Public Service Orientation For Statewide Elected Officials and Agency Heads

1. Public Service Orientation For Statewide Elected Officials and Agency Heads Presented by the Arizona Attorney General’s Office April 2011

2. Why is this Training Mandatory? • “It is the public policy of Arizona that all public officers and employees shall discharge their public duties in full compliance with applicable laws concerning ethical conduct.” 1992 Ariz. Sess. Laws, ch. 134, § 1. • A.R.S. § 38-592(A) requires all state officers and employees to receive public service orientation within six months after the date of hire, election or appointment.

3. Overarching Principles • You are here to serve the public – not for personal benefit. • The public resources you have available to you are to help you serve the public – not for personal benefit.

4. Role of the Ethics Laws • Provide accountability • Prevent even the appearance of impropriety • Protect the Public • Punish wrongdoers

5. CONFLICTS OF INTEREST

6. Conflicts of Interest ARS §§ 38-501 to -511 Applies to all public officers and employees of incorporated cities or towns, of political subdivisions of the state and any of its departments, commissions, agencies, bodies or boards.

7. ARS §§ 501 – 511 trump any provisions to the contrary, whether in law, charter, ordinances or other provisions. Other prohibitions may be added, but these are the minimum.

8. Purpose of Conflict of Interest Laws To avoid situations where a public employee’s personal or financial concerns conflict with the unbiased performance of the employee’s public duties. To insure that public resources are used for public purposes.

9. Contracting: A public employee of a public agency who has, or whose relative has, a substantial interest in any contract, sale, purchase or service to such public agency shall disclose that interest and refrain from voting upon or participating in any manner as a public employee in such contract, sale or purchase. A.R.S. §38-503(A).

10. Decision Making: Any public employee who has, or whose relative has, a substantial interest in any decision of a public agency shall disclose such interest and refrain from participating in any manner in such decision. A.R.S. § 38-503(B).

11. Supplying materials or services: No public employee of a public agency shall supply any equipment, material, supplies or services to such public agency, unless pursuant to an award or contract let after public competitive bidding. A.R.S. § 38-503(C).

12. Substantial Interest A direct or indirect pecuniary or proprietary interest of a public officer or employee or their relative that is not one of the “remote” interests listed in A.R.S. § 38-502(10).

13. Definitions Pecuniary = financial Proprietary = ownership NOT SPECULATIVE

14. Conflict of Interest Relatives: spouse child grandchild parent grandparent siblings (including half-brothers and sisters)

15. More relatives spouses of siblings the parent, brother, sister or child of a spouse (i.e., in-laws) Does not include first cousins

16. Remote Interests Non-salaried officer of a non-profit corporation Landlord/tenant of a contracting party Attorney of a contracting party Member of a non-profit cooperative marketing association Stock ownership of less than 3% of the shares of a corporation for profit, if the income provides less than 5% of your total annual income

17. Remote Interests, cont’d. • Reimbursement of expenses • Recipient of public services generally available • Relatives of School Board members, other than spouses or dependents • Interests of other public agencies • Class interests (your interests are the same as everyone else’s in the group)

18. Before a Conflict Arises Think of possible ways a conflict could occur File initial conflict of interest forms with the person in your department designated to keep such records. List any holding by you or a relative that may require disqualification in future matters.

19. Evaluating Whether A Conflict Exists • A violation of the conflict of interest laws does not require intent • It doesn’t matter whether you actually will be influenced – what matters is whether you meet the criteria set forth in the law

20. Three questions: Could the decision affect, either positively or negatively, an interest of the officer or a relative? If the answer is no, stop. There is no conflict of interest.

21. If yes to Question 1: Is the interest a pecuniary or proprietary interest? Could it affect a financial interest or ownership interest? If the answer is no, stop. The interest will not disqualify you. If yes, go to Question 3.

22. If yes to Question 2: 3. Is the interest one that is statutorily designated as a remote interest? If you have a remote interest = no conflict. If you have an interest that is not remote = conflict.

23. When a Conflict Arises File a conflict of interest form which fully discloses the substantial interest. Every agency or governmental unit must maintain a conflict file. Disclose sufficient information to allow the public to understand the nature of the conflict.

24. And Must REFRAIN from voting or participating in any manner in any discussion or decision of the contract, sale, or purchase.

25. Conduct After Leaving Government Service • A public officer shall not receive compensation for representing someone before an agency on which the officer serves or served within the preceding 12 months concerning any matter in which the officer participated personally during the officer’s service. A.R.S. § 38-504(A).

26. For two years after leaving government service, a public officer or employee shall not disclose or use for personal profit any information acquired during their public service that has been clearly designated as confidential. A.R.S. § 38-503(B)

27. Consequences of Violating the Conflict of Interest Statutes Negative publicity and public opinion Civil suit, costs and attorneys’ fees Criminal penalties Intentional violation = class 6 felony Negligent violation = class 1 misdemeanor Forfeiture of public employment Nullifying contracts

28. Misuse of Public Position

29. Additional Compensation May not accept any money, tangible thing of value, or financial benefit, directly or indirectly, for any service rendered in a matter pending before the public agency. A.R.S. § 38-505(A), see also Arizona Constitution, Art. 22 § 17.

30. Confidential Information May not use or disclose confidential information acquired in the course of official duties. A.R.S. § 38-504(B). Duty exists during employment and two years after.

31. Use of Position May not use position to secure a benefit that would not ordinarily be provided in the performance of official duties. A.R.S. § 38-504(C).

32. Illegal Gratuity or Reward A public officer who knowingly asks or receives any gratuity or reward (or promise thereof) for doing any official act is guilty of a class 6 felony. A.R.S. § 38-444 • May also violate A.R.S. § 38-505(A) or (C)

33. Bribery Soliciting, accepting or agreeing to accept any benefit with the understanding that it may influence official conduct (vote, opinion, judgment, exercise of discretion or other action) • A.R.S. § 13-2602 • Class 4 felony

34. Extortion • A State official commits theft by extortion by knowingly obtaining or seeking to obtain property or services by means of a threat to take or withhold some future action as a public servant. • A.R.S. § 13-1804(A)(7) • Class 4 felony

35. Gifts From Lobbyists It is a class 1 misdemeanor for a State officer or employee to: • Knowingly accept gifts worth more than $10 in any calendar year or any gift designed to influence official conduct from a lobbyist, lobbyist’s principal. A.R.S. § 41-1232.02(J)

36. Lobbyist Entertainment Ban It also is a class 1 misdemeanor for a State officer or employee to: • Accept tickets, expenditures or vouchers to any sporting or cultural event or activity from any lobbyist, public body, lobbyist’s principal, or any person acting on behalf of a lobbyist or principal. A.R.S. § 41-1232.08

37. State v. Ross • Program designed to protect low income seniors by freezing a portion of their property valuation. • Personal information gathered; Assessor’s office maintained list of participants.

38. State v. Ross, cont’d. • Ross supplied list of names and addresses of participants to reverse mortgage lender. • Although he planned to split commissions resulting from the sale of reverse mortgages, no sale and no money resulted.

39. State v. Ross, cont’d. • County assessor was convicted of violating the conflict statute, by attempting to secure a valuable benefit that would not normally accrue through his official duties and that manifested an improper influence with respect to his duties as Assessor.

40. State v. Ross, cont’d. • On appeal, court reversed, holding that although Assessor’s use of the information may have raised ethical and public records issues (obtaining public records for a commercial purpose w/o paying fee), it did not violate conflict of interest statute because there was no action related to his official duties.

41. MISUSE OF PUBLIC RESOURCES

42. Cannot use public property for a private purpose Must receive public benefit in return for the expenditure or use of public property

43. Public Property Photocopies Telephones Facsimile Vehicles E-mail Office postage meter Office supplies

44. Private Purposes Private corporation’s business Officer or employee’s personal business Selling your car or waterbed Letter to Mom Kid’s term paper Candidate’s campaign literature

45. Theft • Taking or unauthorized use of State property or services. A.R.S. § 13-1802. • Examples: • Personal long distance calls on State’s dime • Using State’s postage or courier service for personal business • Unauthorized use of a State vehicle, A.R.S. § 13-1803 • Computer tampering, A.R.S. § 13-2310

46. Fraud • Knowingly making false representations to obtain a benefit. A.R.S. § 13-2310 • Examples: • Filing false timesheet, leave report, travel expense report or per diem voucher

47. Integrity of Public Records • Effective government requires reliable information. • Falsifying public documents violates the public trust.

48. Tampering With a Public Record • Making a false written record purporting to be a public record or stealing, destroying, altering, concealing or falsifying a public record with intent to deceive or defraud is a class 6 felony. A.R.S. § 13-2407

49. A public officer having custody of any public record who steals or destroys, mutilates, defaces, alters, falsifies, removes or secretes the record or any part, or who permits another to do so, is guilty of a class 4 felony. A.R.S. § 38-421(A)

50. Unauthorized Expenditure of Public Funds • An expenditure of public funds made without proper authorization is an illegal act, and both the state official approving the payment and the recipient are liable to the state. A.R.S. § 35-154 • Any State officer or employee who illegally withholds, expends or converts state money to an unauthorized purpose is personally liable for the amount plus 20%. A.R.S. § 35-196.