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Opinion

Opinion EC-COI-91-13

Date: 09/11/1991
Organization: State Ethics Commission

G.L. c. 268A, section 23(b)(2) prohibits selectmen from accepting a token donation from a private party for the purpose of eligibility in the municipal agency health insurance program.

Facts

FACTS:

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You are presently a Selectman in the Town of Northbridge. In the FY1991 and FY1992 budgets, the Town Meeting approved a line item providing no compensation for Selectmen. The Selectmen had recommended this line item to assist in alleviating a budget crisis in Town. Although uncompensated, several of the Selectmen continued to receive health benefits through the Town's group insurance policy under a 1977 Town By-law which provided that compensated and uncompensated employees were eligible for health insurance if their respective boards met certain criteria, such as frequency of meetings. 

Recently, the Northbridge Finance Committee has requested that uncompensated employees be removed from the group health insurance policy pursuant to G.L. c. 32B, the statutory contributory group insurance scheme for county and municipal employees. G.L. c. 32B defines an employee as a person in the service of any political subdivision of the Commonwealth and who receives compensation for such service. G.L. c. 32B, s.2. The definition includes elected and appointed officials. Northbridge Town Counsel has confirmed that c. 32B is applicable to the Town and that the Selectmen must receive compensation in order to be eligible for health benefits. It is estimated that the municipality's contribution to each health insurance premium is approximately $5,000 per year.  

At the time that the Selectmen relinquished their salaries, they were not aware that they would be ineligible for the group insurance coverage. At one of the Selectmen's meetings, a former Selectman offered to donate $5.00 for the purpose of creating a $1.00 salary for each Selectman so that the Selectmen would remain eligible for group insurance.

Question

 Does G.L. c. 268A permit the Selectmen to accept the $5.00 donation?

Answer

No.

Discussion

Selectmen, as municipal officials, are subject to G.L. c. 268A, s.23(b)(2), which prohibits a municipal official from using or attempting to use his position to secure for himself or others unwarranted privileges or exemptions which are of substantial value and which are not properly available to similarly situated individuals. At issue is whether the Selectmen, by accepting the donation, are securing an unwarranted privilege of substantial value that is not available to other similarly situated individuals. 

In past precedent, the State Ethics Commission and the Massachusetts courts have considered a benefit to be of substantial value if it is worth $50 or more. See Commonwealth v. Famigletti, 4 Mass. App. Ct. 584 (1976); {Commission Advisory No. 2}; EC-COI-85-42. In its cases, "the Commission has recognized that 'substantial value' is a standard to be dealt with by judicial interpretation in relation to the facts of the particular case and is more desirable than the imposition of a fixed valuation formula." In the Matter of William A. Burke, Jr., 1985 SEC 248, 251. Among the factors the Ethics Commission will weigh in a determination of whether an item is of substantial value are: the cumulative value of multiple gratuities, any facts which would enhance the face value, and the prospective worth and utility value of a benefit. See EC-COI-88-22 (cumulative value of car rental discounts exceeds $50); 83-70 (unpaid faculty appointment of substantial value); In the Matter of William A. Burke, Jr., 1985 SEC 248 (access to hospital's CEO is of substantial value). 

Under the circumstances you present, the Ethics Commission concludes that the intended benefit conferred on the Selectmen is not $1.00 salary, but rather, the eligibility for health benefits. This conclusion is based on the fact that the proffered donation is only a token salary and the real underlying purpose of the donation is to allow the Selectmen to continue health benefits. These health benefits are of substantial value. 

Further, the Ethics Commission concludes that acceptance of this donation would constitute an unwarranted privilege. Under G.L. c. 41, s.108, it is the responsibility of the town to set the salary and compensation of all elected officers and to revise any salary at a town meeting. See Amerige v. Saugus, 208 Mass. 51 (1911) (town, not selectmen, set compensation rates). At the Town Meetings, the Northbridge residents voted not to compensate their Board of Selectmen. Under these circumstances, a donation from a private party, which is used to obtain personal compensation and benefits that were not appropriated by a town meeting vote as required by law, constitutes an unwarranted privilege for purposes of G.L. c. 268A, s.23(b)(2). Acceptance of this donation is also unwarranted as it is being offered for the personal use of the Selectmen solely because of their status as Selectmen and is not available to other similarly situated individuals, such as all other uncompensated Town personnel. See EC-COI-87-7; 86-17; 86-14.

The Ethics Commission is aware that G.L. c. 44, s.53A permits selectmen to accept gifts on behalf of a municipality,[2] but we do not find that the statute is applicable where the Selectmen are approving a gift for their personal benefit. The Ethics Commission has suggested that c. 44, s.53A may be used as a vehicle by which a private party may pay expenses for public officials without violating G.L. c. 268A. See e.g., Public Enforcement Letters 90-1; 90-2; 90-5. But, implicit in the Commission's suggestion, are the facts that donations under c. 44, s.53A would be used to further 

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municipal purposes and that the Town's governing body would review the appropriateness of the gift.[3] For example, the Commission suggested that c. 44, s.53A may apply to vendor payment of travel expenses for fire chiefs to inspect fire trucks because the travel may serve a legitimate public purpose as fire trucks are manufactured to meet the needs of a specific municipality and the c. 44 procedures would allow scrutiny of the reasonableness of the expenses by other municipal officials. Public Enforcement Letter 90-2. See also, Public Enforcement Letter 90-1 (public interest in travel to inspect curriculum); Public Enforcement Letter 90-5 (may be public purpose in accepting travel packages permitting the Director of Haverhill Council on Aging to make decisions regarding packages offered to the elderly). 

Under the facts that you present, we do not find that the donation to the Board of Selectmen will be used to further municipal purposes. Rather, the donation will be used for the personal benefit of the individual selectmen to obtain health benefits. Compare EC-COI-89-23 (s.s.3 and 23 not violated by donation of computer for benefit of agency, not particular employee); 84-114 (s.s.3 and 23 not violated by donation of artwork for permanent exhibition in government agency and not for personal use of any employee) with EC-COI-87-7 (payment of trip expenses not connected with any municipal duties violates s.23); 86-14 (private automobile purchase discount violates s.23); 85-23 (private stock purchase violates s.23). Accordingly, G.L. c. 268A, s.23(b)(2) will prohibit the Northbridge Selectmen from accepting a token salary from a private party in order to continue health insurance benefits under a municipal group policy.[4] \

[1] You state that the former Selectman made his offer because he believed that the Selectmen's loss of health benefits was unfair where the Selectmen relinquished compensation in order to assist the Town and where past practice permitted uncompensated employees to receive health insurance benefits. This former Selectman does not have any official dealings with the Board of Selectmen.

[2] G.L. c. 44, s.53A provides, in pertinent part, that an officer or department of a town may accept grants or gif] from funds from the federal government or from a charitable foundation, a private corporation, an individual or the Commonwealth and may expend the funds for the purposes of the grant or gift with the approval of the Board of Selectmen without further appropriation.

[3] We note that c. 44, s.53A is titled " An Act Providing that Officers and Departments of Cities, Towns and Districts May Accept Grants or Gifts For Municipal Purposes and May Expend the Same Without Appropriation. " (emphasis added). According to legislative history this legislation was recommended in order to permit municipalities to accept all types of federal grants and to enable all municipal departments to accept grants and gifts for municipal purposes. Among the examples cited in the committee report were grants for public assistance or education. 1964 House No. 83

[4] We note that your facts also present issues under G.L. c. 268A, s.3. Section 3(b) prohibits a public official from accepting an item of substantial value for or because of any official act performed or to be performed by such employee. This section would be violated if the donor of the gift had official dealings before the Board of Selectmen. Because we find that s.23(b)(2) prohibits acceptance of the $5.00 donation, we need not decide, at this time, whether s.3 is violated when a gift is offered solely because of a public official's status as public official, without any further nexus between the donor and the donee.

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