InGov: New Ethics Commission Rules

Hello again friends, colleagues, and clients of GDL Legal PLLC. InGov is a regular column by Geoffrey Long of GDL Legal that covers important news and updates from inside Oklahoma government agencies on matters that are important to you like enforcement, investigations, and changes to rules and laws. InGov is everything you need to know to stay on top of the changing regulatory environment inside your industry. Don’t get caught uninformed, stay updated with InGov by GDL Legal PLLC.

Today I am bringing you a summary of all the changes, additions, and updates to the Oklahoma Ethics Rules that went into effect when the Legislature adjourned on May 26, 2017. 

How are Ethics Rules created and changed?

First, it is important to understand how Ethics Rules are created and amended. The Ethics Commission uses a unique process for adopting and amending Ethics Rules that is mandated by the Oklahoma Constitution. First, the Ethics Commission introduces proposed rule changes that are generated internally by the agency or from requests by people outside the agency. After conducting a public hearing on rule changes, the Commission votes to adopt the rule. 

If a rule change is adopted by the Commission, it is then submitted to the Legislature during the next regular legislative session. The Legislature has two options at this point. First, the Legislature can amend any proposed rule change or deny the rule change. Second, the Legislature can take no action on the proposed rule, and the rule will become effective when the Legislature adjourns at the end of session. This is where we are now. The Legislature adjourned and new Ethics Rules are now effective. 

Campaign Finance Rule Amendments

Candidate Reimbursements

The first change to the Ethics Rules deals with candidate reimbursements. It is now permissible for a candidate to receive reimbursement from the campaign for campaign related expenses paid with personal funds. There are two conditions on the reimbursement:

  1. The reimbursement must be paid within 90 days of the expense, and
  2. The reimbursement must be fully itemized for each individual transaction reimbursed on the candidate's next Report of Contributions and Expenditures. 

Campaign Expenditures to Political Parties

It is now permissible for campaigns to make expenditures to political parties for ordinary and necessary campaign expenses without the payment being treated as a contribution to the political party. In other words, campaigns can now use political parties as vendors for campaign related goods and services. A couple details on this provision:

  1. The political party cannot use this provision to make a profit off of campaigns, and
  2. Expenditures under this "vendor exception" do not reduce the $25,000 limit that may be contributed to a political party by a candidate committee from surplus funds.

Candidate Surplus Funds

There are two new permissible uses for a candidate's surplus funds. 

  1. A candidate can use surplus funds to purchase an item that will be donated to a charity for the charity to use in fund-raising (before this change a candidate could only donate money to the charity). 
  2. A candidate can donate surplus funds directly to the State, a state agency, or a political subdivision (county, municipality, school district). 

Campaign Account Signatories

This amendment to the Ethics Rules gives added flexibility to campaigns. Before this change the Ethics Rules only allowed the candidate, chair, treasurer, and deputy treasurer to make expenditures for a campaign. This amendment allow the candidate to designate additional individuals that can make expenditures on behalf of the campaign. 

Lobbying Regulation Amendments

Filing and Registration Deadlines

There are a few changes that will make certain registration and reporting deadlines easier to comply with:

  1. The deadline for annual lobbyist registration was moved from December 31st to January 15th. 
  2. The reporting deadline that is due at the beginning of January and July was changed from the 5th of the month to the 15th for legislative lobbyists and legislative liaisons.
  3. The reporting deadline for all executive lobbyist reports was changed from the 5th of the month to the 15th. 

Lobbyist Gift Rules

First, note that these specific rule changes will not go into effect until January 1, 2018. The Commission approved fairly substantial changes to the rules allowing gifts and meals from lobbyists.

  1. The limit for non-meal gifts was lowered from $200 to $100 per year.
  2. Lobbyists must be present for any meal given to a state officer or employee.
  3. Lobbyists must be present at the event for any gift given to a state officer or employee that includes attendance at an event (such as a sporting event or concert).
  4. Any gift given to a state officer or employee for an occasion of personal significance must be given contemporaneously with the occasion. 
  5. The Commission provided additional interpretative guidance on the meaning of "infrequently occurring occasion of personal significance." The Commission clarified that this phrase does not include annual events such as birthdays or anniversaries. It is meant to encompass major life events such as marriage, birth of a child, serious illness, retirement, etc.

State Questions

  1. State Question Committees must now include the number of the state question in the name of the committee.
  2. Any organization making a "state question communication" (a newly defined term) of $5,000 or more will be required to make a report detailing the expenditure.
  3. "State question communications" will now require a media disclosure identifying who authorized and paid for the communication.

Conflicts of Interest for State Officers and Employees

Material Financial Interest

The definition of "material financial interest" in the conflict of interest rules was updated to be consistent throughout the Ethics Rules.

Recusal

The Commission revised the rule requiring recusal by state officers and employees. Recusal is now required if:

  1. A particular matter will have a direct and predictable effect on the material financial interests of the state officer or employee;
  2. A person the state officer or employee has a business relationship with is involved or represents a party to the matter; or
  3. A reasonable person with knowledge of the relevant facts would question the impartiality of the state officer or employee.

Summary

Over the last year the Ethics Commission adopted new rules changing various aspects of campaign finance rules, lobbying rules, state question rules, and conflict of interest rules. Some of these changes are small clarifications, and some of these changes are large shifts. It's important to remember that violations of the Ethics Rules can carry significant monetary penalties as well as the significant impact to a reputation. 

You don't have to get caught uninformed about changes and interpretations to the Oklahoma Ethics Rules. GDL Legal PLLC is your premiere source for resolving issues and investigations with the Oklahoma Ethics Commission, but don't wait until a complaint is filed to address compliance with the Ethics Rules. GDL Legal PLLC provides preventative services and resources to keep you compliant with the Oklahoma Ethics Rules before a violation occurs. Contact GDL Legal PLLC today to see how a preventative legal service package can keep you focused on your primary goal. 

GDL Legal PLLC is The Law Office of Geoffrey D. Long. Geoffrey is the former General Counsel to the Oklahoma Ethics Commission. He also previously served as Public Policy Director and Assistant Attorney General at the Oklahoma Attorney General's Office. Geoffrey has extensive experience across state government, and now uses the knowledge he gained behind the walls of government to help people and businesses navigate the rules and regulations produced by state agencies in Oklahoma. If you need help with a Political Action Committee, campaign for public office, an Ethics Commission investigation, or just need guidance on political activity regulation in Oklahoma, then contact GDL Legal PLLC for simple and straightforward solutions. 

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