93.05

OPINION NO. 93-5

A request has been submitted regarding whether the Sheriff of a Maryland county may solicit or accept private donations in support of libel litigation being pursued by him with a local official1. We advise that this activity is subject to significant constraints under the gift solicitation, gift acceptance and financial disclosure provisions of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law)2. Gifts may not be solicited directly or indirectly, and gifts may be accepted only under the very narrow circumstances discussed below.

The Requestor has been Sheriff in the County since 1983. He has been elected three times, and is therefore a well-known person in the County. According to the Requestor, in November 1992 a local newspaper published a series of articles making certain allegations about the Sheriff and another local official. Maintaining that the statements were untrue, the officials sought legal counsel and subsequently a civil defamation law suit was filed in the Circuit Court against both the newspaper corporation and the author of the articles. It seeks $1,000,000 in punitive damages, $500,000 in compensatory damages, and injunctive relief.

Apparently when this situation arose, a public relations firm was employed to speak on the Sheriff's behalf. At the time of the filing of the law suit, a press release was issued that was picked up by several papers and resulted in relatively wide publicity. As a result, according to the Sheriff and his counsel, some people called the Sheriff and the local official to offer moral as well as financial support in their prosecution of the litigation. The Sheriff indicates that he did not initiate these offers or ask for contributions. He advises that his response to these offers was that he could not accept such assistance unless approved under the relevant ethics provisions. He states that he has not been involved in any fundraising or related activities.

Given the anticipated expenses for this type of litigation, the Sheriff would like to follow up on these offers and establish a committee to solicit and accept donations on his behalf. This committee would be composed of private citizens, including some local business people, who know the Sheriff from his many years as a visible person in the area. According to the Requestor, none would be expected to have any "direct dealings" with the Sheriff's Office, and none would have anything to gain, except to enhance "the reputation of the County". The Sheriff's counsel also proposes the additional condition that all funds be provided directly to a depository bank. Under his proposal, the committee would be responsible for soliciting donations, probably including setting up a fundraising dinner. It would make available donation cards/envelopes and persons in attendance could complete them and send their donations directly to the bank depository. Though it would not be anticipated that the Sheriff or the other official would attend or otherwise be directly involved in such events, the counsel would participate as their agent.

This request presents issues under the several gift provisions in the Ethics Law. §1-201(o) of the Law defines "gift" to include "the transfer of anything of economic value regardless of form without adequate and lawful consideration". Political contributions are excluded. Section 3-106(a) provides that officials and employees "may not solicit any gift". It further provides that officials may not knowingly accept any gift, directly or indirectly, from any of the persons listed in §3-106(a) that have the defined relationships with the official or the official's agency or program. Section 4-103 of the Law identifies the information which, if known, is required to be disclosed on financial disclosure statements. This includes individual gifts directly to the official of over $25 in value or a series of gifts totaling $100 or more, as well as gifts to another person at the direction of the official. Gifts must be disclosed if they are "from, or on behalf of, directly or indirectly, any person who does business with the State or is regulated by the State, or is a registrant". Gifts from immediate family, other children and parents, and political contributions are excluded.

The type of situation described here has not been previously formally addressed by this Commission, though some aspects of the request have been addressed by others. The Financial Disclosure Advisory Board, a predecessor to the Ethics Commission as to financial disclosure, considered a trust fund created to pay the legal and related expenses of an official in connection with his defense of criminal charges (Opinion No. 10, November 30, 1977). The trust arose as a result of citizens who "had indicated a desire to assist the official in meeting certain legal expenses". The official had waived the right to any accounting by the trustees of the fund's receipts and disbursements. Interpreting financial disclosure language near identical to the current provisions3, the prior Board concluded that a contribution to the fund would be a gift received by another person at the direction of the official.

Recognizing that the official may not have actually solicited any contributions, the Board said that the concept of "direction" in the financial disclosure law did not necessarily mean only an express order, concluding that it was enough that the official established or consented to the program under which gifts were to be made, particularly as they were ultimately intended for his benefit. The Board also advised that any contributions to the trust that exceeded the threshold value and were from donors listed in the Law, would be required to be disclosed, concluding that the official could not, by a voluntary waiver, avoid a statutory obligation to disclose that existed at the time he created the trust.

In 1986 the Attorney General and this Commission considered the status of funds to be raised in testimonials. It was concluded that if the funds collected were not political contributions for campaign purposes, then they would be gifts subject to the gift prohibitions and requirements of the Ethics Law. Also, in a more recent situation involving application of Article 40A, the Joint Committee on Legislative Ethics considered a request from a member of the General Assembly regarding a legal defense fund. The funds were to be used for criminal defense purposes regarding an already completed case brought by the State, in which the member was found not guilty. The Joint Committee allowed acceptance of funds only if: the contributions were not solicited in any way by the member; a very broad class of donors listed in the statute were prohibited from donating either directly or indirectly even unsolicited gifts; it was recognized that none of the exceptions to the gift acceptance provisions applied; and, if any donations were received, they were to be disclosed to the Joint Committee.

These prior determinations make it clear that the prohibition and disclosure provisions of the Ethics Law were intended to apply to the type of situation presented here. We believe that the unqualified prohibition in the Law against soliciting gifts is aimed at prohibiting officials and employees from soliciting gifts, directly or indirectly, for a personal benefit, and that the prohibition should thus be applied here to significantly limit the scope of possible contribution activity relating to the Sheriff's litigation. The situation presented here involves donations for the benefit of a State official to defray expenses (both legal and public relations) in connection with private civil litigation for money damages undertaken by the State official as a plaintiff against a private citizen. As proposed, it would involve a committee established with the Sheriff's knowledge and encouragement and would accrue to his direct benefit. In our view, under these circumstances, the donations must be viewed as being received, at least indirectly, by the Sheriff, and, as to the financial disclosure section, at least by another person (the committee) at the Sheriff's direction. We therefore advise the Sheriff that donations to a committee for use to defray his public relations and legal expenses as proposed here would be viewed as gifts to him that would be subject to the solicitation, acceptance and financial disclosure provisions of the Law.

Section 3-106(a) prohibits the solicitation of any gift by an official or employee, without regard to value and without regard to the relationship of potential donors to the State or the official's agency. The Sheriff and his attorney indicate that he has not solicited any donations, that to this point all donations have been offered without solicitation. Under the proposed plan solicitations by the committee will be directly on the Sheriff's behalf, and will include the personal involvement of his attorney acting as his agent. In our view, these actions would be inconsistent with the solicitation prohibitions of the Ethics Law. Contributions to the Sheriff are therefore allowable only if they are unsolicited, possibly the result of general public knowledge that the litigation exists. They may not be proffered in response to any activity by the Sheriff, either directly or by another on his behalf to fund his private litigation.

Moreover, the prohibition in § 3-106 would apply to limit acceptance by the Sheriff or his agent of even unsolicited contributions if they are from a controlled donor as set forth in § 3-106(a). Controlled donors include individuals or businesses that contract with his agency, are regulated by it, or have private interests that can be impacted by an official's performance of his duties. For example, in this situation it would include persons with matters currently pending in the Sheriff's office, persons or businesses that provide materials or services to the Office, and attorneys, inmates or others involved in the criminal justice system. Depending on the facts and the operation of the Sheriff's Office, an even wider group of donors could be considered as also being covered by these provisions4.

We also believe that the financial disclosure provisions of Title 4 of the Law would apply to any allowable contributions. In interpreting these provisions under the current Ethics Law, we have generally agreed with the prior Board's approach, in view of there being few changes in the statutory language. Financial disclosure filers have been advised that the words "if known" in §4-103 do not excuse the filer from making a reasonable effort to acquire knowledge that is within his control. As in the earlier case, we conclude that the Sheriff's inability to know the identity of donors and other details would result solely from his own voluntary relinquishment of the right to know, and would not excuse him from the obligation to disclose contributions that are over $25 in value and are from a person doing business with the State or otherwise within §4-103(d).

In summary, the goals of the Ethics Law led to the General Assembly's tightly regulating gift activity in every title of the Ethics Law. The result of this regulatory intention here is to prohibit solicitation of gifts and to very substantially restrict acceptance of unsolicited donations. Although there is the possibility that some donations can be accepted consistent with the Law, if any unsolicited donations are accepted, they should be reviewed very carefully by the Sheriff to assure conformity with the Law and with this Opinion.

William J. Evans, Chairman
    Shirley P. Hill
    Mark C. Medairy, Jr.
    Robert C. Rice, Ph.D.
    Mary M. Thompson

Date: June 28, 1993

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1 The jurisdiction of the State Commission extends only to the Sheriff; the local official is subject to the authority of the local county ethics commission. Our advice deals only with the Sheriff, who is a State official pursuant to §1-201(hh) of the Law; it applies to him notwithstanding any advice obtained from the local commission as to the local official.

2 The §3-104 prohibition against the use of the prestige of one's office is not considered in this opinion, as this provision does not apply to Executive State officials.

3 Note that the Board did not have conflict of interest authority, and this opinion predated the 1979 establishment of the gift restrictions of the current Ethics Law being considered here.

4 Even as to noncontrolled unsolicited donors, if they should later seek some action by the Sheriff's Office subsequent to the donation, they could be considered to be lobbyists under Title 5 of the Ethics Law.