Transcript Ethics for Florida Government Employees Jeffrey R. Smith, CPA, CGFO Indian River County Clerk of Court & Comptroller 5/13/2013 2013 New Clerk Academy.

Ethics for Florida Government
Employees
Jeffrey R. Smith, CPA, CGFO
Indian River County Clerk of Court &
Comptroller
5/13/2013
2013 New Clerk Academy
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Presentation Overview
History of Florida’s Ethics Laws
Ethics Laws
Disclosures
Penalties
Published Ethics Codes
Analysis of Ethics Case Law
Resources
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History of Florida’s Ethics Laws
Florida Constitution revised in 1968
o Required a code of ethics for all state employees
and non-judicial officers
o Prohibited conflict between public duty and
private interests be prescribed by law
o 1976 the “Sunshine Amendment” was adopted
o Provided additional constitutional guarantees
concerning ethics in government.
o Created independent commission(Commission on
Ethics) to investigate complaints
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History of Florida’s Ethics Laws
o Five of the Commission’s nine members are
appointed by the Governor
o Two each are appointed by the President of the
Senate and Speaker of the House of Representatives
o No more than five (5) Commission members may be
members of the same political party
o None of the Commission members may hold any
public employment during their two-year terms of
office
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History of Florida’s Ethics Laws
The “Code of Ethics for Public Officers and
Employees” adopted by the Florida Legislature is
found in Chapter 112 of the Florida Statutes
o Primary goal to promote public interest and maintain
respect of the people for their government
o Ensure that public officials conduct themselves
independently and impartially
o Ensure that public officials are not using their office
for personal gain
o Avoid creation of unnecessary barriers to public
service while maintaining integrity of government
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History of Florida’s Ethics Laws
ROLE OF THE COMMISSION ON ETHICS
o Investigate complaints
o Renders advisory opinions to public officials
o Prescribes forms for disclosure
o Administers the Executive Branch Lobbyist Registration
and Reporting Law
o Maintains financial disclosure filings of constitutional
officers and state officers and employees
o Administers automatic fines for public officers and
employees who fail to timely file and financial disclosures
o May file suit to void contracts, prepares mailing lists of
officials subject to disclosure and makes
recommendations to disciplinary officials when
appropriate
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ETHICS LAWS
 Primarily two types of provisions:
o Those prohibiting certain actions or conduct
o Those requiring certain disclosures be made to public
 Laws generally apply to all public officers and
employees, State and local as well as members of
advisory bodies.
 Principal exclusion are judges – fall under jurisdiction
of Judicial Qualifications Commission
 Public Service Commission members and employees
are subject to additional ethics standards enforced
by the Ethics Commission under Sec 350 of Florida
Statutes.
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Solicitation and Acceptance of Gifts
o Public officers, employees, local government
attorneys AND CANDIDATES are prohibited from
soliciting or accepting anything of value based on
understanding that their vote, official action or
judgment would be influenced by such gift
[S112.313(2) Fla. Stat.]
o Any person required to file financial disclosure Form
1 or Form 6 is prohibited from soliciting any gift from
political action committee, lobbyist who has lobbied
his/her agency in last 12 months or the partner,
firm, employer or principal of such lobbyist
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Solicitation and Acceptance of Gifts, (continued)
o Any person required to file financial disclosure Form 1 or
Form 6 is prohibited from accepting any gift worth over
$100 from political action committee, lobbyist who has
lobbied his/her agency in last 12 months or the partner,
firm, employer or principal of such lobbyist
o Effective in 2006, no EXECUTIVE BRANCH or legislative
lobbyist, or principal shall make indirect or direct
expenditure for purpose of lobbying nor no EXECUTIVE
BRANCH or legislative official shall accept any
expenditure made for the purpose of lobbying
[112.3215, Fla. Stat.]
o This would include any gift UNDER $100 permitted
under Statute 112.3148
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Unauthorized Compensation
o Public officers or employees, local government
attorneys, and their spouses or minor children
prohibited from taking any compensation or
anything of value that:
 They know
 They should have known with exercise of reasonable
care
will influence their vote or official action
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Misuse of Public Position
o Prohibited from corruptly using or attempting to
use their official positions to obtain a special
privilege for themselves or others
Disclosure or Use of Certain Information
o Information not available to the public and
obtained by reason of their position for the
personal benefit of themselves or others
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Solicitation or Acceptance of Honoraria
o Person required to file financial disclosure Form 1 or
Form 6 as well as State procurement employee
prohibited from soliciting honoraria which is related
to his or her public duties or office
o Person required to file financial disclosure Form 1 or
Form 6 as well as State procurement employee
prohibited from accepting an honorarium from
political action committee, lobbyist who has lobbied
his/her agency in last 12 months or the partner,
firm, employer or principal of such lobbyist except
reimbursement of expenses related to an event
provided the expense is disclosed
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Solicitation or Acceptance of Honoraria
(cont’d)
o Lobbyist and their partners, firms, employers or
principals or political action committee
prohibited from giving an honorarium to persons
required to file financial disclosure Form 1 or
Form 6 as well as State procurement employees
o Violations can result in a fine of up to $5,000
and prohibitions from lobbying for 2 years
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Solicitation or Acceptance of Honoraria
(cont’d)
o No EXECUTIVE BRANCH or legislative lobbyist, or
principal shall make indirect or direct
expenditure for purpose of lobbying nor no
EXECUTIVE BRANCH or legislative official shall
knowingly accept directly or indirectly any
expenditure made for the purpose of lobbying
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Prohibited Employment and Business
Relationships
o Doing business with one’s agency
 5% ownership test – his/her spouse or child
o Conflicting employment or Contractual
Relationship
 Public officer or employee prohibited from holding
any employment or contract with any entity or agency
regulated by or doing business with his/her public
agency
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Prohibited Employment and Business
Relationships (cont’d)
o Conflicting employment or Contractual Relationship
(cont’d)
 Public officer or employee prohibited from holding any
employment or contractual relationship which will pose a
frequently recurring conflict between private interests and
public duties or impede full and faithful performance of
public duties
 Limited exceptions exist for legislative bodies, certain
special tax and drainage districts and persons whose
professions qualify them to hold their public positions
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Prohibited Employment and Business
Relationships (cont’d)
o Conflicting Employment or Contractual
Relationship Exemptions from Prohibitions:
 Business rotated among all qualified suppliers
 Business awarded by sealed competitive bidding and
the official has not tried to influence or persuade
agency personnel (Disclosure required on Form 3A)
 In cases of legal advertising, utilities or passage on
common carrier
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Prohibited Employment and Business
Relationships (cont’d)
o Conflicting Employment or Contractual Relationship
Exemptions from Prohibitions(cont’d)
 Emergency purchase required to protect public health,
safety or welfare
 Business entity is sole source of supply and full disclosure
on Form 4A
 Aggregate of such business < $500 in calendar year
 If public officer or employee is employed by tax exempt
organization and the officer or employee is not directly
compensated as a result
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Prohibited Employment and Business
Relationships (cont’d)
o Lobbying State Agencies by Legislators
 Prohibition is for representing another person or entity for
compensation during his/her term in office
o Employees Holding Office
 Prohibition from holding office which governs his/her
employer (i.e. County Commission and being Parks Dir)
o Professional and Occupational Licensing Board
Members prohibited from serving as officer, director,
or administrator of state, county or regional
professional or occupational organization or
association
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Prohibited Employment and Business
Relationships (cont’d)
o Local government attorneys and their law firms
are prohibited from representing private
individuals or entities before the unit of local
government which they serve
o Can’t refer or recommend to his/her firm legal
work involving the local government he/she
serves
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Restrictions on appointing, employing and
contracting with relatives
o Anti-nepotism law
 Public official prohibited from seeking for a relative
any appointment, employment, promotion or
advancement in the agency which he/she is serving
or over which he/she exercises control
 No person shall be appointed, employed, promoted or
advanced in or to a position if such action was
advocated by a related public official
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
Restrictions on appointing, employing and
contracting with relatives (cont’d)
o Anti-nepotism law (cont’d)
 Prohibition DOES NOT apply to school districts (except
as provided in Fla. Stat. 1012.23), community
colleges, and State universities, or to appointments
of boards of municipalities with < 35,000 population
 Approval of budgets does not constitute “jurisdiction
or control” for purposes of this prohibition other than
volunteer emergency medical, fire fighting or police
service providers
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Post Office Holding and Employment
Restrictions
o Lobbying By Former Legislators, Statewide Elected
Officers and Appointed State Officers
 Prohibition from representing any person or entity for
compensation before the government body or agency in
which the individual was an officer or member for two (2)
years
o Lobbying by Former State Employees
 Certain employees of executive and legislative branches of
State government prohibited from representing any person
or entity for compensation before the agency they were
employed by for two (2) years after leaving their positions
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Post Office Holding and Employment Restrictions
o Lobbying by Former State Employees (cont’d)
 These employees include:
 Executive & legislative branch employees serving in SENIOR MANAGEMENT &
SELECTED EXEMPT SERVICE class and any person employed by the
DEPARTMENT OF LOTTERY with authority over policy or procurement
 Auditor General
 Director of OPPAGA
 Sergeant of Arms and Secretary of the Senate
 Sergeant of Arms and Clerk of the House of Representatives
 Executive Director and Deputy Executive Director of Commission on Ethics
 Executive director, staff director or deputy staff director of each joint committee,
standing committee or select committee of the Legislature
 An executive director, staff director, executive assistant, legislative analyst, or
attorney serving the Office of the President of the Senate or the Speaker of the
House
 Senate and House Majority and Minority Party Offices
 Chancellors and Vice-Chancellors of the State University System
 General Counsel to the Board of Regents and all
 All presidents, vice-presidents and deans of each state university
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
o Lobbying by Former Local Government Officers
and Employees
 Any person elected to county, municipal, school district, or
special district office is prohibited from representing
another person or entity for compensation before the
government body or agency he/she was an officer of for two
(2) years after leaving office
 Appointed officers and employees of above may be subject
to same prohibition by local ordinance or resolution
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Voting Conflicts of Interest
o NO STATE PUBLIC OFFICIAL is prohibited from voting
in an official capacity on any matter
o A STATE PUBLIC OFFICER who votes on a measure
which inures to his/her special private gain or loss
or to a PRINCIPAL by whom he/she is retained, a
RELATIVE, BUSINESS ASSOCIATE or PARENT
ORGANIZATION or SUBSIDIARY of CORPORATE
PRINCIPAL by whom he/she is retained must file
memorandum of voting conflict on Commission
Form 8A with the recording secretary within 15 days
after the vote occurs
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ETHICS LAWS
PROHIBITED ACTIONS OR CONDUCT
 Voting Conflicts of Interest
o NO COUNTY, MUNICIPAL, or other LOCAL PUBLIC OFFICER
shall vote in an official capacity upon measure which would
inure to his/her special private gain or loss or to PRINCIPAL,
RELATIVE, BUSINESS ASSOCIATE or PARENT ORGANIZATION or
SUBSIDIARY of CORPORATE PRINCIPAL of which he/she is
retained
o Must publicly announce his/her interest before the vote and
file Form 8A with recording officer within 15 days after the
vote occurs
o No Appointed State or Local Officer shall participate in any
matter inuring to the officer’s private gain or loss or to
Principal, Relative, Business Associate or Parent Organization
or Subsidiary of Corporate Principal to which he/she is
retained without first disclosing the matter on Form 8A
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ETHICS LAWS
DISCLOSURES
 FORM 1 – Limited Financial Disclosure
o Persons include State officers, local officers, candidates for
local elective office and specified State employees
o Some examples include: (not inclusive)
 Elected public officials not serving in a political subdivision
 Commissioner of Education & members of Board of Education
 Appointed member of local governing bodies, expressway authorities,
community colleges, code enforcement boards
 Mayor and chief administrative officer of a county, municipality or
other political subdivision
 Chief of police, fire chief, municipal clerk, school superintendent,
medical examiner, purchasing agent with authority > $15,000
 Each employee of the Commission on Ethics
 Senior managers of the Citizens Property Insurance Corp.
o Exception is for those required to file FORM 6 (including
Constitutional Officers)
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ETHICS LAWS
DISCLOSURES
FORM 1 – Limited Financial Disclosure
(cont’d)
o Information to be disclosed
 Sources and types of financial interests
 Names of employers and addresses of real property
holdings
 NO DOLLAR VALUES are required to be listed
 Certain relationships with and ownership interests in banks,
insurance companies and utility companies
o Candidates must file FORM 1 together with and at
same time as their qualifying papers
o All others required to file by July 1 of each year
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ETHICS LAWS
DISCLOSURES
FORM 6 – Full and Public Disclosure
o All elected constitutional officers and candidates for
such offices
o Mayor and members of City Council and candidates
for such offices in Jacksonville
o Duval County Superintendent of Schools
o Members of Florida Housing Finance Corporation
Board
o The Florida Prepaid College Board
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ETHICS LAWS
DISCLOSURES
FORM 6 – Full and Public Disclosure (cont’d)
o Detailed disclosure of assets, liabilities and sources
of income over $1,000 and their values, and net
worth
o Option to file their most recent income tax return in
lieu of listing sources of income (does not eliminate
reporting of assets, liabilities and net worth)
o Certain relationships with and ownership interests in
banks, insurance companies and utility companies
o Incumbents file by July 1 to Commission on Ethics
o Candidates file at time of qualifying with Supervisor
of Elections
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ETHICS LAWS
DISCLOSURES
 Others
o Form 2 – Quarterly Client Disclosure
o Form 3A – Statement of Interest in Competitive Bid for
Public Business
o Form 4A – Disclosure of Business Transaction,
Relationship or Interest
o Form 8A – Memorandum of Voting Conflict (State Officers)
o Form 8B – Memorandum of Voting Conflict (County, City or
other Local Officers)
o Form 9 – Quarterly Gift Disclosure
o Form 10 – Annual Disclosure of Gifts from Governmental
Entities and Direct Support Organizations and Honorarium
Event Related Expenses
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ETHICS LAWS
PENALTIES
 Non-criminal Penalties for Violation of the Sunshine
Amendment and the Code of Ethics
o No criminal penalties exist
o Penalties may include
Impeachment
Removal from office or employment
Suspension
Public censure
Reprimand
Demotion
Reduction in salary level
Forfeiture of no more than 1/3 salary per month for no more than
12 months
 Civil penalty not to exceed $10,000
 Restitution of pecuniary benefits received



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
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

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ETHICS LAWS
PENALTIES
Candidates
o Disqualification from being on ballot
o Public censure
o Reprimand
o Civil penalty not to exceed $10,000
Former Officers and Employees
o Public censure and reprimand
o Civil penalty not to exceed $10,000
o Restitution of pecuniary benefits received
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ETHICS LAWS
PENALTIES
 Lobbyists
o Failure to Register as an Executive Branch Lobbyist
may result in being:




Fined up to $5,000
Public censured
Reprimanded
Prohibited from lobbying executive branch agencies for 2
years
o Failure to comply with gift rules and honorarium
rules may result in being:
 Fined up to $5,000
 Prohibited from lobbying the agency for 2 years
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ETHICS LAWS
PENALTIES
 Felony Convictions: Forfeiture of Retirement Benefits
o Public officers and employees subject to loss of
retirement benefits if convicted of:




Embezzlement of theft of public funds
Bribery and felonies under Fla. Stat. 838 misuse of public office
Impeachable offenses
Felonies connected with intent to defraud the public
o Automatic penalties for failure to file annual disclosure
 Fines of up to $25 each day late the form is filed after Sept. 1
 Maximum of $1,500
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PUBLISHED ETHIC CODES
Florida Government Finance Officers
Association – www.fgfoa.org
ICMA – www.icma.org
Certified Public Accountants
o AICPA – www.aicpa.org
o FICPA – www.ficpa.org
Lawyers – www.floridabar.org
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Case Studies
ESM Government Securities/Grant Thornton
o Auditing firm known then as Alexander Grant &
Co guilty of falsifying audit of securities dealer
which led to collapse of American Savings &
Loan Association of Florida in turn leading to
collapse of Home State Savings & Loan in
Cincinnati,Ohio and affected 69 other S&L’s in
Ohio in 1985
o Required to pay $36,000,000 award
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Case Studies
 Enron/Arthur Andersen
o Originally found guilty of obstruction of justice and
interfering with an SEC investigation (verdict
overturned on technicality on appeal)
o Shredded documents related to Enron audit
o David Duncan partner for Arthur Andersen
acknowledged that employees destroyed evidence
o Firm was allegedly involved in Worldcom, Qwest
Communications and Global Crossing fraud cases
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Case Studies
 Palm Beach County Commissioner
o Jeff Koons resigned August 3, 2010 amid charges of extortion, perjury and
violating public open meeting laws
o Extortion was not for money but attempt to eliminate opposition to one of
his major projects
 Palm Beach County Commissioner
o Warren Newell pled guilty to public corruption charges in 2007 in pocketing
approximately $500,000 in 3 illegal land deals
o Voted to advance a $190 million water district reservoir project while hiding
his own interest in the project which included a $350,000 bonus if the plan
succeeded
o Directed a $50 million taxpayer funded initiative to protect public access to
waterfront and then steering $14 million of it to a marina where he docked
his boat and was in partnership with the owner and had unpaid docking
fees of more than $48,000
o Third instance was making money on a land deal where he was a secret coowner
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Case Studies
Former Florida Republican Chairman Jim
Greer
o Arrested June 2, 2010 for allegedly running a
scam that bilked money from the state party.
o Owned 60% of a corporation set up to raise
money for the party. Corporation received a 10%
commission on any money raised.
o Charged with 6 counts of organized scheme to
defraud, 4 counts of felony grand theft and 1
count of money laundering
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Resources
 Section 112, part III of Florida Statutes
 Reference guide by Florida Commission on
Ethics
 Foxnews.com
 Palmbeachpost.com
 WBPF-TV.com
 John C. Maxwell, Ethics 101-What Every Leader
Need to Know (Time Warner Book Group, 2005)
 John C. Maxwell, The Choice is Yours (Thomas
Nelson Book Group, 2005)
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