March 28, 2008
Honorable David A. Paterson
Governor of New York State
New York State Governor’s Office
State Capital
Albany, New York 12224
Dear Governor Paterson:
Pursuant to Chapter 14 of the Laws of 2007 and Executive Law §94(2), the New York State Commission on Public Integrity ("Commission") hereby transmits to the Governor and the Legislature this report regarding the Commission’s review of regulations and opinions necessitated by the enactment of the Public Employee Ethics Reform Act of 2007 ("PEERA").
Hailed as the most sweeping reform of ethics laws since passage of the Ethics in Government Reform Act of 1987, PEERA recognizes that there are new challenges facing government and community in the 21st century. State officers and employees who work for and on behalf of government, as well as those who seek to conduct business before Executive branch agencies and the Legislature, must be prepared to do their work in a manner commensurate with the high ethical standards this State always has embraced.
Since its first day of official operation on September 22, 2007, the Commission has weathered the challenges of merging two well-seasoned, yet programmatically diverse organizations into a new entity with an invigorated mission to educate the workforce and the general public concerning the laws pertaining to ethics and lobbying, while also actively pursuing those who seek to act beyond the law’s boundaries.
In addition to creating the Commission, PEERA expanded as well as re-defined State ethics laws and the Commission’s jurisdiction. PEERA’s provisions that are most relevant to this report are those which:
- Expand the Commission’s jurisdiction to include violations of Public Officers Law §74 and Civil Service Law §107;
- Abolish the Public Advisory Council ("PAC") and authorizes the Commission to perform PAC duties;
- Increase penalties for violating Public Officers Law §73 from a maximum of $10,000 to $40,000 plus disgorgement and provides penalties for certain violations of Public Officers Law §74 to include a maximum penalty of $10,000 plus disgorgement;
- Establish factors for consideration when assessing a civil penalty to include: (i) the seriousness of the violation, (ii) the amount of gain to the individual, (iii) whether the individual previously had any civil or criminal penalties imposed, and (iv) any other factors the Commission deems appropriate;
- Ban honoraria payments for speeches made by statewide elected officials, agency heads and legislators;
- Amend the definition of the term "state agency" contained in Public Officers Law §74 to include closely affiliated not-for-profit corporations identified by the State Finance Law;
- Prohibit nepotism and improper political considerations concerning government employment and contracting;
- Expand the list and authorizes copying of those records identified under Executive Law §94(17);
- Amend Public Officers Law §73(5) to redefine the term "gift" as that which has "more than nominal value" including lodging, meals, refreshments, discounts and forbearance;
- Amend the post-employment restrictions to prohibit former employees of the Executive Chamber from appearing or practicing before any State agency for a period of two years after their separation from service; and
- Require the Commission to create and thereafter maintain a publicly accessible website. Such website must include procedures for filing a complaint, all documents publicly available under the Commission’s statute, other than disclosure statements and any other records or information the Commission deems appropriate.
Other amendments include those which:
- Prohibit lobbyists from entering into retainer agreements contingent on the outcome of government grant making and other public funding decisions, and requires registered lobbyists to report their lobbying for grants, loans and other disbursements of public funds over $15,000;
- Require organizations that are lobbyists to report information about the organization’s officers and employees;
- Prohibit lobbyists and their families from offering or giving gifts of more than nominal value to a public official;
- Require lobbyists and their clients to report lobbying of unpaid and per diem members of State boards, commissions and councils; and
- Repeal the current penalty provisions contained in Legislative Law §1-o and replaces them with new provisions, increasing existing penalties and authorizes the suspension of lobbyists who engage in repeat violations.
Advisory Opinions
In view of these changes, and in accordance with PEERA, the Commission has undertaken a review of over 260 published advisory opinions issued by the former New York State Ethics Commission and former New York Temporary State Commission on Lobbying. With the exception of references to the jurisdictional authority and monetary penalties, the principles and recommendations set forth in those opinions remain unchanged by PEERA. The Commission has included on its new website, as well as the websites of its predecessors, guidance regarding the use of opinions which pre-date PEERA.
Advisory Opinion No. 94-16, the New York State Ethics Commission’s seminal opinion pertaining to the gift law [Public Officers Law §73(5)], is the one notable exception to the continued viability of the Commission’s earlier opinions. That opinion, which has been used in countless training sessions and is widely referred to by Ethics Officers across State government, clearly defines the term "gift," identifies circumstances under which the solicitation and/or receipt of a gift constitutes a violation of Public Officers Law §73(5) and lists a series of items of value that constitute "permissible" gifts. With the elimination of the $75 limitation and inclusion of the term "nominal," and the Commission’s jurisdiction over clients and lobbyists subject to the gift prohibitions found in Legislative Law Article 1-A, the Commission has issued a new Advisory Opinion No. 08-01 to address these changes in the law.
Regulations
The following regulations of the former New York State Ethics Commission have been reviewed for consistency with the new law. Although revisions to several of the regulations were under way prior to the enactment of PEERA, all of the current regulations now require some minor revisions as they refer to the former New York State Ethics Commission or the now defunct Public Advisory Council. Other significant changes to the regulations include the following:
- 19 NYCRR Part 930 (Honoraria and Travel Reimbursement) - As a result of the new prohibition on the receipt of honoraria by statewide elected officials and the heads of any civil department, the definitions of "approving authority", "covered individual" and "Procedure to seek approval of and report honoraria" require revision;
- 19 NYCRR Part 937 (Public Inspection of Financial Disclosure Statements) - PEERA authorized the copying of Annual Statements of Financial Disclosure as well as those documents available for public inspection pursuant to Executive Law §94(17). Part 937 currently authorizes the inspection of financial disclosure statements and specifically prohibits the "photocopying, photographing or mechanical duplication" of such statements. These regulations will require significant revision to comport with the new law; and
- 19 NYCRR Part 941 (Adjudicatory Proceedings and Appeals Procedures) - While the adjudicatory procedures of the former New York State Ethics Commission were generally unaffected by PEERA, the regulations will require amendment to incorporate Commission hearings held for alleged violations of Public Officers Law §74 and Civil Service Law §107. In addition, the Commission will also incorporate into its adjudicatory procedures and proceedings, alleged violations of the Lobbying Act. To this end, on December 11, 2007, the Commission passed a resolution adopting 19 NYCRR Part 941 as governing violations of law not heretofore covered by the regulation.
The Commission will work closely with the Governor’s Office of Regulatory Reform and the Department of State to ensure the necessary regulatory amendments are promulgated as soon as is practicable.
In addition to these regulatory amendments, PEERA authorizes the Commission to promulgate new regulations regarding the limitations on the receipt of gifts [Executive Law §94(16)(a)] as well as criteria for determining policy-making status for purposes of Public Officers Law §73-a [Executive Law §94(9)(d)]. The Commission is in the process of conducting research into these areas, particularly with regard to the issue of policy-maker designation, as State agencies appear to have utilized a wide variety of approaches for determining policy-maker status.
The Commission is eager to embrace the mandate it has been given and looks forward to working with you in the coming years.
