Docket No. 493

In the Matter of John F. Cox

May 12, 1994

Disposition Agreement


This Disposition Agreement ("Agreement") is entered into
between the State Ethics Commission ("Commission") and John F. Cox
("Rep. Cox") pursuant to s.5 of the Commission's Enforcement
Procedures. This Agreement constitutes a consented to final order
enforceable in the Superior Court, pursuant to G.L. c. 268B,
s.4(j).

On June 22, 1993, the Commission initiated, pursuant to G.L.
c. 268B, s.4(a), a preliminary inquiry into allegations that Rep.
Cox had violated the conflict of interest law, G.L. c. 268A. The
Commission has concluded its inquiry and, on January 25, 1994,
voted to find reasonable cause to believe that Rep. Cox violated
G.L. c. 268A, s.3 and 23(b)(3).

The Commission and Rep. Cox now agree to the following facts
and conclusions of law:

1. Rep. Cox has served in the state legislature from January
1983 to the present. During that time, he has served on a number
of committees including the Joint Committee on Insurance (1983-
1990), Banks and Banking (1982-1990), and the Committee on Bills in
the Third Reading (1990-1993, chair).

2. Rep. Cox has sponsored many bills affecting the insurance
industry.

3. In addition, Rep. Cox, as a member of various legislative
committees, has participated in many hearings on bills of interest
to the insurance industry. Such participation has included voting
on whether such bills should be reported out of committee. Rep.
Cox also voted on such bills on the House floor.

4. During the period relevant here, F. William Sawyer
("Sawyer") was the senior John Hancock Mutual Life Insurance
Company, Inc. ("Hancock") lobbyist responsible for Massachusetts
legislation. At all relevant times, he was a registered
legislative agent (for Hancock) in Massachusetts. Hancock, a
Massachusetts corporation, is the nation's sixth largest life
insurer doing business in all 50 states. It offers an array of
life, health and investment products. As a Massachusetts domiciled
life insurer, its activities are more comprehensively regulated by
Massachusetts than by any other state.

5. During the period relevant here, George Traylor
("Traylor") was a registered legislative agent in Massachusetts for
various clients, including the Medical Malpractice Joint
Underwriting Association of Massachusetts. The association
provides malpractice and incidental insurance coverage for
physicians, dentists, and hospitals.

6. During the period relevant here, William Carroll
("Carroll") was a registered legislative agent for the Life
Insurance Association of Massachusetts ("LIAM"). LIAM is a trade
association of life insurance companies doing business in
Massachusetts.

7. At all relevant times, Rep. Cox knew that Sawyer and
Carroll were Massachusetts registered lobbyists for Hancock and
LIAM, respectively. Rep. Cox also knew that Traylor was a
Massachusetts registered lobbyist representing a number of
different clients. On occasion these individuals lobbied Rep. Cox
regarding various pieces of legislation.

8. Lobbyists are employed to promote, oppose or influence
legislation.

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9. One way in which some lobbyists further their legislative
goals is to develop or maintain goodwill and personal relationships
with legislators to ensure effective access to them. Some
lobbyists entertain legislators through meals, drinks, golf and
sporting events in order to develop the desired goodwill and
personal relationships.

10. From December 8, 1992 to December 14, 1992, Rep. Cox and
his spouse were in Puerto Rico. Rep. Cox had registered to attend
a Council of State Government's ("CSG") conference in San Juan.
However, he and his spouse stayed at the Las Palmas del Mar Resort
on the southern coast of Puerto Rico. The resort is approximately
40 miles from San Juan. Rep. Cox stayed at Las Palmas with several
other legislators and a number of Massachusetts lobbyists. Rep.
Cox maintains he chose not to stay at the conference hotel in San
Juan because of safety concerns. According to Rep. Cox, because of
the distance from San Juan, he did not attend any of the CSG
conference functions.

On the evening of December 8, 1992, Rep. Cox and his spouse
ate at the Las Palmas Terrace, a restaurant at Las Palmas del Mar.
Rep. Cox did not pay for this meal. Sawyer's records indicate that
Sawyer paid, and that the Coxes' pro rata share of the cost of the
meal was $55.

Rep. Cox and his spouse ate at the Casa Verde restaurant at
Las Palmas del Mar on the evening of December 10, 1992. Again,
Rep. Cox did not pay for the meal. Sawyer's records indicate that
Sawyer paid, and the Coxes' pro rata share of the cost of the meal
was $70.

As to each of the foregoing instances, Rep. Cox testified
that, although he knew there were several Massachusetts lobbyists
staying at Las Palmas, he did not know who paid for these meals.

On December 13, 1992, Rep. Cox and his spouse, along with Rep.
Mara and his spouse, went on a fishing excursion with George
Traylor and another Massachusetts lobbyist. The boat was a 40 foot
fishing vessel with a captain and one member crew. The cost of
chartering the boat was $383. The boat trip lasted several hours
and included deep sea fishing and a stop for snorkeling. A box
lunch was provided. Rep. Cox did not know what, if any,
arrangements had been made between Traylor and the other lobbyist
to pay for this excursion, although he assumed that one or both of
them were paying for it. In fact, Traylor paid for the charter.
The Coxes' pro rata share of the cost of the charter was $128.

11. Between March 10, 1993 and March 14, 1993, Rep. Cox and
his spouse, along with several other legislators and lobbyists,
stayed at the Plantation Resort at Amelia Island, Florida. Most of
the legislators and lobbyists had registered to attend an
educational conference sponsored by the Conference of Insurance
Legislators. According to Rep. Cox, he planned to register for the
conference upon his arrival at Amelia Island but, due to inclement
weather and other circumstances, Rep. Cox neither registered for
nor attended conference events.

On the evening of March 12, 1993, Rep. Cox and his wife ate
dinner at the Ritz Carlton along with a group of Massachusetts
legislators and lobbyists. Again, Rep. Cox understood that one or
more private lobbyists paid for the dinner, although he did not
know which lobbyist paid. Carroll, the lobbyist representing LIAM,
paid for this dinner.[1] The total cost of the dinner was
approximately $3,000. The Coxes' pro rata share of the cost of the
meal was approximately $150.

Finally, Rep. Cox played two rounds of golf while at Amelia
Island. One was at an Amelia Island Plantation course, the other
at the Valley Course at Sawgrass, a golf course located at Ponte
Verde, Florida. Rep. Cox did not pay for his golfing expenses at
either course. He understood that one or more Massachusetts
lobbyists paid for these expenses. It is unclear which lobbyist
paid for these expenses. Greens fees and cart expenses per person
were $80 and $104[2] at Amelia Island and Sawgrass, respectively.

12. Section 3(b) of G.L. c. 268A prohibits a state employee
from directly or indirectly receiving anything of substantial value
for or because of any official act or act within his official
responsibility performed or to be performed by him.

13. Massachusetts legislators are state employees.

14. Anything worth $50 or more is of substantial value for
s.3 purposes.[3]

15. By accepting a $128 fishing boat excursion from Traylor,
while Rep. Cox was in a position to take official actions which
could benefit Traylor, Rep. Cox accepted items of substantial value
for or because of official acts or act within his official
responsibility performed or to be performed by him. In doing so he
violated s.3(b).[4],[5]

16. As the facts above indicate, Rep. Cox received, in
addition to the $128 fishing excursion gratuities, a total of
$459 in gratuities of $50 or

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more,[6] where he states he did not know the specific identity of
the source of the entertainment.

17. Section 23(b)(3) prohibits a public employee from
knowingly or with reason to know acting in a manner which would
cause a reasonable person knowing all of the circumstances to
conclude that anyone can improperly influence or unduly enjoy his
favor in the performance of his official duties.[7]

18. By accepting a total of $459 in entertainment of $50 or
more in value where he did not know the specific identity of the
donor, but did know that the donors were Massachusetts lobbyists,
Rep. Cox acted in a manner which would cause a reasonable person
knowing all these facts to conclude that the lobbyists present
could improperly influence Rep. Cox in the performance of his
official duties.[8] In so acting, he violated s.23(b)(3). In
other words, Rep. Cox knew or had reason to know that his actions
would create an appearance of favoritism.

19. The Commission is aware of no evidence that the
gratuities referenced above were provided to Rep. Cox with the
intent to influence any specific act by him as a legislator or any
particular act within his official responsibility. The Commission
is also aware of no evidence that Rep. Cox took any official action
concerning any proposed legislation which would affect any of the
registered Massachusetts lobbyists in return for the gratuities.
However, even though the gratuities were only intended to foster
official goodwill and access, they were still impermissible.[9]

20. Rep. Cox cooperated with the Commission's investigation.

In view of the foregoing violations of G.L. c. 268A by Rep.
Cox, 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 Rep. Cox:

(1) that Rep. Cox pay to the Commission the sum of one
thousand, seven hundred and fifty dollars ($1,750.00) for
violating G.L. c. 268A, s.3(b) and s.23(b)(3);[10] and

(2) that Rep. Cox waive all rights to contest the
findings of fact, conclusions of law and terms and
conditions contained in this agreement and in any related
administrative or judicial proceedings to which the
Commission is or may be a party.

---------------

[1] The Commission has evidence Carroll subsequently received
contributions of $500 and $600 from two of the Massachusetts
lobbyists who were at this meal.

[2] This $104 included the following: $80 greens fees, $18 for
one-half a cart, and $6 tax.

[3] See Commonwealth v. Famigletti, 4 Mass. App. Ct. 584, 587
(1976); EC-COI-93-14.

[4] See para. 19.

[5] For s.3 purposes, it is unnecessary to prove that the
gratuities given were generated by some specific identifiable act
performed or to be performed. As the Commission explained in
Advisory No. 8, issued May 14, 1985, prohibiting private parties
from giving free tickets worth $50 or more to public employees who
regulate them,

Even in the absence of any specifically identifiable
matter that was, is or soon will be pending before the
official, s.3 may apply. Thus, where there is no prior
social or business relationship between the giver and the
recipient, and the recipient is a public official who is
in a position to use [his] authority in a manner which
could affect the giver, an inference can be drawn that
the giver was seeking the goodwill of the official
because of a perception by the giver that the public
official's influence could benefit the giver. In such a
case, the gratuity is given for his yet unidentifiable
"acts to be performed."

Specifically, s.3 applies to generalized goodwill-engendering
entertainment of legislators by private parties, even where no
specific legislation is discussed. In re Flaherty, 1991 SEC 498,
issued December 10, 1990 (majority leader violates s.3 by accepting
six Celtics tickets from billboard company's lobbyists). In re
Massachusetts Candy and Tobacco Distributors, Inc., 1992 SEC 609
(company representing distributors violates s.3 by providing a free
day's outing [a barbecue lunch, golf or tennis, a cocktail hour and
a clam bake dinner], worth over $100 per person, to over 50
legislators, their staffers and family members, with the intent of
enhancing the distributors' image with the Legislature and where
the legislators were in a position to benefit the distributors).

Section 3 applies to meals and golf, including those occasions
motivated by business reasons, for example, the so-called "business
lunch". In re U.S. Trust, 1988 SEC 356. Finally, s.3 applies to
entertainment gratuities of $50 or more even in connection with
educational conferences. In re Stone & Webster, 1991 SEC 522, and
In re State Street Bank, 1992 SEC 582.

Rep. Cox has argued that s.3 does not apply to meals given to
legislators. There is nothing in the legislative history regarding
s.3 or the language of s.3 to support that argument. In the
Commission's view, s.3 applies to any form of entertainment,
including meals, given to any public official.

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On the present facts, s.3 applies to the lobbyists
entertaining Rep. Cox where the intent was generally to create
goodwill and the opportunity for access, even though specific
legislation was not discussed.

[6] 12/8/92 ($55); 12/10/92 ($70); 3/12/93 ($150); and 3/10/93 to
3/13/93 ($184).

[7] This conduct also raises issues under s.3 discussed above.
Nothing in s.3 requires that the public official know the source of
the gift. All that is required is that the public official know
that he is receiving the gift for or because of official acts or
acts within his official responsibility. On the foregoing facts,
that could be inferred even though Rep. Cox did not know the
specific identity of the donor. In any event, because this is a
matter of first impression, the Commission has decided to resolve
this conduct pursuant to s.23.

[8] Moreover, no matter how carefully this matter is investigated,
the possibility can never be eliminated that Rep. Cox would later
be told of the specific sources of the various gratuities described
above. This only adds to the appearance concern created by such
conduct.

[9] As discussed above in footnote 5, s.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, s.2.
Section 2 is not applicable in this case, however, as there was no
such quid pro quo between the lobbyists and Rep. Cox.

[10] This amount is approximately three times the value of the $587
in prohibited gratuities received by Rep. Cox. The fine reflects
the disgorgement of the improperly received gratuities plus a civil
sanction.

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