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A New Watch Dog and New Rules

February 2, 2012

On August 15, 2011 the Governor signed into law the Public Integrity Reform Act of 2011 (PIRA). The Act reworks aspects of the regulatory framework governing public sector ethics. State Public authority compliance officers would do well to become familiar with the provisions before the newly created commission is up and running. Among the important changes are:

(i)     A new monitoring and enforcement entity, the Joint Commission on Public Ethics (JCOPE), is established with a materially expanded enforcement power. Although the Act was effective last August, members were only appointed last month and it is unlikely that the Commission will be operational prior this Spring.

(ii)     PIRA establishes a very broad notification program for any individual or entity that appears before an entity or agency concerning procurement, rate making, or any other regulatory matter. It is not yet understood whether more casual but intended contacts will fall within the ambit of this requirement. Effective January 1, 2013, the State Department of General Services will be required to create an on-line data base which will reflect all agency and authority contacts.

(iii)     Financial Disclosure Statements have increased in scope and required detail. PIRA will randomly select and audit the Financial Statements to verify their accuracy.

(iv)      PIRA now requires certain individuals who file Financial Disclosure Statements, including attorneys, real estate brokers, any professional licensed by the State Education Department or member of a firm required to register as a lobbyist, may be required to report the names of their clients that have certain business activities before the State and meet threshold criteria. There are a number of important caveats to the requirement, but given the potential relevance to existing and future board members, care should be given to the provision.

(v)     In one instance PIRA relaxes or at least clarifies the former prohibition on gifts that exceed a nominal value shall now be a prohibition on the provision of food and beverage valued in excess of fifteen dollars. It bears note that JCOPE reserves the right to deem an aggregation of multiple gifts of less than $15 a violation of law. PIRA also clarifies that the “widely attended event” exclusion is interpreted to mean (i) events at which at least 25 non-government personnel are invited to attend and (ii) the event is related to the duties or responsibilities of the public official.

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