GIFT ACCEPTANCE AND DISCLOSURE
CITY OFFICIALS ACCEPTING ADMISSIONS TO SPEEDWAY SUITE
To: Name withheld at person's request
SUMMARY:
City officials who are reporting individuals have not accepted either a prohibited or a reportable gift under Section 112.3148, Florida Statutes, where they attend events in a suite at a motor sports speedway under admissions purchased by the city from a nonprofit economic development corporation which leases the suite from the speedway's owner. Under the circumstances, the admissions lack the gratuitous component necessary for a gift and are not indicative of an indirect gift from the speedway's owner (an entity which lobbies the city). CEO 91-68 and CEO 01-19 are referenced.[1]
QUESTION:
Would members of a city commission, the city manager, and other city officials be accepting a prohibited or reportable gift under Section 112.3148, Florida Statutes, were they to attend events in a suite at a motor sports speedway leased to a nonprofit economic development corporation by the speedway's owner, where the city manager pays for their admission to the suite using city funds or where they pay for the admission from their own personal, private funds?
Your question is answered as set forth below.
By your letter of inquiry, materials accompanying the letter, and additional information provided by you in response to questions from our staff, we are advised that you inquire in behalf of the members of the City Commission of the City of Daytona Beach (members) regarding application of Section 112.3148, Florida Statutes (the "gifts law"), in the context discussed herein. Further, we are advised that the City Commission adopted Resolution No. 05-43 (adopted February 2, 2005) authorizing the City Manager to purchase for the members and others suite admissions to motor sports events at a speedway from a nonprofit corporation which leases the suite from the speedway's owner[2] and, inter alia, determining that attendance by City officials at the suite during motor sports events is for the public purpose of promoting economic development of the City. More specifically, regarding the Resolution's conditions as to the City Manager's purchase of admissions, you advise that:
*The admissions shall be usable only by the Mayor, City Commissioners, the City Manager or the Manager's delegate, and other City officials whom the City Manager determines to be reasonably helpful or necessary to promoting economic development.
*Each such person may invite one guest, whose admission also is paid by the City.
*The payment for admissions shall be at fair market value[3] and the source of payment must be one of several specific funding sources identified in the Resolution.[4]
*Payment for admissions shall be subject to availability of funds.
Further, you advise that the owner of the speedway lobbies the City but that the nonprofit corporation[5] which leases the suite at fair market value does not. Additionally, we are advised that the suite lease/license agreement between the nonprofit and the speedway's owner does not require or encourage the nonprofit to use the suite for business promotion and does not contain any related restrictions on the nonprofit's use of the suite; nevertheless, you advise, the nonprofit intends to use the suite consistent with its historical economic development promotion purposes and is willing to invite the persons referenced in the Resolution.
Statutes, including Section 112.3148, Florida Statutes (the "gifts law"), provide in part:
(12)(a) 'Gift,' for purposes of ethics in government and financial disclosure required by law, means that which is accepted by a donee or by another on the donee's behalf, or that which is paid or given to another for or on behalf of a donee, directly, indirectly, or in trust for the donee's benefit or by any other means, for which equal or greater consideration is not given within 90 days, including:
10. Entrance fees, admission fees, or tickets to events, performances, or facilities. [Section 112.312(12)(a)10, Florida Statutes.]
(4) A reporting individual or procurement employee or any other person on his or her behalf is prohibited from knowingly accepting, directly or indirectly, a gift from a political committee or committee of continuous existence, as defined in s. 106.011, or from a lobbyist who lobbies the reporting individual's or procurement employee’s agency, or directly or indirectly on behalf of the partner, firm, employer, or principal of a lobbyist, if he or she knows or reasonably believes that the gift has a value in excess of $100; however, such a gift may be accepted by such person on behalf of a governmental entity or a charitable organization. If the gift is accepted on behalf of a governmental entity or charitable organization, the person receiving the gift shall not maintain custody of the gift for any period of time beyond that reasonably necessary to arrange for the transfer of custody and ownership of the gift. [Section 112.3148(4), Florida Statutes.]
(8)(a) Each reporting individual or procurement employee shall file a statement with the Commission on Ethics on the last day of each calendar quarter, for the previous calendar quarter, containing a list of gifts which he or she believes to be in excess of $100 in value, if any, accepted by him or her, for which compensation was not provided by the donee to the donor within 90 days of receipt of the gift to reduce the value to $100 or less, except the following:
1. Gifts from relatives.
2. Gifts prohibited by subsection (4) or s. 112.313(4).
3. Gifts otherwise required to be disclosed by this section.
(b) The statement shall include:
1. A description of the gift, the monetary value of the gift, the name and address of the person making the gift, and the dates thereof. If any of these facts, other than the gift description, are unknown or not applicable, the report shall so state.
2. A copy of any receipt for such gift provided to the reporting individual or procurement employee by the donor.
(c) The statement may include an explanation of any differences between the reporting individual's or procurement employee's statement and the receipt provided by the donor.
(d) The reporting individual's or procurement employee's statement shall be sworn to by such person as being a true, accurate, and total listing of all such gifts.
(e) If a reporting individual or procurement employee has not received any gifts described in paragraph (a) during a calendar quarter, he or she is not required to file a statement under this subsection for that calendar quarter. [Section 112.3148(8), Florida Statutes.]
Section 112.3148(4) would prohibit the Commissioners', the Manager's, and other City reporting individuals'[6] acceptance of an admission, directly or indirectly, from a lobbyist, or from a partner, firm, employer, or principal of a lobbyist, who lobbies the City. Furthermore, inasmuch as you represent that the speedway's owner lobbies the City, the acceptance of an admission would be prohibited if the admission was gratuitously provided, directly or indirectly, by the owner.
However, under the facts presented, we do not find that acceptance of an admission would be prohibited. Clearly, the scenario presented shows that the owner is being provided consideration ($130,000 annually) by the nonprofit for the lease/license of the suite and that the nonprofit[7] is being provided consideration ($145 per person) for suite admissions; such a situation lacks the necessary gratuitous component required by the statute. Further, we find nothing in the scenario presented in your inquiry indicative of an indirect gift to a reporting individual from the speedway's owner or other prohibited donor.[8]
Regarding the issue of whether City reporting individuals who accept an admission have received a "gift" which they are required to report quarterly[9] on CE Form 9 pursuant to Section 112.3148(8), we find that they have not, inasmuch as, under the circumstances presented, they will be providing equal or greater consideration for their presence in the suite when they are there in behalf of the City. See CEO 01-19.[10]
Accordingly, we find that City officials can attend events in a suite at Daytona International Speedway at the expense of the City without receiving either a prohibited or a reportable gift under Section 112.3148, Florida Statutes.[11]
ORDERED by the State of Florida Commission on Ethics meeting in public session on April 21, 2005 and RENDERED this 26th day of April, 2005.
______________________________
Joel Gustafson, Chair
[1]Opinions of the Commission on Ethics (CEOs) are viewable on its website: www.ethics.state.fl.us
[2]The speedway is the Daytona International Speedway (DIS), the nonprofit corporation is the Checkered Flag Committee (CFC), and the speedway's owner is International Speedway Corporation (ISC).
[3]You advise that the fair market value of a single admission into the suite is $145: annual suite lease/license fee of $130,000, divided by the total number of admissions in the year (975), with the total admissions being arrived at by multiplying the 13 event days in the year by 75 admissions per event. See CEO 91-68 regarding this methodology.
[4]The Resolution identifies the funding sources as Bike Week sponsorship fees and each elected official's personal account. You advise that Bike Week sponsorship fees are paid by parties whom the City approves as corporate sponsors of the Bike Week Festival, in exchange for which the parties are provided advertising, including corporate logos on promotional banners on City property and sponsorship identification on Festival brochures and the official Festival website; and that the City receives a portion of the fees. You advise that "each elected official's personal account" means an official's private (not City-derived) funds.
[5]You advise that the nonprofit hosts a Checkered Flag/NASCAR/LPGA Annual Golf Tournament, which raises funds for local charities; uses the suite to host various events and uses the suite for its meetings; and volunteers its members to act as goodwill ambassadors during speedway owner events; all-the-while promoting the foregoing activities as opportunities to educate members of the public as to the economic benefits of motor sports entertainment and industry activities.
[6]City commissioners, city managers, and certain other local officials are "reporting individuals" subject to the gifts law. See Sections 112.3148(2)(d) and 112.3145(1)(a), Florida Statutes.
[7]As represented, the nonprofit would lack the necessary status as a partner, firm, employer, or principal of a lobbyist (who lobbies the City) for purposes of the prohibition, assuming arguendo that its provision of admissions to City officials would be gratuitous.
[8]Assuming arguendo the existence of a gratuitous component regarding the speedway's owner's provision of the suite or suite admissions to the nonprofit, the following information provided in your inquiry discounts the existence of an indirect gift from the owner to City reporting individuals: the owner has no ownership of and no control over the nonprofit; there are no payments or bookkeeping transactions between the owner and the nonprofit reimbursing the nonprofit for the value of the admissions or for the value of any portion of the value of the admissions; the nonprofit would not be acting under the direction of the owner; the nonprofit has full and independent decision-making authority to determine whether the City, as opposed to others, would receive the admissions; and you have no knowledge of the existence of any relationship between the owner and the nonprofit, other than the suite lease/license relationship.
[9]Or which they are required to report annually on CE Form 10 pursuant to Section 112.3148(6), Florida Statutes.
[10]However, we find that the City's provision of an additional admission to a reporting individual enabling him or her to invite his or her spouse or other guest at no expense to the reporting individual, while it can be accepted, must be reported quarterly (by the end of the calendar quarter following the calendar quarter in which it is accepted) on CE Form 9. Under the facts presented, the value to be reported regarding the additional admission would be $145.
[11]Of course, we find that no portion of the gifts law is implicated when a City reporting individual attends events at the suite where he or she pays fair market value for admission(s) from his or her own personal, private funds.