Docket No. 509

In the Matter of Michael P. Walsh

November 16, 1994

Disposition Agreement


This Disposition Agreement ("Agreement") is entered into
between the State Ethics Commission ("Commission") and Michael P.
Walsh ("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 August 9, 1993, the Commission initiated, pursuant to G.L.
c. 268B, s.4(a), a preliminary inquiry into allegations that Walsh
had violated the conflict of interest law, G.L. c. 268A. The
Commission has concluded its inquiry and, on July 12, 1994, voted
to find reasonable cause to believe that Walsh violated G.L. c.
268A, s.3.

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

1. Walsh has served in the state legislature from January
1983 to the present. During that time, Walsh has served on various
committees, including the Joint Committee on Insurance (until
February 1988) where he served as vice chairman. Walsh is
currently the chairman of the Government Regulations Committee.

2. As a state representative, Walsh has sponsored and co-
sponsored bills affecting the interests of the insurance industry.

3. In addition, Walsh, as a member of various committees,
has participated in many hearings on bills of interest to the
insurance industry. Such

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participation has included voting on whether such bills should be
reported out of committee. Walsh has also 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 fifty 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 and lobbyist for the Massachusetts
Medical Society, which represents the interests of medical
professionals in Massachusetts.

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

7. At all relevant times, Walsh knew that Sawyer and Scott
were lobbyists for Hancock. At all relevant times, Walsh also knew
that Carroll was a lobbyist for LIAM and that Hunt was a lobbyist
for the Massachusetts Medical Society. From time to time, these
four individuals lobbied 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. On December 8, 1990, Scott paid $68 for Walsh to golf at
the Mahogany Run Golf Course in St. Thomas in the Virgin Islands,
where Walsh was attending a Council of State Governments
conference.

11. In March 1991, while Walsh was attending a National
Conference of Insurance Legislators ("NCOIL") conference in
Savannah, Georgia, Sawyer paid for Walsh's golf and related
expenses at Sea Pines Plantation, at a cost of $163, and provided
Walsh and his guest with at least one free meal costing in excess
of $50. Thus, in March 1991, Walsh received gratuities from Sawyer
totalling more than $213.

12. During the fall of 1992, Sawyer provided Walsh with two
Hancock tickets for Phantom of the Opera at the Wang Center. Walsh
attended the show with his wife. These two tickets were worth
$120.

13. Between March 10, 1993 and March 15, 1993, Walsh and his
wife stayed at the Plantation Resort at Amelia Island, Florida,
where he attended a conference sponsored by NCOIL which ran from
March 11th to March 14th. Walsh stayed at the Plantation Resort
with a number of other legislators and Massachusetts lobbyists.

On the evening of March 11, 1993, Walsh and his wife ate
dinner at the Plantation Resort with Sawyer and a group of
Massachusetts legislators. Sawyer paid for the dinner. The value
of this gratuity was at least $50.

On the evening of March 12, 1993, Walsh and his wife ate
dinner at the Ritz Carlton with a group of Massachusetts
legislators and lobbyists. Carroll, the lobbyist representing
LIAM, paid for this dinner.[1] The total cost of the dinner was
approximately $3,000. The Walshes' pro rata share of the cost of
the dinner was approximately $150.

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

14. 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.

15. Massachusetts legislators are state employees.

16. Anything worth $50 or more is of substantial value for
s.3 purposes.[2]

17. By accepting a total of approximately $700 in drinks,
meals, lodging, golf and theater entertainment from Scott, Sawyer,
Carroll and Hunt, all while Walsh was in a position to take
official actions which could benefit those legislative agents
and/or their principals, 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,
Walsh violated s.3(b).[3]

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18. The Commission is aware of no evidence that the
gratuities referenced above were provided to Walsh 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 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.[4]

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

(1) that Walsh pay to the Commission the sum of two
thousand, one hundred dollars ($2,100.00)[5]; and

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

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

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

[3] 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 John Hancock Life
Insurance Company, 1994 SEC ____ (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
$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.

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

[4] As discussed above in footnote 3, 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 Walsh.

[5] This amount is three times the $700 approximate total value of
the prohibited gratuities received by Walsh and represents both a
disgorgement of the gratuities and a civil sanction.

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