STATE ETHICS COMMISSION 2014 ANNUAL REPORT STATE ETHICS COMMISSION¶S ANNUAL REPORT TO THE GOVERNOR & GENERAL ASSEMBLY FOR THE YEAR ENDING DECEMBER 31, 2014 ST A T E E T H I CS C O M M ISSI O N George L. Wainwright, Jr., Chair Jane F. Finch, Vice Chair 1324 M A I L SE R V I C E C E N T E R R A L E I G H , N C 27699-1324 Commissioners: Barbara K. Allen Francis X. DeLuca William P. Farthing, Jr. Clarence G. Newsome J. LeRoy Roberts Perry Y. Newson, Executive Director Phone: 919-715-2071 Fax: 919-715-1644 Email: ethics.commission@doa.nc.gov www.ethicscommission.nc.gov February 13, 2015 The Honorable Patrick McCrory Governor 20301 Mail Service Center Raleigh, NC 27699-0301 The Honorable Tim Moore Speaker, North Carolina House of Representatives 16 W. Jones Street, Room 2304 Raleigh, NC 27601-1096 The Honorable Phil Berger President Pro Tempore, North Carolina State Senate 16 W. Jones Street, Room 2007 Raleigh, NC 27601-2808 RH (WKLFV &RPPLVVLRQ¶V 4 Annual Report Dear Governor McCrory, Speaker Moore, & President Pro Tem Berger: Pursuant to section 138A-10(11) of Chapter 138A (the State Government Ethics Act), the State Ethics Commission hereby submits its 2014 DQQXDO UHSRUW RQ WKH &RPPLVVLRQ¶V DFWLYLWLHV DQG generally on the subject of public disclosure, ethics, and conflicts of interest. Sincerely, Perry Y. Newson, Executive Director TABLE OF CONTENTS ! PART I THE STATE ETHICS COMMISSION ............................................ 3 PART II 2014 LEGISLATIVE CHANGES ................................................ 10 PART III &200,66,21¶6 $&7,9,7,(6 .................................................... 12 A. DESIGNATION OF ADDITIONAL COVERED BOARDS. ...... 12 B. STATEMENT OF ECONOMIC INTEREST (SEI) FILINGS ..... 14 C. EDUCATION .......................................................................... 17 D. ADVICE & ADVISORY OPINIONS. ........................................ 20 E. COMPLAINTS. ....................................................................... 22 F. OTHER MAJOR A&&203/,6+0(176««««««««« ATTACHMENT A «««««««« ««««««««««««««« ATTACHMENT B««««««««««««««« ««««««««.. 31 !" PART I: THE STATE ETHICS COMMISSION A. MISSION STATEMENT. The State Ethics &RPPLVVLRQ¶V SULPDU\ PLVVLRQ LV WR HQVXUH WKDW SXEOLF RIILFLDOV covered by the State Government Ethics Act (Chapter 138A of the North Carolina *HQHUDO 6WDWXWHV ³H[HUFLVH WKHLU DXWKRULW\ KRQHVWO\ DQG IDLUO\ IUHH IURP LPSURSULHW\ WKUHDWV IDYRULWLVP DQG XQGXH LQIOXHQFH ´ 7KH &RPPLVVLRQ LV FKDUJHG ZLWK HQVXULQJ WKDW standards of ethical conduct and standards regarding conflicts of interest are adhered to by public officials. The Commission also ensures that lobbyists and lobbyist principals understand and comply with their duties and responsibilities under the Lobbying Law (Chapter 120C). The Commission accomplishes this mission through a combination of disclosure (transparency), education, advice, and enforcement. 3 B. AUTHORITY. The State Government Ethics Act (³(WKLFV $FW´ and the Lobbying Law grant VSHFLILF DXWKRULW\ WR WKH 6WDWH (WKLFV &RPPLVVLRQ ³WKH &RPPLVVLRQ´ IRU DGPLQLVWHULng and enforcing those laws. Specifically, the Ethics Act designates the Commission as WKH ³VROH 6WDWH DJHQF\ ZLWK DXWKRULW\ WR GHWHUPLQH FRPSOLDQFH ZLWK RU YLRODWLRQV RI >WKH $FW@ DQG WR LVVXH LQWHUSUHWDWLRQV DQG DGYLVRU\ RSLQLRQV XQGHU >WKH $FW@ ´ G.S. 138A10(c). Those decisions and advisory opinions are binding on all other State agencies. Id. The Lobbying Law grants specific authority to both the Commission and the Secretary of State. The Commission has the sole authority for interpreting the meaning and application of the Lobbying Law, including issuing advice and advisory opinions to persons affected by the Lobbying Law, and adopting rules interpreting the law. The Commission also has sole authority over Article 3 (Prohibitions and Restrictions), Article 5 (Liaison Personnel), and Article 7 (Persons Exempted). The Secretary of State has the sole authority to adopt rules, orders, and forms necessary to administer the provisions of Article 2 (Registration), Article 4 (Reporting), and Article 8 (Miscellaneous Reporting). The Ethics Act and the Lobbying Law establish a specific code of conduct for certain public officials and lobbyists and ensure transparency through various reporting requirements. A table detailing the obligations of officials and employees covered by the Ethics Act is in Attachment A. 4 C. POWERS AND DUTIES. 7KH &RPPLVVLRQ¶V SULPDU\ SRZHUV DQG GXWLHV LQFOXGH x $GPLQLVWHULQJ WKH 6WDWHPHQW RI (FRQRPLF ,QWHUHVW ³6(,´ ILQDQFLDO GLVFORVXUH and evaluation process; x Issuing advice and formal advisory opinions on the Ethics Act and the Lobbying Law; x Adopting rules and advisory opinions interpreting the Lobbying Law and rules to administer the Ethics Act and Articles 3, 5, & 7 of the Lobbying Law; x Educating public servants, legislators, and legislative employees on the ethics and lobbying laws, and educating lobbyists, lobbyist principals, and liaison personnel on the Lobbying Law; and, x Investigating complaints. $ OLVW RI WKH &RPPLVVLRQ¶V SULPDU\ VWDWXWRU\ SRZHUV DQG GXWLHV XQGHU WKH (WKLcs Act is set out in Attachment B. The Commission is required to meet at least quarterly and at other times as called by the chair or four of its members. In 2014, the Commission held six meetings: x x x x x x February 11, 2014 February 28, 2014 March 10, 2014 May 9, 2014 August 22, 2014 November 14, 2014. 7KH &RPPLVVLRQ¶V RSHQ VHVVLRQ PLQXWHV IRU WKHVH PHHWLQJV DUH DYDLODEOH E\ contacting the State Ethics Commission at (919) 715-2071 or by e-mail at ethics.commission@doa.nc.gov. 5 D. ORGANIZATION. MEMBERSHIP. The State Ethics Commission is made up of eight (8) members who serve in staggered four-year terms. Four members are appointed by the Governor, no more than two of whom may be of the same political party. Four members are appointed by the General Assembly: two upon recommendation of the Speaker of the House, neither of whom can be of the same political party; and two upon the recommendation of the President Pro Tempore of the Senate, neither of whom can be of the same political party. Four new members were appointed in 2014. Governor Pat McCrory appointed William P. Farthing, Jr. to serve a four-year term running from January 1, 2014 through December 31, 2017. In March 2014, Governor McCrory appointed George L. Wainwright, Jr. to serve a term ending December 31, 2017. On December 18, 2014, Speaker of the House of Representatives Thom Tillis appointed Tommy D. McKnight to a four-year term running from January 1, 2015 through December 31, 2018, replacing Barbara K. Allen. On December 31, 2014, Speaker Tillis appointed Robert L. Moseley, Jr. to fill the unexpired term of John M. Tyson, which expires on December 31, 2016. The following chart reflects the current membership of the Commission: Middle Name First Name Last Name Start Date End Date Appointed By Francis X. DeLuca 11/14/2013 12/31/2016 Senate William P. Farthing 1/1/2014 12/31/2017 Governor Jane Flowers Finch 1/1/2007 12/31/2015 Governor Tommy D. McKnight 1/1/2015 12/31/2018 House Robert L. Moseley 1/1/2015 12/31/2016 House Clarence G. Newsome 1/23/2007 12/31/2014 Senate 6 James LeRoy Roberts 5/31/2012 12/31/2015 Governor George L. Wainwright 3/28/2014 12/31/2017 Governor The Governor appoints a sitting member of the Commission to serve as chair. Governor McCrory appointed John M. Tyson to serve as chairman effective January 1, 2014. In order to run for a seat on the North Carolina Court of Appeals, Judge Tyson resigned as a member of the Commission in August 2014. Governor McCrory appointed George L. Wainwright, Jr. to replace Judge Tyson effective August 14, 2014. Justice Wainwright continues to serve as chairman until his successor is appointed. Commission members elect a vice-chair annually from its membership. On February 28, 2014, the Commission elected Jane Finch to serve as vice-chair. Ms. Finch has served as vice-chair for the Commission since it began in January 2007. STAFF. The Commission is staffed by an Executive Director, an Assistant Director, four additional attorneys, three paralegals, and four administrative positions. There were several staffing changes in 2014 including: x The Complaints Unit paralegal resigned and moved to a different agency and was replaced by current employee, Lisa Johnson, who was previously in the SEI Unit. x Gretchen D. Aycock joined the Commission staff from the Department of Administration as a staff attorney March 1st. She now leads the SEI Unit. x Diana Latta-Faison was hired as a new paralegal in the SEI Unit. x A new position was added by the General Assembly to primarily focus on the SEI process for MPO/RPO filers. Dorothy Strickland was hired for that position. x The Assistant Director retired in June and was replaced by a former contract attorney, Pam Cashwell. 7 x E. The Advice Unit paralegal resigned to move to a new agency and her position was reclassified for budgetary reasons to an administrative assistant position. At the close of 2014, we were in the hiring process. BUDGET. While the Commission operates on a fiscal year budget cycle, at the end of 2014, WKH &RPPLVVLRQ¶V certified budget was approximately $1,154,373. In July 2014, the Commission received a non-recurring budget carry-forward in the amount of $30,494 from the prior fiscal year. The carry-forward was provided to complete planned and ongoing technological upgrades to WKH &RPPLVVLRQ¶V website and our SEI database, including providing online access to the public for SEIs. In August 2014, preparations began for WKH *RYHUQRU¶V -17 biennial budget recommendations to the General Assembly. The State Budget Director requested that all general fund agencies, including the Commission, identify a net 2% reduction in their budgets. A two percent reduction for the Commission would equal $23,087. Given that RYHU RI WKH &RPPLVVLRQ¶V budget is for personnel costs (personal services), and non-negotiable information technology (ITS) charges account for over $50,000 (more than 50% of the remaining non-personnel costs), it is extremely difficult to identify significant non-personnel budget cuts, particularly on the heels of previous cuts of the same magnitude in 2013 ,Q DGGLWLRQ DOO RI WKH &RPPLVVLRQ¶V IRXU ³SURJUDPV´ LWV FRUH mission) are statutorily mandated and therefore not subject to elimination without a change to the current law. With these and other constraints in mind, the Commission requested that its budget reduction be limited to one percent (1%) and achieved by re-classifying a vacant paralegal position to an administrative assistant position, with the difference being 8 applied to the requested cut. This request is pending. However, the reclassification was approved by DOA and the hiring process was in progress at the end of 2014. 9 PART II: 2014 LEGISLATIVE CHANGES During the 2014 legislative session, the General Assembly made relatively few substantive revisions to the ethics and lobbying laws. Some of the most significant changes related to the local transportation entities, Metropolitan Planning Organizations ³032V´ DQG 5XUDO 7UDQVSRUWDWLRQ 3ODQQLQJ 2UJDQL]DWLRQV ³532V´ . See below and S.L. 2014-58. As background information, in 2013, the General Assembly required PHPEHUV RI 7UDQVSRUWDWLRQ $GYLVRU\ &RPPLWWHHV ³7$&V´ of MPO/RPOs to file financial interest disclosure forms (SEIs), as well as real estate disclosure forms (REDs) with the Commission. They follow an independent conflict of interest standard restricting members from taking certain actions which would provide a financial benefit to themselves or related entities or individuals. In the 2014 legislative session, the General Assembly made the following MPO/RPO-related changes: x Required that the Commission refer written allegations of an MPO/RPO PHPEHU¶V NQRZLQJ violation of the SEI requirements to the Director of the State Bureau of Investigation for investigation and referral to the District Attorney for possible prosecution; x Added new sections 138A-25(d) and (e) to the Ethics Act specifying the penalties for an MPO/RPO membeU¶V IDLOXUH WR ILOH D WLPHO\ DQG complete SEI and RED: a $250 fine for failure to file either form within 30 days of receipt of WKH &RPPLVVLRQ¶V QRWLFH and failure to file either form within 60 days of receipt of that notice is a misdemeanor. x Directed the Commission to report an MPO/RPO PHPEHU¶V IDLOXUH WR ILOH or their filing of an incomplete SEI or RED within 60 days of receipt of notice to the SBI Director for investigation and possible referral to the District Attorney unless the Commission determines that extenuating circumstances exist. 10 Also in 2014, the General Assembly made members of several economic development entities subject to the Ethics Act. In particular, legislation provided that all officers, employees, and members of the governing board of an economic development nonprofit corporation (the Economic Development Partnership and Economic Development Accountability & Standards Committee) are public servants and subject to the requirements of the Ethics Act. However, all officers, members of the nonprofit board, and employees whose annual compensation is less than $80,000 were not required to file an SEI. S.L. 2014-18. The Ethics Act was amended to provide that candidates required to file SEIs must file them with the Commission rather than with local Boards of Elections. The State Board of Elections was also required to send the Commission notice of an individual qualifying to be on the ballot within five days of such qualification and must also provide notification of the SEI filing requirement to any individual who is nominated to fill a post-nomination vacancy. Finally, legislative changes increased the membership of the Education & Workforce Innovation Commission (a covered board) from 11 to 14. 11 PART III: THE &200,66,21¶6 $&7,9,7,(6 A. DESIGNATION OF ADDITIONAL COVERED BOARDS. BACKGROUND. The Ethics Act covers State boards and commissions that are created by statute or executive order, non-advisory in nature, and designated as covered by the State Ethics Commission. G.S. 138A-3(1c). The Commission applies the criteria found in 30 NCAC 02 .0101, Non-Advisory Boards, to determine if a board is non-advisory. Specifically, a board will be deemed non-advisory if the board is authorized to perform any of the following functions: 1. Allocate, spend, award, or invest public money where the expenditures do not relate solely to the internal operations of the boards; 2. Issue, renew, deny, revoke or suspend licenses; 3. Adopt rules, regulations, standards, or criteria affecting those outside of the board or commission; 4. Enter into or approve contracts involving public money; or 5. Set policy governing operation of a State agency. Staff is authorized to apply the criteria to all new boards to develop a recommendation as to whether the board should be covered by the Ethics Act. This process is non-adversarial, and any board wishing to contest VWDII¶V UHFRPPHQGDWLRQ may appear before the Commission. In addition, the General Assembly can mandate FRYHUDJH IRU ERDUGV RU RWKHU HQWLWLHV WKDW ZRXOG EH GHHPHG ³DGYLVRU\´ DQG WKXV QRW covered under the Ethics Act. 12 2014 COVERED BOARDS. In 2014, using the above coverage criteria, the Commission reviewed 22 boards to determine if they met the criteria. The Commission voted to designate the following four (4) boards as non-advisory thereby covering those boards and their members under the Ethics Act: 1. Education and Workforce Innovation Commission 2. Rural Infrastructure Authority 3. State Water Infrastructure Authority 4. North Carolina Human Trafficking Commission The Commission determined the remaining 18 boards were either advisory or non-state boards and therefore should not be covered by the Ethics Act: 1. *RYHUQRU¶V 7HDFKHU Advisory Committee 2. *RYHUQRU¶V $GYLVRU\ &RXQFLO RQ +LVSDQLF /DWLQR $IIDLUV 3. *RYHUQRU¶V $GYLVRU\ &RXQFLO RQ 6PDOO DQG +LVWRULFDOO\ 8QGHUXWLOL]HG Businesses 4. *RYHUQRU¶V 7DVN )RUFH RQ Safer Schools 5. *RYHUQRU¶V 6WDWHZLGH ,PSDLUHG 'ULYLQJ 7DVN )RUFH 6. Educator Effectiveness and Compensation Task Force 7. Enterprise Grants Management Oversight Committee 8. Oregon Inlet Land Acquisition Task Force 9. Permanency Innovation Initiative Oversight Committee 10. *RYHUQRU¶V +HDOWK DQG 6DIHW\ /HDGHUVKLS 7HDP 11. Medicaid Reform Advisory Group 12. North Carolina Military Affairs Commission 13. Charlotte Douglas International Airport Commission 13 14. State Board of Proprietary Schools 15. *RYHUQRU¶V :RUNLQJ *URXS RQ 9HWHUDQV 6HUYLFH 0HPbers and their Families 16. *RYHUQRU¶V &RXQFLO RQ +RPHOHVVQHVV 17. *RYHUQRU¶V 6XEVWDQFH $EXVH DQG 8QGHUDJH 'ULQNLQJ 3UHYHQWLRQ and Treatment Task Force 18. Academic Standards Review Commission. In addition, the General Assembly directly made the following boards subject to WKH (WKLFV $FW DQG WKH &RPPLVVLRQ¶V MXULVGLFWLRQ 1. Economic Development Partnership of North Carolina, Inc.; 2. Economic Development Accountability & Standards Committee; 3. Funding Committee for the North Carolina Commercial Fishing Resource Fund; 4. Coal Ash Management Commission. In total, eight new boards or commissions were covered in 2014, resulting in 87 newly covered individuals who are required to file statements of economic interest and take the mandatory ethics training course. B. STATEMENT OF ECONOMIC INTEREST (SEI) FILINGS. BACKGROUND. The Ethics Act UHTXLUHV PRVW ³FRYHUHG SHUVRQV´ SXEOLF VHUYDQWV1, legislators, and judicial officers2), as well as candidates for any of these offices that are elected, to file a Statement of Economic Interest ³ 6(,´ GLVFORVLQJ FHUWDLQ ILQDQFLDO professional, familial, and personal information. As noted previously, the TAC members of MPOs/RPOs and their alternates are also required to file SEIs and an RED. The SEI 1 2 ³3XEOLF VHUYDQW´ LV GHILQHG LQ * 6 $-3(30). ³-XGLFLDO RIILFHUV´ LQFOXGHV justices, judges, district attorneys, and clerks of court. 14 PXVW EH ILOHG SULRU WR WKH FRYHUHG SHUVRQ¶V initial appointment, election, or employment and no later than April 15th of every year thereafter. Earlier dates apply to candidates. Certain public servants whose compensation from the State is less than $60,000 per year and voting student members of community college and university boards of trustees do not have to file an SEI.3 The &RPPLVVLRQ PXVW SUHSDUH DQ HYDOXDWLRQ RI SXEOLF VHUYDQWV¶ DQG 032 532 PHPEHUV¶ DQG DOWHUQDWHV¶ 6(,V LQ RUGHU WR LGHQWLI\ DQ\ DFWXDO RU SRWHQWLDO FRQIOLFWV RI interest between their private interests and their public duties. In most cases, the public VHUYDQW¶V LQLWLDO 6(, PXVW EH HYDOXDWHG SULRU WR WKH LQGLYLGXDO DVVXPLQJ KLV RU KHU SXEOLF position. However, university and community college officers and trustees may assume their public position prior to the SEI evaluation. Beginning July 1, 2013, the Commission established a biennial cycle for evaluating most SEIs. The Ethics Act does not require the Commission to prepare evaluations for legislators, judicial officers, and candidates. Finally, the Commission may impose penalties for late or non-filing. Within 30 days after the due date, the Commission must notify persons who have either failed to file or filed an incomplete SEI. The person then has 30 days to complete the SEI or be subject to a $250.00 fine. Failure to complete the SEI within 60 days of initial notice by the Commission is a violation of the Ethics Act, and the person may be removed from his or her public position. As the charts below indicate, more than 7000 SEI were filed LQ 2I WKRVH ZHUH ILOHG HOHFWURQLFDOO\ WKURXJK WKH &RPPLVVLRQ¶V ZHEVLWH 3 They are, however, subject to all other applicable provisions of the Ethics Act. 15 SEI STATISTICS. The 2014 SEI filing statistics for covered persons are as follows: Number of SEI Filers Approximately 6400 Number receiving a 30 day letter for failure to file or incomplete filing Number receiving a 60 day letter for failure to file or incomplete filing 475 68 Number assessed $250 fine 46 Number of appeals from fine 2 Number recommended for removal 10 The 2014 SEI filing statistics for MPO/RPO filers are as follows: Number of SEI Filers Approximately 650 Number receiving a 30 day letter for failure to file or incomplete filing 52 Number receiving a 60 day letter for failure to file or incomplete filing 20 Number assessed $250 fine 16 Number of appeals from fine 1 Number recommended for removal 0 16 C. EDUCATION. BACKGROUND. Both ethics and lobbying education are required by the ethics and lobbying laws. Public servants and ethics liaisons in the executive branch must attend ethics education within six months of election, appointment, employment, or notification WKDW WKH LQGLYLGXDO¶V ERDUG KDV EHHQ GHVLJQDWHG DV D FRYHUHG ERDUG 7KH\ PXVW DOVR attend a refresher presentation at least every two years thereafter. The Commission also offers lobbying education and awareness programs to lobbyists and liaison personnel (State agency legislative liaisons); however, this education is not mandatory. Legislators must attend within either two months of the convening of the General $VVHPEO\ WR ZKLFK WKH OHJLVODWRU LV HOHFWHG RU WZR PRQWKV DIWHU WKH OHJLVODWRU¶V appointment, whichever is later. Legislative employees must attend a presentation within three months of employment and attend a refresher presentation at least every two years thereafter. Currently, over 7,300 individuals are required to attend ethics and lobbying education presentations. Judicial officers are not required to attend an ethics education presentation unless they are also serving in a public servant position (e.g., are appointed to a covered board). The Commission encourages any staff members who work directly with public servants to attend an ethics and lobbying education presentation. In 2014, the Commission also provided the filing members of MPOs and RPOs education and training regarding SEIs and REDs. This education and training was initially presented via a webinar. The webinar was recorded and archived and remains DVVHVVDEOH RQ WKH 'HSDUWPHQW RI 17 7UDQVSRUWDWLRQ¶V ZHEVLWH DW: http://new.livestream.com/NC-DOT/events/3630954. The Commission encourages all TAC members and TAC Coordinators to participate in this SEI/RED education and training; however, it is not mandatory. 2014 EDUCATION OPTIONS. Ethics and lobbying education presentations are conducted live, by video streaming via the North Carolina Research and Education Network (NC-REN), and online. Most live sessions originate in Raleigh. Some are stand-alone programs; others are broadcast live to sites across the State (primarily on university campuses) via NC-REN. The Commission tries to ensure geographic balance when scheduling presentations. The Commission also offers the mandatory ethics education online, via the ComPLVVLRQ¶V ZHEVLWH 2014 ETHICS EDUCATION PRESENTATIONS. The 2014 education presentation statistics are as follows: Public Servants & Others in the Executive Branch.4 Live Programs Offered Locations5 14 56 Total Attendees 426 Online Participants 1297 TOTAL PARTICIPANTS 1723 4 Includes public servants and ethics liaisons whose attendance is mandatory, as well as other employees who are not covered by the Ethics Act but who attend voluntarily or at the direction of their supervisors. 5 Includes Raleigh locations and distance presentations. Therefore, you can have multiple locations served through one program. 18 Legislators. Programs Offered Locations 3 Total Attendees 3 3 Legislative Employees. Online Participants 222 Lobbyists & Lobbyist Principals. Programs Offered 1 Locations 1 Total Attendees 52 MPO and RPO TAC Members. Programs Offered 1 Locations Webinar Total Attendees 72 Others.6 Programs Offered 8 Locations Live and/or Video Streaming Total Attendees 296 NEWSLETTERS. The Ethics Act requires the Commission to publish newsletters periodically. In addition, the Lobbying Law requires the Commission to publish an annual lobbying newsletter containing summaries of advisory opinions. 6 Includes programs concerning the ethics and lobbying laws that do not meet the statutory education requirements ( e.g., Continuing Legal Education presentations). 19 In 2014, the Commission published six (6) newsletters 7KH &RPPLVVLRQ¶V newsletters can be found on its website at: http://www.ethicscommission.nc.gov/News/newsArchive.aspx. D. ADVICE & ADVISORY OPINIONS. BACKGROUND. The Ethics Act and Lobbying Law authorize the Commission staff to issue informal advice, both written and oral, and the Commission to issue formal written advisory opinions on specific issues regarding the meaning and applicability of the Ethics Act and the Lobbying Law. Advice and formal advisory opinions relate to an LQGLYLGXDO¶V GXWies and responsibilities under the Ethics Act in specific circumstances, including advice concerning the gift ban, conflict of interest standards, and other requirements of the Ethics Act. Advice and formal advisory opinions interpreting the Lobbying Law address lobbyist and lobbyist principal registration, expenditure and payment reporting requirements, and the gift ban applicable to registered lobbyists, lobbyist principals, and liaison personnel. Advice and formal advisory opinions also address other restrictions applicable to registered lobbyists, the six-PRQWK ³FRROLQJ RII´ SHULRG DSSOLFDEOH WR OHJLVODWRUV WKH *RYHUQRU¶V &DELQHW, Council of State members, and former State employees, and the other reporting requirements applicable to persons otherwise exempted from the Lobbying Law. Individuals who may request advice concerning the Ethics Act include public servants, legislative employees, individuals responsible for supervising or appointing a public servant or legislative employee, legal counsel, and ethics liaisons. Legislators may also request advice concerning the Ethics Act and certain provisions of the 20 Legislative Ethics Act. Anyone affected by the Lobbying Law, including lobbyists, lobbyist principals, and liaison personnel, may also request advice. Finally, the State Auditor may request an advisory opinion on specific questions involving the meaning and application of the Ethics Act, certain provisions of the Legislative Ethics Act, or the Lobbying Law. Requests for advice must relate to real or reasonably anticipated facts or circumstances. All requests for advice and advisory opinions, advice and advisory opinions given, and related information are confidential and may not be disclosed without the permission of the requester. However, formal advisory opinions concerning WKH /REE\LQJ /DZ PXVW EH SURYLGHG WR WKH 6HFUHWDU\ RI 6WDWH¶V RIILFH Generally, a formal written advisory opinion issued by the Commission gives the requester immunity from investigation by the Commission, adverse action by the UHTXHVWHU¶V ERDUG RU DJHQF\ DQG LQYHVWLJDWLRQ E\ WKH 6HFUHWDU\ RI 6WDWH +RZHYHU D formal advisory opinion from the Commission does not grant immunity for violations of WKH FULPLQDO ODZ LQ WKH SHUIRUPDQFH RI WKH LQGLYLGXDO¶V RIILFLDO GXWLHV ,QIRrmal advice issued by Commission staff does not grant immunity. The Commission publishes redacted formal advisory opinions on its website within 30 days of issuance. These RSLQLRQV FDQ EH IRXQG XQGHU ³$GYLVRU\ 2SLQLRQV´ RQ WKH &RPPLVVLRQ¶V ZHEVLWH. The Commission also issues recommended formal advisory opinions to legislators. However, those opinions are transmitted to the Legislative Ethics Committee (LEC), which has sole authority to issue formal advice to legislators. Until the LEC issues its opinion, a legislator who relies on a recommended formal advisory opinion is immune from investigation by the Commission or the LEC (unless it involves 21 DQ DOOHJHG YLRODWLRQ RI FULPLQDO ODZ LQ WKH SHUIRUPDQFH RI WKH OHJLVODWRU¶V RIILFLDO GXWLHV adverse action by the house of which the legislator is a member, and investigation by the Secretary of State. ADVICE & FORMAL ADVISORY OPINION STATISTICS. Formal Advisory Opinions Lobbying 1 Ethics 6 2014 Total Formal Advisory Opinions Issued 7 Informal Advisory Opinions (Ethics & Lobbying) 2014 Total Informal Advisory Opinions Issued E. 583 COMPLAINTS. ETHICS COMPLAINTS. The Commission has a statutory mandate to investigate complaints alleging unethical conduct by covered persons and legislative employees. The Commission must conduct inquiries sufficient to either dismiss the complaint for a lack of probable cause or hold a hearing for public servants. For legislators, legislative employees, and some judicial officers, the complaint is referred to the appropriate authority after a finding of probable cause. Allegations against judges that involve the Code of Judicial Conduct must be referred to the Judicial Standards Commission without investigation. 22 The Commission uses a panel system to expedite the resolution of ethics complaints. Prior to June 1, 2014, the panels consisted of two Commission members (each from different political parties) and the executive director. However, on June 1, 2014, a rule change became effective that removed the executive director from the panels. The panel first determines through a preliminary inquiry, whether the complaint alleges sufficient facts to conduct a further inquiry into the charges (PI Panel). If the complaint does not allege sufficient facts, it is dismissed or additional information is requested. If sufficient facts are alleged, staff conducts an investigation, and its findings are then presented to the same panel for a probable cause determination. If the PI Panel members cannot agree at the preliminary inquiry stage as to whether the complaint alleges facts sufficient to constitute a violation, then the matter proceeds to an investigation. Similarly, if the panel members disagree on the probable cause determination, then the complaint proceeds to the Commission for determination, with the panel members recusing themselves from voting. If the Probable Cause Panel finds no probable cause, the complaint is dismissed and reported to the Commission at the next meeting. If the Commission finds probable cause, public servants are entitled to a public hearing before the Commission. The Commission also has the authority to settle complaints involving public servants. All settlement agreements are deemed confidential. Other than for SEI filing violations, the Commission cannot assess a civil penalty for Ethics Act violations. Also, other than providing false information or for failing to disclose information on an SEI, there are no criminal penalties for violations of the Ethics Act. 23 For legislators, if probable cause is found, the complaint is referred to the LEC. For judicial officers, if probable cause is found, the complaint is referred to the appropriate entity; however, allegations of violations of the Code of Judicial Conduct must be referred to the Judicial Standards Commission without investigation. If probable cause is found involving a complaint against a legislative employee, the complaint is referred to the General Assembly. Ethics Act complaints and all records associated with them are confidential, unless a hearing is held. LOBBYING COMPLAINTS. The Commission shares responsibility for enforcement of the Lobbying Law with the Secretary of State. Specifically, the Commission enforces WKH JLIW EDQ FRQWLQJHQF\ IHHV HOHFWLRQ LQIOXHQFH DQG WKH ³FRROLQJ RII´ period for legislators and certain public servants. Similar to the Ethics Act complaint process, a panel is used to screen complaints. Complaints and other records associated with them are confidential. The Commission may assess a civil penalty for violations of the Lobbying Law. Violations of certain portions of the Lobbying Law, including the gift ban, also have a criminal penalty. Apparent criminal violations must be referred to the District Attorney for possible prosecution. 24 COMPLAINT AND INVESTIGATION STATISTICS. 2014 Ethics Complaints !"#$%&'%()**$+% ,-#.)/)*0&/12*)*3*$% 4356$+% %% ,! "#$$%&'!()$*#$'!($)+!,-./! ")+01#%234!! 5)3#1!6)+01#%234!$&6&%7&'!! .-/! 829:%$%&4! ")23#63&'!")++%44%)2!;:3!2)! 6)+01#%23!0$)6&44&'! <=! >%46&11#2&):4! ")++%44%)2!6)0%&'!)2!6)+01#%234! 3)!)3?&$!#@&26%&4!)$!'&0#$3+&234! .)23?4! D/TG!.