Know Before You Go: Valuing the "Gift" You Receive When You’re a Guest at an Event

In the course of performing work on the City’s behalf, City officials may often have the occasion to attend various events that are sponsored or conducted by organizations or businesses that interact with them in their capacity as a City official. Attending these events may further the City’s purposes by allowing City decision makers the time and opportunity to better understand issues, people or products – all of which can be key ingredients in the development of successful public policies, programs or services. While City officials may pay to attend some events, sometimes officials are invited to attend an event as a guest of another person.

Whenever an official attends an event, it is important to remember that state and City gift laws can apply. Remembering this – and knowing what to value and how to value it – will go a long way toward helping that official comply with state and City gift limits and reporting requirements. Complying with these provisions, in turn, helps ensure that City officials avoid conflicts of interests and take all steps to maximize public confidence that their governmental decisions are based only on the best interests of the City.

State and City gift restrictions apply to all City employees who are required to file public Statements of Economic Interests (Form 700). Appointed and elected officials and certain employees are required to file these periodic financial disclosure statements because they have authority to make, or participate in making, governmental decisions. Under City law, these individuals are known as "City officials" and are subject to City gift laws, among other provisions of the City’s Governmental Ethics Ordinance.

A gift is anything of value for which monetary or other consideration of equal or greater value is not given in return. A gift may include meals, tickets to events, and rebates or discounts (unless the rebate or discount is made in the regular course of business to any member of the public without regard to official status). A gift can also include the food, beverages, or other tangible items, such as a goodie bag, that may be provided to attendees at an event or function.

Yes. City law bans any gifts to "high-level officials" [1] from registered lobbyists and lobbying firms and to other City officials if the lobbyist or lobbying firm lobbies that official’s agency. This restriction took effect in January following Los Angeles voters’ adoption of Measure R, and bans both the giving and receipt of these gifts. Under City law prior to Measure R’s enactment, lobbyists and lobbying firms were limited to gifts of no more than $25 per year per official.

For all other sources, City law also places limits on the amount of gifts an official can receive from any one source in a calendar year. For any source that is considered a "restricted source" [2] to a City official, gifts are limited to no more than $100 per calendar year from that source. In addition, state law limits to $390 the total amount of gifts any official can receive from a source that is covered by his or her financial disclosure category. [3]

Consequently, City officials need to identify whether the source of the potential gift is a registered lobbyist or lobbying firm, a "restricted source" to them, or a source that is covered by their financial disclosure filing category. For a current list of registered lobbyists or lobbying firms, visit the Commission’s website at http://ethics.lacity.org/lobby/lobby.cfm. Based on this information, the official can determine whether the potential gift may be accepted.

For example, if a City Councilmember is given a ticket to a banquet and the banquet is paid for, in whole or in part, by a registered lobbyist or lobbying firm, the Councilmember would not be able to attend because the ticket to the event has a value and would be considered a gift, and City law bans gifts from lobbyists to elected officials.

If a City official wishes to accept a gift from a restricted or reportable source that would exceed the gift limits, state law allows an official to "pay down" the gift so that its value is within the allowable amount. For instance, if a restricted source to a City official gives him or her a gift valued at $150, the official may accept the gift only if he or she pays the source $50, thus making the total gift’s given value within the $100 limit. It is important to note, however, that gifts from registered lobbyists or lobbying firms to a high-level official, or to an official, whose department they lobby, may not be paid down because there is no allowable gift amount from lobbyists and lobbying firms to those individuals.

In general, the value of a gift is its fair market value. However, the State has specific laws for valuing attendance and admittance to certain types of events. According to these laws, the value of attending an event can vary depending on several factors, including the type of event, the number of people who attend and the function the City official may serve at the event.

To assist officials in determining whether they may attend an event and to help them comply with gift limit laws and reporting requirements, the Ethics Commission has prepared two guides on how to value attendance. For a guide to valuing attendance at charitable fundraisers, testimonial dinners, and invitation-only events, click here. For a guide to valuing tickets or passes to sporting events, amusement parks, or other similar events and facilities, click here.

In addition, the Commission recently updated its gift chart to aid City officials in determining whether they can accept a gift from particular sources. For a copy of the gift flow chart, click here.

City and State law require City officials to report the receipt of certain gifts on their Statement of Economic Interests for the period in which they received the gift(s). A gift, or a combination of gifts, from a reportable source with a value of at least $50 is required to be reported. The gift limits are cumulative, so it is important that City Officials keep track of any gifts they receive throughout the year.

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