Ethics Advisory Opinion No. 98
Issued By: City Attorney’s Office
May a city official accept a gift worth more than $100 from a personal friend?
If so, is the official required to report the receipt of the gift?
A city official has inquired whether he may accept a gift valued at more than $100 from a personal friend. The friend has no business relationship with the city and is not associated with any entity that has or is seeking a business relationship with the city. If he may accept the gift, the official also asks whether he is required to include the gift in his annual financial disclosure report.
III. The Ethics Code
A. Receipt of Gifts or Benefits
The Ethics Code includes two rules which regulate the acceptance of gifts by city employees. The first restricts gifts given with the intent to influence or reward a city official or employee for official action. This rule states:
A city official or employee shall not solicit, accept, or agree to accept any gift or benefit for himself or herself or his or her business:
(A) that reasonably tends to influence or reward official conduct; or
(B) that the official or employee knows or should know is being offered with the intent to influence or reward official conduct.
Ethics Code, Section 2-45(a)(1).
The second rule restricts gifts from specific sources, regardless of the motivation for the gift:
A city official or employee shall not solicit, accept, or agree to accept any gift or benefit, from:
(A) any individual or business entity doing or seeking to do business with the City; or
(B) any registered lobbyist or public relations firm; or
(C) any person seeking action or advocating on zoning or platting matters before a city body,
save and except for
i) items received that are of nominal value; or
ii) meals in an individual expense of $50 or less at any occurrence and no more than a cumulative value of $500 in a single calendar year from a single source.
Ethics Code, Section 2-45(a)(2). There are some exceptions for gifts from these restricted sources, including the admission to events attended in connection with the official or employee’s city responsibilities. See Ethics Code, Section 2-45(b) for complete list of exceptions.
In this inquiry, the official’s friend is not a “restricted” donor under Section 2-45(a)(2), i.e. he is not doing or seeking to do business with the city, a registered lobbyist or a person seeking zoning or platting action. Accordingly, the restrictions under Section 2-45(a)(2) do not apply. Further, there is nothing to indicate the gift is being offered to influence or reward the official for official action. Therefore, Section 2-45(a)(1) is not implicated, either.
The two ethics code provisions regarding the acceptance of gifts do not prohibit or limit the official from receiving a gift from his personal friend. The next issue, though, is whether the official must report the gift.
B. Reporting Gifts and Benefits
As noted, the Ethics Code regulates the receipt of gifts from certain sources and whether the benefit must be reported. These are separate requirements. A city employee may be authorized to receive a gift, but may or may not be required to disclose it.
There are two disclosure provisions. First, all officials, including board members, and executive-level staff are required to submit a full annual financial disclosure report. Ethics Code, Section 2-73. Some other designated staff members, the “specified employees,” are required to submit a one-page annual gift report. Ethics Code, Section 2-78. The remaining employees are not subject to financial disclosure requirements. For individuals who file financial disclosure or gift reports, they must report the receipt of gifts with more than $100, regardless of their source.
There are exceptions, though, for the types of gifts or benefits that must be included in the report:
(1) lawful campaign contributions which are reported as required by state statute or local ordinance;
(2) gifts received from family members within the second degree of affinity or consanguinity;
(3) gifts from an individual based on personal friendship who during the preceding three calendar years: a) has not done or sought to do business with the city; b) has not sought city action on any issue before the City Council or any city board or commission; c) is not associated with any business or entity that has done or sought to do business with the city; and d) is not associated with any business or entity that has sought city action on any issue before the City Council or a city board or commission;
4) gifts received among and between fellow city employees and city officials;
5) admission to events in which the reporting party participated in connection official duties; and
6) payment of or reimbursement of travel and accommodation expenses accepted in connection with official duties which have been reported [on a travel report];
Ethics Code, Sections 2-74(n) and 2-78. Under these exceptions, the employee will not be required to report the gift from his friend because the gift is based on personal friendship and the friend has not during the preceding three years sought business or action from the city, nor has the friend been associated with any business or entity that has sought business or action from the city. The official will not be required to report the gift from his friend on his annual financial disclosure report.
It should be noted, though, that there are state reporting requirements for the city’s elected officials, city manager and city attorney. Under Chapter 572 of the Local Government Code, these officials must submit a Personal Financial Statement in which they are required to disclose any gift worth more than $250 given to themselves, their spouses or dependent children. The only exceptions to this requirement are gifts given by lobbyists who are required to report their expenditures or gifts from family members related within the second degree.
Under the circumstances of this inquiry, the employee may accept the gift from the personal friend regardless of the value of the gift. The official is not required to report the gift under the reporting requirements of the city’s Ethics Code. He may be required to report the gift under the state requirements set out in Chapter 572 of the Local Government Code.