Advisory Opinion No. 2001-29

Application Of The Code To The State Employees'
Campaign For Charitable Giving

Ms. Carol Carney, Chair of the Connecticut State Employees' Campaign for Charitable Giving, has asked the State Ethics Commission for an advisory opinion regarding the application of the Code of Ethics to silent auctions and raffles conducted by state agencies as part of the Campaign. Specifically, Ms. Carney poses the following questions:

1. May state agencies solicit donations of items for such auctions and raffles from businesses or other entities from the private or non-profit sectors?
2. If the answer to question one is yes,

3. When items are donated for silent auctions and raffles from state officials and employees, (a) are there any restrictions on the eligibility of any state officials or employees, including members of the State Employees' Campaign Committee, to bid on such items or purchase raffle tickets and (b) are there any requirements with regard to bidding procedures?

The State Employees' Campaign For Charitable Giving (Campaign) is established by statute "…to raise funds from state employees for charitable and public health, welfare, environmental, conservation and service purposes." Conn. Gen. Stat. §5-262a(3). Given this legal status, the Campaign can qualify for "gifts to the state," which are defined in the Code as: "Goods or services…which are provided to the state…for use on state property, or…to support an event or the participation by a public official or state employee at an event, and…which facilitate state action or functions" Conn. Gen. Stat. §1-79(e)(5).

Applying this conclusion to Ms. Carney's queries:

1. Yes. Items donated for this purpose qualify as gifts to the state. In making such solicitations, however, agencies should be scrupulous in avoiding any implication that donations from regulated entities will result in beneficial treatment by the regulatory agency.
2. a. To avoid the potential problem set forth in no. 1, supra, any solicitations should preferably be on the letterhead of the Campaign, not of the state agency; and should be signed by a representative of the Campaign, not the agency head. The Commission wishes to emphasize, however, that these procedures are recommended, but not mandated under the Code.
   2. Members of the Campaign Committee are not, in general, precluded from bidding on auction items or purchasing raffle tickets. Rather, in order to prevent any opportunity for misuse of position and to insure the integrity of the activities in question, only those Campaign members specifically assigned to administer a particular auction or raffle are barred from such participation.
   3. To avoid any improper benefit to participating state employees, items utilized in any silent auction must not be sold for less than fair market value. Similarly, any raffle must be designed and conducted in a manner which insures that monies raised are, at a minimum, equivalent to the fair market value of the items to be awarded. These restrictions will prevent any potential misuse of public position for financial benefit. For example, the restrictions will preclude the solicitation of expensive items from regulated entities which can then be acquired, at less than market value, by officials or employees of the regulatory agency in auctions or raffles which are, in most instances, limited to those agency personnel.

   The Commission notes, however, that such concerns are not present if the items are donated by individuals or entities not subject to regulation by the state agency conducting the fundraising (or otherwise restricted by the Code’s gift limitations). Consequently, for those unregulated donors, the Code will not require that fair market value be received for raffled or auctioned items.

   1. a. Again, as in no. 2(b), supra, only those assigned to administer a particular auction or  raffle are prohibited from bidding or purchasing tickets in that fundraising effort.
   2. In contrast to items donated by regulated entities or lobbyists, when the items for auctions or raffles are donated by fellow state employees, the potential for misuse of position for financial benefit in violation of the Code is not present. Specifically, under the Code no public official or state employee can receive a tangible benefit of over ten dollars (with exceptions not pertinent) from a lobbyist or an individual or entity doing business with, seeking business from, or regulated by the state servant's agency or department. Conn. Gen. Stat. §1-84(j) and (m).

   These restrictions do not, however, extend to benefits provided by fellow employees, regardless of the employment relationship (e.g., supervisor/subordinate). Consequently, in this instance, it is beyond the authority of the State Ethics Commission to mandate that auction or raffle items be given a minimum fair market price. Rather, the valuation rules for such state employee donated items (and items donated by other nonrestricted individuals and entities) are within the purview of the Campaign Committee.

In closing, the Commission wishes to reiterate that the utilization of fair market value for raffled or auctioned items donated by restricted classes is essential to prevent misuse of public position, however inadvertent, for financial gain. Not unimportantly, such valuation will also help maximize the charitable purpose of the fundraising. Nonetheless, if the Campaign believes these rules are potentially burdensome or even unworkable, it has the option of advertising and opening its raffles and auctions to the public. This alternative will address the Commission’s concerns and allow the Campaign to proceed under whatever valuation rules it deems appropriate.

By order of the Commission,

Rosemary Giuliano
Chairperson