December 10, 1990

 

DISPOSITION AGREEMENT

 

This Disposition Agreement (Agreement) is entered into between the State Ethics Commission (Commission) and Charles F. Flaherty (Rep. Flaherty) 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, §4(j).

On March 8, 1989, the Commission initiated, pursuant to G.L. c. 268B, §4(a), a preliminary inquiry into possible violations of the conflict of interest law, G.L. c. 268A, by Rep. Flaherty.  The Commission has concluded the inquiry and, on October 10, 1990, voted to find reasonable cause to believe that Rep. Flaherty violated G.L. c. 268A, §3.

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

1.  Rep. Flaherty has been a member of the state House of Representatives (House) since 1967 and the House Majority Leader since 1985.  As such, Rep. Flaherty is a state employee as that term is defined in G.L. c. 268A, §1(q).

2.  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.

3.  Ackerley Communications of Massachusetts, Inc. (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.

4.  Outdoor advertising in Massachusetts is regulated by state law.  In addition, from time to time bills are proposed in the 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 bad a substantial negative effect on Ackerley’s business in Massachusetts and on its financial interests.  Most, if not all, of these bills have 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.

5.  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.

6.  On November 16, 1988, Ackerley’s then president and its general manager for outdoor advertising operations, Louis R. Nickinello (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 Rep. Flaherty and Nickinello,[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, Ackerley’s registered legislative agent, Elizabeth Palumbo (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 Rep. Flaherty and Palumbo,[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 Rep. 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 Celtics game.  Rep. Flaherty did not inform his four guests that he had received the tickets from Ackerley.  While in the Ackerley skybox at the November 16, 1988 Celtics game, Rep. Flaherty and his guests were treated by Ackerley to complimentary food and beverages, at an average per person cost to Ackerley of approximately fifteen dollars.

10.  Section 3(b) of G.L. c. 268A prohibits a state employee from accepting anything of substantial value for himself for or because of any official act or act within his official responsibility performed or to be performed by him. Anything with a value of $50 or more is of substantial value for the purposes of §3.[3]

11.  By receiving the five free Ackerley skybox tickets from Nickinello and Palumbo, while, as a House member and as Majority Leader, he was in a position to take official action concerning proposed legislation which would affect Ackerley’s financial interests, Rep. Flaherty received a gift of substantial value for himself[4] for or because of acts within his official .n sponsibility performed or to be performed by him.[5] In so doing, Rep. Flaherty violated G.L. c.268A, §3(b).[6]

12.  The Commission is aware of no evidence that the November 16, 1988 Celtics tickets were received by Rep. Flaherty in return for his being influenced in his performance of any specific official act as a legislator or any particular act within his official responsibility. 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. 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.[7]  However, even if the gift and receipt of the tickets were only intended to create official goodwill, it was still impermissible.

In view of the foregoing violation of G.L. c. 268A §3(b), 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. Flaherty:

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

2. that Rep. Flaherty pay to the Commission the sum of one hundred and fifty dollars ($150.00) as a forfeiture of the unlawful benefit be received in accepting the five Ackerley skybox tickets[8]

3. that Rep. Flaherty undertake measures, agreeable to the Commission, to ensure that all House members are fully informed concerning the conflict of interest and financial disclosure laws, particularly as those laws apply to legislators, and are made aware that they may not accept gratuities in violation of G.L. c. 268A, §3;

4. that Rep. Flaherty will act in conformance with the requirements of G.L. c. 268A in his future conduct as a state employee; and

5. that Rep. Flaherty 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.[9]  



[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 notes Rep. Flaherty’s position that it was not his understanding that he would be held responsible for the acceptance of five tickets 499 under circumstances in which he intended to use only one ticket for himself.  Where a public employee receives several tickets to use at the employee’s discretion and the employee gives some or all of the tickets to others to use as his guests, however, the Commission views the employee as having received all of the tickets for himself and attributes to the employee the value of all the tickets received in determining whether substantial value was given and received for the purposes of G.L. c. 268A, §3. See, e.g., Public Enforcement Letter 89-2, 1988 Ethics Commission 360, 365 at footnote 6.

 

[5] 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 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 by 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 a 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.

 

[6] 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 section 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.

 

[7] 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.

 

[8] The Commission made clear in Advisory No. 8 that in appropriate cases it would seek to recover any economic advantage any person obtained in violating §3.

 

[9] 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 and a $150 forfeiture 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 6 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.