GIFT ACCEPTANCE AND REPORTING

GIFT ACCEPTANCE AND DISCLOSURE REQUIREMENTS FOR SUCCESSFUL BIDDER AT SILENT AUCTION

To:       Carla Miller, Jacksonville Office of Ethics, Compliance and Oversight

Matt Schellenberg, Jacksonville City Councilman

SUMMARY:

A member of a City Council, who places the highest bid on a "poker party" donated to a silent auction by a pari-mutual facility which is the principal of a lobbyist of the City, has not received a "gift" as the term is defined in Section 112.312(12), Florida Statutes. Rather, he has purchased an item at fair market value. Nor has the Councilmember received a gift when the pari-mutual facility, as part of its business operations, makes a contribution to a charity chosen by a member of the Councilmember's poker party group. CEO 93-27 is referenced.

QUESTION 1:

May a member of the City Council accept, and if so, must he report, a poker party for which he was the successful bidder at a silent auction, where the item was donated to the auction's organizers by the principal of a lobbyist of the City?

Under the circumstances presented, your question is answered as set forth below.

You inquire, on behalf of a member of the Jacksonville City Council, regarding the gift acceptance limitations and gift reporting requirements applicable to the Councilmember. Through e-mail correspondence and telephone conversations with our staff, you relate that the Councilmember attended a fundraiser for the Rotary Club in March 2012. You advise that the event was open to the public and was not targeted to public officers or employees. You write that as part of its event, the Club held a silent auction, that Rotary Club members solicited the items to be auctioned off, and that the Councilmember had no involvement in the solicitation. You also advise that the silent auction operated by having tables set up with the items (or a photo or description of the items) displayed. Attendees would write down their bids and sign their names on a sheet of paper provided, and at the end of the evening, the pieces of paper were collected and the highest bidder won the item. You state that all the bids could be viewed by subsequent bidders or other event attendees, but that neither the Club nor the donors of the items to be auctioned off had any ability to influence who would bid or win.

You write that the Councilmember placed the highest bid ($250) on a poker party for 25 at a local poker room, and that the party, if sold by the poker room, would cost $500. The gift was donated to the Rotary Club for the auction by the poker room, and a lobbyist for the poker room had, in September 2011, appeared before the City Council seeking a rezoning on behalf of the poker room. You inquire whether, under these circumstances, the poker party was a "gift," if so, whether the Councilmember may accept the gift, and if he may accept it, whether he must report it.

Section 112.3148(4), Florida Statutes, states:

A reporting individual or procurement employee or any other person on his or her behalf is prohibited from knowingly accepting, directly or indirectly, a gift from a political committee or committee of continuous existence, as defined in s. 106.011, or from a lobbyist who lobbies the reporting individual's or procurement employee's agency, or directly or indirectly on behalf of the partner, firm, employer, or principal of a lobbyist, if he or she knows or reasonably believes that the gift has a value in excess of $100; however, such a gift may be accepted by such person on behalf of a governmental entity or a charitable organization. If the gift is accepted on behalf of a governmental entity or charitable organization, the person receiving the gift shall not maintain custody of the gift for any period of time beyond that reasonably necessary to arrange for the transfer of custody and ownership of the gift.

Pursuant to this statute, the Councilmember is prohibited from accepting a gift worth more than $100 coming directly or indirectly from a lobbyist of the City, or from a principal of that lobbyist.

The term "lobbyist" is defined at Section 112.3148(2)(b)1, Florida Statutes, to mean:

any natural person who, for compensation, seeks, or sought during the preceding 12 months, to influence the governmental decisionmaking of a reporting individual or procurement employee or his or her agency or seeks, or sought during the preceding 12 months, to encourage the passage, defeat, or modification of any proposal or recommendation by the reporting individual or procurement employee or his or her agency.

The poker room employed a lobbyist to act on its behalf in an effort to influence the Councilmember's agency - the City Council - in a rezoning issue less than 12 months before the silent auction. Accordingly, the poker room is the principal of a lobbyist, and the Councilmember would be prohibited from accepting, either directly or indirectly, a gift from the poker room worth more than $100.

In CEO 93-27, we dealt with circumstances in which the Florida Sheriffs Association accepted items for use as door prizes in a drawing in which only sheriffs could participate. We said,

where a lobbyist agrees to donate a door prize to the FSA, it would appear that he has given a gift with an intent to benefit a sheriff, a reporting individual. That gift therefore would be considered an "indirect gift" for purposes of Section 112.3148(4), Florida Statutes, and Rule 34-13.310(6), Florida Administrative Code. Further, where a sheriff receives a door prize with a value in excess of $100 provided by a lobbyist, he has received an indirect gift from a lobbyist which is prohibited by Section 112.3148(4), Florida Statutes.

In contrast to the situation addressed in CEO 93-27, under the circumstances you present there is no indication the poker room provided the poker party as an item to be auctioned by the Rotary Club with the intent that the Councilmember, or any public official, supply the winning bid. The event was open to all persons, and there is no suggestion that the poker room knew when it donated the item to the Club that the Councilmember would bid, much less win. Rather, the facts you have provided indicate that the poker room provided the poker party to the Rotary Club as an item to be auctioned as the Rotary Club saw fit and for its own benefit.

We further find that the poker party was not a "gift" from the Rotary Club to the Councilmember. The applicable definition of the term "gift" is found in Section 112.312(12)(a), Florida Statutes, which states that "gift" means "that which is accepted by a donee . . . [and] for which equal or greater consideration is not given within 90 days. . . ." The question here is whether the Councilmember paid "equal or greater consideration" to the Rotary Club for the poker party.

The Councilmember paid $250 for a party for which the poker room would ordinarily charge $500. However, he did so in the context of an auction, the very nature of which is to pit willing buyers against one another in an effort to obtain the highest price possible. Indeed, "auction" is defined as "a public sale in which property or items of merchandise are sold to the highest bidder." American Heritage Dictionary, Second College Edition, 1985. [emphasis supplied.] Although the poker room itself may be able to sell poker parties for $500 in other circumstances, the fact that the Rotary Club was only able to obtain $250 for the party it auctioned off does not convert the sale into a gift.

As we have found that the Councilmember has not received a "gift," it is not necessary to address the question of gift reporting requirements. Question 1 is answered accordingly.

QUESTION 2:

Would a donation by the poker room to a charity selected by a member of the Councilmember's poker party group constitute a prohibited gift to the Councilmember?

Under the circumstances presented, your question is answered in the negative.

You relate that as a pari-mutual facility, the poker room is required to maintain a fund for charitable activities as part of its licensing. The poker room accomplishes its charitable activity requirement, at least in part, by making donations from this fund to charities chosen by winners at poker parties. You write that at the poker party, members of the Councilmember's group of 25 persons received chips to play with, and pursuant to the common business practice of the poker room, the winner of the night (the person finishing with the most chips) was allowed to designate a charity, to which the poker room made a $1,000 donation. You advise that the Councilmember was not the winner of the night.

Section 112.3148(4) expressly contemplates, and does not prohibit, gifts to charitable organizations, even though such gifts may be handled by or associated with a public official. However, Section 112.313(2), Florida Statutes, states:

SOLICITATION OR ACCEPTANCE OF GIFTS.-No public officer, employee of an agency, local government attorney, or candidate for nomination or election shall solicit or accept anything of value to the recipient, including a gift, loan, reward, promise of future employment, favor, or service, based upon any understanding that the vote, official action, or judgment of the public officer, employee, local government attorney, or candidate would be influenced thereby.

It is not inconceivable that a charitable contribution could be used or offered as a quid pro quo for official action. In Complaint No. 07-039, In re Karen Marcus, we found allegations that a county commissioner solicited a contribution to her favorite charity from a person interested in a matter before the county commission legally sufficient for investigation as to whether Section 112.313(2), Florida Statutes, had been violated. (The complaint was ultimately dismissed with a finding of no probable cause.)

In the facts before us, there is no indication that the Councilmember solicited the donation or that the donation was anything other than the fulfillment of the poker room's licensing obligations consistent with its usual business practices. Under these circumstances, we find that the donation was not prohibited by Section 112.313(2), and was not a prohibited or reportable gift pursuant to Sections 112.3148(4) or 112.3148(8).

Question 2 is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on March 8, 2013, and RENDERED this 13th day of March, 2013.

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Susan Horovitz Maurer, Chair