Agenda Item 4D
July 21, 2015
Action
MEMORANDUM
TO:
FROM:
SUBJECT:
County Council
Robert H. Drummer, Senior Legislative Attorney
n
N
Work.session/Action:
Bill 39-14, Ethics -Amendments
Bill 39-14, Ethics - Amendments, sponsored by the Council President at the request of
the Ethics Commission, was introduced on July 29, 2014. A public hearing was held on
September 16, at which the County Attorney, representing the County Executive, and the Chair
and Staff Director of the County Ethics Commission appeared (see County Executive testimony
on ©55).
Bill 39-14 would revise prov1s1ons of the County Ethics Law governing financial
disclosure and solicitation and acceptance of gifts, mainly to meet certain requirements of State
law. See the transmittal letter from the Ethics Commission for details (©37-40). For further
analysis of the Bill and how it relates to the State requirements, see the Bill review letter from
the County Attorney on ©41-54.
Background
The County Attorney's bill review memo on
©41-54
well describes how the requirements
of the State Ethics Law are applied to the County Ethics Law, and how those requirements for
elected officials
in
particular have been affected by recent amendments to the underlying State law.
1
We
will
not attempt in this memo to repeat or summarize the analysis of either the County Ethics
Commission in its transmittal memo on ©37-40 or the County Attorney in his bill review memo; we
urge Councilmembers to read both closely, particularly the County Attorney's State law
background discussion on ©41-43.
Briefly, the standards set by the State law are that the County
law must be
"similar"
to the State law for all public employees except elected officials, and must
be
"equivalent to or exceed the requirement of"
State law for elected officials (County Executive
and Councilmembers).
For the State laws which articulate the standards that the County law must meet, see §§5-808 and 5-809 of a new
General Provisions (GP) Article of the Maryland Code at ©56-56a.
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In both cases, the State law allows the County to modify its law
''to
the extent necessary to
make the provisions
relevant to the prevention of conflicts of interest in that jurisdiction:".
Staff
of the State Commission apparently interprets the latter phrase to only allow those modifications of
County law that would make the County law more stringent than the State law; however, that is not
what this proviso says.
In
Council staff's view, the primary goal of the County Ethics Law
generally, and this Bill specifically, should be to improve the County law and make it clearer, more
effective, and easier to apply and enforce, rather than simply conform it to the State law in every
detail.
Given the recent State law amendments, an issue that pervades this Bill is how much to
differentiate elected officials (County Executive and Councilmembers) from other public employees
for purposes of
gift
solicitation and receipt and financial disclosure.
Council staff's view is that, as
it has to date, the County Ethics Law should as a general rule treat all public employees as
equally as possible, and variations should be made for elected officials (or any other employee
subset) only when State law or the nature of their positions clearly so requires.
The Bill was scheduled for a worksession before the Government Operations and Fiscal
Policy Committee on July 2, 2015. After Council staff had prepared a worksession packet, the
Council President· decided that this Bill should instead be reviewed and acted on by the entire
Council without a Committee recommendation. This memo will include an update of the
discussions of the issues among Council staff, County Ethics Commission staff, and the Executive
Branch occurring after the cancelled July 2 worksession.
Staff Amended Bill
Council staff, working with the County Attorney's Office; prepared
an
amended Bill with
our joint recommendations. See ©65-103. As each of the issues is discussed, we will refer to the
appropriate lines of the Staff Amendment
so
the Council can see how we recommend each issue be
resolved. We also received a memorandum from the County Ethics Commission outlining
6
objections to proposed changes in the Staff Amendment. See the June 29 memorandum at ©104-
106. We will discuss the position of the County Ethics Commission where appropriate in this
packet.
County Ethics Commission Comments
Although all 6 objections made by the County Ethics Commission were characterized as
objections to changes proposed by Council staff, 2 of the objections were to provisions that they had
proposed in the Bill as introduced and were left unchanged by the Staff Amendment. None of the 6
objections from the County Ethics Commission involved changes proposed in the Bill to conform to
State law. Each of the 6 positions outlined in the June 29 memorandum would make the County
law stricter than the State Ethics Law.
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Last week, Council staff met with the Staff Director and Chief Counsel for the County
Ethics Commission to work out alternative amendments for Council consideration for each of the
provisions in the Staff Amendment the County Ethics Commission opposed. Each of these
amendments will be presented as an alternative to the recommendations described in the issues for
Council decision.
County Executive's Comments
The County Executive sent a memorandum to the Council on July 15, 2015 commenting on
the June 29 memorandum from the County Ethics Commission. See ©114-118. The Executive
summarized his position on these 6 issues:
Jn sum, the Council Staff Draft 6 Amendments delete changes proposed by the
Commission that are unworkable, impractical, and would establish such nebulous
standards as to set traps for the unwary. The Council Staff Draft 6 Amendments
accomplish the prime objective of Bill 39-14, to meet the new standards set by the
state. They will also guard against improper irif/uence and ensure that public
officials and employees exercise impartial, independent judgment when
conducting public business.
We will present the Executive's position on each of these 6 issues as they are discussed below.
Issues for Council Decision
Corif/icts ofInterest
1) Mutual fund exclusion. The current Ethics Law, as amended in 2010, excludes from the
definition of
Interest or economic interest,
which applies to both financial disclosure and conflict of
interest provisions, any mutual fund regulated
by
the Securities and Exchange Commission in
which the investor does not control the purchase or sale of individual securities. See ©67, lines 29-
42 of the Staff Amendment. This amendment recognized that, as a practical matter, no action by a
County official could effectively influence the share price of any widely sold mutual fund, so there
was no need to require financial disclosure filers to
list
every mutual fund whose shares they held.
Bill 39-14 would instead exclude any mutual fund "that is publicly traded on a national
scale"
unless
the fund specializes in a "specific sector or area" that is regulated by the public
employee's governmental unit. See ©3, lines 32-35. Council staff does not believe that the
proposed amendment would make the law clearer or more effective. First, we are not sure how to
measure whether a fund is "publicly traded on a national scale", or why that should be the standard.
The current standard - that the fund is registered with and regulated by the SEC - leaves no room
for doubt and to our knowledge has not given rise to any interpretive issues. Second, even if a fund
specializes in a particular economic sector or geographic area that a public employee regulates, in
our view it's highly doubtful that an official or employee of this County could take an action that by
itself would be far-reaching enough to
affect
that sector and influence the fund's share price.
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Council staff recommendation:
amend the Bill to put back the mutual ftmd exclusion in the
current law as shown on lines 29-42 of the Staff Amendment at ©67.
2) Soliciting gifts.
Bill 39-14 would modify the current Ethics Law's provisions regulating
the extent to which public officials and employees can solicit or accept gifts from anyone who has
an economic interest in County government actions.
(A)
Prohibition.
Most broadly, the Bill would prohibit a "public employee" (which
includes, among many others, County elected officials, specifically the County Executive and
Councilmembers) from soliciting
any
gift from
anyone.
See ©3, line 38.
2
The current law (see ©3-4, lines 38-55) has a narrower set of restrictions, which only
prohibit soliciting gifts:
• during official work hours;
• at a County agency;
• from a lobbyist;
• from someone who does business with the employee's agency or is regulated by that
agency;
• from employees whom the employee supervises;
• while wearing a County uniform or otherwise identifiable as a public employee;
• for the employee's own benefit (unless the Ethics Commission approves); or
• with the intent of affecting or offering to affect any action by a County agency.
Bill 39-14 would repeal all these qualifications and would, for example, prohibit an elected
official or other County employee from ftmd-raising from anyone for the employee's church or
college or the United Way, or possibly
(if
broadly interpreted) even from trick-or-treating with the
employee's children at Halloween or asking a co-worker to cook dinner for a sick colleague. In our
view, this stringent a provision is overbroad and unnecessarily restrictive.
Ibis extremely expansive approach is consistent with both State law3, at least on its surface,
and the State Ethics Commission's position that, as described by County Ethics Commission staff
(see ©39), the County law should:
follow the State's lead by imposing broad restrictions that could be modified or
narrowed in application through interpretation (rather
than
through exceptions in the
law) ... The State recommendation is for Montgomery County to include this broad
prohibition in the law, without any exceptions, and through (County Ethics
Commission) interpretation of the prohibition, create what caveats make practical
sense. County (staff) were concerned that generic provisions would not provide
suitable notice of what conduct is being prohibited. Notice of what constitutes a
The Bill would also prohibit a public employee from soliciting a gift from a lobbyist on behalf of another person (see
e>5,
lines 90-92). Given the general prohibition on line 38, Council staff is unsure why this specific provision is needed.
This provision is also essentially copied from the State law.
3
The State Ethics Law contains an essentially identical, equally broad provision. See Maryland Code, General
Provisions (GP) Article, §5-505(a)(I).
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violation is particularly important where violations are sanctioned by civil and
criminal penalties.
Council staff sees at least two major policy reasons why this broad-brush approach is
inadvisable for the County Ethics Law. First, as both the County Ethics Commission staff and the
County Attorney pointed out, this kind of sweeping provision gives little notice of what would or
would not violate the law. When civil and criminal penalties are involved, due process essentially
requires fair notice to the affected population of what conduct will violate the law. Since (for
example) we doubt that any legislative body will consciously intend to criminalize all charitable
fund-raising by public employees, a law which does so on its face would not provide effective
notice. Particularly in this County, the Council has tried to make County laws accessible and
intelligible to the average, not legally trained person by using plain language drafting principles.
The State Commission's advice would take the County in a diametrically opposite direction.
Second, the State Commission's approach would effectively transfer legislative authority to
the County Ethics Commission, which, while appointed by the County Executive, is not directly
answerable to the voters. Under this approach, the County Ethics Commission would define which
exceptions to a sweeping general prohibition "make practical sense". With all due respect, in our
view that is the County Council's job. Under the current law4, the County Commission can adopt
regulations "to implement this Chapter", but they must be consistent with the underlying law. A
broad delegation of legislative authority to adopt whatever exceptions to the gift prohibition "make
practical sense" might not be legally sustainable. And, as a practical matter, a citizen Commission
that meets once a month and has only a 3-person
staff
is not well equipped to take on this level of
regulatory burden.
Council staff recommendation:
retain the current scope provisions regarding gift
solicitation.
If
the State Ethics Commission
has
specific objections to any particular provision
(which they have not articulated to date), consider their objections individually. See the lines 97-
102 and 119-123 of the Staff Amendment at ©69, 70.
(B)
Exceptions
The current law's prohibition also comes with a set of carefully-drafted
exceptions that have been in effect for several decades and which the State Ethics Commission has
previously approved as complying with the requirements of State law.
The exceptions in the current law to the prohibition on soliciting gifts from certain persons
(see ©4-5, lines 56-89) allow a public employee to solicit a gift:
• for a charitable drive (e.g., United Way) at work as part of the employee's official
duties;
• for a charity if the employee does not only solicit employees the employee
supervises or persons who do business with the employee's agency;
• for a public-private partnership approved by the County Executive or Council
President in an order published in the County Register;
• for a nonprofit
fire
or rescue corporation while wearing its uniform; and
4
County Code §19A-6(aX4).
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as an elected official for a charity if the solicitation is disclosed on the official's
annual financial disclosure form.
The last provision, relating to elected officials, was inserted in the County law to allow the
Executive and Councilmembers to lend their names to charitable events or fund-raising letters, as
many worthwhile organizations frequently request. At the public hearing several Councilmembers
expressed concern that their ability to do so would be eliminated or severely curtailed if this Bill is
enacted as introduced. The County Ethics Commission opposes this exception for elected officials,
arguing that it "allows elected officials, and only elected officials, to use the prestige of their office
to advance the interests of private charities." See the County Ethics Commission's 6-29-15
memorandum at ©104-105.
At least regarding elected officials, the current County law is not more permissive than the
current State law as actually applied. Guidance to State legislators (see ©57-58) from the Joint
Committee on Legislative Ethics allows them to solicit charitable contributions, as long as they
don't solicit from individual registered lobbyists, but they can solicit contributions from businesses
that employ lobbyists. The guidance also makes clear that they can endorse, or lend their names to,
fund-raising by charities. And, as far as we can tell, the State guidance does not require legislators
to report on whose behalf they have solicited, as the County law does for elected officials.
Council staff recommendation: consistent with the previous recommendation, retain the
current set of exceptions.
If
the State Ethics Commission objects to any particular exception,
consider that provision individually. See lines 158-190 of the Staff Amendment at ©71-73.
Alternative Amendment - Use by Elected Officials of the Prestige of Office to Conduct
Charitable Fundraising.
Council
staff
and County Ethics Commission
staff
worked together to draft an alternative
amendment for Council consideration. See the Charitable Solicitation Amendment at ©107-108.
This amendment would have 3
parts.
It would:
(1)
(2)
(3)
require that the solicitation be addressed to a large group of people in a mass mailing
or similar electronic communication that is not targeted to restricted donors or
employees supervised by the elected official;
continue the requirement that the elected official report the solicitation on a financial
disclosure form; and
prohibit the elected official from participating in any decision (such as the award of a
grant) in which the charitable organization is a party.
Executive's position:
"The Staff Alternative Amendment is unacceptable because
it
would
preclude an elected official from recommending a charity for a County grant simply because he
or she signed a solicitation letter for that charity. I support retaining the present provision, as
set out in the Staff Draft 6 Amendment.
"
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3) Accepting
gifts;
exceptions.
Bill 39-14 would retain, but in some areas significantly
modify, the current County law's provisions on acceptance of unsolicited gifts:
5
Frequently the
Bill's primary objective here is to track the State law more closely.
(A)
"Seeks to do business.
"
Bill 39-14 would prohibit a public employee from accepting
a gift, not just from individuals or organizations that do business with the employee's agency, as the
current law provides, but also from anyone who "seeks to do business, regardless of amount" with
that agency (see ©5, lines 99-100). While this clause does require that the employees knows or
should know about the business, as the County Attorney pointed out on ©44-45 "this new language
introduced a degree of uncertainty . . . that could ensnare a public employee who has no practical
means for learning if a business is 'seeking' to do business with the County".
Council staff
recommendation:
eliminate the requirement to determine if a donor "seeks
to
do business" with the
County. Council staff recommends inserting a definition of a "restricted donor" that covers the
current description of a person that a public employee must not accept a gift from. See lines 44-53
of the Staff Amendment at ©67. This definition of a restricted donor does not include a person who
seeks
to
do business with the County fonnerly on line 197 of the Staff Amendment at ©73.
Meals.
The Bill would update and clarify a currently problematic provision. Now
an employee can accept a meal from
a
restricted donor6 as long as all meals provided to that
employee by that donor do not exceed $50 in any year. This provision has prevented employees
(other than elected officials who are invited as a "courtesy to the office" under another exception,
discussed below) from accepting invitations
to
dinners and like events from organizations such as
the Chamber of Commerce where the nominal cost of the event would exceed $50 (an amount set
several decades ago), even if the actual cost of the meal is somewhat less.
7
(B)
Similar to the State law, Bill 39-14 (see ©6, lines 107-111) would effectively waive the $50
ceiling
if
at least 20 persons attend the function and retain the $50 ceiling if fewer than 20 persons
attend, in all cases "in the presence of the donor or sponsoring entity".
In
other words, the law
would draw a distinction between large, essentially public, events, and individual or smaller private
meals. This amendment would, in all cases, preclude a public employee from accepting a meal,
regardless of value, from a restricted donor when the donor is not present (i.e., the legendary
practice in Annapolis of a lobbyist leaving his credit card at a restaurant for legislators to use, or the
more contemporary offer to an employee of a gift card to use on their own at Starbucks). (Under
the County law's financial disclosure provisions, discussed later, meals of $50 or more would
generally be reported.) Although the County Ethics Commission proposed this amendment in the
Bill as introduced, they now request that we retain the requirement that an employee's supervisor or
See generally proposed amendments on
1(;)5-7,
lines 93-150.
This is a defined term in the Staff Amendment that we propose to use to encompass lobbyists and those who do
business with or are regulated by the County or are otherwise specially affected by County actions. See lines 44-53
of the Staff Amendment at ©67. The State Ethics Commission uses a similar term, "controlled donors".
7
Under a "general guidance" document that the County Ethics Commission issued in November 2012 for events held by
restricted donors, the County, acting through the Chief Administrative Officer or Council Administrator, could accept an
invitation "on behalf of the County" to certain events (not including holiday parties) where the County would benefit by
having staff attend the event; the CAO or Council Administrator would then select particular staff to attend. In Council
staffs view this indirect invitation process, while used several times in the last 18 months, has proven cumbersome and
not particularly transparent.
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manager designate the employee to attend the function. See the County Commission's 6-29-15
memorandum at ©l 05.
Council staff recommendation:
accept this amendment as introduced. See lines 206-211
of the Staff Amendment at ©73.
Alternative Amendment - Meals Amendment.
The alternative meals amendment would require approval of the employee's attendance at
the event by the employee's supervisor after finding that the employee's attendance is in the
County's interest.
If
the Council wants to adopt this amendment, it can
be
accomplished by the
Meals Amendment
at ©109.
This amendment would continue the current practice whereby a restricted donor can provide
free tickets to the County and a County official can use the free ticket to send a subordinate public
employee to the event.
Executive's position:
"The Commission now opposes its own proposal, preferring that the
County follow a cumbersome process where the CAO or Council Administrator reviews each
invitation, determines whether the County would benefit by having staff attend the event and,
if
so, selects particular staff to attend The Staff Alternative Amendment is unacceptable inasmuch
as it also requires this cumbersome review process. I support the Staff Draft 6 Amendment,
which reflects the Commission's original proposal.
"
(C)
Nominal gifts.
Bill 39-14 would slightly modify the 4 paragraphs that comprise the
current law's limits on accepting gifts of nominal value (see ©6,7, lines 112-118, 131-133, and 135-
137). Ceremonial gifts would be limited to "insignificant" monetary value (a term not defined in
the law), rather
than
$100. The gift need not commemorate an event or achievement associated
with the employee, as the current law requires. Nominal value gifts could not cost more that $20,
rather than $10.
8
Books and other informational or advertising items could only be worth $20,
rather than $25. Honoraria would be better defined as given for speaking or participating at a
meeting, but only if offering the honorarium is not related to the employee's official position.
None of these amendments is substantively earth-shaking; their
primary
goal is to conform
the County law more closely to the State law. These 4 paragraphs could be reorganized and
redrafted to better define and distinguish among them, but at the cost of less precisely tracking the
State law.
Council staff recommendation:
accept these amendments. See lines 212-222 and 233-248
of the Staff Amendment at ©73-74, 74-75.
"Courtesy to the office" invitations.
Bill 39-14 would make several major changes
(D)
to the current law's "courtesy to the office" exception, which allows elected officials to accept
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The price of coffee mugs and baseball caps has risen markedly in recent years.
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invitations from restricted donors to certain types of events. First, it would limit the exception to
charitable, cultural, and political events, as the State law does, excluding civic, labor, trade, and
sports events. Second, it would limit acceptance to the official
him-
or herself. where the current
County law lets the official bring a guest or, under a 2010 amendment, designate someone to
represent the official. lbird, although the Bill does not expressly mention this, the State
Commission will insist that the invitation must come from the sponsor of the event rather
than
a
third-party, such as a lobbyist or other restricted donor.
If
the meals exception is amended as discussed above, this provision becomes relatively less
important because many of the events currently covered (other than sports events) are meal-
centered. Also, many civic, labor, or trade events in our view could qualify as charitable or political
events, depending on which organization sponsors them.
Nonetheless, in our view this provision as currently written is well tailored to the legitimate
expectations placed on local elected officials by their constituents - namely, to personally attend
their organization's events, often more than one event simultaneously, or at least to send an
appropriate representative. Organi7.ational leaders tend to be offended when their complimentary
invitations are dismissed and they are told their local officials either must pay for the event or
cannot attend, and the number of scheduled events places a burden on officials whose salaries are
not set to meet that level of expense.
Council staff recommendation:
modify this amendment to retain civic, labor, and trade
events, but exclude sports events; require each event to have at least 20 participants; and require the
invitation to come from the event sponsor rather
than
a third party. Continue to allow an elected
official to assign a designee to attend an event. See lines 223-232 of the Staff Amendment at ©74.
(E)
Perishable gifts (the "fruit basket exception").
The current County law was
amended in 2010 (see ©7, lines 143-150) to allow an employee who receives a gift that the
employee cannot legally accept, which the employee otherwise must either return to the donor or
transfer to the County, to, if the gift is a perishable item, transfer it to a charitable or educational
organization "that can make timely and effective use of the gift".
In Council staffs view, this creative provision was a practical solution to a recurring office
problem: the receipt of unsolicited fruit baskets and various other perishable items, especially during
busy holiday periods, that cannot be timely used by a County agency and should not go to waste,
but would be impractical (and sometimes insulting) to return to the donor. It was based on the
actual practice in many Council offices of taking such items to the nearest day care, homeless, or
senior center.
Since this provision took effect in April 20 I 0, we have not heard of any issue arising under
it or any substantive reason to repeal it, other
than
that it is not expressly contained in the State law.
Repealing it would not offer any solution to the problem it attempts to solve.
Council staff recommendation:
retain this provision. See lines 252-257 of the Staff
Amendment at ©75.
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4) Misuse of prestige of office.
Section 19A-14 currently prohibits a public employer from intentionally using the prestige
of office for private gain or the gain of another. This provision was referred to in the discussion of
soliciting gifts. The County
has,
along with other local jurisdictions, permitted police officers to
work outside employment while off duty in their uniforms. The Police Department has developed
guidelines for what is permitted. This long-time practice could
be
considered a violation of Section
19A-14. There are significant policy reasons for permitting this practice. It extends the active
police presence in the County since officers are required to respond to incidents they witness at all
times while in the County. We recommend an amendment that would permit the County Ethics
Commission to adopt a regulation authorizing this limited practice to avoid a conflict with the
Ethics Law. The County Commission did not expressly mention this in their 6-29-15
memorandum, but has previously requested an amendment to remove the County Commission from
the requirement that police officer outside employment be approved by the Commission. There is
no equivalent exception in the State Ethics Law. However, since this practice does not apply to an
elected official, it must only be similar to State law rather
than
equivalent.
·
Council staff recommendation:
amend the law to permit the County Ethics Commission to adopt
a regulation that would permit this practice. See lines 90-91 of the Staff Amendment at ©69.
Financial Disclosure
5) Confidential Statements.
County Code §19A-17(a) requires the County Executive, the Chief Administrative
Officer, Deputy Chief Administrative Officer, special assistants to the County Executive, the
director and deputy director of each department, principal office, and office in County
government, and members of the Ethics Commission to file a public financial disclosure
statement. Code §l 9A-l 7(b) expressly requires Assistant Chief Administrative Officers,
attorneys in the Office of the County Attorney, Hearing Examiners, members of the Fire and
Rescue Commission, and paid members of any board, commission, committee, or authority of
County government to file a confidential financial disclosure statement.
Code §19A-17 also authorizes the County Executive to designate, by regulation issued
under method 2, other public employees in the Executive Branch, the Revenue Authority, Board
of License Commissioners, or Housing Opportunities Commission to file a public, limited
public, or confidential financial disclosure statement. When making this designation, §19A-
17(c) requires the Executive to consider if an employee has substantial responsibility for:
1.
2.
3.
4.
5.
6.
7.
contracting or procurement;
administering grants or subsidies;
land use, planning and zoning;
regulating, licensing or inspecting any business;
other decisions with significant economic impact;
law enforcement; and
controlling access to confidential information.
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Code
§
19A-17 also authorizes the Council to designate additional employees in the
Legislative Branch.
A public financial disclosure statement must include comprehensive information
regarding real property interests, business interests, sources of income, gifts, offices, debts, and
liabilities (Code §19A-19). A limited public financial disclosure statement must include
information about any economic interest or gift that "may create a conflict between the employee
or member's personal interest and official duties" (Code §19A-17(a) (6)). The County Ethics
Commission must make public financial disclosure statements and limited public financial
disclosure statements available to the public for examination.
A confidential financial disclosure statement must include the same comprehensive
information regarding real property interests, business interests, sources of income, gifts, offices,
debts, and liabilities as is required for a public financial disclosure statement (Code §19A-19).
However, the County Ethics Commission is prohibited from making confidential financial
disclosure statements available to the public for examination (Code §19A-18(e) (4)).
The State Ethics Law does not provide for a limited public statement or a confidential
statement.
In
order to conform to the State law, the County Ethics Law should be amended to
make all financial disclosure statements public.
Council staff recommendation:
amend the law to require everyone to file a public statement
and delegate the authority to designate employees not listed in the law to the Chief
Administrative Officer for the Executive Branch and Council Administrator for the Legislative
Branch. See lines 258-382 of the Staff Amendment at ©75-80.
6) Substantive review of statements.
Code §19A-18(e) requires the CAO or designee to review each financial disclosure
statement filed by an employee to see
if:
(i)
the answers are complete;
(ii)
there is any conflict of interest with the person's official duties; and
(iii)
there is any potential conflict of interest.
There is no equivalent requirement in the State Ethics Law. As the County Attorney pointed out, it
is almost impossible for the reviewer to determine
if
there is a conflict or a potential conflict by just
looking at the filed statement This provision may have been inserted in the County law
to
make
sure someone reviewed a confidential statement.
If
the Council accepts our recommendation to
eliminate the confidential statement, we do not believe this substantive review is necessary or
advisable. The County Ethics Commission continues to believe that this review by a supervisor is
important. See County Ethics Commission 6-29-15 memorandum at ©105.
Council staff recommendation:
limit the review to determine if the statement is complete. See
lines 553-555 of the Staff Amendment at ©86.
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Alternative Amendment - Review Amendment
If
the Council decides to retain some substantive review of statements, Council staff and
County Ethics Commission staff prepared an alternative amendment
that
would go back to current
law. See the
Review Amendment
at© 110.
Executive's position:
"The Staff Alternative Amendment does more closely mirror the present
ethics law. But,
if
the Council adopts the recommendation to make all financial disclosure
statements public, then there is no basis to insist on department head review and certification of
each individual statement. Again, I support the StaffDraft 6 Amendment.
"
7)
Value of assets.
Md. Code General Provisions
Art.
§5-607 requires a filer to list the amowit of consideration
paid or received for real estate or other property owned or sold. Except for the value of gifts
received, Code §19A-19 permits a filer to report the value of an interest in property by categories
listed in the law. The
staff
of the State Ethics Commission interprets our statutory categories for
:valuing property interests as not equivalent to the State law. Requiring an accurate statement of
consideration paid or received for each interest in property is burdensome and a wealth indicator
rather than a disclosure of potential conflicts of interest. How much a filer paid or received for an
interest in property does not change whether or not the transaction creates a conflict of interest.
Permitting the County Ethics Commission to adopt a regulation permitting the listing of a value of
an interest by category is reasonable. At most, the actual consideration paid should only apply to a
statement filed by an elected official, since State law only requires the financial disclosure law for
all other County employees to be similar rather than equivalent.
Council staff recommendation:
add authority for the Cowity Ethics Commission to adopt a
regulation permitting the amowit of consideration paid or received to be satisfied by listing a
category. See lines 852-856 of the Staff Amendment at ©97.
8) Source of income for fees.
Both State law and current County law require a financial disclosure statement
to
include all
earned income from employment of the filer or an immediate family member and any ownership of
a business. The Bill, as introduced, would add a requirement to list the source of each fee received
by the filer for services performed. For example, a filer with a home design consulting business
would not only have to list ownership of the business, but also the name of each client who paid the
filer for services during the reporting year. The County Ethics Commission generated this idea
from a Federal regulation (5 CFR §2634.308) that requires a Federal filer to report each source of
compensation that exceeds $5000, but dropped the exclusion for fees below $5000. While this may
provide some information about conflicts, it is burdensome
and
difficult for a filer to comply with.
Council staff recommendation:
delete this new requirement. See lines 914-920 of the Staff
Amendment at ©99-100.
12
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Alternative Amendment
Council staff and County Ethics Commission
staff
prepared an alternative amendment that
would limit this requirement to fees received greater than $5000. See the
Source of Fees
Amendment
at
©
111.
Executive's position:
"/
can support the Staff Alternative Amendment with the modifications
shown below (highlighted in grey). Using the example above, these amendments would make
clear that the filer who also works as a realtor would only have to identify each individual client
who paid him (whether directly or through the realty firm) more than $5,000 for services he
personally provided to that client. The exception in subsection (i) would be deleted as
unnecessary.
"
[[ffi]J
00
®
Sources
gf
earned income.
The statement must list the name and address of each employer of the filer,
other
than
the County Government, or a..m_ember of
the
filer's immediate
family. and each business entity of which the filer or
~
member of the filer's
immediate family was
~
sole or partial owner and from which the filer or
member of the filer's immediate family received earned·
time
· . The statement must include
source
d ·
~ater
than $5000 for services provided
Q.y
the filer during the reporting period.
However,~
filer need not
include an
ill
Ill
which is
consi~confidential
as a result of a orivileged
relationship. established by law. between the reporting employee and
@YOOfSOn.
"I support the Staff Draft 6 Amendment. I can also support the StaffAlternative Amendment with
the modifications shown above.
"
9) Self-certification.
The Bill, as introduced, includes a revised
§19A-20
which would require a certification by a
filer that neither the filer, nor the filer's relatives, have any interest that may create a conflict of
interest. The Bill would further require the filer to amend the statement
within
5 days after an event
occurring during the year that may create a conflict
that
was not already reported. The County
Attorney argues that this provision is difficult to comply with, especially as to whether an economic
interest
may
create a conflict. The 5-day time period to amend a statement is also burdensome.
See
the County Attorney Bill Review Memorandum at ©50-51. The County Ethics Commission
13
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supports this provision. See the County Ethics Commission 6-29-15 memorandum at ©106.
There
is
no equivalent provision
in
State law.
Council staff recommendation:
delete the self-certification requirement as long as all statements
would be public. See lines 993-1012 of the Staff Amendment at ©102-103.
Council staff and County Ethics Commission
staff
prepared an alternative amendment that
would eliminate the requirement to report on interests owned by relatives who are not in the filer's
immediate family and eliminates the requirement to report any change within 5 days. See the
Certification Amendment
at © 112.
If
the Council wants to add the certification requirement proposed by the County Ethics
Commission, we recommend using the
Certification Amendment.
"Again, I support the Staff Draft 6 Amendment removing this provision.
Although the Staff Alternative Amendment removes the 5 day reporting requirement, it is
unacceptable because it still requires a flier to certify that neither the filer nor the filer's
immediate family has any interest that "may create" a conflict of interest.
"
Executive's position:
10) Immediate Family Amendment.
The Bill, as introduced, would require a filer to disclose an interest in a business or property
of the filer's immediate family or other relative only
if
the filer controlled the interest either directly
or indirectly. Although this was proposed by the County Ethics Commission, they changed their
position in the June 29 memorandum and now request an amendment that would require disclosure
of all interests owned by a filer's immediate family and only an interest owned by another relative if
the filer controlled the interest.
Council staff supports this request
and recommends adoption of
the
Immediate Family Amendment
at ©113.
Executive's position:
I support the Staff Draft 6 Amendment removing this provision. I also
support the StaffAlternative Amendment because I believe it achieves the same result.
11) Contents of statement for each type of filer.
The Bill, as introduced, and the Staff Amendment each create 3 types of financial disclosure
forms. A person filing under §l9A-17(a) (elected officials) must report all content required. A
person filing under §19A-17(b) (people occupying appointed positions named in the law) must
report all content required without the actual value of consideration paid or received for property
interests. Finally, a member of the MLS, a board member, or a person designated by the CAO or
the Council Administrator under §19A-17(c) must only report compensation or property interests in
an entity doing business with the agency the employee works for. The final group creates an
obligation to report less
than
all outside compensation or property owned, but requires the filer to
determine whether the compensation or property interest is from or with an entity doing business
with the filer's agency. This may be more difficult and create more issues for the filer than simply
listing all compensation and property. Rather
than
require this 3d group to make these difficult
14
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determinations, it would be easier to simply list all compensation and property interests required for
the 2d group.
It
would also avoid having to create 3 separate forms.
Council staff recommendation:
make the content requirements for the 3d group the same
as
the
2dgroup by:
Amend lines 957-970 ofthe StaffAmendment as follows:
(£}
Each statement filed under
ns~&tt6filJ;~Si@o@f!19AJI7'{b}J,;filid:1;mzJ7tC)
must
disclose all information required to be disclosed under subsection
.(fil:
However,
the filer need not specify the nature or amount of consideration given in exchange
for an interest or the fair market value of an interest.
For~
debt, the filer need
only disclose the information required under subsection
.(ill
[[ill])
(6}(A).
ff:lll
Each statement filed under Section 19A-l 7(c) must disclose. to the best of the
filer's knowledge. the information required in subsection .(fil[[ill])(4) with respect
to gifts and must disclose the information otherwise required in subsection
(fil
only with respect to any interest, compensated position, or liability ([that may
create~
conflict under Section 19A-11 or is prohibited under Section 19A-12]]
with an entity doing business
affiliated.
'WithJlle
County agency with which
the
employee is
fl
Circle#
1
36
37
41
55
56
57
59
65
104
107
109
110
This packet contains:
Bill 39-14
Legislative Request Report
Transmittal memo from Ethics Commission
Bill review letter from County Attorney
County Executive testimony
State law provisions
State legislators' gift guidance
Fiscal and Economic Impact statements
Staff Amendment
County Ethics Commission 6-29-15 memorandum
Charitable Solicitation Amendment
Meals Amendment
Review Amendment
Source of Fees Amendment
Certification Amendment
Immediate Family Amendment
County Executive Memo
F:\LAW\BILLS\1439 Ethics
Law
Update\Action Memo 7-21-15.Doc
111
112
113
114
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CORRECTED COPY
Bill No.
39-14
Concerning: Ethics - Amendments
Revised:
9-17-14
Draft No.
2b
Introduced:
July
29, 2014
Expires:
January
29, 2016
Enacted: - - - - - - - - -
Executive: - - - - - - - - -
Effective: - - - - - - - - -
Sunset Date: -.:..:.No=n=e'-------
Ch. _ _ ,Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the request of the Ethics Commission
AN ACT
to:
(1)
(2)
revise certain provisions of the County ethics law governing financial disclosure and
solicitation and acceptance of
gifts
to meet certain requirements of state law; and
generally update and amend the County ethics law.
By amending
Montgomery County Code
Chapter 19A, Ethics
Sections 19A-4, 19A-16, 19A-17, 19A-18, 19A-19, and 19A-20
Boldface
Underlining
[Single boldface brackets]
Double undedio.i!Jg
[[Double boldface brackets]]
...
...
...
Heading or defined term
Added to existing law by original bill.
Deleted.from existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No.
39-14
(CORRECTED COPY)
1
Sec.1. Sections 19A-4, 19A-16, 19A-17, 19A-18, 19A-19, and 19A-20 are
amended as follows:
19A-4.
Definitions.
2
3
4
5
6
7
Unless the context clearly indicates otherwise, the following words have the
following meanings:
*
G)
*
*
Interest
or
economic interest
means any source of income or any other
legal or equitable economic interest, whether or not the interest is
subject to an encumbrance or a condition, which is owned or held in
whole or in part, jointly or severally, and directly or indirectly. Interest
does not include:
( 1)
an interest in a time deposit or demand deposit in a financial
institution or in a money market fund with assets of at least
$10,000,000;
8
9
10
11
12
13
14
15
(2)
an interest in an insurance policy, endowment policy, or annuity
contract under which an insurance company promises to pay a
fixed number of dollars either in a lump sum or periodically for
16
17
18
19
life
or some other specified period; [or]
(3)
an interest in a deferred compensation plan that:
(A)
(B)
has more than 25 participants; and
the Internal Revenue Service has detennined qualifies
under section 457 of the Internal Revenue Code; [or]
(4)
an interest in a common trust fund or a trust that forms part of a
pension plan or profit-sharing plan that:
(A)
(B)
has more than 25 participants; and
the Internal Revenue Service has detennined to be a
qualified trust or college savings plan under the Internal
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BILL
No.
39~14
(CORRECTED COPY)
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Revenue Code; [and] or
(5)
an interest in a mutual fund [(including a closed-end fund and a
unit investment trust) regulated by the Securities and Exchange
Commission, in which the investor does not control the purchase
or sale of the individual securities the fund holds] that is publicly
traded on
f!:
national scale unless the mutual fund is composed
primarily of holdings of stocks and interests
in~
specific sector or
area that is regulated
hy
the individual's governmental unit.
*
19A-16.
(a)
Soliciting or accepting gifts.
*
*
A public employee must not solicit [a] any gift [to the employee or
another person or organization:
(1)
from any business or person who:
(A)
(B)
is registered or must register as a lobbyist;
does business with the County agency with which the
public employee is affiliated; or
(C)
is, or owns or operates a business that is, regulated by the
County agency with which the public employee is
affiliated;
(2)
during official work hours, or at a County agency, or from any
other public employee who is supervised directly
ot
indirectly by
the public employee;
(3)
while wearing all or part of an official uniform of a County
agency, or while otherwise identifiable as a public employee;
(4)
for the employee's own benefit, unless the Ethics Commission
approves the solicitation; or
(5)
with the intent of affecting or offering to affect any action by a
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54
©
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BILL NO.
39-14
(CORRECTED COPY)
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County agency].
[(b)
However, a public employee may solicit a gift:
( 1)
from public employees during official work hours, or at a County
agency, for a charitable drive that is approved by the County
Executive or (for public employees of the legislative branch) the
President of the Council, when the solicitation is part of the
public employee's official duties;
(2)
from any person to a charitable organization, as defined in the
state law regulating public charities, or a municipality, if the
public employee does not solicit gifts primarily from those
persons who do business with or are regulated by the county
agency with which the public employee is affiliated, or from
other employees who are supervised directly or indirectly by the
public employee;
(3)
from any person, during official work hours, while identifiable as
a public employee, or at a County agency, for the benefit of a
County agency or a nonprofit organization formally cooperating
on a program with a County agency if the solicitation is
authorized by the County Executive or (for public employees of
the legislative branch) the President of the Council in an order
printed in the County Register that designates:
(A)
(B)
(C)
(D)
the public employee authorized to solicit the gift;
the purpose for which the gift is sought;
the manner in which the gift may be solicited;
the persons or class of persons from whom gifts may be
solicited; and
(E)
the type of gifts that may
be
solicited;
©
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BILL NO.
39-14
(CORRECTED COPY)
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90
(4)
while wearing all or part of a uniform of the corporation, to a
nonprofit fire or rescue corporation of which the public employee
is a member; or
( 5)
from any person to a charitable organization, as defined in the
state law regulating public charities, while identifiable as an
elected official, if the employee lists in a supplement to each
annual financial disclosure statement each organization to which
the employee solicited a contribution during that year.]
{Q}
A public employee must not directly solicit or facilitate the solicitation
of
~
91
92
93
(
c)
gii1.
on behalf of another person. from an individual regulated
lobbyist.
A public employee must not knowingly accept a direct or indirect gift
from any individual or organization that the public employee knows or
reasonably should know:
( 1)
is registered, or must register, as a lobbyist on a matter that is or
could be considered by the County agency with which the public
employee is affiliated;
(2)
does or seeks to do
business~
94
95
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99
100
101
102
regardless of amount, with the
County agency with which the public employee is affiliated;
(3)
owns or operates a business that is regulated by the County
agency with which the public employee is affiliated; or
(4)
has an identifiable economic interest that is different from that of
the general public, which the public employee may substantially
affect in performing the public employee's official duties.
(d)
Subsection (c) does not apply to:
103
104
105
106
107
108
(1)
meals and beverages consumed in the presence of the donor or
sponsoring entity at
~
function attended
Q.y
at least 20 persons
~
0
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BILL No. 39-14 (CORRECTED COPY)
109
if fewer than 20 uersons attend. meals and beverages consumed
in the uresence of the donor or suonsoring entity which do not
exceed $50 in value from the same source in any calendar year;
(2)
ceremonial gifts or awards [with a resale] that have insignificant
monetary value [of $100 or less, if the gift or award
commemorates an event or achievement associated with the
public employee);
(3)
[items of personal property, other than cash, worth less than $10;]
unsolicited gifts of nominal value that do not exceed $20 in cost,
or trivial items of informational value;
(4)
reasonable expenses for food, travel, lodging, and scheduled
entertainment of the public employee, given in return for the
. public employee's participation in a panel or speaking at a
meeting;
(5)
gifts to an elected official, [or that official's designee who is
assigned to represent the official at an event included in this
paragraph,] if the gift:
(A)
(B)
is a courtesy extended to the office; and
consists of tickets or free admission for the [employee and
one guest] elected official to attend a charitable, cultural,
[civic, labor, trade, sports,] or political event, including
meals and beverages served at the event;
( 6)
any item that is solely informational or of an advertising nature,
including a book, report, periodical, or pamphlet, if the resale
value of the item is [$25] $20 or less;
(7)
(8)
gifts from a relative;
honoraria [or awards for achievement) for speaking to or
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@)
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BILL
No.
39~
14
(CORRECTED COPY)
136
137
138
participating in
f!:
meeting if the offering of the honorarium is not
related to the employee's official position; or
(9)
a specific gift or class of gifts which the Commission exempts
from this Section after finding in writing that accepting the gift or
class of gifts is not detrimental to the impartial conduct of the
business of a County agency.
(e)
Subsection (c) does not apply to unsolicited gifts to a County agency.
A public employee who receives a gift that the public employee must
not accept under this Section must report the gift to the Commission, if
otherwise required to report it, and return the gift to the donor or transfer
the gift to the County.
[If
the unacceptable gift is a perishable item, the
employee, instead of transferring the gift to the County, may transfer it
to a charitable or educational organization that can make timely and
effective use of the gift, so long as the employee is not an officer,
director, trustee, partner, or employee of the receiving organization.]
139
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153
(f)
19A-17.
Who must file a financial disclosure statement.
[(a)] The following persons must file a public financial disclosure statement
under oath:
[(1)]
(fil
each incumbent and candidate for:
154
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156
157
158
159
160
161
162
[(A)]
ill
County Executive; and
[(B)]
ill
County Council;
[(2)]
ili.)
the following public employees:
[(A)]ill Chief Administrative Officer and any Deputy or
Assistant Chief Administrative Officer;
[(B)]ffi
special assistants to the County Executive;
[(C)]Q) director and deputy director of each department,
principal office, and office in the County government;
0
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BILL
No. 39-14
(CORRECTED COPY)
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164
[(D) any officer holding a position designated by law as a non-
merit position;]
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ffi
each Hearing Examiner m the Office of Zoning and
Administrative Hearings;
[(E)]
ill
members of the County Board of Appeals;
[(F)
members of the Commission; and]
each member of the Fire and Emergency Services
Commission, Board of License Commissioners, Revenue
Authority, and Housing Opportunities Commission;
[(G)]
ill
members of the Merit System Protection Board;
{fil
®
the Council Administrator and the Deputy Council
Administrator, if any;
.(2)
each Senior Legislative Analyst, Legislative Analyst,
Senior Legislative Attorney, and Legislative Attorney for
the County Council;
(lQ) the Legislative Information Officer for the County
Council;
.(11)
each Senior Legislative Analyst and Legislative Analyst in
the Office of Legislative Oversight;
182
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186
187
188
189
@
each Legislative Senior Aide III for the County Council;
ill)
the Inspector General;
[(3)]
.a±)
any person who is appointed to serve in an acting
capacity in any position listed in the preceding paragraphs
while the position is vacant; and
{£)
the following public employees, if not already required to file under this
Section:
ill
any employee in the Management Leadership Service;
©
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BILL
No.
39-14
(CORREClED COPY)
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207
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209
210
211
ill
any paid member of any board, commission, or committee of
County government, and any other member of
~
board,
commission, or committee of County government who the Chief
Administrative Officer designates; and
ill
any other public employee in the Executive branch of County
government designated
Qy
the Chief Administrative Officer, and
any public employee in the legislative branch of County
government designated
Qy
the Council Administrator.
[(4)
any other public employee in the Executive branch, or in the
Revenue Authority, Board of License Commissioners, or
Housing Opportunities Commission, including any person listed
in subsection
(b),
who the County Executive designates by
regulation issued under method (2) after finding that filing a
public financial disclosure statement will promote trust and
confidence in County government;]
[(5)
any other public employee in the legislative branch including the
County Board of Appeals, and in the Merit System Protection
Board, including any person listed in subsection
(b),
who the
Council designates by resolution after finding that filing a public
financial disclosure statement will promote trust and confidence
in County government; and]
[(6)
the members of a board, commission, committee, or similar body
in the Executive branch, or of the Revenue Authority, Board of
License Commissioners, or Housing Opportunities Commission,
which the County Executive designates by regulation issued
under Method (2) or any public employee in the legislative
branch, including the County Board of Appeals, and in the Merit
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BILL
No.
39-14
(CORRECTED COPY)
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235
System Protection Board, who the Council designates by
resolution, after finding that filing a limited public financial
disclosure statement will promote trust and confidence in County
government.
The financial disclosure required under this
paragraph must be limited to information concerning any
economic interest or gift that may create a conflict between the
employee or member's personal interests and official duties. The
Commission must adopt a regulation specifying the information
that must be disclosed. A public employee who files a limited
public financial disclosure statement under this paragraph must
also file a confidential financial disclosure statement if required
to
do so under subsection (b). A public employee need not file a
limited public financial disclosure statement under this paragraph
if the employee already is required to file a public financial
disclosure statement.)
[(b)
The following persons must file a confidential financial disclosure
statement under oath:
(1)
(2)
Assistant Chief Administrative Officers;
attorneys in the Office of the County Attorney;
Hearing Examiners;
Members of the Fire and Emergency Services Commission;
paid members of any board, commission, committee, or authority
of County government, including members of the Board of
License Commissioners, the Revenue Authority, and the Housing
Opportunities Commission;
(6)
any public employee in the Executive branch, or in the Revenue
Authority, Board of License Commissioners, or Housing
236
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242
243
(3)
(4)
(5)
-®-
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Bill No. 39-14 (CORRECTED COPY)
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Opportunities Commission, who the County Executive designates
by regulation issued under method (2) after finding that filing a
confidential financial disclosure statement will promote trust and
confidence in County government; and
(7)
any public employee in the legislative branch in9luding the
County Board of Appeals, and in the Merit System Protection
Board, who the Council designates by resolution after finding
that filing a confidential financial disclosure statement will
promote trust and confidence in County government.]
[(c)]
@In
designating other public employees to file [public or confidential]
financial disclosure statements (under subsection (a)(4) or (b)(6)], the
[Executive should]
Chief Administrative Officer and Council
Administrator respectively must include those employees [who have
substantial responsibility for one or more of the following functions]
whose duties and responsibilities are likely to substantially affect private
interests and require significant participation through decision or the
exercise of significant judgment, and without substantial supervision
and review, in taking
!i!:
government action regarding:
( 1)
(2)
(3)
(4)
( 5)
(6)
(7)
[(d)
contracting or procurement;
administering grants or subsidies;
land use, planning and zoning;
regulating, licensin& or inspecting any business;
other decisions with significant economic impact; and
law enforcement[; and
controlling access to confidential information].
262
263
264
265
266
267
268
269
270
The Executive and Council, respectively, must annually review the list
of employees designated under subsections (a)(4), (a)(5), (a)(6), (b)(7),
®
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BILL NO. 39-14 (CORRECTED COPY)
271
and (b)(8) for compliance with the purposes of this Article.]
19A-18.
Financial disclosure statement; procedures.
272
273
274
275
276
277
278
279
280
281
282
[(a)
( 1)
Each public employee required to file a public financial
disclosure statement under subsection 19A-l 7(a) must file the
statement under oath by April 15 of each year for the previous
year.
(2)
Any person nominated by the County Executive to hold any
office listed in paragraph 19A-17(a)(2) must file the statement
before the Council confinns the appointment.
(3)
If
the Council makes an appointment to any office listed in
paragraph 19A-17(a)(2), the applicant must file the statement as
part of the application for the position.]
283
284
[(b)
Unless a statement has been filed under subsection (a), each candidate
for an office listed in paragraph 19A-17(a)(l) must file with the Board
of Supervisors of Elections a financial disclosure statement under oath
for the year before the year in which the certificate of candidacy is filed.
The statement must be filed with the certificate of candidacy.]
285
286
287
288
[(
c)
If
a certificate of candidacy is filed before January 1 of the year in
which the election is held, the candidate must file a supplemental
financial disclosure statement under oath for the year before the year in
which the election is held. The supplemental statement must be filed
with the Board of Supervisors of Elections on or before the last day to
withdraw a candidacy. The Board of Supervisors of Elections must
notify each candidate of this obligation to file a supplemental financial
disclosure statement at least 20 days before the last day to withdraw a
candidacy.
If
the candidate fails to file a timely supplemental statement,
the candidacy is withdrawn.]
289
290
291
292
293
294
295
296
297
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BILL
No. 39-14
(CORRECTED COPY)
298
299
[(d)
The Board of Supervisors of Elections must not accept a certificate of
candidacy or certificate of nomination unless a financial disclosure
statement in proper form has been filed. Within 30 days after receiving
a statement, the Board must fmward the statement to the Commission to
be retained under this Chapter.)
300
301
302
303
304
305
306
307
308
309
310
[(e)
(1)
(A)
Any person required to file under subsection 19A-17(b)
must file a financial disclosure statement under oath with
each director of a County agency with which the person
was affiliated during the reporting period. Any person
required to file under subsection 19A-17(b) who is not
supervised by a director must file a financial disclosure
statement under oath with the Chief Administrative
Officer.
311
312
313
314
315
316
(B)
The statement must be filed by April 15 for the previous
year.
(C)
The director or the Chief Administrative Officer must
review the statement to see if:
(i)
(ii)
the answers are complete;
there is any conflict of interest with the person's
official duties; and
317
318
319
320
321
322
323
324
(iii)
(D)
there is any potential conflict of interest.
The Chief Administrative Officer may designate the head
of a County agency to review a statement. A director of a
County agency or the Chief Administrative Officer may
designate the deputy director of the agency or the chief of a
division of the agency to review a statement. The
designator must inform the Commission of the delegation.
@
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BILL
No.
39-14
(CoRRECTED
COPY)
325
326
327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
342
343
344
The designee is subject to the same rules of confidentiality
as the designator.
(2)
After certifying that each part of the statement has been
completed and that, on the basis of the information reported,
there is no conflict of interest or potential conflict of interest with
the filer's official duties, the agency director or Chief
Administrative Officer must forward the statement to the
Commission within 30 days after receiving it. The agency
· director or the Chief Administrative Officer may retain a copy of
the statement for one year after forwarding
it
to the Commission.
If
asked by an agency director, the Chief Administrative Officer,
the County Executive, a Council member, or the filer of the
statement, the Commission must review any statement
within
120
days after receiving it.
(3)
The Commission, the Chief Administrative Officer, the County
Executive, a member of the County Council, the County
Attorney, the Director of the Office of Legislative Oversight, the
filer of the statement, or their designees, may review a statement
at
any
time. A designee must be appointed in writing and is
subject to the same rules of confidentiality as the designating
345
346
347
party.
(4)
Any confidential financial disclosure statement filed under this
Chapter must not be made available to the public for
examination. The Commission must retain each statement for 6
years. After the 6-year period expires, the Commission must
destroy each statement unless the Commission determines that
the statement is needed to resolve an investigation or complaint.]
348
349
350
351
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BILL
No. 39-14
(CORRECTED COPY)
352
353
354
355
356
357
358
359
360
361
362
363
364
365
366
367
368
369
370
371
[(f)
Each public employee required to file an annual financial disclosure
statement under Section 19A-17 must also file a financial disclosure
statement:
( 1)
within 15 days after the employee begins employment in a
position covered by Section 19A-17, covering the current
calendar year up to the date of filing and, unless the employee has
already filed a statement for the previous year, the previous
calendar year; and
(2)
before the employee leaves a position covered by Section 19A-
17, unless the employee has taken another position covered by
Section 19A-17. The Director of Finance must not issue an
employee's final paycheck until the employee has filed a
statement required by this paragraph. Any statement filed under
this paragraph must be treated and reviewed as if it were an
annual statement, except that it need only report on the period
after the employee's last previous annual statement, if any.]
[(g)
The Commission must make available each statement filed under
subsection 19A-17(a) for examination and copying during normal office
hours. · The Commission may charge reasonable fees and adopt
procedures for examining and copying statements.]
372
373
374
375
376
377
378
[(h)
The Commission must provide forms for filing financial disclosure
statements. Forms should be made available no later than January 1
each year.]
[(i)
A person must not use any financial disclosure statement required under
this Chapter for commercial purposes.]
[G)
A financial disclosure statement is filed under oath if the person signs a
declaration that the financial disclosure statement is made under the
8
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1439
ethics law update\bill 2b comn corrected.doc
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BILL NO.
39-14
(CORRECTED COPY)
379
380
381
382
383
384
385
386
387
388
389
390
391
392
393
394
395
396
397
penalties of perjury.]
(ill
Each public employee required to file
fl
public financial disclosure
statement under Section 19A-17 must file g financial disclosure
statement in the system established
.Qy
the Chief Administrative Officer
under subsection
.Q1t
ill
.Qy
April 15 of each year ifthat person was g filer at the end of the
previous calendar year, covering the year iust ended;
in~
ill
within 15 days after g public employee begins employment
position covered
.Qy
Section 19A-17, covering the prior year and
the current year
1ill
to the date of filing;
ill
before an employee leaves g position covered
.Qy
Section 19A-17,
unless the employee has taken another position covered
.Qy
Section 19A-17. The Director of Finance must not issue an
employee's final paycheck until the employee has filed
~
statement required
.Qy
this paragraph. Any statement filed under
this paragraph must cover the period since the employee's last
filed statement;
ill
before the Council confirms the appointment of any person
nominated
h.y
the County Executive to hold any office listed in
subsection 19A-l 7(b), covering the prior year and the current
year
yp
to the date of filing. Any person required to file
fl
report
under this paragraph need not file
~
398
399
400
401
402
403
404
405
report under paragraph
ill
unless 90 days has passed since the filing of the report under this
paragraph; and
ill
as part of the application for
!!
Council-appointed office listed in
subsection 19A-l 7{b), covering the prior year and the current
year
1ill
to the date of filing. Any person required to file g report
@
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BILL
No.
39-14 (CORRECTED COPY)
406
407
408
409
410
under this paragraph need not file !! report under paragraph
ill
unless 90 days has passed since the filing of the report under this
paragraph.
®
Each candidate for an office listed in subsection 19A-17(a) must file
with the County Board of Elections
!!
financial disclosure statement
covering the prior year and the current year
!fil
to the date of filing the
candidate's certificate of candidacy. The statement must be filed with
the certificate of candidacy or certificate of nomination. The County
Board of Elections must not accept !! certificate of candidacy or
certificate of nomination unless !! financial disclosure statement in
proper form has been filed.
411
412
413
414
415
416
417
418
419
420
421
422
423
424
If
!! statement has been filed under
subsection
.ill1
then the statement required
.Qy
this subsection need only
cover the current year
!fil
to the date of filing the certificate of candidacy
or nomination.
.(£)
If
at the end of!! calendar year in which !! candidacy is pending and no
election has occurred, the candidate must file
!!
financial disclosure
statement with the County Board of Elections covering the year just
ended.
The statement must be filed on or before the last day to
candidacy. The County Board of Elections must notify each
withdraw~
425
426
427
428
429
430
431
432
candidate of this obligation to file the financial disclosure statement at
least 20 days before the last day to withdraw
!!
candidacy.
If
the
candidate does not file
!!
timely statement under this subparagraph, the
candidacy is withdrawn
Qy
operation oflaw.
@
The County Board of Elections must not accept
!!
certificate of
candidacy or certificate of nomination unless the candidate has filed
!!
financial disclosure statement in proper form.
W
ill
(A)
Any person, other than!! candidate for elective office, who
®
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BILL
No.
39-14
(CORRECTED COPY)
433
434
435
436
437
438
439
440
441
442
443
444
445
446
447
448
449
450
451
is required to file under Section 19A-l 7, must file
~
financial disclosure statement
in
an electronic system set
Yn
to receive and administer financial disclosure reports.
The filer must certify that each statement was made to the
best of the filer's knowledge and belief.
(fil
The Chief Administrative Officer must review each
statement for filers in the Executive Branch, and the
Council Administrator must review each statement for
each filer
in
the Legislative Branch, to see if:
ill
(ii)
the answers are complete; and
there are conflicts or potential conflict of interests
with the filer's official duties.
.{Q)
For each filer who is an incumbent under Section 19A-
17(a), the Chief Administrative Officer must review each
statement for the position of County Executive and the
Council Administrator must review each statement for
each member of the County Council.
(D)
For departments and offices in the Executive Branch, the
Chief Administrative Officer may designate the head of
f!
department or office to review
!!
statement. For offices of
the Legislative Branch, the Council Administrator may
designate the head of an office to review
director
of~
~
452
453
454
455
456
457
458
459
statement. A
County department or office or the Chief
Administrative Officer or the Council Administrator, as
appropriate, may designate the deputy director of the
department or the chief
of~
division to review
§:
statement.
Each designation must be reported to the Chief
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BILL
No.
39~
14
(CORRECTED COPY)
460
461
462
463
464
465
466
467
468
469
470
471
472
473
474
475
476
477
478
Administrative Officer or the Council Administrator, as
appropriate, and to the Commission. The reviewer may
seek the advice of public employees familiar with the
filer's official responsibilities, including the filer's
supervisor, in evaluating the report under subparagraph
ffi1
ill
Each reviewer must certify within 30 days that the statement has
been completed and, on the basis of the information reported,
there is no cont1ict of interest or potential conflict of interest with
the filer's official duties.
If~
reviewer cannot so certify or has
identified
~
conflict of interest or potential conflict of interest, the
reviewer must immediately notify the Commission and the Chief
Administrative Officer for an employee of the Executive Branch
and the Council Administrator for an employee of the legislative
branch that the reviewer is unable to certify the statement.
ill
The Commission must make available each statement filed under this
Article for examination and copying during normal office hours. The
Commission may charge reasonable fees and adopt procedures to
examine
and~
statements.
4
79
.(g)
The Commission must make available the electronic form for filing
annual financial disclosure statements
calendar year.
~
480
481
482
483
484
485
486
the first business day of each
.(h)
The Chief Administrative Officer must establish and maintain an
electronic system
to
facilitate filing of and public access to financial
disclosure statements required under this Article. Any electronic system
must report, current to within one business day, an accurate list of each
public employee required to file
S!:
statement under Section 19A-17,
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BILL NO. 39-14 (CORRECTED COPY)
487
488
489
490
491
492
493
494
495
496
whether the employee is required to file under subsections 19A-17(a),
(Q1
or
(91
and include the employee's position, necessary contact
information, the reviewer, and whether the report is an initial, annual, or
final report. This list must be current and correspond to personnel
records and records of memberships in boards, committees and
commissions. Any electronic system must
be
able to generate reports
Y.PQTI
request of the Chief Administrative Officer, the Council
Administrator, or the Commission detailing who is required to file and
the current state of compliance
.J2y
public employees with financial
disclosure filing and review requirements under this Article.
The
497
498
499
500
501
502
503
504
505
506
507
508
509
51 O
County Executive must annually, or more frequently as requested,
provide the list of employees designated to file financial disclosure
reports to the Council.
The Commission must make all necessary
accommodations for any person who does not have access to the
electronic system.
ill
ill
A person must not use any financial disclosure statement required under
this Chapter for comniercial purposes.
The Commission must retain each financial disclosure statement filed
under
this
Article
for~
years. For each filer filing under subsection
19A-17(a), the retention period must be at least
.Q
years, after which
each record must be archived.
19A-19.
Content of financial disclosure statement.
[The financial disclosure statement required under Section 19A-17 must
disclose the following information about the filer for the previous year:]
[(a)
all economic interests in any real property, including leasehold interests
and interests in oil, gas, or mineral royalties or leases, if the property is
located in Montgomery County, Prince George's County, Howard
511
512
513
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BILL NO.
39-14
(CORRECTED COPY)
514
515
516
517
518
519
520
521
522
523
524
525
526
527
528
529
530
531
532
533
534
535
536
537
538
539
540
County, or Frederick County, Maryland; the District of Columbia; or
Fairfax County or Loudoun County, Virginia. The filer must specify:
(1)
the nature of each property, and its .location by street address,
mailing address, or legal description;
(2)
the nature and extent of the interest held, and any applicable
conditions and encumbrances;
(3)
(4)
how, when, and from whom the interest was acquired;
the nature and amount of the consideration given in exchange for
the interest.
If
the interest was not acquired by purchase, the filer
must provide the fair market value of the interest when it was
acquired;
(5)
if an interest was transferred during the previous year:
(A)
(B)
(C)
(6)
the interest transferred;
the nature and amount of the consideration received; and
to whom the interest was transferred; and
the name of any other person with an interest in the property;]
[(b)
all economic interests in any business.
In
this subsection, business does
not include an agency or instrumentality of federal, state, County, or
local government. The filer must specify:
(1)
the name of the business.
If
the business is a corporation, the filer
must list the stock exchange (if any) on which the corporation's
securities are traded and the corporation's trading symbol.
If
securities of the business are not publicly traded, the filer must
list the address of the business' principal office;
(2)
the nature and value of the interest held, and any applicable
conditions and encumbrances. The filer must specify what
percentage of the business the filer owns, if the filer knows the
0
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BILL No. 39-14 (CORRECTED COPY)
541
542
543
544
545
546
547
548
549
550
551
552
553
554
555
556
557
558
559
percentage; and
(3)
if an interest was acquired or transferred during the previous year,
the filer must describe the interest acquired or transferred, the
nature and amount of the consideration and, if known, the name
of the other person or business in the transaction;]
[(c)
each source of income from an economic interest that is not disclosed
elsewhere, from which the filer received or was entitled to receive $500
or more during the previous year. The filer must specify:
( 1)
the name, and the address of the principal office or residence, of
the source;
(2)
(3)
the type of income; and
the amount of income by category:
(A)
(B)
$500 to $5,000; or
over $5,000.
(4) (A)
If
the source and the filer have a confidential relationship,
the filer need not report the information required under
paragraph (1) unless the source:
(i)
is registered or must register as a lobbyist on a
matter that is or could be considered by the County
agency with which the filer is affiliated;
(ii)
does business with the Coilnty agency with which
the filer is affiliated;
(iii)
owns or operates a business that is regulated by the
County agency with which the filer is affiliated; or
(iv)
has an economic interest that is different from the
public interest, which the filer may substantially
affect in performing the filer's official duties.
560
561
562
563
564
565
566
567
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BILL
No.
39-14
(CORRECTED COPY)
568
569
570
571
572
573
574
575
576
577
578
579
580
581
582
583
584
585
586
(B)
The Commission must designate only one person to review
this information.
If
the reviewer finds a reasonable basis to
believe that a violation of this Chapter, or Sections 2-109,
l lB-51 or 11B-52(a), has occurred, the entire Commission
may review the information.
(C)
Confidential relationship means a relationship between
two persons that creates a privilege against testifying under
state law;]
[(d)
(1)
each gift given to the filer, to a member of the filer's immediate
family, or to any other person at the filer's cfuection, during the
previous year if the donor of the gift:
(A)
is registered, or must register,
as
a lobbyist on a matter that
is or could be considered by the County agency with which
the filer is affiliated;
(B)
does business with the County agency with which the filer
is affiliated; or
(C)
owns or operates a business that is regulated by the County
agency with which the filer is affiliated.
(2)
The filer must specify:
(A)
(B)
the nature of each gift;
the value of each gift by category:
(i)
(ii)
$50 or under;
$51 to $100;
$101 to $500; or
over $500; and
587
588
589
590
591
592
593
594
(iii)
(iv)
(C)
the person who gave the gift or directed, either directly or
indirectly, that the gift be given.
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BILL
No. 39-14
(CORRECTED COPY)
595
596
597
598
599
600
601
602
603
604
605
606
607
608
609
610
611
612
613
(3)
The filer need not report the following gifts on any part of the
financial disclosure statement:
(A)
a gift to the filer with a value of less than $50, unless the
same person gave the filer, members of the filer's
immediate family, another person at the filer's direction, or
any combination of them, gifts totaling more than $100
during the previous year;
(B)
a gift to a member of the filer's immediate family with a
value of less than $100, unless the same person gave the
filer, members of the filer's immediate family, another
person at the filer's direction, or any combination of them,
gifts totaling more than $100 during the previous year;
(C)
a gift received under Section 19A-16(d)(5), unless the gift
is admission
to
a cultural or sports event valued at $50 or
more;
(D)
a gift from a relative of the filer, or a gift to a relative by
the filer, unless:
(i)
the value of all gifts from the same relative exceeds
$100,and
(ii)
the relative:
(a)
is registered, or must register, as a lobbyist on
a matter that is or could be considered by the
County agency with which the filer is
affiliated;
(b)
does business with the County agency with
which the filer is affiliated; or
(c)
owns or operates a business that is regulated
614
615
616
617
618
619
620
621
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622
623
624
625
626
627
628
629
630
631
632
633
634
63 5
636
637
638
639
640
by the County agency with which the filer is
affiliated; or
(E)
[(e)
(1)
a political contribution governed by state law;]
all offices, including any directorship, trusteeship, or partnership,
held at any time during the previous year in any business that:
(A)
is doing business with or is regulated by a County agency;
has an office in the County; or
to the filer's knowledge, has an interest in real property
located in the County.
(B)
(C)
(2)
The filer must specify:
(A)
the name, and the address of the principal office, of each
business; and
(B)
the title and nature of each office;]
[(
f)
all liabilities over $500 owed at any time during the previous year by the
filer, except a debt owed to a relative. The filer need not report any debt
less than $5000 owed on a consumer credit card account. The filer need
not report a debt over $5000 owed on a consumer credit card account
unless the debt is owed for more than 90 days. A consumer credit card
account is an open-ended credit card account used
to
obtain money,
property, or services for personal, family, or household purposes. The
filer must specify:
(1)
(2)
(3)
(4)
to whom the liability is owed;
the amount owed at the end of the year;
the terms of payment of the liability;
how much the principal amount of the liability increased or
decreased during the year; and
(5)
any security given for the liability;]
641
642
643
644
645
646
647
648
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BILL
No. 39-14
(CORRECTED COPY)
649
650
651
652
653
654
655
656
657
658
659
660
661
662
663
664
665
666
667
[(g)
all debts over $500 owed to the filer at any time during the previous
year, except a debt owed by a relative. The filer must specify:
(1)
(2)
the debtor;
the amount of the debt at the end of the year;
the terms of payment of the debt;
how much the principal amount of the debt increased or
decreased during the year; and
(3)
(4)
(5)
[(h)
any security given for the debt;]
a list of all members of the filer's immediate family who are employed
in any capacity by a County agency; and]
[(i)
any other interest or information that the filer wants to disclose to carry
out the purposes of this Chapter.]
[G)
If
the filer is required to file under paragraph 19A-17(a)(l), the filer
must list the amount and issuer of each bond or other security owned
during the previous year that was issued by the County, any bi-county
agency with jurisdiction in the County, and any city or town in the
County.]
[(k)
If
the filer is required to identify any person or business, the filer must
designate, if known, whether that person or business has done business
or expects to do business with, or is regulated by, a County agency.]
668
669
670
671
672
673
674
675
[(l)
In this Section and Section 19A-20, interest means any interest held at
any time during the previous year.]
[(m)
If
a filer is required to report any amount or value, including the _value
of any property, under this Section, except subsections (c) and (d), the
filer may specify the amount or value by category:
(1)
(2)
$1000 or less;
over $1000.]
0
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BILL NO.
39-14
(CORRECTED COPY)
676
677
678
679
680
681
682
683
684
685
686
687
688
689
690
691
692
693
694
!fil
Each financial disclosure statement filed under Section 19A-17(a) must
disclose the following:
ill
Interests in real property.
®
The statement must identify each interest in real property,
regardless of the property's location.
an
For each interest in real property, the statement must
include:
ill
the nature of the property, and the location
!2y
street
address, mailing address, or legal description of the
property;
(ill
the nature and extent of the interest held, including
any condition or encumbrance on the interest;
(iii)
the date when, the manner in which, and the identity
of the person from whom the interest was acquired;
(iv)
the nature and amount of the consideration given in
exchange for the interest
m:i
if the interest was
acquired other than
!2y
purchase, the fair market
value of the interest when
i!
was acquired;
M
if any interest was transferred, in whole or in part, at
any time during the reporting period,
f!
description
of the interest transferred, the nature and amount of
the consideration received for the interest, and the
identity of each person to whom the interest was
transferred; and
695
696
697
698
699
700
701
702
(vi)
the identity of any other person with an interest in
the property.
ill
Interests in corporations, partnerships or other businesses.
§
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BILL
No.
39-14 (CORRECTED COPY)
703
704
705
706
707
708
709
710
(A)
The statement must list each interest in any corporation,
partnership, limited liability partnership, limited liability
corporation, sole proprietorship, or other business.
ill)
For each interest reported, the statement must specify:
ill
the name and, unless the interest is traded publicly
on
~
national exchange, the address of the principal
office of the corporation, partnership, limited
liability partnership, limited liability corporation,
sole proprietorship, or other business;
(ii)
the nature and amount of the interest held, including
any condition or encumbrance on the interest;
(iii)
711
712
713
714
715
716
for any interest transferred, in whole or in part, at
any time during the reporting period,
~
description
of the interest transferred, the nature and amount of
the consideration received for the interest, and, if
known, the identity of the person to whom the
interest was transferred; and
(iv)
for any interest acquired during the reporting period:
717
718
719
720
721
722
723
724
ill
the date when, the manner in which, and the
identity of the person from whom the interest
was acquired; and
ill
the nature and amount of the consideration
given in exchange for the interest
~
725
726
727
728
if the
interest was acquired other than
]2y
purchase,
the fair market value of the interest when
was acquired.
i!
729
©
A filer may satisfy the requirement to report the amount of
®
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BILL
No.
39-14
{CORRECTED COPY)
730
731
732
733
734
735
736
737
738
739
740
741
742
743
744
745
746
747
748
the interest held under subparagraph (B)(ii)
:Qy
reporting,
instead
of~
dollar amount:
ill
for an equity interest in
~
corporation, the number of
shares held and, unless the corporation's stock is
publicly traded, the percentage of equity interest
held; or
(ii)
for an equity interest in
~
partnership, the percentage
of equity interest held.
(ill
For purposes of subparagraph (B)(i), the filer need not
report the address of any publicly held company.
ill
Gifts.
(A)
The statement must list each gift valued at more than $20
or any series of gifts totaling $100 or more received during
the reporting period from or on behalf
Qfi
directly or
indirectly, any one person who does business with the
County.
@)
For each gift listed, the statement must specify:
ill
(ii)
the nature and value of the gift; and
the identity of the person from whom, or on behalf
of whom, directly or indirectly, the gift was
received.
749
750
751
752
753
754
755
756
ill
Employment with, or interests
i!:1.
entities doing business with the
County.
(A)
The statement must identify each office, directorship, and
salaried employment
:Qy
the filer or member of the filer's
immediate family held at any time during the reporting
period with any entity doing business with the County.
0
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BILL
No. 39-14
(CORRECTED COPY)
757
758
759
760
761
762
763
764
765
766
767
768
769
770
771
772
773
774
775
@
For each position listed under this Section, the statement
must include:
ill
(ii)
the name and address of the principal office of the
business entity;
the title and nature of the office, directorship, or
salaried employment held, and the date it started;
and
(iii)
the name of each County agency with which the
entity is involved, indicated
Q,y
identifying one or
more of the three categories of "doing business", as
defined in Section 19A-4{e).
ill
Indebtedness to entities doing business with the County.
(A)
The statement must identify each liability, other than
~
retail credit account, to any person doing business with the
County owed at any time during the reporting period by:
ill
(ii)
the filer; or
!!
member of the filer's immediate family if the filer
was involved in the transaction giving rise to the
liability.
776
777
778
779
780
781
782
783
@
For each liability reported under this paragraph, the
statement must specify:
ill
(ii)
the identity of the person to whom the liability was
owed, and the date the liability was incurred;
the amount of the liability owed at the end of the
reporting period;
(iii)
the terms of payment of the liability, and the extent
to which the principal amount of the liability was
0
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BILL
No.
39-14 (CORRECTED COPY)
784
785
786
787
788
789
790
791
792
793
794
795
796
797
798
799
800
801
802
increased or reduced during the year; and
(iv)
the security, if any, given for the liability.
®
Employment with the County.
The statement must identify each
immediate family member of the filer employed
!2y
the County in
any capacity at any time during the reporting period.
ill
Sources
Qf
earned income.
(A)
The statement must list the
~
and address of each
employer of the filer, other than the County Government,
and each business entity of which the filer or
!!
member of
the filer's immediate family was
!!
sole or partial owner
and from which the filer or member of the filer's
immediate family received earned income at any time
during the reporting period. The statement must include
the source of each fee for services provided
!2y
the filer
during the reporting period. However,
!!
filer need not
include any information with respect to any person for
whom services were provided
!2y
any firm or association of
which the filer was
!!
member, partner, or employee unless
the filer was directly involved in providing those services.
The filer need not disclose
.a
minor child's employment or
business ownership if the agency that employs the filer
does not regulate, exercise authority over, or contract with
the place of employment or business entity of the minor
child.
803
804
805
806
807
808
809
810
@
(Q
If
!!
source of earned income and the filer have
!!
confidential relationship which creates
!!
privilege against
testifying under state law, the filer need not report the
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BILL
No. 39-14
(CORRECTED COPY)
811
812
813
814
815
816
817
818
819
820
821
822
823
824
825
826
827
828
829
identity of the source unless the source:
(i)
is registered or must register as
~
lobbyist on
~
matter that is or could be considered
.2y
the County
agencywith which the filer is affiliated;
(ii)
does business with the County agency with which
the filer is affiliated;
(iii)
owns or
operates~
business that is regulated
.2y
the
County agency with which the filer is affiliated; or
(iv)
has an economic interest that is different from the
public interest, which the filer may substantially
affect in performing the filer's official duties,
in which case the identity of the source must be disclosed
confidentially to the Commission in
~
manner prescribed
.2y
the Commission.
{fil
The statement may also include any additional interest or
information that the filer wishes to disclose.
(hl
For the purposes of subsections
WW
and (a)(2), the following interests
must be treated as the interests of the filer of the statement:
ill
an interest held
by
g
member of the filer's immediate family if
the filer, at any time during the reporting period, directly or
indirectly controlled the interest;
830
831
832
833
834
835
836
837
ill
ill
an interest held
.2y
~
business entity in which the filer held
~
30%
or greater interest at any time during the reporting period; or
an interest held
.2y
~trust
or estate in which, at any time during
the reporting period:
(Al
the filer held
or
~
reversionary interest or was
~
beneficiary;
0
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BILL NO.
39-14
{CORRECTED COPY)
83 8
839
~
@)
if~
revocable trust, the filer was
~
settlor.
Each statement filed under Section 19A-17(b) must disclose all
information required to be disclosed under subsection
U!1
However, the
filer need not specify the nature or amount of consideration given in
exchange for an interest or the fair market value of an interest. For
~
840
841
842
843
844
845
846
847
848
849
debt, the filer need only disclose the information required under
subsection (a)(S)(A).
@
Each statement filed under Section 19A-17(c) must disclose the
information required in subsection (a)(3) with respect to gifts and must
disclose the information otherwise required in subsection
fru
only with
respect to any interest, compensated position, or liability that may create
~conflict
under Section 19A-11 or is prohibited under Section 19A-12.
850
851
852
853
[19A-20.
Interests attributable
to
filers.]
[Under section 19A-19, the following must be reported as an economic interest
of the filer:
(a)
(b)
any economic interest held by a member of the filer's immediate family;
any economic interest held by a relative of the filer, if:
(1)
the interest was controlled by the filer, directly or indirectly, at
any time during the previous year; and
(2)
the interest could be affected by an action or a failure to act by
the filer in the performance of official duties;
(
c)
854
855
856
857
858
859
860
861
862
863
any economic interest in real property held by a business in which the
filer owns an interest, ifthe property is located in Montgomery County,
Prince George's County, Howard County, or Frederick County,
Maryland; the District of Colilmbia; or Fairfax County or Loudoun
County, Virginia; and if the filer's prorated interest in the real property
has a market value of more than $1,000.
If
the securities of the business
864
8
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BILL
No. 39-14
(CORRECTED COPY)
865
866
867
868
869
870
871
872
873
874
875
876
877
878
879
880
881
882
883
884
885
886
887
888
889
890
~
are publicly traded, the filer need not report the interest in the real
property; and
(d)
any economic interest held by a trust, except a common trust fund, if the
filer:
(1)
(2)
(3)
holds an income interest of more than $1,000;
holds a reversionary interest of more than $1,000; or
is a trustor or beneficiary of a revocable trust.]
19A-20.
Certifications regarding conflicts of interest.
ill
In
addition to any other requirement of this Article, each person who
files~
financial disclosure statement under Section 19A-l 7 must certify
that, to the best of the filer's knowledge, neither the filer nor the filer's
immediate family or relatives have any interest, including any liability,
that may
If~
create~
conflict of interest under Section 19A-l l or 19A-12.
filer is unable to so certify, the filer must separately identify, in the
~
manner required
Qy
the Commission, any interest that may create
conflict of interest under Section 19A-l
l
or 19A-12.
Qi}
The annual certification filed under subsection
ill
must be filed
Qy
April
U
of each year with the filer's financial disclosure statement.
If the economic interests of
~
filer, including those of an immediate
family member or relative, have changed since the filer's last filed
certification such that
~
conflict of interest may be created under Section
19A-1 l or 19A-12, or if the filer or an immediate family member
received
~
reportable gift from any person doing business with the
filer's County agency or department, the filer must, within
~
days after
the event, amend the certification filed under subsection
ill
and identify
each possible conflict or gift.
0
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BILL NO. 39-14 (CORRECTED COPY)
891
Approved:
892
Craig
L.
Rice, President, County Council
893
Date
Approved:
894
Isiah Leggett, County Executive
Date
895
896
This is a correct copy ofCouncil action.
Linda M. Lauer, Clerk of the Council
Date
0
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LEGISLATIVE REQUEST REPORT
Bill 39-14
Ethics
-
Amendments
DESCRIPTION:
Bill 39-14 would revise certain provisions of the County ethics law
governing financial disclosure and solicitation and acceptance of gifts
to meet certain requirements of state law.
County law should be updated to conform to state law.
To conform County law to State law.
Ethics Commission
To be requested.
To
be
requested.
To be requested.
To be researched.
Mike Faden, Senior Legislative Attorney, 240-777-7905
To
be
researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
A violation of Chapter 19A is a Class A violation.
f:\law\bills\1439 ethics law update\legislative request report.doc
@
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MONTGOMERY COUNTY ETHICS COMMISSION
Kenita V. Barrow
Chair
Mark L Greenblatt
Vice Chair
April 11, 2014
Craig Rice
Council President
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
Isiah Leggett
County Executive
Montgomery County
Executive Office Building
l 0 l Monroe Street,
2nd
Floor
Rockville, MD 20850
RE: Ethics Commission Legislative Proposal
Dear Mr. Council President and
Mr.
County Executive:
The Montgomery County Ethics Commission (MCEC) proposes changes to the
Montgomery County Public Ethics
Law
to align the County's law with Maryland State
law requirements on gifts and financial disclosure. The proposal also includes provisions
that the MCEC believes appropriate for providing assurance that County employees do
not have conflicts of interest
in
the performance of their duties. The proposals are
attached.
The State's Public Ethics Law requires local governments
to
enact laws similar to the
State's for their respective jurisdictions. Prior to 2010, Montgomery County's Ethics
Law had been considered to be compliant with the State requirement of similarity.
In
2010, the State Ethics Law was amended to further mandate that as to elected local
officials, local governments' laws must be equivalent
to
or exceed the requirements of
State law with respect to conflict of interest and financial disclosure provisions.
Moreover, the 2010 amendments required each local ethics commission to annually
Montgomery County Ethics Commission
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VI
100 Maryland Avenue, Room 204. Rockville, MD 20850
OFFICE 240-777-6670, FAX 240-777-6672
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Ethics Commission Legislative Proposal
April 11, 2014
Page2
certify that their respective local laws are in compliance with the State's requirements
with regard to elected officials. The State Ethics Commission staff has communicated
that in light of the 2010 law and other factors, including a Court case finding a local
jurisdiction's laws not sufficiently similar to the State's law, the State Ethics
Commission's view on what constitutes "similar"
has
narrowed since the time the State
Commission viewed Montgomery County's law as meeting the similarity requirement.
The State law requirements for local ethics laws include:
15-804. Conflict of interest laws.
(a)
In general.
-Except as provided in subsection
(b)
of this section, the
conflict of interest provisions enacted by a county or municipal corporation
under § 15-803 of this subtitle shall be similar to the provisions of Subtitle
5
of this title, but may be modified to the extent necessary to make the
provisions relevant to the prevention of conflicts of interest in that
jurisdiction.
(b)
For elected local officials.
-The conflict of interest provisions for
elected local officials enacted by a county or municipal corporation under
§
15-803
of this subtitle shall be equivalent to or exceed the requirements of
Subtitle
5
of this title, but may be modified to the extent necessary to make the
provisions relevant to the prevention of conflicts of interest in that
jurisdiction.
15-805. Financial disclosure laws.
(b)
Similarity to Ethics
Law.
-
(1) Except as provided in paragraph (2) of
this subsection and subsection (c) of this section, the financial disclosure
provisions enacted by a county or municipal corporation under§
15-803
of
this subtitle shall be similar to the provisions of Subtitle 6 of this title, but
shall be modified to the extent necessary to make the provisions relevant to
the prevention of conflicts of interest in that jurisdiction. (2) The financial
disclosure provisions for elected local officials enacted by a county or
municipal corporation under§
15-803
of this subtitle
shall
be equivalent to or
exceed the requirements of Subtitle 6 of this title, but shall be modified to the
extent necessary to make the provisions relevant to the prevention of conflicts
of interest in that jurisdiction.
Representatives of the State Ethics Commission have stated that the State Ethics
Commission interprets the clauses at the end of these provisions permitting and
mandating modifications as meaning that additional requirements can be imposed that
exceed the State requirements, but that local requirements under these paragraphs cannot
Montgomery County Ethics Commission
100 Maryland
Avenue, Room
204,
RockviJle,
MD 20850
OFFICE 240..777-6670, FAX 240-777-6672
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Ethics Commission Legislative Proposal
April 11, 2014
Page 3
be different from the State requirements in such a way as to lessen that which is required
by State law.
1
In the fall of2011, MCEC staff began an examination of the differences between the
State ethics laws and the County's ethics laws. In April 2012, the MCEC submitted for
State Ethics Commission staff review a draft of proposed amendments
to
the
Montgomery County Public Ethics Law. These proposed changes suggested alternatives
to
the County's current ethics law as
it
applies
to
Count}' elected officials. On April 12,
2013, another proposal was forwarded to State Ethics Commission staff. In the fall of
2013, correspondence between the State Ethics Commission staff and MCEC staff
resulted in refinement of the MCEC proposal. This proposal has been further refined as a
result of :further input by the State Ethics Commission and from the Montgomery County
Attorney and from the County's Senior Legislative Counsel. A meeting was held on
February 24, 2014, in which MCEC
staff,
State Ethics Commission staff, the County
Attorney and Senior Legislative Counsel discussed the then current draft.
At this meeting, State Ethics Commission staff provided general guidance as
to
what
language would be acceptable to the State Ethics Commission.
In
several instances, the
Montgomery County proposal was more specific than State law as to what conduct would
be prohibited. The direction from the State Ethics Commission
staff was
for
Montgomery County to follow the State's lead by imposing broad restrictions that could
be modified or narrowed in application through interpretation (rather
than
through
exceptions in the law). For example, State law prohibits the solicitation of any gift by an
employee. The State recommendation is for Montgomery County to include this broad
prohibition in the law, without any exceptions, and through MCEC interpretation of the
prohibition, create what caveats make practical sense. County participants in the meeting
were concerned that generic provisions would not provide suitable notice of what conduct
is being prohibited. Notice of what constitutes a violation is particularly important where
violations are sanctioned by civil and criminal penalties.
Given the State Ethics Commission's insistence on provisions being submitted that meet
its requirements, the MCEC has decided to accede to the bulk of
the State
Ethics
Commission staff recommendations on what should be contained in the MCEC's
proposal for the County's gift and financial disclosure laws. The MCEC fully recognizes
that the County's policy makers, in particular, the County Council, may have views that
deviate from those of the State Ethics Commission about what is required by State Ethics
Law. The MCEC forwards this proposal
with
a genuine and vested interest in how the
County's law is ultimately enacted. But the MCEC, meeting once monthly, cannot be an
efficient or appropriate arbiter between the State Ethics Commission and the County
The State Ethics Commission has prepared model local laws, availabJe on its website, which it
recommends for counties and municipalities subject to the equivalency and similarity
requirements.
Montgomery County Ethics Commission
1
IOO Maryland Avenue, Room 204, Rockville, MD 20850
OFFICE 240-777-6670, FAX 240-777-6672
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Ethics Commission Legislative Proposal
April 11, 2014
Page4
Council or County Executive on what should or must be contained in the County's Ethics
Law.
Particular Features of Proposed Law Going Beyond State Requirements
The MCEC proposes several significant changes from the current Public Ethics Law and
adds provisions that exceed State requirements. The new features mandated by State law
include that all financial disclosures be made publicly available and that there be
increased disclosure for elected officials, particularly as regards valuation of assets.
The proposal recommends three levels of disclosure, with elected officials
providing, consistent with State law requirements, greater disclosure
than
non-
elected senior County officials who are designated by law as filers. The current
designation process for identifying filers is eliminated in favor of a static statutory
list of filers being identified. A third tier of filers would be designated as filers
without the formal method 2 regulatory process existing under current law who
would only identify conflicting holdings and reportable gifts.
The proposal explicitly imposes on the Chief Administrative Officer a
requirement
to
establish an electronic system for submission and management of
financial disclosure reports.
The proposal includes a requirement to disclose sources of fees for services
provided by the filer.
The proposal requires public employees to certify that to the best of their
knowledge, there are no conflicts of interests, or alternatively,
to
identify the
interests that may create a conflict of interest.
The proposal requires public employees to report to the MCEC within 5 days any