Docket No. 537

In the Matter of Massachusetts Medical Society

December 14, 1995

Disposition Agreement




This Disposition Agreement ("Agreement") is entered into
between the State Ethics Commission ("Commission") and the
Massachusetts Medical Society ("Mass. Medical") pursuant to s.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, s.4(j).

On July 12, 1994, the Commission initiated, pursuant to G.L.
c. 268B, s.4(a), a preliminary inquiry into allegations that
Mass. Medical had violated the conflict of interest law, G.L. c.
268A. The Commission has concluded the inquiry and, on September
27, 1994, voted to find reasonable cause to believe that Mass.
Medical violated G.L. c. 268A, s.3.

The Commission and Mass. Medical now agree to the following
findings of fact and conclusions of law:

1. Mass. Medical is the oldest continuously operating
medical society in the country, having been incorporated by the
Massachusetts Legislature in 1781. The purpose of the Society is
to advance medical knowledge, to support professional and ethical
medical standards and to promote the health and well being of the
citizens of the Commonwealth.

2. Mass. Medical is a non-profit corporation whose
membership is made up of physicians, residents and medical
students who primarily reside or have professional activity in
Massachusetts. Mass. Medical is governed by a 524 member House
of Delegates and a 32 member Board of Trustees. Mass. Medical
has an elected president who serves a one-year term. Mass.
Medical currently has 15,251 members, most of whom pay annual
dues.

3. The medical profession in Massachusetts is subject to
many state laws. Numerous bills are filed in the Massachusetts
Legislature each year potentially affecting the medical
profession and the public health.[1] Mass. Medical monitors
proposed laws potentially affecting the medical profession and
the public health, and frequently seeks to promote, oppose or
otherwise influence such legislation.

4. Mass. Medical has many committees and departments
through which it advances the practice of medicine. During the
period here relevant, Mass. Medical had a Government Relations
Department which was responsible for monitoring Massachusetts
legislation of interest to Mass. Medical's members and presenting
Mass. Medical's position on such proposed laws to members of the
Legislature.

5. Mass. Medical employed lobbyists, including Andrew Hunt
("Hunt"), who was, at all times here relevant, a Massachusetts
registered legislative agent for Mass. Medical. He was assigned
to the Government Relations Department and functioned as a full-
time lobbyist for Mass. Medical in dealing with the Massachusetts
Legislature. In this role, he tracked health care legislation of
interest to Mass. Medical, coordinated testimony and
presentations to legislative committees, and met with various
legislators and their staff.

6. In order to effectively present Mass. Medical's
position on legislation to state legislators, Hunt developed and
maintained personal relationships with legislators and their
staff people. These personal relationships ensured that Hunt
would have access to these government officials so that Mass.
Medical's position on proposed laws could be presented.

7. During the period here relevant, one way in which Hunt
created strong, personal relationships with Massachusetts
legislators was by providing them with free meals and drinks,
golf, and other gratuities. These gratuities created and/or
fostered goodwill and personal relationships between the public
officials and Hunt which, in turn, enhanced Hunt's access to the
public officials.

8. During the period here relevant, Hunt submitted a
monthly expense report to Mass. Medical listing each of his
expenses by amount, date and by reference to a general
description of the nature of the expense, such as "medical
malpractice" or "medicare." The reports, however, failed to
identify who was entertained. In any event, Mass. Medical paid
for all of these expenses.

9. Hunt has refused to now identify who was entertained.

10. Between July 1989 and April 1993, Hunt provided
individual Massachusetts legislators with meals, golf and other
entertainment worth $50 or more on numerous occasions. The value
of this entertainment was approximately $15,000.[2] Examples of
such entertainment are as follows.

a. From December 8 to December 14, 1992, Hunt was in
Puerto Rico. There was a Council of State Governments ("CSG")
conference being held in San Juan at the time. Hunt stayed at
the Las Palmas del Mar Resort on the southern coast of Puerto
Rico with several legislators and a number of Massachusetts
lobbyists. On December 13, 1992, Hunt and another Massachusetts
lobbyist went on a fishing excursion with two representatives and
their spouses. For that purpose, Hunt and the other lobbyist
chartered a 40- foot fishing vessel with a captain and one-member
crew. The boat trip lasted several hours and included deep sea
fishing, a stop for snorkeling, and a box lunch. The cost of
chartering the boat was $766, split equally between Hunt and the
other lobbyist. Thus, Hunt provided each legislator and his
spouse with entertainment at a cost to him of $128 per couple.

b. Between March 10 and March 15, 1993, Hunt stayed at the
Plantation Resort at Amelia Island, Florida, where an educational
conference sponsored by the Conference of Insurance Legislators
("COIL") ran from March 11th to March 14th. Hunt stayed at the
Plantation Resort with a number of Massachusetts legislators and
lobbyists. During his stay, Hunt paid a total of $240 in greens
fees for three Massachusetts legislators. (The cost of each
greens fee was approximately $80.)

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.

12. Massachusetts legislators and their staff are state
employees.

13. Anything with a value of $50 or more is of substantial
value for s.3 purposes.[3]

14. By giving individual Massachusetts legislators or their
staff gratuities worth $50 or more while each such legislator or
staff member was, recently had been, or soon would be in a
position to take official action concerning proposed legislative
matters which could affect the financial or other interests of
Mass. Medical's members, Mass. Medical's legislative agent gave
those legislators and their staff members gifts of substantial
value for or because of acts within their official responsibility
performed or to be performed by them. As a corporation, Mass.
Medical acts through and is responsible for the conduct of its
employees. Because it is responsible for the conduct of its
legislative agent, Mass. Medical violated G.L. c. 268A,
s.3(a).[4]

15. The Commission is not aware of any evidence that (a)
Mass. Medical gave any of the foregoing gratuities to legislators
with the intent to influence any specific official act by them as
legislators; or (b) that the legislators in return for the
gratuities took any official action concerning any proposed
legislation which would have affected Mass. Medical. In other
words, the Commission is not aware of a quid pro quo. Even if
the conduct of Mass. Medical was only intended to create
goodwill, it was still impermissible.

16. Mass. Medical, through its current officers, has
cooperated with the Commission in its investigation.[5]

In view of the foregoing violations of G.L. c. 268A, s.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 Mass. Medical:

(1) that Mass. Medical pay to the Commission the sum
of forty-five thousand dollars ($45,000) as a civil
fine for violating G.L. c. 268A, s.3(a); and

(2) that Mass. Medical waives 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.

-------------------------
[1] Many of these bills have a potential economic impact on
Mass. Medical's members.

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[2] As discussed, Hunt's records do not identify who he
entertained. The Commission, however, has based the $15,000
figure on the following: (1) certain legislators have identified
themselves as having been entertained by Hunt; (2) a significant
portion of the expenses were incurred at conferences attended by
Massachusetts legislators; (3) the amount of expenses was far in
excess of any amount Hunt could have incurred for his own expense
and expenses in connection with that portion of his job that did
not involve him in dealing with legislators or their staff; and
(4) Hunt's refusal to testify precluded the Commission from
obtaining direct evidence of the amount of the gratuities and
accordingly, because of the unavailability of such direct
evidence, the Commission has drawn an adverse inference that on
numerous occasions during this time period he did provide (as a
Mass. Medical lobbyist) $50 or more in entertainment value to
Massachusetts legislators.

As noted, neither the Commission nor Mass. Medical had
sufficient information to determine the actual amount of
gratuities Hunt provided to Massachusetts legislators between
July 1989 and April 1993. However, in order to bring closure to
this matter by the Disposition Agreement, Mass. Medical has
stipulated to the figure set by the Commission.

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

[4] 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,

[E]ven in the absence of any specifically identifiable
matter that was, is or soon will be pending before the
official, section 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 as yet
unidentified "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. See In re John
Hancock Mutual Life Insurance Company, 1994 SEC 646 (Hancock
violated s.3(a) by providing meals, golf and event tickets to
legislators); 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 a $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." See 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. See In re Stone
and Webster, 1991 SEC 522, and In re State Street Bank, 1992 SEC
582.

In arriving at the $50 or more expense figure, the
Commission would include all expenses on a single day or at a
single conference attributable to a specific legislator. For
example, a lunch and dinner on a given day for a legislator might
cost less than $50, but if totalled they equaled or exceeded $50,
they would be included. In addition, where the lobbyist paid for
a legislator's spouse's expenses, those expenses would be
attributed to the legislator.

On the present facts, s.3 applies to entertainment of
legislators and their staff by Mass. Medical's lobbyist where the
intent was generally to create goodwill and the opportunity for
access, even if specific legislation was not discussed.

[5] The Commission also notes that within days of the
Disposition Agreement entered into by John Hancock (1994 SEC 646,
dated March 21, 1994), Mass. Medical implemented a written policy
to bring all expenditures in line with the standards outlined in
that Disposition Agreement. This was before the Commission
notified Mass. Medical that it was the subject of a Preliminary
Inquiry. The policy memorandum, dated March 29, 1994, provides
that no legislative agent, government relations staffer or
consultant should expend $100 or more cumulatively over the
course of any year on gifts, entertainment of any kind, including
meals and drinks, on any one legislator and his or her family
members, and further that on any given occasion, gifts and
entertainment of any kind, including meals and drinks, totaling
$50 to any one legislator and his or her family are prohibited.

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