Ackerley Communications of Massachusetts, Inc., Docket No. 406

Docket No. 406
In the Matter of Ackerley Communications of Massachusetts, Inc.

DISPOSITION AGREEMENT

This Disposition Agreement (Agreement) is entered into between the State Ethics Commission (Commission) and Ackerley Communications of Massachusetts, Inc. (Ackerley), pursuant to section 5 of the Commission’s Enforcement Procedures.  This Agreement constitutes a consented to final Commission order enforceable in the Superior Court, pursuant to G.L. c. 268B, §(j).

On March 8, 1989, the Commission initiated, pursuant to G.L. c. 268B, §4(a), a preliminary inquiry into allegations that Ackerley had violated the conflict of interest law, G.L. c. 268A.  The Commission has concluded the inquiry and, on October 10, 1990, voted to find reasonable cause to believe that Ackerley violated G.L. c. 268A, §3, through the acts of its employees.

The Commission and Ackerley now agree to the following facts and conclusions of law:

1.  Ackerley is a corporation doing business in Massachusetts.  Ackerley is a major owner of outdoor billboards in Massachusetts and sells and leases advertising space on its outdoor billboards.

2.  At the time here relevant, Ackerley’s president and its general manager for outdoor advertising operations was Louis R. Nickinello (Nickinello), Ackerley’s registered legislative agent was Elizabeth Palumbo (Palumbo), and both Nickinello and Palumbo were employees and agents of Ackerley.

3.  Outdoor advertising in Massachusetts is regulated by state law. In addition, from time to time bills are proposed in the state House of Representatives (House) which, if enacted, would further regulate outdoor advertising.  In 1988, several bills were proposed in the House which, if enacted, would have placed new restrictions on outdoor billboard advertising and would have had a substantial negative effect on Ackerley’s business in Massachusetts and on its financial interests.  Most, if not all, of these bills had been filed during prior legislative sessions.  As had occurred in prior years, in 1988 these bills were referred to committee for study and none were voted on by the House.

4.  In 1988, Ackerley leased Skybox No. 32 at the Boston Garden.  The skybox contained twelve seats and the lease entitled Ackerley to twelve tickets for those seats for almost all events held at the Boston Garden, including all Boston Celtics basketball and Boston Bruins hockey games.

5.  Charles F. Flaherty (Rep. Flaherty) is a member of the House and the House Majority Leader.  As such, Rep. Flaherty is a state employee as that term is defined in G.L. c. 268A, §1(q).  As a state representative and as House Majority Leader, Rep. Flaherty participates, by speech and debate, by voting and by other means, in the process by which laws are enacted in the Commonwealth.  During the time here relevant, Rep. Flaherty was not a member of any committee that considered outdoor advertising legislation and there is no evidence that he voted on any measure which directly pertained to the regulation of outdoor advertising.

6.  On November 16, 1988, Nickinello gave Rep. Flaherty three Ackerley skybox tickets to that evening’s Celtics game at the Boston Garden.  While there is some evidence of a long-standing personal relationship between Nickinello and Rep. Flaherty,[1] the evidence does not establish that that relationship was the predominant motivating factor in Nickinello’s giving Rep. Flaherty the three tickets.

7.  On November 16, 1988, Palumbo gave Rep. Flaherty two Ackerley skybox tickets to that evening’s Celtics game at the Boston Garden.  While there is some evidence of a long-standing personal relationship between Palumbo and Rep. Flaherty,[2] the evidence does not establish that that relationship was the predominant motivating factor in Palumbo’s giving Rep. Flaherty the two tickets.

8.  The Ackerley skybox tickets which were given to Flaherty did not have a face value printed on them. The five tickets were, however, worth at least $30 each and, thus, a total of at least $150.

9.  Rep. Flaherty used the five free Ackerley skybox tickets he received from Nickinello and Palumbo to take himself and four fellow House members to the November 16, 1988 Celtics game.  While Rep. Flaherty and his four colleagues were in the Ackerley skybox watching the game, Ackerley made available to them complimentary food and beverages, at an average per person cost to Ackerley of approximately fifteen dollars.

10.  Evidence was presented that it is Ackerley’s policy that its skybox tickets may not be given to public officials.

11.  Section 3(a) of G.L. c. 268A, prohibits anyone from, directly or indirectly, giving a state employee anything of substantial value for or because of any official act performed or to be performed by the state employee. Anything with a value of $50 or more is of substantial value for §3 purposes.[3]

12.  By giving the five Ackerley skybox tickets to Rep. Flaherty, while, as a House member and as House Majority Leader, Rep. Flaherty was in a position to take official action concerning proposed legislation which would affect Ackerley’s financial interests, Nickinello and Palumbo gave Rep. Flaherty a gift of substantial value for or because of acts within Rep. Flaherty’s official responsibility performed or to be performed by him.[4]  In so doing, Nickinello and Palumbo violated G.L. c. 268A, §3(a).[5]

13.  As a corporation, Ackerley acts through and is responsible for the acts of its agents and employees.  This conclusion applies even if these actions are unauthorized.  Thus, in that Ackerley’s employees and agents, Nickinello and Palumbo, violated §3 by providing Rep. Flaherty with five free skybox tickets, Ackerley also violated G.L. c. 268A, §3(a), notwithstanding the evidence that was presented that Ackerley’s policy prohibited the giving of its skybox tickets to public officials and that those acts were not authorized by that policy.

14.  The Commission is aware of no evidence that the November 16, 1988 Celtics tickets were given to Rep. Flaherty with the intent to influence any specific official act by him as a legislator or any particular act within his official responsibility. The Commission is also aware of no evidence that Rep. Flaherty took any official action concerning any proposed legislation which would affect Ackerley in return for the tickets.[6] However, even if the conduct were only intended to create official goodwill, it was still impermissible.

15.  When summoned to testify under oath before the Commission during the preliminary inquiry concerning this matter, Nickinello and Palumbo, based upon the advice of their own legal counsel, both invoked their state and federal constitutional rights against compelled self-incrimination and declined to answer questions concerning any free tickets and other gratuities given by them and Ackerley to Massachusetts state, county or municipal employees and officials.  Because adjudicatory proceedings before the Commission are administrative rather than criminal in nature, the law allows the Commission to draw an adverse inference from such a refusal to testify.  In this matter, the adverse inference would be that Nickinello, Palumbo and Ackerley have provided unlawful gratuities to Massachusetts public officials in addition to the previously described five November 16, 1988 Celtics tickets to Rep. Flaherty.  Ackerley, however, during the preliminary inquiry provided the Commission with corporate records, testimony and other information concerning its activities and the activities of its agents and employees sufficient to persuade the Commission not to draw any such adverse inference from Nickinello’s and Palumbo’s refusal to testify.  Thus, when the Commission voted on this matter on October 10, 1990, it did not find reasonable cause to believe that Nickinello, Palumbo and Ackerley had provided such additional gratuities in violation of §3.  The Commission, nevertheless, reserves the right to pursue any such additional violations of G.L. c. 268A, should allegations of such other illegal gratuities be brought to its attention.

In view of the foregoing violations of G.L. c. 268A, §3(a), the Commission has determined that the public interest would be served by the disposition of this matter without further enforcement proceedings, on the basis of the following terms and conditions agreed to by Ackerley:

     1. that Ackerley pay to the Commission the sum of five hundred dollars ($500.00) as a civil fine for violating G.L. c. 268A, §3(a);

     2. that Ackerley undertake measures, agreeable to the Commission, to assure that in the future no sporting event tickets owned by Ackerley or any other gratuities be given by Ackerley or by any of Ackerley’s agents, officers or employees to any Massachusetts state, county or municipal employee or official in violation of §3; and

     3. that Ackerley waive all rights to contest the findings of fact, conclusions of law and terms and conditions contained in this Agreement in any related administrative or judicial proceeding to which the Commission is or may be a party.[7]

 



[1] Nickinello and Rep. Flaherty were formerly House colleagues when Nickinello served as a state representative for several years.
[2] Palumbo was a House staffer during some of Rep. Flaherty’s years at the House. Palumbo’s family and Rep. Flaherty have a long-standing friendship.
[3] See Commonwealth v. Famigletti, 4. Mass. App. 584 (1976).

[4] The Commission made explicitly clear in its Advisory No. 8, entitled "Free Passes," issued on May 14, 1985, that tickets to sporting events may be items of substantial value for §3 purposes. The Commission also made clear in Advisory No. 8 that the giving of such tickets to a public employee by a party subject to the employee’s official authority violates §3 when the tickets are given for or because of official acts performed or to be performed by the public employee. Furthermore, the Commission reiterated in Advisory No. 8 its ruling in its 1981 decision in In the Matter of George Michael, 1981 SEC 59, 68, that §3 prohibits gifts of substantial value for the purpose of securing a public employee’s official goodwill. As the Commission stated in Michael,

A public employee need not be impelled to wrongdoing as a result of receiving a gift or a gratuity of substantial value in order for a violation of Section 3 to occur. Rather, the gift may simply be a token of gratitude for a well-done job or an attempt to foster goodwill. All that is required to bring Section 3 into play is a nexus between the motivation for the gift and the employee’s public duties. If this connection exists, the gift is prohibited. To allow otherwise would subject public employees to host of temptations which would undermine the impartial performance of their duties, and permit multiple remuneration for doing what employees are already obliged to do - a good job.

[5] Where a public employee is in a position to take official action concerning matters affecting a party’s interests, the party’s gift of something of substantial value to the public employee and the employee’s receipt thereof violates §3, even if the public employee and the party have a private personal relationship and the employee does not in fact participate in any official matter concerning the party, unless the evidence establishes that the private relationship was the motive for the gift. See Advisory No. 8.
[6] As the Commission made clear in the Michael decision and in Advisory No. 8, §3 of G.L. c. 268A is violated even where there is no evidence of an understanding that the gratuity is being given in exchange for a specific act performed or to be performed. Indeed, any such quid pro quo understanding would raise extremely serious concerns under the bribe section of the conflict of interest law, G.L. c. 268A, §2. Section 2 is not applicable in this case, however, as there was no such quid pro quo between Ackerley’s agents (Nickinello and Palumbo) and Rep. Flaherty.

[7] The Commission is authorized to impose fines of up to $2,000 for each violation of G.L. c. 268A. Here, however, the Commission has determined that it would be in the public interest to resolve this matter with a $500 fine because:

(1) this is the first case in which the Commission has found the gift to and receipt by a public employee of a gratuity to violate G.L. c. 268A, §3 despite evidence of a "mixed motive" for the gift/receipt of the gratuity. On the one hand, there is no question that Nickinello and Palumbo attempted to foster goodwill with Rep. Flaherty at a time when legislation affecting Ackerley’s interests was pending. On the other hand, there is evidence of long-standing private relationships between Rep. Flaherty and Nickinello and Palumbo. As discussed in footnote 5 above, however, to the extent a private relationship is a motivating factor in the gift/receipt of such a gratuity, the private relationship must be the motive for the gift or §3 is violated; and

(2) the gift and receipt of the tickets in this case was apparently a single incident and not part of a pattern or practice of misconduct and involved a relatively small amount of value given and received.