Informal Advisory Opinion No. 96-4

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Informal Advisory Opinion No. 96-4 INFORMAL ADVISORY OPINION NO. 96-4 The Hawaii State Ethics Commission ("Commission") issued a charge against a state official alleging violations of the State Ethics Code, Chapter 84 of the Hawaii Revised Statutes ("HRS"), in connection with his participation in five golf tournaments during the time he served as an official of a state agency. In addition, the Commission considered a request from the official for an advisory opinion regarding this matter. The official's request for an advisory opinion was made to the Commission after he had participated in the events. The Commission issued this informal advisory opinion to address both the charge and the official's request for an advisory opinion. With respect to each golf tournament, the official was charged with violating HRS section 84-11, known as the gifts law. That provision of the State Ethics Code states as follows: §84-11 Gifts. No legislator or employee shall solicit, accept, or receive, directly or indirectly, any gift, whether in the form of money, service, loan, travel, entertainment, hospitality, thing, or promise, or in any other form, under circumstances in which it can reasonably be inferred that the gift is intended to influence the legislator or employee in the performance of the legislator's or employee's official duties or is intended as a reward for any official action on the legislator's or employee's part. "Official action" is defined by the State Ethics Code as "a decision, recommendation, approval, disapproval, or other action, including inaction, which involves the use of discretionary authority." The gifts law prohibits a state official or employee from accepting a gift if it can "reasonably be inferred" that the gift is intended to influence or reward discretionary action on the part of the state official or employee. The official generally denied the allegations set forth in the charge. He informed the Commission that after satisfying himself that his participation would not influence his actions and was not intended as a reward, he participated in the golf tournaments in his state capacity. He indicated that he participated in the events to demonstrate the state administration's support, as well as his personal support, for events important to the tourism industry. The facts and circumstances relevant to the official's involvement with each of the five golf tournaments and the Commission's disposition of this case are set forth in the following paragraphs. The Commission was informed that a certain golf tournament for professional and amateur golfers was held annually on a neighbor island. The tournament was a "by invitation only" event. The charge issued against the official pertained to his participation in that tournament in three different years. The events are hereinafter referred to as "Golf Tournament 1," "Golf Tournament 2," and "Golf Tournament 3." (1) Golf Tournament 1 The official was invited to participate in Golf Tournament 1 by a particular individual on behalf of a certain company, hereinafter referred to as "Company A." Company A was a corporate sponsor of the event. Another business was the title sponsor and "site host" for the event. The official stated that he participated in the tournament for one day and did not stay overnight. He reported that his airfare was paid either by the State of Hawaii or with his own airline coupons. He may have accepted food served at the event. The Commission was informed that as a corporate sponsor of the tournament, Company A was allocated a single professional-amateur ("pro-am") slot for an individual to participate in the event. The dollar value of that slot was unknown. However, the Commission was informed that the fee for a pro-am slot in a golf tournament that appeared to be similar to Golf Tournament 1 had been approximately $4,000. It was reported that each participant in Golf Tournament 1 received a set of golf clubs and a golf bag valued at approximately $1,200. It did not appear that those golf items came directly from Company A. The official said that they were given by the promoters of the tournament, rather than by Company A. The official stated that he attended the tournament in his state capacity. He indicated that he represented the State at the event. It appeared that the official may have been a substitute for the Governor at the event. That information was supported by Company A. According to Company A, Company A recognized that the event would be attended by senior executives from various industries and major corporations, and believed that participation by a representative of state government would generate positive exposure for the State. Company A therefore extended an invitation to the Governor, or in his absence, to the state official. It appeared that in his state capacity, the official took official action that directly affected Company A. It appeared that the official's state agency had an ongoing business relationship with Company A. The official explained that Company A products were included in state equipment price lists. He said that divisions of his state agency and agencies attached to his agency made requests to purchase Company A products, and during his tenure, he approved such purchases based on need, the availability of funds, and proper procurement considerations. Previously, the official had been involved in the approval or completion of his state agency's purchase of certain Company A products on a sole source basis. The official informed the Commission that he disposed of the golf clubs and bag he received for participating in Golf Tournament 1. Initially, the official stated that, after consultation with the person who had extended the invitation to him on behalf of Company A, the items were sold, with the proceeds going to charity and no tax deductions taken by the official. The official indicated that the reason Company A did not take the items was that the clubs were for a right-handed golfer, and the person who had extended the invitation to the official from Company A was left-handed. The official later stated that he sold the items to one of his subordinate employees. The Commission was informed that on a work day and in the official's office, he offered to sell the clubs and bag to his subordinate. After his subordinate agreed to buy the items, it was alleged that the official directed his subordinate to negotiate a price with the official's secretary and to pay the secretary for the items. The items were sold to the subordinate. The official said that the proceeds went to various charities and that he later returned to his subordinate the money he had received from his subordinate for the items, to mitigate any ethical concerns. The official was charged with violating HRS section 84-11 of the State Ethics Code for: (1) accepting Company A's invitation to participate in Golf Tournament 1; and (2) accepting golf clubs and a golf bag given in connection with his participation in that tournament. The official was also charged with violating HRS section 84-13 of the State Ethics Code, which pertains to fair treatment, for selling the golf clubs and bag to his subordinate. The relevant parts of HRS section 84-13 state as follows: 2 §84-13 Fair treatment. No legislator or employee shall use or attempt to use the legislator's or employee's official position to secure or grant unwarranted privileges, exemptions, advantages, contracts, or treatment, for oneself or others; including but not limited to the following: . (3) Using state time, equipment or other facilities for private business purposes. (4) Soliciting, selling, or otherwise engaging in a substantial financial transaction with a subordinate or a person or business whom the legislator or employee inspects or supervises in the legislator's or employee's official capacity. The "fair treatment" section of the State Ethics Code prohibits state officials and employees from using or attempting to use their official positions to obtain unwarranted benefits for themselves or others. The official was charged with violating HRS section 84-13 for having his secretary negotiate the purchase price of the items with his subordinate and complete the sales transaction with his subordinate, thereby giving the official an unwarranted benefit. The official was also charged with violating HRS section 84-13(4) for engaging in a substantial financial transaction with a subordinate. Finally, the official was charged with violating HRS section 84-13(3) for using state time, equipment, or other facilities for the private sale of the items to his subordinate. (2) Golf Tournament 2 Company A also invited the official to participate in Golf Tournament 2, which was held the year after Golf Tournament 1 occurred. Company A was a corporate sponsor for Golf Tournament 2. The title sponsor and "site host" for the event was the same as in the previous year. It appeared that Company A was allocated a pro-am slot in Golf Tournament 2 and invited the official to fill that slot. The invitation was extended to the official on behalf of Company A by the same person who had extended the invitation to him for Golf Tournament 1. The dollar value of a slot to participate in Golf Tournament 2 was unknown. The Commission, however, was told that the value of a slot to participate in an event that appeared to be similar to Golf Tournament 2 had been approximately $4,000. The official stated that he participated in Golf Tournament 2 for one day and did not stay overnight. He said that the State paid his airfare. The official may have accepted food served at the event.
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