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Interpretative Opinion 09-01: Conflict of Interest

February 13, 2009
 

Brian K. Flowers
General Counsel
Council of the District of Columbia
1350 Pennsylvania Avenue, N.W., Suite 4
Washington, DC 20004

Re: Potential Conflict of Interest

This responds to your request for an opinion concerning the propriety of proposed solicitations of contributions by an employee of the Council for a constituent service fund maintained by the Councilmember by whom he is employed. You additionally state that the Council employee also serves as an Advisory Neighborhood Commissioner (ANC). You cite the following facts as relevant to the request:

(a) The employee’s proposed solicitations will not be coordinated out of the office of the Councilmember;

(b) The solicitations will not occur on District government premises; and

(c) The solicitations will not occur during normal business hours of the District government.

D.C. Official Code § 1-1101.01(6)(B) excepts the following from the definition of “contribution”:

“vii. The use of real or personal property, and the costs of invitation, food and beverages voluntarily provided by an individual to a candidate in rendering voluntary personal services on the individual’s residential premises for related activities; or

“viii. The sale of any food or beverage by a vendor for use in a candidate campaign at a charge less than the normal comparable charge if such charge for use in a candidate’s candidate is at least equal to the cost of such food or beverage to the vendor; to the extent that the provisions of [these paragraphs] do not exceed $500 each with respect to any candidate’s election.”

D.C. Official Code § 1-1101.01(7) excepts the following from the definition of “expenditure”:

“(D) Notwithstanding the foregoing provisions of this paragraph, [expenditure] shall not be construed to include the incidental expenses. . .made by or on behalf of individuals in the course of volunteering their time on behalf of a candidate or political committee or the use of real or personal property and the cost of any food or beverage voluntarily provided by an individual to a candidate in rendering voluntary personal services on the individual’s residential premises for candidate-related activity if the cumulative value of such activities by such individual on behalf of any candidate do not exceed $500 with respect to any election.”

D.C. Official Code § 1-1101.01(8) defines “person” to mean “an individual, partnership, committee, corporation, labor organization, and any other organization.”

D.C. Official Code § 1-1104.03(a) states, “[t]he Mayor, Chairman of the Council, and each member of the Council may establish citizen service programs. . .and may finance the operation of such programs with contributions from persons, provided that contributions. . .do not exceed an aggregate amount of $40,000 in any 1 calendar year.” Additionally, “[n]o person shall make any contribution which, and neither the Mayor, the
Chairman of the Council, nor any member of the Council shall receive any contribution from any person which, when aggregated with all other contributions received from such person, exceed $400 per calendar year, provided, that such $400 limitation shall not apply
to contributions made by the Mayor, the Chairman of the Council, or any member of the Council for the purpose of funding his or her own citizen service program within the District of Columbia.” However, D.C. Official Code § 1-1104.03(e) provides that “[a]ctivities authorized by this section may be carried on at any location in the District of Columbia, provided that employees of the District of Columbia government do not engage in citizen-service fundraising activities during normal business hours.”

D.C. Official Code § 1-1104.03(d) provides that “[a]ll contributions and expenditures made by persons to the Mayor, Chairman of the Council, and each member of the Council as provided by subsection (a) of this section, and all expenditures made by the Mayor, Chairman of the Council, and each member of the Council as provided by subsection (a) of this section, shall be reported to the Director of Campaign Finance quarterly on forms which the Director shall prescribe. All of the record keeping requirements of this chapter shall apply to contributions and expenditures made under this section.”

D.C. Official Code § 1-1131.01(g) states, “All contributions made by any person directly or indirectly to or for the benefit if a particular candidate or that candidate’s political committee, which are in any way earmarked, encumbered, or otherwise directed through an intermediary or conduit to that candidate or political committee, shall be treated as contributions from that person. . .and shall be subject to the limitations[.]”

According to the regulations of the D.C. Office of Campaign Finance (OCF), “[c]itizen-service program R&E Reports shall be filed quarterly each year of the first (1st) day of the following months: (a) January; (b) April; (c) July; and (d) October.” See 3 D.C.M.R. § 3017.2. Additionally, §3402 of the OCF regulations delineates the manner in which receipts must be collected and preserved. Specifically, “[r]ecords of receipts and contributions shall be maintained to show the following: (a) [w]ith the exception of receipts for sales or collections, cumulative totals; and (b) [f]or sales or collections, a detailed record of receipts and expenditures.” Moreover, “[a]ll filers shall separately identify undesignated receipts from designated receipts.” See 3 D.C.M.R. §§ 3402.3-3402.4.

First, the statute provides that the affected Member of the Council “may finance the operation of the [CSF] with contributions from persons[.]” A person is, among others, simply an individual. It is irrelevant that the person from whom the contribution is received is an employee of the affected Member of the Council by whom that person may be employed. So long as the contribution from the person is within the prescribed limitations and is donated for the unambiguous purposes of the citizen-services fund, the activity does not violate District law.

Second, the employee proposes to solicit contributions for CSF of the affected Member of the Council. Within certain parameters, the employee may solicit funds for the CSF of the affected Member of the Council. Note that CSF activities may be carried on at any location in the District of Columbia, ”provided that employees of the District of Columbia government do not engage in citizen-service fundraising activities during normal business hours.”

Whenever the office of the affected Member of the Council, presumably the employee’s place of work, is open for “normal business hours,” the employee is prohibited from conducting any CSF fundraising activities. Alternatively, while in the office of the affected Member of the Council, during non-business hours, the employee is free to engage in citizen-service fundraising activities for same.

To wit, proposed solicitations may be coordinated out of the office of the affected Member of the Council and may occur on District government premises, so long as the activities of the CSF are not coordinated or conducted during normal business hours of

the office of the affected Member of the Council or the District government premises. For your information, the statute authorizes any public official who may establish a CSF to “request. . .suitable office space in a publicly owned building for the operation of a CSF.” See D.C. Official Code §1-1104.03(a-1).

Whereupon, the crux of the matter is not where the solicitation occurs; but, when it occurs. It does not matter that solicitations for CSF funds may emanate from District government premises. However, said solicitations for CSF funds cannot occur during normal business hours of those District government premises.

Third, the employee also serves in the role of ANC to an Advisory Neighborhood Commission. You should be aware that OCF recently concluded an investigation into an ANC who allegedly used his position for personal gain. In making my determination that the ANC “realized personal gain. . .because he purposed to do so,” the Director concluded that although the ANC solicited and received funds for another entity, he performed same “in his position as Advisory Neighborhood Commissioner.” See In the Matter of Kevin Chapple, Advisory Neighborhood Commissioner, Advisory Neighborhood Commission 2C02, Full Investigation 2008-103 (OCF, January 23, 2009). Contrarily, an ANC, in another matter, was not found to have used her position for personal gain because she accepted a donation for an entity in her capacity other than as an ANC. See In the Matter of Wilhelmina Lawson, OCF FI 9805A (OCF, December 30, 2005.)

Ergo, the employee must be cognizant and diligent to seek funds solely in the name of the CSF of the affected Member of the Council and for its purposes. At no time should there be any indication of any misunderstanding as to for whom the employee is soliciting. More importantly, due to the nature of both of the positions of ANC and Member of the Council, it bears advising that “[n]o campaign activities shall be conducted nor shall campaign literature or paraphernalia be distributed as part of citizen-service programs[.]”

Because the CSF statute imbues OCF with the authority to applying the recordkeeping procedures for candidates and political committees to CSF programs, the employee may host a fundraiser in the home; and, except from contributions the value of the property and costs of invitations, food and beverages provided thereby to stage the event, up to $500; in addition, the employee may except from expenditures the cost for same, up to $500. These monies must be reported on “Schedule C, Sales and Collections,” of OCF Form 10, Report of Receipts and Expenditures for a Citizen-Service Program (revised 6/03).

The employee may solicit by phone calls, letters and e-mails. The employee may also request contributions to be paid directly to the constituent services fund. To repeat, if these activities are executed on District government premises, they must be performed outside of normal business hours of the premises. Id.

Again, because the recordkeeping procedures for candidates and political committees apply to CSF programs, the bundling of contributions is allowed; but, all contributions received through a conduit must be attributable to the original donor. See D.C. Official Code §1-1131.01(g). OCF specifies by regulation that all receipts must contain the full name, mailing address, occupation and principal place of business, if any, and date of contribution of each and every donor to verify the documentation required by OCF to properly review its reports. See 3 D.C.M.R. §3402.1, as amended.

The foregoing is an Interpretative Opinion of the Director of the Office of Campaign Finance. Pursuant to D.C. Official Code §1-1103.05, you are entitled to request an Advisory Opinion from the Board of Elections and Ethics on this transaction or activity.

Should you have any additional questions, please contact William O. SanFord, Senior Staff Attorney at (202) 671-0550.