Newsletters: School District Articles

Ethics Reform enacted by General Assembly

Legal Insights for School Districts (Summer 2004)

by Anthony M. Peccarelli

The Illinois General Assembly recently adopted legislation ending a long fought reformation of ethical conduct in Illinois state government. The State Officials and Employees Ethics Act is a combination of two acts, P.A. 93-615 (H.B. 3412) and P.A. 93-617 (S.B. 702), and is codified at 5 ILCS 430/1-1 et seq. While the legislation covers a vast array of state governmental conduct, the legislation impacts units of local government and school districts. This article will briefly highlight the legislation directed to school districts.

Although the prior State Gift Ban Act (5 ILCS 425/1 et seq.) was declared unconstitutional by a trial judge in the Circuit Court, 12th Judicial Circuit, Will County, the Illinois Supreme Court held that the plaintiffs in that litigation lacked standing to file the suit and reversed the trial court on that basis. The Illinois Supreme Court did not rule on the constitutionality of the State Gift Ban Act. The new Act specifically repeals the State Gift Ban Act, and other statutes are significantly affected by the new legislation.

School districts were mandated to pass an ordinance or resolution within six (6) months of the effective date of the legislation or by June 9, 2004, relating to gifts and prohibited political activities. Although there is little guidance in the legislation for school districts, the Illinois Attorney General was mandated to create model ordinances and resolutions which were recently made available on-line at www.ag.state.il.us. The ordinance or resolution adopted by school districts shall be not less restrictive than the new legislation.

There is no specific provision that school districts must provide for an Ethics Commission or appoint an Ethics Officer as required for State Constitutional Officers. However, the legislation infers that to give effect to an ordinance or resolution that school districts should form an Ethics Commission and appoint an Ethics Officer. The legislation also mandates ethics training for employees. The legislation suggests that any ordinance or resolution passed by a school district may provide for criminal and civil penalties. Criminal penalties consistent with the legislation may include conviction of a Class A Misdemeanor. There are also civil and criminal fines that could be assessed.

Relating to the prohibition and ban on gifts, the legislation also describes prohibited sources of gifts or hospitality. The legislation creates a broader ban on gifts and hospitality by prohibited sources than the ban on gifts and hospitality from prohibited sources in the prior State Gift Ban Act. The legislation prohibits political activity by employees and requires some documentation of the activity of employees during the hours of work. An employee shall not use property of the school district in furtherance of a campaign for an elected office. Officials may neither require employees to perform political activity nor may the employee be rewarded for doing political activity outside of the hours of work.

A gift is defined as "any gratuity, discount, entertainment, hospitality, loan, forbearance, or other tangible or intangible item having monetary value including, but not limited to, cash, food and drink, and honoraria for speaking engagements related to or attributable to government employment or the official position of an employee, member or officer." There are exceptions to the ban on gifts listed in the legislation.

Prohibited source is defined as "any person or entity who: (1) is seeking official action (i) by the member or officer or (ii) in the case of an employee, by the employee. . .or other employee directing the employee. . . ; (2) does business or seeks to do business (i) with the member or officer or (ii) in the case of an employee, by the employee. . .or other employee directing the employee. . . ; (3) conducts activities regulated (i) by the member or officer or (ii) in the case of an employee, by the employee. . .or other employee directing the employee . . . ; (4) has interests that may be substantially affected by the performance or non-performance of the official duties of the member, officer, or employee; or (5) is registered or required to be registered with the Secretary of State under the Lobbyist Registration Act. There are exceptions.

Spouses and immediate family members, as defined in the legislation, are also prohibited from accepting any gift from any prohibited source. However, gifts from family members or gifts provided on the basis of a personal friendship do not violate the ban. Should a gift be tendered from a prohibited source, the recipient of the gift will not be in violation of the ban if the gift is promptly returned or the gift is donated to a charitable organization or the monetary value of the gift’s value is donated to a charitable organization exempt from federal income taxation.

The new Act limits food and refreshment solicited for or accepted by a public employee or officer to $75 per person per single calendar day. This limitation is separate from the cumulative $100 limitation under the new Act on any other items purchased for a public employee or officer during a calendar year. The new legislation also states that a local government may implement stricter policies than the limitations in the Act.

The legislation prohibits members (as defined in the Act) and their spouses or immediate family members from serving on certain boards, commissions, authorities or task forces created by State Law or by executive order of the Governor if that person is entitled (i) to receive more than 7 ½% of the total distributable income under a state contract other than an employment contract or (ii) that person and his or her spouse or immediate family members have more than a combined interest of 15% of the total distributable income under a state contract other than an employment contract. There are some exceptions to this prohibition. Lobbyists are subject to the legislation as well. Lobbyist registration was previously required. However, under the new legislation, a lobbyist is required to register no later than two (2) days after being retained. The registration form now requires further information regarding the lobbyist’s client, including the nature of the client’s business, as well as community and public interests of the client. Further, should there be any change in the nature of employment, the lobbyist has up to fourteen (14) days to amend the original registration form and submit the new information to the Secretary of State.

The new legislation by the General Assembly is a lengthy and detailed series of amendments that cover other provisions affecting government and officials throughout the State. This article merely scratches the surface in this ethics reform legislation. It is imperative that school districts or any person or entity subject to the legislation carefully read the legislation, become familiar with its contents, understand its requirements, and meet the standards of ethical conduct addressed by the legislation.

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