Advisory Opinion No. 1997-14

Application Of The Code Of Ethics To Employees Of The University Of Connecticut

Various issues have been raised by University of Connecticut (UCONN) employees regarding the application of the Code of Ethics for Public Officials, Connecticut General Statutes, Chapter 10, Part I to activities in which they participate in furtherance of fulfilling their state responsibilities and duties and/or which benefit UCONN.

Following is a list of questions which the Commission has been asked to address by Mr. Thomas Q. Callahan, Associate Vice President for Institutional Advancement for UCONN:

A. Activities Related to the University's Marketing, Development, and Private Fund- raising Obligations

The University regularly holds cultivation, recognition and stewardship events for donors, potential donors, alumni and other friends. The ultimate purpose of these activities is to secure private contributions to strengthen the quality of University programs. These events may be hosted and/or underwritten by the University, the University of Connecticut Foundation (UCF), the University of Connecticut Alumni Association (UCAA), or an unaffiliated third-party such as an individual volunteer or corporation. University Trustees and employees, and occasionally their spouses, are often asked to attend these events as their relationship, role or expertise is of interest to the donor or prospect and their presence contributes to the success of the event. These events normally occur outside normal working hours (evenings and weekends).

1. Must University Trustees or employees reimburse the sponsoring organization for the entertainment portion of the event (meals, beverages, tickets, etc.)?

The events in question are planned in order to further state action or functions, i.e., fundraising for the University. A state employee or public official who attends such an event is present as part of his or her state duties. The fact that many of these events may occur outside of normal working hours is irrelevant. If the University pays for the event out of its budget, it is assumed to be a legitimate and authorized business expense of the University. The University Trustee and/or state employee does not have to reimburse its employer for any of the associated expenses.

With regard to outside sponsorship of such events, no public official or state employee, or member of such person's immediate family, may knowingly accept any gift or gifts known to amount to fifty dollars or more in value in any calendar year from a lobbyist. Conn. Gen. Stat. §1-84(i). Additionally, a public official or state employee may not knowingly accept gifts of fifty dollars or more in value in any calendar year from any person doing business with or seeking to do business with the University. Conn. Gen. Stat. §1-84(m). There is an exemption, however, to the definition of gift for goods or services which are provided to the state and facilitate state action or functions. Conn. Gen. Stat.§§l- 79(e)(5), l-9l(g)(5); Regulations of Conn. State Agencies §1-92-5l.

If an outside group, such as UCF, UCAA, or an unaffiliated third-party, provides funding, it will be covering the costs of an event which is being held on behalf of and/or for the benefit of the University. Such an expense would be considered a "gift to the state", since it facilitates the execution of state action or functions. Again, the University Trustee or state employee would not need to reimburse the outside group.

2. Must University Trustees or employees reimburse the sponsoring organization for the cost of the spouse's participation?

In general, a state employee or public official may not use his or her state position for personal financial benefit or the benefit of certain family members. See Conn. Gen. Stat. §1-84(c). It follows, therefore, that a state employee or public official may not accept benefits received by virtue of that position for the use of his or her spouse.

In a prior advisory opinion, the Commission considered the application of the gift limitations when an employee of a lobbyist group has a spouse who is a state employee. See State State Ethics Commission Advisory Opinion No.92-19, 54 CLJ 14, p. 5C (10/6/92). The Commission ruled that the gift limitations do not apply to the employee of the lobbyist since any benefits conferred are received in return for services rendered to the organization. The Commission declined to extend this exemption to the employee's spouse. The Commission ruled that even if the spouse is expected to attend a particular dinner or other event, the individual could only accept from that organization up to $150 in food and drink and up to $50 in gifts in a calendar year (The Ethics Code's statutory benefit limits). Id. It further advised that if it appears that the limits may be exceeded, the spouse is not precluded from attending an event, provided that he or she reimburse the lobbyist for any overage. Id.

In another Advisory Opinion, the Commission noted that the statutory limitations on gifts established for lobbyists are amounts which the Legislature has deemed to be non- excessive and, therefore, unobjectionable under the law. See Advisory Opinion No. 92- 5, 53 CLJ 38, p. C, (3/17/92). It ruled that the gift limits contained in the Code will be considered the benchmark for determining what is excessive for non-lobbyist expenditures for the benefit of public officials, state employees, and immediate family members. Id. The receipt of such excessive benefits would be considered a use of one's state position in violation of Conn. Gen. Stat. §1-84( c ).

It is argued that the mandate to engage in private fundraising activities creates a unique situation because spouses are expected to participate at many events in order to adequately cultivate donor relationships. The Commission, however, declines to create an exception which would apply only to University personnel. The same argument could be made by other state officials who frequently must attend business dinners and functions. An example of such officials are employees from agencies, such as the Department of Economic Development, who are involved in attracting new business to the State. The Commission would then be in the position of unilaterally setting standards as to which state officials do or do not merit such an exception. As an administrative agency, the Ethics Commission does not possess such authority; and has, in fact, granted exceptions to Code requirements only under the most compelling and specific circumstances. See, Ethics Commission Advisory Opinion No.89-10, 50 CLJ 44, p. 3C (5/2/89) (Open and public contract requirements of Conn. Gen. Stat. §1-84(i) waived when an emergency threatened public health and safety). Furthermore, maintenance of the prohibition prevents the opportunity to take advantage of "perks" in excess of one's agreed upon compensation. Establishing a system which allows the individuals involved to decide when it is appropriate to bring one's spouse to events may well create too many opportunities for abuse.

As discussed, supra, when a public official or state employee attends such events he is doing so as a requirement of his state job and/or duties. The spouse, however, is not so obligated nor is it part of the state person's job description to require the spouse's attendance at such events. Such a requirement would imply that individuals who are single would not be in a position to adequately accomplish one's job duties. In support of a continuation of the practice of spousal attendance at such events, it is claimed that this participation is customary in academia. This may well be so. Such custom, however, must yield to the inescapable dictates of the law when the academics in questions are also public officials and state employees subject to The Code of Ethics. Furthermore, any compelling argument to the contrary is substantially diminished by the fact that the practice at issue may continue; only the financial arrangement must be altered. Therefore, consistent with the rationale of Advisory Opinion Nos. 92-19 and 92-5, even if one is expected to bring a spouse for certain social occasions, the benefits received by the spouse must be within the gift limitations contained in the Code. Any overage received from anyone donor, including the University, must be reimbursed.

3. Do the requirements differ if the event is paid for using University, UCF, UCAA or unaffiliated third party funds? (Note: Restricted donor funds or unrestricted donor funds provided by UCF may be used to fully or partially underwrite or reimburse these events. Restricted donor funds include gifts designated for a specific purpose such as to underwrite the expenses associated with a lecture series. Unrestricted donor funds are gifts provided by donors with no restrictions other than they be used for the benefit of the University).

The requirements are the same regardless of the source of the payment.

4. For an event underwritten and sponsored by the UCF, does it make a difference if the source of the funds is from operating funds, donor restricted funds or unrestricted donor funds?

It does not make a difference, pursuant to §1-84(c), which funds UCF uses to underwrite the events.

5. If an event conducted to advance the University's private fundraising objectives was underwritten by an unaffiliated third party that is a registered lobbyist or doing business with the University, could University Trustees, employees and other public officials and their spouses accept meals and/or travel expenses related to such events? Is the registrant required to report these expenditures as part of its regular lobbying report to the State Ethics Commission?

As discussed, supra, the payment of the expenses by the lobbyist would be considered a legitimate gift to the state. Consequently, the University Trustees, employees, and other public officials in attendance in their official capacity would not need to reimburse. Spouses, on the other hand, would be restricted to receiving benefits within the gift limits. Pursuant to Conn. Gen. Stat. §1-96, a registered lobbyist must file periodic financial reports disclosing amounts expended or received both for lobbying and for activities in furtherance of lobbying. The Commission has ruled that the phrase "in furtherance of lobbying" includes activities and expenditures which foster good will with public officials, unless the activity is clearly personal and unrelated to any lobbying purpose. State Ethics Commission Advisory Opinion No.93-14, 55 Conn. L.J. No.5, p. 3E (July 27, 1993); State Ethics Commission Advisory Opinion No.94-19, 56 CLJ 12, p. 7C, (9/20/94). The Commission further stated that this exception could rarely be used by a business entity since, in general, only an unreimbursed expenditure made by an individual could be a personal, nonbusiness expense. Id. Consequently, if the unaffiliated third-party is a communicator registrant, i.e., an individual, doing business with or seeking to do business with or otherwise attempting to influence the University , then the expenditures would be considered in furtherance of lobbying and must be reported on its financial reports. Regardless of such a business nexus, a client registrant (which is not an individual) would need to report the expenditures on its financial report, in accordance with the schedule contained in §1-96.

6. If the host or sponsor of an event is an individual who is a registrant or employed by a registrant, do similar restrictions apply?

As discussed, supra, expenditures which foster good will be considered an expense in furtherance of lobbying and must be disclosed on the appropriate financial report of a registrant. If, however, the individual is not hosting or sponsoring an event on behalf of its employer, is not being reimbursed for the expenditures made, and is involved because of personal reasons, then the event need not be reported as an expense in furtherance of lobbying. An example where this may occur is if the individual is an alumnus of the University and is participating in fundraising activities because of his past association. However, individual registrants still need to report expenditures for the benefit of a public official in the legislative or executive branch or a member of the staff or immediate family of such official which are unreimbursed and required to be itemized. Conn. Gen. Stat. §1-96(b)(3). Furthermore, the gift limits for lobbyists still apply whether the expenditure is related or unrelated to lobbying.

7. May University employees and their spouses accept payment of the cost of food and beverage associated with attending a fundraising event to benefit an unrelated charitable organization where an employee, Trustee, donor or prospect was being recognized? Does the source of funds (University, UCF, UCAA or unaffiliated third party) used to payor reimburse the expense matter?

University employees who attend such events, as part of their state duties, may accept payment for the associated costs. As discussed ~, the employee will have to reimburse the donor for the spouse' s attendance for the amount received in excess of the gift limits. The portion of the cost which is attributed to the charitable donation does not count toward any of the limits and does not need to be reimbursed. See Advisory Opinion No.91-15, 52 CLJ 51, p.2C (6/18/91). The requirements are the same regardless of the source of the funds.

B. Employment/Compensation

1.  An employee of the University spends approximately 25% or more of his/her time working for UCF. The Foundation reimburses the University for this time. When engaged in Foundation related activities, do the State Ethics Commission's regulations which cover state employees apply?

UCF was established in 1964 as a private, nonprofit corporation to assist in obtaining financial support for the University from private sources. It serves as the primary organization responsible for coordinating private fundraising activities. For purposes of the Code of Ethics, UCF is not considered part of the University. The employee, however, is already subject to the Code and it is solely by virtue of his position with UCONN that he holds the position with UCF. Therefore, he must act pursuant to the Code whether he is performing duties for UCONN or UCF. See, State Ethics Commission Advisory Opinion No.89-3, 50 CLJ 31, p. 2C, (1/31/89) (Commission ruled that Chief State's Attorney subject to the Code while engaged in secondary employment as an instructor for Municipal Police Training Council when such employment was obtained solely by virtue of his state position).

2. Compensation agreements between the University and certain University personnel may include membership at a private club for the purpose of entertaining donors and prospects. Unrestricted UCF funds would be used to pay for this portion of compensation. Does any provision of Conn. Gen. Stat. §1-84 apply?

It is not the State Ethics Commission's charge to determine the appropriate amount of compensation any individual may receive from the University. Therefore, under the Code, it is permissible for the University to structure compensation as all salary or as salary and payment for other expenses. Such payments would need to be included in the employee's W -2 or Form 1099 at the end of the year as compensation for employment with the University. For example, if membership in a private club cost $5,000 per year, it is not an issue, under the Code, whether the individual receives $50,000 in salary plus payment for the membership, or alternatively received $55,000 in salary , as long as the entire $55,000 is included in the employee's income for IRS purposes. Any portion of this compensation paid for by UCF would be considered a gift to the state.

3. The contract for the compensation of University employees at UCONN may provide that the University pay for spousal travel when authorized by the University President. The Director's or employee's spouse may serve as an uncompensated good will ambassador for the University. University, UCF, UCAA, NCAA, or Big East Conference funds may be used to reimburse the Director or employee for such expenses. Is the compensation agreement permitted by the Code? Pursuant to Conn. Gen. Stat. §1-84(k), when is the filing of a disclosure statement required?

As discussed supra, employee compensation agreements may provide for payment of certain anticipated out-of pocket expenses. These expenses must be included in the employee's total compensation as reported to the IRS. The Commission, however, does not recognize the employee's spouse as an uncompensated good will ambassador for the University. Unless the spouse, in his or her own right, has been selected to represent the University, the individual would only be accompanying the state employee because of and by virtue of the employee's position and/or status with the University. Therefore, any benefits arranged for or received in addition to one's agreed upon compensation would be a use of one's position in violation of Conn. Gen. Stat. §1-84(c). Any such payments for spousal travel, in excess of this compensation and exceeding the Code's gift limits, would need to be paid for directly by the employee or reimbursed to the donor by the employee. Again, as discussed supra. customary practice of spousal attendance by other private and/or public institutions is not germane to the application of Connecticut's specific and unique Code of Ethics; and the Commission may not allow an exception in this case.

Pursuant to §1-84(k), a public official or state employee may only receive payment or reimbursement for necessary expenses for any activity in his official capacity.

"Necessary expenses" are defined in Conn. Gen. .Stat. §1-84(q) of the Code as:

...a public official's or state employee's expenses for an article, appearance or speech or for participation at an event, in his official capacity, which shall be limited to necessary travel expenses, lodging for the nights before, of and after the appearance, speech or event, meals and any related conference or seminar registration fees.

If the state employee is attending the conference as a participant or facilitator of the conference (for example, the individual is asked to attend in his official capacity to give a speech or head a panel discussion), the payment of such expenses would be considered "necessary expenses" which would require the filing of a statement pursuant to §1-84(k), unless the payment was provided by the federal government or another state government. During the legislative debate on the passage of §1-84(k), it was made clear that payment for spousal expenses would be rejected as unnecessary to the occurrence of the event and tantamount to an illegal fee or honorarium. See Volume 34, H.R. Proc., part 30, June 12, 1991 Special Session, pp. 63,64. See also. Regulations of Conn. State Agencies § 1-81- 21 (b ). Therefore, the filing of such a statement by the employee's spouse would never be required since the acceptance of such expenses would be in violation of the Code.

Alternatively, a public official or state employee may be attending, but not actively participating in, a conference or seminar, as part of his state job and/or duties, typically for educational purposes. Under such circumstances, the payment of expenses by a party other than the University would be a gift to the state. Whenever a gift to the State incidentally benefits a public official or state employee in an amount of fifty dollars or more and the donor is an individual or entity regulated by, doing business with, or seeking to do business with the University, the individual's superior must certify, in writing, to the State Ethics Commission, prior to acceptance of the benefit, that the gift, in fact, facilitates state action or functions and is sanctioned by the University. Regulations of Conn. State Agencies §1-81-27(b). This certification procedure is used only when the necessary expense disclosure procedure mandated by §1-84(k) is not applicable. Regulations of Conn. State Agencies §1-81-27(c). For purposes of the gift to the state provision, UCF, UCAA, NCAA, and the Big East Conference are all entities which do business with the University. In attending these events, the donor group may cover any expenses which the state would sanction and be allowed to pay for, if the University itself covered the expenses. For example, when traveling on state business, the Department of Administrative Services has guidelines on what expenses the State may cover. Any expenses over and beyond those allowed by state guidelines (e.g., a round of golf or tickets to a play) would not be considered a gift to the state and would therefore be subject to the Code's general gift limitations.

4. The Athletic staff members' employment agreement contains a provision that states it is governed by and subject to the Code. Are these agreements in compliance with the Code? Are the authorized outside employment contracts in compliance with the Code?

A review of the employment agreements, including provisions which allow outside employment, payments for expenses for country club memberships, spousal travel, or special travel accommodations, indicate the agreements are in compliance with the Code. However, the State Ethics Commission is not in a position to determine if the actual outside employment contracts comply with the Code requirements. Since the agreement itself refers to the Ethics Code, any relevant sections of outside employment contracts which set forth the individual's obligations and duties should be submitted to the State Ethics Commission for review to ensure that no individual has entered into a contract which would be in violation of the Code. Specifically, it would be a use of one's state position, in violation of §1-84(c), for a member of the athletic staff to be paid by an outside sports company to require team members to use their equipment and/or sports apparel.

C. Operations

1. Faculty members and other University employees may travel out-of-state to attend a professional conference. Expenses may be paid with funds from a research grant, the UCF, UCAA, the professional association or another third party. Is the employee required to file an expense report with the Commission pursuant to § 1-84(k)? Does the source of funds used to payor reimburse the expense matter?

As discussed supra, if the faculty member or employee is attending as a participant or facilitator of the conference, then the filing of a report pursuant to §1-84(k) would be required. Otherwise, payments made by a party, other than the University, would be a gift to the state, and certification to the State Ethics Commission would be required prior to acceptance of the payments. All private sources of funds would be treated in the same manner.

2. May University employees accept payment of a University related business lunch limited to University employees when authorized by senior University administrative personnel? Does the source of funds used to payor reimburse the expense matter?

University payments for related business lunches authorized by senior administrative personnel may be accepted by University employees, under the Code. Payments which the University would be authorized to make from its own operating funds, may also be paid for by outside groups as a gift to the state. Expenses which the University cannot authorize would not be a legitimate gift to the state and would be subject to the gift limitations.

3. May University employees accept payment of food and beverage associated with occasional receptions held to strengthen employee morale hosted for them and their spouses by one or members of the University' s management team ? Does the source of funds used to payor reimburse the expense matter?

As discussed in two supra, payments which the University would be authorized to make from its own operating funds may be accepted by the employees. Payments for spouses would not be acceptable unless within the gift limits established by the Ethics Code. Payments which the University could otherwise make, may be paid by the outside enumerated parties as a legitimate gift to the state. Any unauthorized payments would need to be within the gift limits. Reimbursement for any resultant overage would be required.

4. May University employees accept gifts to recognize certain life events, such as retirement, when authorized by senior University administrative personnel? Does the source of funds used to payor reimburse the expense matter?

Such gifts given to University employees would be in recognition of their work for the University and the value of such gifts would be included in their income for IRS purposes as compensation. Under the Code, the employee may accept such gifts. Payments or reimbursements by a third-party would be considered a legitimate gift to the state.

5. May Athletic Department staff members and other University staff accept gifts awarded by the University in recognition of successful season or tournament performances as authorized by senior University administrative personnel? Does the source of funds used to payor reimburse the expense matter?

The answer is the same as discussed in number four supra.

6. The University may occasionally host events to engage and educate executive and legislative branch members, i.e., an alumni legislative reception or new legislator orientation session. Additionally, University Trustees, legislative and executive branch officials and employees may be periodically invited to attend significant University events e.g., commencement, convocation, special events) and related receptions. University, UCF or UCAA or unaffiliated third party funds may be used to fully or partially underwrite these events. Do the Code's annual gift limits for public officials and state employees apply? Does the source of funds used to payor reimburse the expense matter?

Any benefits paid for by the University for any state employee or public official who attends in his or her official capacity may be accepted by such individuals. If any other third party makes such expenditures on behalf of the University, it would be considered a gift to the state.

7. Periodically, spouses and family members of coaches, athletic administrators, other University employees and athletic staff members may travel on a University chartered airplane or bus or a commercial airline to attend various athletic events. Is this permissible?

Again, the State Ethics Commission does not recognize the attendance of these individuals as necessary to accomplish a state purpose. The right to take an open spot on the team plane or bus is being offered only because of or by virtue of their family member's state position or status. Using state property to avoid personal payment for such travel expenses would be use of one's state position for personal financial gain in violation of Conn. Gen. Stat. §1-84(c). If the spouse or other family member took such a spot, he or she would need to reimburse the University for the value of that seat.

D. Athletics -Events

1. The Big East Conference and/or NCAA provide travel and/or other expenses incident to the University's participation in post-season tournaments. The Conferences may also award gifts, the value of which may exceed the $50 gift limit e.g., watches and stereos) to coaches, other Athletic Department and University staff and student athletes to commemorate their participation in a tournament or an accomplishment that occurred in a tournament. Periodically, spouses and family members of University employees may serve as unpaid UCONN representatives to foster relations with Conference donors, fans and tournament officials. May University employees accept these gifts? Does the source of funds matter? Must such payments and reimbursement be reported pursuant to Conn. Gen. Stat. §1-84(k)?

Any gifts received from outside parties which stem from one's state job duties are deemed the property of the state. The coaches and other staff members should turn these items over to the University. The University may then allow these individuals to have the items as part of their compensation. The value of the items would need to be reported as compensation for IRS purposes.

Unless agreed to as part of one's compensation, as discussed supra, the payment for spousal expenses is not allowed, regardless of the source of funds. If such expenses are paid as part of one's compensation agreement, no §1-84(k) statement is required. Rather the compensation agreement and related University records, which are public documents, provide the necessary disclosure. The payment by an outside third party for coaches' and other staff members' attendance at a tournament would be a gift to the state and reported, as described supra, to the State Ethics Commission prior to the trip.

2. Coaches and other University employees are occasionally invited to participate in charity events, such as golf tournaments, as "celebrities". The funds raised benefit a charitable organization other than the University of Connecticut. Participants receive various gifts and meals. The fee to participate is substantially higher than the actual cost of a round of golf. May these "celebrity" /state employees participate? Would the gift limits apply to these situations?

In a prior advisory opinion, the Commission ruled that a state official's invitation to a participate in a charity golf tournament, which was extended solely because of his public position, did not qualify for the necessary expense exception to the Code's overall gift limitations. State Ethics Commission Advisory Opinion No.95-18, 57 CLJ 19, p. 7E, (11/7/95). The Commission would not allow the receipt of expenses in situations where the only activity is participation in the underlying charity event, ~ as a player in a golf or tennis tournament. Id. In this case, however, the state employee is not being invited solely because of his state position and is not representing the University or required to participate as part of his or her state responsibilities. Rather, the individual is being invited to participate because of his celebrity status. It is not germane that this celebrity status may have been derived through his or her state accomplishments. This interpretation is consistent with analogous Commission precedent which allows a state employee to use his expertise, but not his office, for outside employment opportunities, even if such expertise is gained from state service. This celebrity status applies to a very limited number of University employees. The individual must be well or widely known and easily recognizable by the general public. Two examples are Coaches Jim Calhoun and Geno Auriemma, whose celebrity status is confirmed by their outside commercial endorsements.

Therefore, if the state employee does, in fact, have such celebrity status, then he or she may participate in these tournaments without concern for the Code's gift limitations. This would be the case even if the sponsoring organization was a registered lobbyist. Although the gift limits do apply whether such gifts are given for lobbying or nonlobbying purposes, as long as the individuals received the same benefits as all other celebrity participants, the benefits received would not be deemed gifts but rather items in exchange for their service to the charity and participation in the event to help with its promotion.

If the public official or state employee does not have celebrity status, then the Code's gift provisions are applicable. In a prior Advisory Opinion, the Commission ruled that the value of any gifts and/or food or beverage provided does not include the portion which is attributable to the charitable donation. In calculating the gift component of tournament prizes, the cost of the prizes is pro rated among all the tournament participants. The value of the other benefits received, i.e., the round of golf or commemorative apparel, is the fair market value or the amount the charity has been charged by the country club for each individual's participation. See, Ethics Commission Advisory Opinion No.91-15, 52 CLJ 51, p. 2C (6/18/91).

3. A coach is offered a position with a cable network to offer analysis on live broadcast of professional women's basketball games. At the introduction of each broadcast, he is introduced by name and his title as UCONN Coach. Occasionally, during the broadcast, the other broadcasters refer to the coach as "Coach" instead of by name. Is this an impermissible use of the coach's position?

In a prior Advisory Opinion, the Commission held that it would be a use of office, in violation of Conn. Gen. Stat. §1-84(c), for a state employee to use his state title in a promotional brochure for his private consulting business. See, State Ethics Commission Advisory Opinion 81-5,42 CLJ 49, p.13 (6/2/81). It follows, therefore that use of one's state title to promote one's outside employment, including a paid promotion for an unrelated third party, would be an impermissible use of state position. The coach may, however, use his state title to promote UCONN, in a resume, or when being introduced for identification purposes. In this case, the use of his title during the cable program will be done for identification only and not in order to promote the program itself. Therefore, it is permissible, under the Code, for the coach's state title to be used when he is introduced and he may be referred to as "Coach" instead of specifically by name during the program.

By order of the Commission,

Maurice FitzMaurice
Chairperson