• Out of State Companies: Beware of the Gift Restrictions to Louisiana's Public Servants under Louisiana's Code of Governmental Ethics
  • December 5, 2014 | Author: Richard G. Passler
  • Law Firm: Breazeale, Sachse & Wilson, L.L.P. - Baton Rouge Office
  • Louisiana’s Code of Governmental Ethics (“Ethics Code”) has gained some renown as one of the most restrictive in the nation. The restrictions can be quite difficult to follow and even what can seem like clear language permitting certain gifts can, and has been, interpreted extremely restrictively. Quite possibly, the navigation difficulty results from the specific restrictions on gifts being interspersed throughout Louisiana’s Ethics Code.

    Generally, Louisiana’s Ethics Code prohibits any public servant from soliciting or accepting, either directly or indirectly, any thing of economic value as a gift or gratuity from any person:

    1. Who has or is seeking a contractual, business, or financial relationship with the public servant’s agency; or
    2. Who is seeking, for compensation, to influence the passage or defeat of legislation by the public servant’s agency.

    On the surface these prohibitions may seem clear, but it is imperative to know how the Ethics Code defines certain of the terms it uses to fully understand their breadth.

    The first key definition in understanding to whom the prohibition on gifts applies is the definition of the term public servant. The Ethics Code defines that term as any person, whether compensated or not, who is a public employee, appointed or elected official (except judges to whom special rules apply), and anyone in the performance of a governmental function (even if not employed by a governmental entity in the traditional fashion). Consequently, the term public servant is actually broader than one’s traditional notion of a public employee - and, as a result, expanding the realm of persons bound by the Ethics Code and its restrictions on the receipt of gifts.

    The next key definition in understanding what gifts are prohibited is the definition of the term thing of economic value. The Ethics Code defines this term to include much more than money - it also includes any other thing having economic value. This definition has been interpreted to include virtually anything given to a public servant. The Ethics Code recognizes relatively few exceptions to this definition.

    Among the key recognized exceptions are:

    1. Promotional items - but only as long as they have no substantial resale value - such as calendars, pens, hats, and t-shirts which bear a company’s name or logo.
    2. Food and drink consumed while the public servant is the personal guest of the gift giver. However, for this exception to apply, the gift giver or a representative thereof must be present when the food and drink are consumed. And reasonable transportation and entertainment which are incidental to the food and drink are also allowed. The present limitation on the value of the food and drink is $58.00 and is subject to a number of other restrictions that are beyond the scope of this article.
    3. Complimentary admission to a civic, non-profit, educational, or political event. But this exception has been interpreted to only apply when the public servant is giving a speech at the event, is on a panel for discussion during the event, or is an honoree on the program at the event. Specifically not included within this exception are tickets to sporting events of any types (i.e., whether professional or nonprofessional).
    4. The acceptance of flowers or a donation in connection with the death of an immediate family member (once again, as defined by the Ethics Code) of the public servant, as long as the value does not exceed $100.00.

    Louisiana’s Ethics Code also prohibits any public employee from soliciting or accepting, either directly or indirectly, anything of economic value as a gift or gratuity from any person:

    1. Who conducts operations or activities which are regulated by the public employee’s agency; or
    2. Who has substantial economic interests which may be substantially affected by the performance or nonperformance of the public employee’s official duties.

    Once again, while on the surface these prohibitions may seem clear, it is imperative to keep in mind the definitions provided in the Ethics Code for a number of its terms.

    For example, with respect to these prohibitions, they do not apply to public servants; rather,only to public employees - a definition which excludes elected officials. These restrictions, while not limited to, only tend to arise in regulatory relationships such as licenses or permits. The Ethics Code also contains its own, broadly-based definition for the term substantial economic interest.

    The bottom line is that when it comes to gifts and gratuities, it is not the value of the potential gift or gratuity that determines whether it can be accepted by a public servant or public employee - the restrictions provided by the Ethics Code are applicable regardless of the amount. Consequently, a potential gift or gratuity to a public servant (whose definition include public employee) is prohibited under the Ethics Code no matter what the price may be unless it is authorized by one of its exceptions, and where the exception for food and drink, the $58.00 value limitation applies.