‘Tis the (Approaching) Season: Gifts and Gift Limits for City Officials

With fall upon us and the holiday season fast approaching, it is this time of year that many City officials are faced with questions about gifts. "Are gifts acceptable?" "Are there limits on gifts from certain sources?" "What should I do if I receive a gift that is not allowable under the law?"

Here are some basic reminders that can help you sort through the answers and help keep you in compliance with the law.

As with all questions relating to gifts, the first step is to understand your relationship to the gift giver. In general, it’s helpful to think of three categories of givers:

First, if the person who wants to give you a gift is a registered lobbyist or lobbying firm who is authorized to lobby your agency (see http://ethics.lacity.org/lobby/lobby.cfm for registration lists that are updated regularly), you may take no more than $25 in gifts from that source in any calendar year. For "high level officials" such as elected officials, Members of the Board of Public Works, Ethics Commissioners and Planning Commissioners, however, gifts from any registered lobbyist, lobbying firm or lobbyist employer are limited to $25 in a calendar year.

For a complete list of positions defined as "high-level officials," see the City’s Governmental Ethics Ordinance [at Los Angeles Municipal Code section 49.5.2], which is available on the Commission’s website at http://ethics.lacity.org/PDF/law_geo.pdf.

If the giver is not a lobbyist or lobbying firm, the next question to ask is whether that person is a "restricted source" to you. That is, are they a person doing or seeking to do business with your agency? Are they a registered lobbyist employer? Have they attempted to influence you on any matter, even if they’re not a registered lobbying entity? Do they have any matter involving a license, permit or other entitlement for use pending before you, or did they have one pending before you in the last nine months? If so, they may be a restricted source to you. Gifts from anyone who is a restricted source to you are limited to no more than $100 per calendar year.

To see how City law defines a restricted source for various categories of officials, see LAMC sec. 49.5.2. at http://ethics.lacity.org/PDF/law_geo.pdf.

Finally, if the giver is neither a lobbying entity nor a restricted source, you still need to consider whether the person is considered a "disclosable source of income" to you. To determine that, you’ll need to take a look at your department’s Conflict of Interest Code. By reviewing the disclosure category that applies to your position, you can identify the kinds of sources from whom you are required to disclose any income. If your disclosure category requires you to disclose income from a particular type of source, then state law limits you to accepting no more than $360 per calendar year from that source.

Next, determine the value of the gift received. If the exact dollar amount of a gift is unknown, you must report a good faith estimate of the item’s fair market value on your Statement of Economic Interests, also called Form 700. Reporting the value as "over $50" or "value unknown" is not adequate disclosure.

Finally, there are some circumstances in which exceptions apply. Gifts from family members or partners in bona-fide dating relationship, for example, are not limited or reportable. Similarly, gifts received that are not kept and are turned over to the City within 30 days of their receipt are exempted.

Further, for purposes of gift restrictions, state law considers a ticket to a political fundraising event to have no value. That ticket, therefore, is deemed to not be a "gift" and it is neither restricted nor reportable by the official who receives it. Similarly, state law also does not restrict tickets to events that are fundraisers to benefit 501(c)(3) non-profit organizations. Because state laws in this area can be complex, it’s always best to ask rather than assuming a ticket to an event is unrestricted.

There also are some exceptions to gift rules when it comes to "non-recurring ceremonial occasions," such as weddings, bar mitzvahs, and graduations. For instance, you are allowed to receive gifts valued at less than $100 presented to your or a member of your immediate family at your wedding. These gifts may be reportable if valued over $50, and you are still prohibited from receiving gifts valued over $100 from restricted sources.

Example:

A registered lobbyist who frequently appears before your Commission is a friend from college and attends your son’s bar mitzvah. He gives your son a $50 savings bond. Even though he is restricted to giving you gifts valued at less than $25 each year, this circumstance presents an exception. However, because your son is a dependent and the gift meets the $50 threshold, you must report the gift on your annual Statement of Economic Interests. In addition, your lobbyist friend will also have to report the payment (considered an "activity expense") on his next quarterly lobbying report that he files with the City Ethics Commission. (See http://ethics.lacity.org/efs2003/index.cfm?fuseaction=lobsearch.mainmenu )

So what’s the bottom line?

First, it’s important to remember that gift restrictions exist to help ensure that City officials and employees are, and appear to be impartial in all matters that come before them. Limiting the amount of gifts to an official, and from whom they can be received, reinforces for the public that governmental decisions are based only on the merits, and not influenced by any perks the decision maker may have received.

Finally, because the laws can be complex, remember to ask for guidance any time you have a question about whether you can receive a gift, or how you should report it. Feel free to contact us at the City Ethics Commission. We can be reached at (213) 978-1960, and we’re here to help!

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