Ethics for Florida Government Employees

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

2. Presentation Overview • History of Florida’s Ethics Laws • Ethics Laws • Disclosures • Penalties • Published Ethics Codes • Analysis of Ethics Case Law • Resources 2013 New Clerk Academy

3. History of Florida’s Ethics Laws • Florida Constitution revised in 1968 • Required a code of ethics for all state employees and non-judicial officers • Prohibited conflict between public duty and private interests be prescribed by law • 1976 the “Sunshine Amendment” was adopted • Provided additional constitutional guarantees concerning ethics in government. • Created independent commission(Commission on Ethics) to investigate complaints 2013 New Clerk Academy

4. History of Florida’s Ethics Laws • Five of the Commission’s nine members are appointed by the Governor • Two each are appointed by the President of the Senate and Speaker of the House of Representatives • No more than five (5) Commission members may be members of the same political party • None of the Commission members may hold any public employment during their two-year terms of office 2013 New Clerk Academy

5. History of Florida’s Ethics Laws • The “Code of Ethics for Public Officers and Employees” adopted by the Florida Legislature is found in Chapter 112 of the Florida Statutes • Primary goal to promote public interest and maintain respect of the people for their government • Ensure that public officials conduct themselves independently and impartially • Ensure that public officials are not using their office for personal gain • Avoid creation of unnecessary barriers to public service while maintaining integrity of government 2013 New Clerk Academy

6. History of Florida’s Ethics Laws • ROLE OF THE COMMISSION ON ETHICS • Investigate complaints • Renders advisory opinions to public officials • Prescribes forms for disclosure • Administers the Executive Branch Lobbyist Registration and Reporting Law • Maintains financial disclosure filings of constitutional officers and state officers and employees • Administers automatic fines for public officers and employees who fail to timely file and financial disclosures • May file suit to void contracts, prepares mailing lists of officials subject to disclosure and makes recommendations to disciplinary officials when appropriate 2013 New Clerk Academy

7. ETHICS LAWS • Primarily two types of provisions: • Those prohibiting certain actions or conduct • Those requiring certain disclosures be made to public • Laws generally apply to all public officers and employees, State and local as well as members of advisory bodies. • Principal exclusion are judges – fall under jurisdiction of Judicial Qualifications Commission • Public Service Commission members and employees are subject to additional ethics standards enforced by the Ethics Commission under Sec 350 of Florida Statutes. 2013 New Clerk Academy

8. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Solicitation and Acceptance of Gifts • Public officers, employees, local government attorneys AND CANDIDATES are prohibited from soliciting or accepting anything of value based on understanding that their vote, official action or judgment would be influenced by such gift [S112.313(2) Fla. Stat.] • Any person required to file financial disclosure Form 1 or Form 6 is prohibited from soliciting any gift from political action committee, lobbyist who has lobbied his/her agency in last 12 months or the partner, firm, employer or principal of such lobbyist 2013 New Clerk Academy

9. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Solicitation and Acceptance of Gifts, (continued) • Any person required to file financial disclosure Form 1 or Form 6 is prohibited from accepting any gift worth over $100 from political action committee, lobbyist who has lobbied his/her agency in last 12 months or the partner, firm, employer or principal of such lobbyist • Effective in 2006, no EXECUTIVE BRANCH or legislative lobbyist, or principal shall make indirect or direct expenditure for purpose of lobbying nor no EXECUTIVE BRANCH or legislative official shall accept any expenditure made for the purpose of lobbying [112.3215, Fla. Stat.] • This would include any gift UNDER $100 permitted under Statute 112.3148 2013 New Clerk Academy

10. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Unauthorized Compensation • Public officers or employees, local government attorneys, and their spouses or minor children prohibited from taking any compensation or anything of value that: • They know • They should have known with exercise of reasonable care will influence their vote or official action 2013 New Clerk Academy

11. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Misuse of Public Position • Prohibited from corruptly using or attempting to use their official positions to obtain a special privilege for themselves or others • Disclosure or Use of Certain Information • Information not available to the public and obtained by reason of their position for the personal benefit of themselves or others 2013 New Clerk Academy

12. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Solicitation or Acceptance of Honoraria • Person required to file financial disclosure Form 1 or Form 6 as well as State procurement employee prohibited from soliciting honoraria which is related to his or her public duties or office • Person required to file financial disclosure Form 1 or Form 6 as well as State procurement employee prohibited from accepting an honorarium from political action committee, lobbyist who has lobbied his/her agency in last 12 months or the partner, firm, employer or principal of such lobbyist except reimbursement of expenses related to an event provided the expense is disclosed 2013 New Clerk Academy

13. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Solicitation or Acceptance of Honoraria (cont’d) • Lobbyist and their partners, firms, employers or principals or political action committee prohibited from giving an honorarium to persons required to file financial disclosure Form 1 or Form 6 as well as State procurement employees • Violations can result in a fine of up to $5,000 and prohibitions from lobbying for 2 years 2013 New Clerk Academy

14. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Solicitation or Acceptance of Honoraria (cont’d) • No EXECUTIVE BRANCH or legislative lobbyist, or principal shall make indirect or direct expenditure for purpose of lobbying nor no EXECUTIVE BRANCH or legislative official shall knowingly accept directly or indirectly any expenditure made for the purpose of lobbying 2013 New Clerk Academy

15. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Prohibited Employment and Business Relationships • Doing business with one’s agency • 5% ownership test – his/her spouse or child • Conflicting employment or Contractual Relationship • Public officer or employee prohibited from holding any employment or contract with any entity or agency regulated by or doing business with his/her public agency 2013 New Clerk Academy

16. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Prohibited Employment and Business Relationships (cont’d) • Conflicting employment or Contractual Relationship (cont’d) • Public officer or employee prohibited from holding any employment or contractual relationship which will pose a frequently recurring conflict between private interests and public duties or impede full and faithful performance of public duties • Limited exceptions exist for legislative bodies, certain special tax and drainage districts and persons whose professions qualify them to hold their public positions 2013 New Clerk Academy

17. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Prohibited Employment and Business Relationships (cont’d) • Conflicting Employment or Contractual Relationship Exemptions from Prohibitions: • Business rotated among all qualified suppliers • Business awarded by sealed competitive bidding and the official has not tried to influence or persuade agency personnel (Disclosure required on Form 3A) • In cases of legal advertising, utilities or passage on common carrier 2013 New Clerk Academy

18. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Prohibited Employment and Business Relationships (cont’d) • Conflicting Employment or Contractual Relationship Exemptions from Prohibitions(cont’d) • Emergency purchase required to protect public health, safety or welfare • Business entity is sole source of supply and full disclosure on Form 4A • Aggregate of such business < $500 in calendar year • If public officer or employee is employed by tax exempt organization and the officer or employee is not directly compensated as a result 2013 New Clerk Academy

19. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Prohibited Employment and Business Relationships (cont’d) • Lobbying State Agencies by Legislators • Prohibition is for representing another person or entity for compensation during his/her term in office • Employees Holding Office • Prohibition from holding office which governs his/her employer (i.e. County Commission and being Parks Dir) • Professional and Occupational Licensing Board Members prohibited from serving as officer, director, or administrator of state, county or regional professional or occupational organization or association 2013 New Clerk Academy

20. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Prohibited Employment and Business Relationships (cont’d) • Local government attorneys and their law firms are prohibited from representing private individuals or entities before the unit of local government which they serve • Can’t refer or recommend to his/her firm legal work involving the local government he/she serves 2013 New Clerk Academy

21. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Restrictions on appointing, employing and contracting with relatives • Anti-nepotism law • Public official prohibited from seeking for a relative any appointment, employment, promotion or advancement in the agency which he/she is serving or over which he/she exercises control • No person shall be appointed, employed, promoted or advanced in or to a position if such action was advocated by a related public official 2013 New Clerk Academy

22. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Restrictions on appointing, employing and contracting with relatives (cont’d) • Anti-nepotism law (cont’d) • Prohibition DOES NOT apply to school districts (except as provided in Fla. Stat. 1012.23), community colleges, and State universities, or to appointments of boards of municipalities with < 35,000 population • Approval of budgets does not constitute “jurisdiction or control” for purposes of this prohibition other than volunteer emergency medical, fire fighting or police service providers 2013 New Clerk Academy

23. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Post Office Holding and Employment Restrictions • Lobbying By Former Legislators, Statewide Elected Officers and Appointed State Officers • Prohibition from representing any person or entity for compensation before the government body or agency in which the individual was an officer or member for two (2) years • Lobbying by Former State Employees • Certain employees of executive and legislative branches of State government prohibited from representing any person or entity for compensation before the agency they were employed by for two (2) years after leaving their positions 2013 New Clerk Academy

24. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Post Office Holding and Employment Restrictions • Lobbying by Former State Employees (cont’d) • These employees include: • Executive & legislative branch employees serving in SENIOR MANAGEMENT & SELECTED EXEMPT SERVICE class and any person employed by the DEPARTMENT OF LOTTERY with authority over policy or procurement • Auditor General • Director of OPPAGA • Sergeant of Arms and Secretary of the Senate • Sergeant of Arms and Clerk of the House of Representatives • Executive Director and Deputy Executive Director of Commission on Ethics • Executive director, staff director or deputy staff director of each joint committee, standing committee or select committee of the Legislature • An executive director, staff director, executive assistant, legislative analyst, or attorney serving the Office of the President of the Senate or the Speaker of the House • Senate and House Majority and Minority Party Offices • Chancellors and Vice-Chancellors of the State University System • General Counsel to the Board of Regents and all • All presidents, vice-presidents and deans of each state university 2013 New Clerk Academy

25. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Lobbying by Former Local Government Officers and Employees • Any person elected to county, municipal, school district, or special district office is prohibited from representing another person or entity for compensation before the government body or agency he/she was an officer of for two (2) years after leaving office • Appointed officers and employees of above may be subject to same prohibition by local ordinance or resolution 2013 New Clerk Academy

26. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Voting Conflicts of Interest • NO STATE PUBLIC OFFICIAL is prohibited from voting in an official capacity on any matter • A STATE PUBLIC OFFICER who votes on a measure which inures to his/her special private gain or loss or to a PRINCIPAL by whom he/she is retained, a RELATIVE, BUSINESS ASSOCIATE or PARENT ORGANIZATION or SUBSIDIARY of CORPORATE PRINCIPAL by whom he/she is retained must file memorandum of voting conflict on Commission Form 8A with the recording secretary within 15 days after the vote occurs 2013 New Clerk Academy

27. ETHICS LAWSPROHIBITED ACTIONS OR CONDUCT • Voting Conflicts of Interest • NO COUNTY, MUNICIPAL, or other LOCAL PUBLIC OFFICER shall vote in an official capacity upon measure which would inure to his/her special private gain or loss or to PRINCIPAL, RELATIVE, BUSINESS ASSOCIATE or PARENT ORGANIZATION or SUBSIDIARY of CORPORATE PRINCIPAL of which he/she is retained • Must publicly announce his/her interest before the vote and file Form 8A with recording officer within 15 days after the vote occurs • No Appointed State or Local Officer shall participate in any matter inuring to the officer’s private gain or loss or to Principal, Relative, Business Associate or Parent Organization or Subsidiary of Corporate Principal to which he/she is retained without first disclosing the matter on Form 8A 2013 New Clerk Academy

28. ETHICS LAWSDISCLOSURES • FORM 1 – Limited Financial Disclosure • Persons include State officers, local officers, candidates for local elective office and specified State employees • Some examples include: (not inclusive) • Elected public officials not serving in a political subdivision • Commissioner of Education & members of Board of Education • Appointed member of local governing bodies, expressway authorities, community colleges, code enforcement boards • Mayor and chief administrative officer of a county, municipality or other political subdivision • Chief of police, fire chief, municipal clerk, school superintendent, medical examiner, purchasing agent with authority > $15,000 • Each employee of the Commission on Ethics • Senior managers of the Citizens Property Insurance Corp. • Exception is for those required to file FORM 6 (including Constitutional Officers) 2013 New Clerk Academy

29. ETHICS LAWSDISCLOSURES • FORM 1 – Limited Financial Disclosure (cont’d) • Information to be disclosed • Sources and types of financial interests • Names of employers and addresses of real property holdings • NO DOLLAR VALUES are required to be listed • Certain relationships with and ownership interests in banks, insurance companies and utility companies • Candidates must file FORM 1 together with and at same time as their qualifying papers • All others required to file by July 1 of each year 2013 New Clerk Academy

30. ETHICS LAWSDISCLOSURES • FORM 6 – Full and Public Disclosure • All elected constitutional officers and candidates for such offices • Mayor and members of City Council and candidates for such offices in Jacksonville • Duval County Superintendent of Schools • Members of Florida Housing Finance Corporation Board • The Florida Prepaid College Board 2013 New Clerk Academy

31. ETHICS LAWSDISCLOSURES • FORM 6 – Full and Public Disclosure (cont’d) • Detailed disclosure of assets, liabilities and sources of income over $1,000 and their values, and net worth • Option to file their most recent income tax return in lieu of listing sources of income (does not eliminate reporting of assets, liabilities and net worth) • Certain relationships with and ownership interests in banks, insurance companies and utility companies • Incumbents file by July 1 to Commission on Ethics • Candidates file at time of qualifying with Supervisor of Elections 2013 New Clerk Academy

32. ETHICS LAWSDISCLOSURES • Others • Form 2 – Quarterly Client Disclosure • Form 3A – Statement of Interest in Competitive Bid for Public Business • Form 4A – Disclosure of Business Transaction, Relationship or Interest • Form 8A – Memorandum of Voting Conflict (State Officers) • Form 8B – Memorandum of Voting Conflict (County, City or other Local Officers) • Form 9 – Quarterly Gift Disclosure • Form 10 – Annual Disclosure of Gifts from Governmental Entities and Direct Support Organizations and Honorarium Event Related Expenses 2013 New Clerk Academy

33. ETHICS LAWSPENALTIES • Non-criminal Penalties for Violation of the Sunshine Amendment and the Code of Ethics • No criminal penalties exist • Penalties may include • Impeachment • Removal from office or employment • Suspension • Public censure • Reprimand • Demotion • Reduction in salary level • Forfeiture of no more than 1/3 salary per month for no more than 12 months • Civil penalty not to exceed $10,000 • Restitution of pecuniary benefits received 2013 New Clerk Academy

34. ETHICS LAWSPENALTIES • Candidates • Disqualification from being on ballot • Public censure • Reprimand • Civil penalty not to exceed $10,000 • Former Officers and Employees • Public censure and reprimand • Civil penalty not to exceed $10,000 • Restitution of pecuniary benefits received 2013 New Clerk Academy

35. ETHICS LAWSPENALTIES • Lobbyists • Failure to Register as an Executive Branch Lobbyist may result in being: • Fined up to $5,000 • Public censured • Reprimanded • Prohibited from lobbying executive branch agencies for 2 years • Failure to comply with gift rules and honorarium rules may result in being: • Fined up to $5,000 • Prohibited from lobbying the agency for 2 years 2013 New Clerk Academy

36. ETHICS LAWSPENALTIES • Felony Convictions: Forfeiture of Retirement Benefits • Public officers and employees subject to loss of retirement benefits if convicted of: • Embezzlement of theft of public funds • Bribery and felonies under Fla. Stat. 838 misuse of public office • Impeachable offenses • Felonies connected with intent to defraud the public • Automatic penalties for failure to file annual disclosure • Fines of up to $25 each day late the form is filed after Sept. 1 • Maximum of $1,500 2013 New Clerk Academy

37. PUBLISHED ETHIC CODES • Florida Government Finance Officers Association – www.fgfoa.org • ICMA – www.icma.org • Certified Public Accountants • AICPA – www.aicpa.org • FICPA – www.ficpa.org • Lawyers – www.floridabar.org 2013 New Clerk Academy

38. Case Studies • ESM Government Securities/Grant Thornton • Auditing firm known then as Alexander Grant & Co guilty of falsifying audit of securities dealer which led to collapse of American Savings & Loan Association of Florida in turn leading to collapse of Home State Savings & Loan in Cincinnati,Ohio and affected 69 other S&L’s in Ohio in 1985 • Required to pay $36,000,000 award 2013 New Clerk Academy

39. Case Studies • Enron/Arthur Andersen • Originally found guilty of obstruction of justice and interfering with an SEC investigation (verdict overturned on technicality on appeal) • Shredded documents related to Enron audit • David Duncan partner for Arthur Andersen acknowledged that employees destroyed evidence • Firm was allegedly involved in Worldcom, Qwest Communications and Global Crossing fraud cases 2013 New Clerk Academy

40. Case Studies • Palm Beach County Commissioner • Jeff Koons resigned August 3, 2010 amid charges of extortion, perjury and violating public open meeting laws • Extortion was not for money but attempt to eliminate opposition to one of his major projects • Palm Beach County Commissioner • Warren Newell pled guilty to public corruption charges in 2007 in pocketing approximately $500,000 in 3 illegal land deals • Voted to advance a $190 million water district reservoir project while hiding his own interest in the project which included a $350,000 bonus if the plan succeeded • Directed a $50 million taxpayer funded initiative to protect public access to waterfront and then steering $14 million of it to a marina where he docked his boat and was in partnership with the owner and had unpaid docking fees of more than $48,000 • Third instance was making money on a land deal where he was a secret co-owner 2013 New Clerk Academy

41. Case Studies • Former Florida Republican Chairman Jim Greer • Arrested June 2, 2010 for allegedly running a scam that bilked money from the state party. • Owned 60% of a corporation set up to raise money for the party. Corporation received a 10% commission on any money raised. • Charged with 6 counts of organized scheme to defraud, 4 counts of felony grand theft and 1 count of money laundering 2013 New Clerk Academy

42. Resources • Section 112, part III of Florida Statutes • Reference guide by Florida Commission on Ethics • Foxnews.com • Palmbeachpost.com • WBPF-TV.com • John C. Maxwell, Ethics 101-What Every Leader Need to Know (Time Warner Book Group, 2005) • John C. Maxwell, The Choice is Yours (Thomas Nelson Book Group, 2005) 2013 New Clerk Academy