We have been requested to provide advice as to whether the Secretary of the Department of Natural Resources (DNR) may accept gifts of entertainment, lodging, etc. from persons regulated by his agency; and, if so, how such gifts must be reported.

This request does not involve a particular fact situation about which specific information is known. Rather, the Secretary has described general situations about which he is concerned. They involve guidance regarding the propriety of accepting gifts, as well as the proper disclosure of them. They cover two general sets of circumstances:

(1) The Secretary states that he can be entertained by entities or persons regulated by his agency in situations where the activity may be viewed as related to his official duties. This may include invitations to hunt, fish, take a boat ride, participate in a seafood festival, etc. He raised the question of whether his participation in such functions is appropriately viewed as part of his official responsibilities as DNR Secretary.

(2) The second situation involved in this request has to do with invitations the Secretary receives from individuals purely in his personal capacity. He indicates that he is concerned since his Department's regulatory authority is so substantial that he might be in violation (or be required to report) if he accepts an invitation and subsequently learns that the individual has a license issued by DNR, or has applied for a DNR permit.

Section 3-106 of the Public Ethics Law (Article 40A, §3-106, Annotated Code of Maryland, the Ethics Law) generally prohibits acceptance of gifts from entities regulated by one's agency. Subsection (b) sets forth specific exceptions that may be applied, provided that it is determined that the gift will not impair the impartiality or independent judgment of the official or, if of significant value, give the appearance of doing so or being intended to do so. The exceptions include:

(1) Meals and beverages;

(2) Ceremonial gifts or awards which have insignificant monetary value;

(3) Unsolicited gifts of nominal value or trivial items of informational value;

(4) 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 at the meeting;

(5) Gifts of tickets or free admission extended to an elected constitutional officer to attend professional or intercollegiate sporting events or charitable, cultural, or political events, if the purpose of such gift or admission is a courtesy or ceremony extended to the office;

(6) A specific gift or class of gifts which the Commission exempts from the operation of this section upon a finding, in writing, that acceptance of the gift or class of gifts would not be detrimental to the impartial conduct of the business of government and that the gift is purely personal and private in nature;

(7) Gifts from a person related by blood or marriage, or a member of his household; or

(8) Honoraria.

To the extent the Secretary's invitations involve gifts coming strictly within one of the exceptions (including, for example, meals and beverages, or other expenses in connection with a speaking engagement), we believe they are excepted from the prohibition as long as they do not come under the provisory language of subsection (b). Where the invitation or gift goes beyond the limited provisions of the exceptions to include other more substantial benefits, we believe that a different result is required.

We recognize that sometimes such contacts can be viewed as part of an official's efforts to maintain communications with persons involved in his agency's program. However, we believe that in situations such as this the public perception is important, especially where such invitations involve special personal entertainment or recreational activities that accrue to the individual. Even though such activities may arguably relate to official interests, the fact remains that what the public sees is an official receiving entertainment and other benefits at the expense of a person or entity whose economic interests can be impacted by the official and his agency. This is especially so for high level officials in agencies with substantial regulatory power. We therefore do not believe that acceptance of such invitations is allowable, either under a general interpretation of section 3-106 or by regulatory action. If participation in such activities is viewed as an essential agency function, then the costs can be estimated and officially budgeted.

A second aspect of the Secretary's request involves acceptance of gifts from personal friends, acquaintances or well-wishers. Such gifts are also covered by section 3-106 if they are from an individual described in subsection (a). The Board of Ethics (the Commission's predecessor agency) considered the gift provisions under the Code of Ethics (Title 19 COMAR) in connection with this issue in its Opinion No. 123 (Title 19 COMAR, Opinion No. 123). It held under its waiver authority that ordinary courtesy in the home could be accepted from a personal friend subject to one's regulation, but no other gift of any kind could be accepted. The circumstances there involved a long, apparently very close family friendship that was clearly not a function of the parties' regulatory relationship, and also was a situation where the official was able to disqualify himself from matters involving his friend. The Ethics Law continued the general substantive thrust of the gift provision at issue in Opinion No. 123, but deleted the general waiver authority. We agree with the Board's approach and conclude that ordinary home courtesies may be accepted, but that other gifts from regulated parties who are personal friends may not be accepted unless they fit into the criteria of subsection (b), and are determined not to impair impartiality or to influence or be intended to influence official actions.

The Secretary has also inquired about the duty to disclose allowable gifts in his annual disclosure form. Section 4-103(d) of the Ethics Law requires disclosure of all gifts over $25 in value from parties doing business with the State, unless a gift meets certain very limited exceptions. If gifts of meals or beverages, or entertainment, for example, are valued at under $25, or are from a family member, then they plainly need not be reported. If an otherwise disclosable gift does not meet the exception criteria of section 4-103(d) however, the Ethics Law requires its disclosure in accordance with Schedule D of the Financial Disclosure Form. We have consistently noted in response to general inquiries that we do not have authority to waive the detailed filing requirements of the Law.

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

Date: February 10, 1982