The Alabama Ethics Commission (the “Commission”) held a regularly scheduled meeting on October 5, 2016. At the meeting, the Commission formally extended the comment period for two significant advisory opinions affecting candidates, businesses and nonprofit associations. The Commission also adopted two previously published opinions after receiving public comments, issued six new opinions, and rejected one proposed opinion. Below are some of the highlights from the meeting and a brief summary of the Commission’s activities.

Key Takeaways

1. The definition of a “principal” is still unsettled.

At a special meeting last month, the Commission issued A.O. 2016-24 (“McCalla Opinion”), which broadly interpreted the definition of “principal.” Under the Commission’s interpretation, the definition “applies not just to the ‘business’ that employs a lobbyist, but also to the ‘persons’ who, in their association with the business, employ, retain, or direct a lobbyist.” (emphasis added). Although the application of this interpretation will depend on the circumstances, the Commission expressly stated that the following individuals are likely to be principals:

  • People who occupy top-level, decision-making positions within an entity/organization;
  • Executive-level personnel who (through their position, influence or discretionary authority) are responsible for the lobbyist’s compensation or actions on behalf of the entity/organization or who can otherwise act on behalf of the entity/organization;
  • Members of the Board of Directors;
  • Officers; and
  • Related individuals who have authority.

The Commission initially delayed the effective date of this opinion until October 2, 2016, to provide for a period of public comment. However, the Commission has extended the comment period until December 7, 2016.

2. The gift law only applies to gifts from lobbyists, subordinates of lobbyists and principals.

The Commission issued a self-generated opinion, A.O. 2016-34 (“Teachers Opinion”), which sought to clarify how the Ethics Law applies to gifts to public employees. A prior opinion, A.O. 2011-12, suggested that there is per se prohibition on gifts from all individuals and organizations – not just lobbyists, subordinates of lobbyists, and principals. The Commission overruled A.O. 2011-12 on that issue and held that the primary gift restrictions found in § 36-25-5.1 apply only to gifts from lobbyists, subordinates of lobbyists, and principals. According to this guidance, public officials and public employees may receive unrestricted gifts from persons who are not lobbyists, subordinates of lobbyists, and principals, so long as the gift(s) would not violate other prohibitions, including the use of public office for personal gain, lobbyist solicitations, and attempts to corruptly influence official action. Despite this new interpretation, public officials and public employees are still prohibited from soliciting or receiving a gift from a subordinate or anyone whom they inspect, regulate or supervise in their official capacity pursuant to § 36-25-5(e). The Commission also stated that a “safe harbor” still exists for public officials and public employees who opt to follow the exceptions in § 36-25-5.1(b), even though they are no longer bound by them with respect to people who are not lobbyists, subordinates of lobbyists, or principals. The Commission delayed the effective date of this opinion until December 7, 2016, to provide for a period of public comment.

3. The Commission recommended that public entities create formal policies for gifts.

In the Teachers Opinion, the Commission cautioned public employees and public officials to exercise “proper judgment” with respect to gifts and encouraged all public school boards to develop formal policies regarding gifts, specifically holiday gifts. The opinion implies that all public entities could benefit from developing formal ethics policies to “prevent violations as well as the perception of violations.”

4. The Commission is focusing much of its attention on issues related to solicitations.

Certain solicitations by public officials and public employees are prohibited by the Ethics Law and are subject to criminal prosecution. The Commission has taken a special interest in solicitations as many of its recent opinions address issues related to solicitations made by public officials and public employees. In the last two months alone, the Commission has addressed questions related to solicitations for charitable donations, political contributions, job opportunities, and gifts. The Commission is expected to provide more guidance on certain solicitations after the comment period expires for multiple opinions in December.

5. The Commission is very interested in public comments.

Although advisory opinions are typically effective the day that they are issued, the Commission has started delaying the effective date of certain advisory opinions to allow for public comments. The Commission appears to be sensitive to the potential impact of its guidance and is increasingly seeking comments from individuals, businesses and nonprofit associations on multiple opinions.

6. Investigations are ongoing.

After addressing advisory opinions, the Commission went into executive session to conduct investigation hearings. Because Alabama’s grand jury rules apply to the Commission’s investigations, the investigations are confidential. Nonetheless, it is clear that the Commission is actively pursuing Ethics Law complaints and investigating potential Ethics Law violations.

Summary of the Commission’s Activities:

The comment period for two key opinions was extended to December 7, 2016.

  • A.O. 2016-23 (“FCPA”) – Permissible and impermissible uses of campaign funds.
  • A.O. 2016-24 (“McCalla Opinion”) – Solicitation of principals for charitable donations/who is a principal.

Two previous issued opinions were adopted after a public comment period.

  • A.O. 2016-25 (“Bicentennial Opinion”) – Fundraising and solicitations made on behalf of the Alabama Bicentennial Commission/permissible solicitation methods.
  • A.O. 2016-27 (“ASEA Opinion”) – Soliciting/accepting employment opportunities from principals and lobbyists while serving as a public employee or public official.

New Opinions

  • A.O. 2016-28 (“Whatley Opinion”) – A public official may fundraise and otherwise campaign for other state and local candidates in Alabama, including soliciting lobbyists for campaign contributions.
  • A.O. 2016-29 (“Bowden Opinion”) – Permissible solicitation methods/Alabama Power receiving and responding to fundraising requests from charities and nonprofit organizations that are supported by public officials.
  • A.O. 2016-30 (“Shaw Opinion”) – A candidate may use campaign funds to pay for legal advice related to the FCPA, and public officials may use excess campaign funds to pay for the legal defense of civil and criminal actions related to their office.
  • A.O. 2016-31 (“Chambliss Opinion”) – Sen. Chambliss may continue his private practice as a civil engineer so long as he complies with the revolving door restrictions and does not use his office for personal gain.
  • A.O. 2016-32 (“Pittman Opinion”) – Sen. Pittman may sponsor and vote on gas tax legislation so long as he and his businesses are not uniquely affected by the legislation.1
  • A.O. 2016-34 (“Teachers Opinion”) – The gift law does not apply to teachers (i.e., public employees and public officials) when the gift is not being provided by a lobbyist, a subordinate of a lobbyist, or a principal.2

Rejected Opinions3

  • A.O. 2016-33 (“Mayor Strange Opinion”) – Whether members of the Montgomery City Council may vote for expenditures supporting the local school board or the local chamber of commerce when their family members work for those organizations.