81.23

OPINION NO. 81-23

An Opinion has been requested from the Commission as to whether the Deputy Commissioner of Insurance may accept travel expenses from industry groups related to his agency (the Insurance Division, Department of Licensing and Regulation) in connection with his attendance at seminars and participation in panel discussions at the groups' annual conventions.

The Requestor here is the Deputy Insurance Commissioner. He indicates that he has been requested to participate in panel discussions concerning current insurance issues at the June conventions of the Life Underwriters Association and the Independent Insurance Agents. He would be participating on State time in his official status as the Deputy Insurance Commissioner. He indicates that given the shortage of travel funds, the expenses of the trip would have to be borne by him rather than his agency. He states, however, that the sponsoring organizations have offered to provide lodging and some meals to him as a panel participant. He notes that his wife has also been invited.

The question here is application of the provisions of §3-106 of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law), which prohibits officials and employees from accepting gifts from persons or entities that do business with or are regulated by the State, or whose interests can be directly affected by the particular official or employee. A preliminary question in this situation is whether payment of travel expenses by these two industry associations constitutes a gift from an entity described in §3-106(a). These associations, though their membership and their interests are clearly within the regulatory authority of the Insurance Division, do not themselves appear to be entities regulated by the Division. However, the Independent Insurance Agents had two registrants under the lobbyist provisions of the Ethics Law (Article 40A, Title 5, Annotated Code of Maryland) for the 1981 session.

In addition, given the position of the Requestor, both of these entities' abilities to successfully accomplish the objectives of their members could be directly impacted by the actions of the Requestor. 032;

We therefore conclude that the proffered travel expenses are a gift subject to the provisions of the Ethics Law. The question is whether they may be accepted under exception (4) in §3-106(b) of the Ethics Law. Under this provision an employee may accept a gift of "reasonable expenses for food, travel, lodging, and scheduled entertainment of the official or employee for a meeting which is given in return for participation in a panel or speaking engagement." A qualification of this exception is that there be a finding that the gift would not tend to impair the official's impartiality or independence of judgment, or, if of significant value, be designed to or give the appearance of doing so.

As the proposed travel expenses appear to fit quite clearly into the exception, the question is whether the gift fits within the proviso language of subsection (b). The proffered gift here appears to involve meals and lodging for one or two nights in Ocean City, Maryland during the annual meetings of the two entities; transportation is not included. These expenses would appear to be offered uniformly to all speakers. We do not believe these circumstances raise sufficient questions under the proviso language of §3-106(b) to preclude application of the exception of §3-106(b)(4). We therefore conclude that in the circumstances presented to us the proffered gift of lodging and meals may be accepted by the Requestor.

Another aspect of this request is the inclusion of the Requestor's spouse in the invitation. It should be noted that the exception in §3-106(b)(4) originally included gifts to spouses. However, the General Assembly in its 1981 Session amended this provision, effective June 1, 1981, to exclude spouses from this exception. (Laws of 1981, Ch. 796.) We believe that the intention here was to treat gifts to spouses in these situations as indirect gifts to officials and employees, and to prohibit their acceptance from covered entities without exception. It is therefore our view that though the Requestor may accept lodging and meals from the sponsors, if his spouse accompanies him, her expenses may not be paid by the sponsoring organizations.

Herbert J. Belgrad, Chairman
    Reverend John Wesley Holland
    Betty B. Nelson
    Barbara M. Steckel

Date: June 23, 1981