURRENT LAW
NEW LAW
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!)
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2015 Changes
TOPIC
CURRENT LAW
Travel Disclosure No definition
NEW LAW
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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2015 Changes
TOPIC
CURRENT LAW
NEW LAW
Ethics Council
15 Member Council
9 Member Council
Staffing through
Division of Legislative
Services (DLS)
Same
4 year staggered terms
Same
Former judges may
now be considered
DLS employs
Executive Director
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2015 Changes
TOPIC
CURRENT LAW
NEW LAW
Ethics Council Duties
Review filed forms for
completeness
Council requests to complete forms
made in writing and prescribe time
to file completed form
Compare disclosures
contained in lobbyist
filings
Issue formal opinions and informal
advice
Request amendments to
ensure completeness or
correct errors as needed
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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2015 Changes
TOPIC
CURRENT LAW
NEW LAW
Local Filing
File disclosure forms
with Council beginning
with the December 15,
2015 filing
Ensures local officers
and employees DO
NOT have to file
December 15, 2015
filing with Council
Prior to this date, filings
made with local clerk of Necessary amendment
governing body or
due to delayed
school board
effective date of Act
(time permitted for
Council to get up to
speed on Act and efiling)
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2015 Changes
TOPIC
NEW LAW
Local Filing (Cont’d)
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
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
The 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 INTERESTS
• Prohibited and Unlawful Conduct includes:
–
–
–
–
–
–
Extortion
Bribery
Insider trading
Anti-honoraria
Anti-gift
Anti-revolving door
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CONFLICT OF INTERESTS
• 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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CONFLICT OF INTERESTS
• 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
INTEREST
• Annual disclosure
– Semi-annual eff. December 15, 2015
• “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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STATEMENT OF ECONOMIC
INTEREST
• Selected Categories:
• Personal Liabilities (Schedule B)
– Report Debts in 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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STATEMENT OF ECONOMIC
INTEREST
• Selected Categories:
• Securities (Schedule C)
– Report securities in excess of $5,000
– 2014 Reform – threshold decreased from $10,000
– Looks at aggregate of officer and immediate family
members.
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STATEMENT OF ECONOMIC
INTEREST
• 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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STATEMENT OF ECONOMIC
INTEREST
• Selected Categories:
• Gifts (Schedule E)
– Broad definition
– Includes:
•
anything of value including any gratuity, favor, discount, entertainment,
hospitality, loan, forbearance, or other item having monetary value, and
includes services as well as gifts of transportation, local travel,
lodgings, and meals, whether provided in-kind or by purchase of a
ticket, payment in advance, or reimbursement after the expense has
been incurred
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GIFTS
• Does NOT 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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GIFTS
• Does NOT 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, stepbrother, or step-sister; or the donee's brother's or sister's spouse;
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GIFTS
• Does NOT 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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GIFTS
• 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
– Applies to immediate family members
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GIFTS
• § 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 § 2.23103.1.
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GIFTS
• 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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STATEMENT OF ECONOMIC
INTEREST
• 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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STATEMENT OF ECONOMIC
INTEREST
• Penalty for Non-Compliance:
– Negligent violations –
• Recision of contract involved
• Forfeiture of any gain realized by official
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BRIBERY
• 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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BRIBERY
– 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
quo for favorable treatment.
• Gift / gratuity violation does not require a formal “this for
that” understanding.
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BRIBERY
– Criminal – Class 4 Felony
– Max. imprisonment 2-10 years; max.
fine $100,000
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CAUTIONARY TALES
• The McDonnells' were charged with
accepting $177,000 in lavish gifts and loans
from Jonnie Williams, the former chief
executive of Star Scientific Inc, in exchange
for promoting his company and its antiinflammatory Anatabloc.
• Convicted under Federal corruption statutes –
not Virginia law.
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CAUTIONARY 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 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 FORWARD
• Fallout from McDonnell convictions resulted
in greater public awareness of Virginia’s
elected officials – including Sheriffs.
• Given media opportunity to declare open
season on elected officials:
– Assumption that they can be influenced through a
gift or trip to do something appropriate.
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MOVING 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 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 & CANOLES
Christopher T. Page
757.259.3847
ctpage@kaufcan.com
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