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30-day grace vexes state's ethics panel

New law on lobbyist gifts allows time to fix violations, limits investigations by Michael R. Wickline | April 18, 2015 at 2:46 a.m.

Arkansas Ethics Commission members are perplexed about how to administer a new law that restricts their ability to investigate elected officials who accept gifts from lobbyists.

Act 1280, passed by the Arkansas Legislature this year and signed into law by Gov. Asa Hutchinson, gives a grace period to any lawmaker or other state elected official who unintentionally accepts a prohibited gift from a lobbyist and returns it within 30 days of learning that it is barred by law.

If the improper gift has been consumed or is no longer available, an official can avert an investigation by paying an amount "equal to or greater than the value of the gift," the law says.

If the official can argue that the alleged violation was unintentional and that he returned the gift or paid for it within the time the law allows, then the commission "shall not proceed with an investigation," the law says.

"If somebody is eligible to raise that affirmative defense [against an alleged ethics violation under Act 1280], the Ethics Commission won't proceed with an investigation and, if they do take that corrective action within the 30-day period, then ... there is no violation and there is no case," said commission Director Graham Sloan.

"It is a 30-day grace period," he told the commission Friday during its meeting in Little Rock.

The commission will have to decide whether such a violation is "unintentional" or not, Sloan said Friday as he briefed the commission on ethics laws enacted by the Legislature.

But commission Chairman William Bird III of North Little Rock wondered how the commission would determine whether the official unintentionally accepted a prohibited gift in these cases if the commission is barred from conducting an investigation.

Sloan said the commission will have to amend its rules of practice and procedure and "create a process to allow y'all to make that determination or make that decision."

The commission could ask the official facing an ethics complaint over a prohibited gift to submit his "explanation or materials" if he claims he unintentionally accepted the gift, so the commission would have that information to consider the case for the first time, Sloan said.

Commission member Sharon Trusty of Russellville, who is a former state senator, questioned why the Legislature made a distinction between the unintentional and intentional acceptance of a prohibited gift from a lobbyist.

"I've always had a problem with legislative intent," she acknowledged.

Sloan said he believes that lawmakers didn't want to allow a state official to knowingly accept a prohibited gift and then return it within 30 days to avoid ethics regulators.

"I think the concern on that was 'No, this is not just a get-out-of-jail-free card,'" he said.

Act 1280 says that the new wording "shall not be construed to authorize a person to knowingly or willfully solicit or accept a gift in violation of this section."

Sloan said the commission's rules for enforcing Amendment 94 of the Arkansas Constitution will have to be approved by the Legislative Council before they go into effect under Act 1258, which requires most state agencies to get the approval of the council for their proposed rules before they go into effect. Voters in November approved Amendment 94, which extended the time lawmakers may hold office, prohibited lobbyists from providing certain gifts to state officials and banned direct corporate and union contributions to candidates.

Trusty later asked: "Can we take the word 'intentional' out?"

But Sloan said the commission couldn't do so because "it's in there for a purpose."

After the commission's meeting, the sponsor of Act 1280, Sen. Jon Woods, R-Springdale, said the law includes a 30-day "cure period" patterned after federal law because it was suggested by several other lawmakers.

The commission should contact federal ethics officials to get guidance on how it administers the law, he said.

The 30-day "cure period" is aimed at making sure an official can "make up for" accepting a cup of coffee or unknowingly accepting a ticket to an event without becoming "an ethics violator," said Woods.

"The person is still going to come down [to the Ethics Commission] and prove it was an oversight or mistake," he said.

Woods said the law will allow the commission to investigate "serious violations."

But he's open to changes. "I would be happy to run any legislation if they feel something needs to be cleaned up," he said.

During the commission's meeting, Sloan said Act 1280 also creates a 30-day grace period for correcting unintentional reporting errors on campaign-finance reports and on the annual Statement of Financial Interest reports.

The Statement of Financial Interest reports are annual personal financial disclosures filed by state officials.

"I don't think taking a contribution from a prohibited PAC [political action committee] would constitute an unintentional reporting error," Sloan said.

"But we do get cases from time to time where somebody did leave an address off [a campaign-finance report] for a contributor, so there will be a missing piece of information and that person will be given 30 days to cure it," he said.

"I think it will be a question for you to decide if [a campaign-finance] report has 25 contributions and ... [required] information was left blank on every one of them, is that an unintentional reporting error or not," Sloan said.

Bird said "the hard question is going to be what is going to be defined as unintentional error.

"What is an error versus what is like ignorance of the reporting requirements?"

Commission member Sybil Hamilton of Little Rock said it could be easier for the commission to decide whether a candidate made an unintentional error if the candidate is appearing before the commission for a second time based on a similar mistake.

Act 1280 grants the commission enforcement authority and rule-making authority under Amendment 94 to the state constitution, Sloan said.

The law extends the prohibition against lawmakers and constitutional officers accepting certain gifts from lobbyists to apply to state Supreme Court, the Court of Appeals, circuit and district judges, and prosecutors.

Amendment 94 allows the acceptance of food or drink from a lobbyist for "a planned activity" to which a specific governmental body is invited.

Sloan said Act 1280 defines a planned activity as an event where a written invitation is issued 24 hours before the event.

The law also limits a lobbyist to paying for food or drink to one planned activity for officials during a seven-day period, and "without that provision arguably the lobbyist could have held a planned activity every night of the week," he said.

Amendment 94 allows officials to accept payments by regional or national organizations for travel to regional or national conferences when the presence of an Arkansas official has been requested.

Act 1280 defines travel as including transportation, lodging and conference registration fees, Sloan said.

The law also includes a prohibition for a candidate or official to display one or more campaign banners, signs or other campaign literature larger than 12 inches by 12 inches on a vehicle belonging to the candidate or official while on the Capitol grounds.

The commission is authorized to propose rules to implement the ban, including levying a fine of up to $150 for a violation of the ban, Sloan said.

"There was discussion [in a legislative] committee as to whether that's constitutional or not, and somebody might challenge it and that would be a question for the court to decide," he said.

Act 1280 also increases the campaign contribution limit from $2,000 to $2,700 per election and requires the commission to adjust the limit by inflation in each odd-numbered year, Sloan said.

Amendment 94 also created a public commission that has increased the salaries of elected officials; increased the amount of time that lawmakers may serve in the House, Senate or both chambers to 16 years; and prohibited direct campaign contributions from corporations and unions to elected officials.

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