Docket No. 491

In the Matter of Thomas P. Walsh

May 12, 1994

Disposition Agreement




This Disposition Agreement ("Agreement") is entered into
between the State Ethics Commission ("Commission") and Thomas P.
Walsh ("Rep. Walsh") 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.
Walsh 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. Walsh violated
G.L. c. 268A, s.3 and 23.

The Commission and Rep. Walsh now agree to the following
findings of fact and conclusions of law:

1. Rep. Walsh has served in the state legislature from
January 1987 to the present. During that time, Rep. Walsh has
served on various committees, including the Joint Committee on
Insurance where he has served as vice chairman since 1992.

2. Rep. Walsh has sponsored several bills affecting the
insurance industry.

3. In addition, Rep. Walsh, as a member of various
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.
Walsh also has voted on bills of interest to the insurance industry
when they reached the House floor.

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

5. During the period here relevant, Andrew Hunt ("Hunt") was
a registered legislative agent for the Massachusetts Medical
Society.

6. During the period here relevant, 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. Walsh knew that Sawyer and
Scott were lobbyists for Hancock. Rep. Walsh also knew that Hunt
was a lobbyist for the Massachusetts Medical Society and that
Carroll was a lobbyist for LIAM. On occasion, these individuals
lobbied Rep. Walsh regarding various pieces of legislation.

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

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. Sometime in 1989, Scott provided Rep. Walsh and a guest
of the representative with dinner and admission to Hancock's
private box at the Boston Garden to watch a Bruins game. Admission
to Hancock's box was alone valued at $128 for Rep. Walsh and his
guest. The cost of the dinner is not known.[1]

11. In January 1990, Sawyer provided Rep. Walsh and his wife
with dinner and admission to Hancock's private box at the Boston
Garden to watch a Celtics game. Admission to Hancock's box was
alone valued at $141 for Rep. Walsh and his wife. The cost of
the dinner is not known.[2]

12. In November 1991, Sawyer provided Rep. Walsh with two
Hancock tickets to a Harry Connick, Jr. concert at the Wang Center.

These two tickets were worth $68[3].

13. In December 1992, Sawyer provided Rep. Walsh with two
Hancock tickets for the Nutcracker at the Wang Center. These two
tickets were worth $92.[4]



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14. Between March 10, 1993 and March 15, 1993, Rep. Walsh and
his spouse stayed at the Plantation Resort at Amelia Island,
Florida, where he attended an educational conference sponsored by
the Conference of Insurance Legislators which ran from March 11th
to March 14th. Rep. Walsh stayed at the Plantation Resort with a
number of other legislators and Massachusetts lobbyists.

On the evening of March 11, 1993, Rep. Walsh and his wife ate
dinner at the Plantation Resort with Sawyer and a group of
Massachusetts legislators. Sawyer paid for the dinner. The
Walshes' pro rata share of the cost of the dinner was $104.

On the evening of March 12, 1993, Rep. Walsh and his wife ate
dinner at the Ritz Carlton with a group of Massachusetts
legislators and lobbyists. Rep. Walsh did not pay for his or his
wife's meal. Rep. Walsh testified that, although he knew that
several Massachusetts lobbyists were at the meal, he did not know
who paid for the meal. Carroll, the lobbyist representing LIAM,
paid for this dinner.[5] The total cost of the dinner was
approximately $3,000. The Walshes' pro rata share of the cost of
the dinner was approximately $150.

While at Amelia Island, Rep. Walsh golfed twice. On March 11,
1993, Rep. Walsh golfed with Sawyer and two other Massachusetts
legislators. Rep. Walsh's golf fees were paid for by Sawyer at a
cost of $80. On March 15, 1993, Rep. Walsh golfed with Hunt and
two other Massachusetts legislators. Rep. Walsh's golf fees were
paid for by Hunt at a cost of $80.

15. 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.

16. Massachusetts legislators are state employees.

17. Anything worth $50 or more is of substantial value for
s.3 purposes.[6]
18. By accepting a total of approximately $693 in drinks,
meals, golf and theater entertainment from Sawyer, Scott and
Hunt[7], all while Rep. Walsh was in a position to take official
actions which could benefit those legislative agents and/or their
principals, Rep. Walsh accepted items of substantial value for or
because of official acts or acts within his official responsibility
performed or to be performed by him. In doing so, Rep. Walsh
violated s.3(b).[8]

19. As the facts above indicate, Rep. Walsh received, in
addition to the $693 in gratuities from Sawyer, Scott and Hunt, a
total of $150 in gratuities of $50 or more, where he did not know
the specific identity of the source of the gratuities.[9]

20. 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.

21. By accepting gratuities of $50 or more in value where he
did not know the specific identity of the donor, but had reason to
know that the donors were Massachusetts lobbyists, Rep. Walsh acted
in a manner which would cause a reasonable person knowing all these
facts to conclude that the lobbyists present could improperly
influence him in the performance of his official duties.[10] In
other words, Rep. Walsh knew or had reason to know that his actions
would create an appearance of favoritism. In so doing, Rep. Walsh
violated s.23(b)(3).[11]

22. The Commission is aware of no evidence that the
gratuities referenced above were provided to Rep. Walsh with the
intent to influence any specific act by him as a legislator or any
particular act within his official responsibility. Also, the
Commission is aware of no evidence that Rep. Walsh 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.[12]

23. Rep. Walsh cooperated with the Commission's
investigation.

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

(1) that Rep. Walsh pay to the Commission the sum of two
thousand, five hundred dollars ($2,500.00) for violating
G.L. c. 268A, s.3(b) and s.23(b)(3);[13] and
(r that Rep. Walsh waive all rights to contest the
findings of fact, conclusions of law, and terms and
conditions contained in this

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agreement in this or any related administrative or
judicial proceedings to which the Commission is or may be
a party.

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

[1] This dinner is not identified in Scott's records. Rep. Walsh
voluntarily disclosed the dinner in his testimony before the


Commission. He had no recollection as to its cost, but believed it
did not equal or exceed $50.

[2] This dinner is not identified in Sawyer's records. Rep. Walsh
voluntarily disclosed the dinner in his testimony before the
Commission. He had no recollection as to its cost, but believed it
did not equal or exceed $50.

[3] Rep. Walsh testified that Sawyer informed him that the tickets
were provided to Hancock free-of-charge in return for Hancock's
support of the Wang Center's restoration and that, thus, Rep. Walsh
believed that the value of the tickets was zero. Because Sawyer
has refused to testify in this matter, the Commission has been
unable to confirm Rep. Walsh's testimony on this point. However,
regardless of whether Hancock paid for the tickets and regardless
of what Sawyer may have told Rep. Walsh, the value of the tickets
for G.L. c. 268A purposes was the price at which such tickets were
available for purchase by the general public.

[4] See footnote 3.

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

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

[7] $128, Scott, 1989; $141, Sawyer, 1990; $68, Sawyer, 1991; $92,
Sawyer, 1992; $184, Sawyer, 1993; and $80, Hunt, 1993.

[8] 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. Walsh 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.

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

[9] The Walshes' $150 share of the March 12, 1993 dinner paid for
by Carroll.

[10] Moreover, no matter how carefully this matter is investigated,
the possibility can never be eliminated that Rep. Walsh 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.

[11] 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 his position. On
the foregoing facts, that could be inferred even though Rep. Walsh
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.

[12] As discussed above in footnote 8, 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, and such quid pro quo
understanding would raise extremely serious concerns under the
bribe section of the conflict of interest of 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. Walsh.

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[13] This amount is approximately three times the value of the $843
in prohibited gratuities received by Rep. Walsh in violation of s.3
and s.23(b)(3). It represents both a disgorgment of the gratuities
and a civil sanction.

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