Ethics for Florida Government Employees

2013 New Clerk Academy 1

Ethics for Florida Government Employees

Jeffrey R. Smith, CPA, CGFOIndian River County Clerk of Court

& Comptroller

5/13/2013


Presentation Overview

History of Florida’s Ethics LawsEthics LawsDisclosuresPenaltiesPublished Ethics CodesAnalysis of Ethics Case LawResources

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History of Florida’s Ethics Laws

Florida Constitution revised in 1968 oRequired a code of ethics for all state

employees and non-judicial officerso Prohibited conflict between public duty and

private interests be prescribed by lawo 1976 the “Sunshine Amendment” was adopted

oProvided additional constitutional guarantees concerning ethics in government.

oCreated independent commission(Commission on Ethics) to investigate complaints

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oFive of the Commission’s nine members are appointed by the Governor

oTwo each are appointed by the President of the Senate and Speaker of the House of Representatives

oNo more than five (5) Commission members may be members of the same political party

oNone of the Commission members may hold any public employment during their two-year terms of office

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The “Code of Ethics for Public Officers and Employees” adopted by the Florida Legislature is found in Chapter 112 of the Florida StatutesoPrimary goal to promote public interest and

maintain respect of the people for their governmentoEnsure that public officials conduct themselves

independently and impartiallyoEnsure that public officials are not using their office

for personal gainoAvoid creation of unnecessary barriers to public

service while maintaining integrity of government

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ROLE OF THE COMMISSION ON ETHICSo Investigate complaintsoRenders advisory opinions to public officialso Prescribes forms for disclosureoAdministers the Executive Branch Lobbyist Registration

and Reporting LawoMaintains financial disclosure filings of constitutional

officers and state officers and employeesoAdministers automatic fines for public officers and

employees who fail to timely file and financial disclosuresoMay file suit to void contracts, prepares mailing lists of

officials subject to disclosure and makes recommendations to disciplinary officials when appropriate

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ETHICS LAWS

Primarily two types of provisions:o Those prohibiting certain actions or conducto Those requiring certain disclosures be made to public

Laws generally apply to all public officers and employees, State and local as well as members of advisory bodies.

Principal exclusion are judges – fall under jurisdiction of Judicial Qualifications Commission

Public Service Commission members and employees are subject to additional ethics standards enforced by the Ethics Commission under Sec 350 of Florida Statutes.

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ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT

Solicitation and Acceptance of Giftso Public officers, employees, local government

attorneys AND CANDIDATES are prohibited from soliciting or accepting anything of value based on understanding that their vote, official action or judgment would be influenced by such gift [S112.313(2) Fla. Stat.]

o Any person required to file financial disclosure Form 1 or Form 6 is prohibited from soliciting any gift from political action committee, lobbyist who has lobbied his/her agency in last 12 months or the partner, firm, employer or principal of such lobbyist

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Solicitation and Acceptance of Gifts, (continued)o Any person required to file financial disclosure Form 1 or

Form 6 is prohibited from accepting any gift worth over $100 from political action committee, lobbyist who has lobbied his/her agency in last 12 months or the partner, firm, employer or principal of such lobbyist

o Effective in 2006, no EXECUTIVE BRANCH or legislative lobbyist, or principal shall make indirect or direct expenditure for purpose of lobbying nor no EXECUTIVE BRANCH or legislative official shall accept any expenditure made for the purpose of lobbying [112.3215, Fla. Stat.]

o This would include any gift UNDER $100 permitted under Statute 112.3148

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Unauthorized Compensationo Public officers or employees, local

government attorneys, and their spouses or minor children prohibited from taking any compensation or anything of value that: They know They should have known with exercise of

reasonable care will influence their vote or official action

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Misuse of Public Positiono Prohibited from corruptly using or

attempting to use their official positions to obtain a special privilege for themselves or others

Disclosure or Use of Certain Informationo Information not available to the public and

obtained by reason of their position for the personal benefit of themselves or others

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Solicitation or Acceptance of Honorariao Person required to file financial disclosure Form 1 or

Form 6 as well as State procurement employee prohibited from soliciting honoraria which is related to his or her public duties or office

o Person required to file financial disclosure Form 1 or Form 6 as well as State procurement employee prohibited from accepting an honorarium from political action committee, lobbyist who has lobbied his/her agency in last 12 months or the partner, firm, employer or principal of such lobbyist except reimbursement of expenses related to an event provided the expense is disclosed

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Solicitation or Acceptance of Honoraria (cont’d)o Lobbyist and their partners, firms, employers

or principals or political action committee prohibited from giving an honorarium to persons required to file financial disclosure Form 1 or Form 6 as well as State procurement employees

oViolations can result in a fine of up to $5,000 and prohibitions from lobbying for 2 years

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Solicitation or Acceptance of Honoraria (cont’d)oNo EXECUTIVE BRANCH or legislative

lobbyist, or principal shall make indirect or direct expenditure for purpose of lobbying nor no EXECUTIVE BRANCH or legislative official shall knowingly accept directly or indirectly any expenditure made for the purpose of lobbying

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Prohibited Employment and Business RelationshipsoDoing business with one’s agency

5% ownership test – his/her spouse or childoConflicting employment or Contractual

Relationship Public officer or employee prohibited from

holding any employment or contract with any entity or agency regulated by or doing business with his/her public agency

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Prohibited Employment and Business Relationships (cont’d)o Conflicting employment or Contractual

Relationship (cont’d) Public officer or employee prohibited from holding any

employment or contractual relationship which will pose a frequently recurring conflict between private interests and public duties or impede full and faithful performance of public duties

Limited exceptions exist for legislative bodies, certain special tax and drainage districts and persons whose professions qualify them to hold their public positions

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Prohibited Employment and Business Relationships (cont’d)oConflicting Employment or Contractual

Relationship Exemptions from Prohibitions: Business rotated among all qualified suppliers Business awarded by sealed competitive

bidding and the official has not tried to influence or persuade agency personnel (Disclosure required on Form 3A)

In cases of legal advertising, utilities or passage on common carrier

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Prohibited Employment and Business Relationships (cont’d)o Conflicting Employment or Contractual

Relationship Exemptions from Prohibitions(cont’d) Emergency purchase required to protect public health,

safety or welfare Business entity is sole source of supply and full

disclosure on Form 4A Aggregate of such business < $500 in calendar year If public officer or employee is employed by tax exempt

organization and the officer or employee is not directly compensated as a result

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Prohibited Employment and Business Relationships (cont’d)o Lobbying State Agencies by Legislators

Prohibition is for representing another person or entity for compensation during his/her term in office

o Employees Holding Office Prohibition from holding office which governs his/her

employer (i.e. County Commission and being Parks Dir)o Professional and Occupational Licensing Board

Members prohibited from serving as officer, director, or administrator of state, county or regional professional or occupational organization or association

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Prohibited Employment and Business Relationships (cont’d)o Local government attorneys and their law

firms are prohibited from representing private individuals or entities before the unit of local government which they serve

oCan’t refer or recommend to his/her firm legal work involving the local government he/she serves

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Restrictions on appointing, employing and contracting with relativeso Anti-nepotism law

Public official prohibited from seeking for a relative any appointment, employment, promotion or advancement in the agency which he/she is serving or over which he/she exercises control

No person shall be appointed, employed, promoted or advanced in or to a position if such action was advocated by a related public official

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Restrictions on appointing, employing and contracting with relatives (cont’d)oAnti-nepotism law (cont’d)

Prohibition DOES NOT apply to school districts (except as provided in Fla. Stat. 1012.23), community colleges, and State universities, or to appointments of boards of municipalities with < 35,000 population

Approval of budgets does not constitute “jurisdiction or control” for purposes of this prohibition other than volunteer emergency medical, fire fighting or police service providers

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Post Office Holding and Employment Restrictionso Lobbying By Former Legislators, Statewide Elected

Officers and Appointed State Officers Prohibition from representing any person or entity for

compensation before the government body or agency in which the individual was an officer or member for two (2) years

o Lobbying by Former State Employees Certain employees of executive and legislative branches of

State government prohibited from representing any person or entity for compensation before the agency they were employed by for two (2) years after leaving their positions

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Post Office Holding and Employment Restrictionso Lobbying by Former State Employees (cont’d)

These employees include: Executive & legislative branch employees serving in SENIOR MANAGEMENT &

SELECTED EXEMPT SERVICE class and any person employed by the DEPARTMENT OF LOTTERY with authority over policy or procurement

Auditor General Director of OPPAGA Sergeant of Arms and Secretary of the Senate Sergeant of Arms and Clerk of the House of Representatives Executive Director and Deputy Executive Director of Commission on Ethics Executive director, staff director or deputy staff director of each joint committee,

standing committee or select committee of the Legislature An executive director, staff director, executive assistant, legislative analyst, or

attorney serving the Office of the President of the Senate or the Speaker of the House

Senate and House Majority and Minority Party Offices Chancellors and Vice-Chancellors of the State University System General Counsel to the Board of Regents and all All presidents, vice-presidents and deans of each state university

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o Lobbying by Former Local Government Officers and Employees

Any person elected to county, municipal, school district, or special district office is prohibited from representing another person or entity for compensation before the government body or agency he/she was an officer of for two (2) years after leaving office

Appointed officers and employees of above may be subject to same prohibition by local ordinance or resolution

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Voting Conflicts of Interesto NO STATE PUBLIC OFFICIAL is prohibited from

voting in an official capacity on any mattero A STATE PUBLIC OFFICER who votes on a measure

which inures to his/her special private gain or loss or to a PRINCIPAL by whom he/she is retained, a RELATIVE, BUSINESS ASSOCIATE or PARENT ORGANIZATION or SUBSIDIARY of CORPORATE PRINCIPAL by whom he/she is retained must file memorandum of voting conflict on Commission Form 8A with the recording secretary within 15 days after the vote occurs

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Voting Conflicts of Interesto NO COUNTY, MUNICIPAL, or other LOCAL PUBLIC OFFICER shall

vote in an official capacity upon measure which would inure to his/her special private gain or loss or to PRINCIPAL, RELATIVE, BUSINESS ASSOCIATE or PARENT ORGANIZATION or SUBSIDIARY of CORPORATE PRINCIPAL of which he/she is retained

o Must publicly announce his/her interest before the vote and file Form 8A with recording officer within 15 days after the vote occurs

o No Appointed State or Local Officer shall participate in any matter inuring to the officer’s private gain or loss or to Principal, Relative, Business Associate or Parent Organization or Subsidiary of Corporate Principal to which he/she is retained without first disclosing the matter on Form 8A

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ETHICS LAWSDISCLOSURES

FORM 1 – Limited Financial Disclosureo Persons include State officers, local officers, candidates for

local elective office and specified State employeeso Some examples include: (not inclusive)

Elected public officials not serving in a political subdivision Commissioner of Education & members of Board of Education Appointed member of local governing bodies, expressway authorities,

community colleges, code enforcement boards Mayor and chief administrative officer of a county, municipality or

other political subdivision Chief of police, fire chief, municipal clerk, school superintendent,

medical examiner, purchasing agent with authority > $15,000 Each employee of the Commission on Ethics Senior managers of the Citizens Property Insurance Corp.

o Exception is for those required to file FORM 6 (including Constitutional Officers)

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FORM 1 – Limited Financial Disclosure (cont’d)

o Information to be disclosed Sources and types of financial interests Names of employers and addresses of real property

holdings NO DOLLAR VALUES are required to be listed Certain relationships with and ownership interests in

banks, insurance companies and utility companiesoCandidates must file FORM 1 together with and

at same time as their qualifying papersoAll others required to file by July 1 of each year

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FORM 6 – Full and Public DisclosureoAll elected constitutional officers and

candidates for such officesoMayor and members of City Council and

candidates for such offices in JacksonvilleoDuval County Superintendent of SchoolsoMembers of Florida Housing Finance

Corporation BoardoThe Florida Prepaid College Board

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FORM 6 – Full and Public Disclosure (cont’d)oDetailed disclosure of assets, liabilities and sources of

income over $1,000 and their values, and net worthoOption to file their most recent income tax return in

lieu of listing sources of income (does not eliminate reporting of assets, liabilities and net worth)

oCertain relationships with and ownership interests in banks, insurance companies and utility companies

o Incumbents file by July 1 to Commission on EthicsoCandidates file at time of qualifying with Supervisor of

Elections

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Otherso Form 2 – Quarterly Client Disclosureo Form 3A – Statement of Interest in Competitive Bid for

Public Businesso Form 4A – Disclosure of Business Transaction, Relationship

or Interesto Form 8A – Memorandum of Voting Conflict (State Officers)o Form 8B – Memorandum of Voting Conflict (County, City or

other Local Officers)o Form 9 – Quarterly Gift Disclosureo Form 10 – Annual Disclosure of Gifts from Governmental

Entities and Direct Support Organizations and Honorarium Event Related Expenses

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ETHICS LAWSPENALTIES

Non-criminal Penalties for Violation of the Sunshine Amendment and the Code of Ethicso No criminal penalties existo Penalties may include

Impeachment Removal from office or employment Suspension Public censure Reprimand Demotion Reduction in salary level Forfeiture of no more than 1/3 salary per month for no more than 12

months Civil penalty not to exceed $10,000 Restitution of pecuniary benefits received

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CandidatesoDisqualification from being on balloto Public censureoReprimandoCivil penalty not to exceed $10,000

Former Officers and Employeeso Public censure and reprimandoCivil penalty not to exceed $10,000oRestitution of pecuniary benefits received

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Lobbyistso Failure to Register as an Executive Branch

Lobbyist may result in being: Fined up to $5,000 Public censured Reprimanded Prohibited from lobbying executive branch agencies

for 2 yearso Failure to comply with gift rules and honorarium

rules may result in being: Fined up to $5,000 Prohibited from lobbying the agency for 2 years

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Felony Convictions: Forfeiture of Retirement Benefitso Public officers and employees subject to loss of

retirement benefits if convicted of: Embezzlement of theft of public funds Bribery and felonies under Fla. Stat. 838 misuse of public

office Impeachable offenses Felonies connected with intent to defraud the public

o Automatic penalties for failure to file annual disclosure Fines of up to $25 each day late the form is filed after Sept.

1 Maximum of $1,500

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PUBLISHED ETHIC CODES

Florida Government Finance Officers Association – www.fgfoa.org

ICMA – www.icma.orgCertified Public Accountants

oAICPA – www.aicpa.orgo FICPA – www.ficpa.org

Lawyers – www.floridabar.org

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http://www.fgfoa.org/

http://www.icma.org/

http://www.aicpa.org/

http://www.ficpa.org/

http://www.floridabar.org/


Case Studies

ESM Government Securities/Grant Thorntono Auditing firm known then as Alexander

Grant & Co guilty of falsifying audit of securities dealer which led to collapse of American Savings & Loan Association of Florida in turn leading to collapse of Home State Savings & Loan in Cincinnati,Ohio and affected 69 other S&L’s in Ohio in 1985

oRequired to pay $36,000,000 award

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Case Studies

Enron/Arthur Anderseno Originally found guilty of obstruction of justice

and interfering with an SEC investigation (verdict overturned on technicality on appeal)

o Shredded documents related to Enron audito David Duncan partner for Arthur Andersen

acknowledged that employees destroyed evidence

o Firm was allegedly involved in Worldcom, Qwest Communications and Global Crossing fraud cases

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Case Studies

Palm Beach County Commissionero Jeff Koons resigned August 3, 2010 amid charges of extortion, perjury and

violating public open meeting lawso Extortion was not for money but attempt to eliminate opposition to one of

his major projects Palm Beach County Commissioner

o Warren Newell pled guilty to public corruption charges in 2007 in pocketing approximately $500,000 in 3 illegal land deals

o Voted to advance a $190 million water district reservoir project while hiding his own interest in the project which included a $350,000 bonus if the plan succeeded

o Directed a $50 million taxpayer funded initiative to protect public access to waterfront and then steering $14 million of it to a marina where he docked his boat and was in partnership with the owner and had unpaid docking fees of more than $48,000

o Third instance was making money on a land deal where he was a secret co-owner

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Case Studies

Former Florida Republican Chairman Jim GreeroArrested June 2, 2010 for allegedly running a

scam that bilked money from the state party.oOwned 60% of a corporation set up to raise

money for the party. Corporation received a 10% commission on any money raised.

oCharged with 6 counts of organized scheme to defraud, 4 counts of felony grand theft and 1 count of money laundering

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Resources

Section 112, part III of Florida StatutesReference guide by Florida Commission on

EthicsFoxnews.comPalmbeachpost.comWBPF-TV.com John C. Maxwell, Ethics 101-What Every Leader

Need to Know (Time Warner Book Group, 2005) John C. Maxwell, The Choice is Yours (Thomas

Nelson Book Group, 2005)

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Documents

Ethics for Florida Government Employees