Settlement  In the Matter of Leon Stamps

Date:	05/14/1991
Organization:	State Ethics Commission
Docket Number:	412

Disposition Agreement

This Disposition Agreement (Agreement) is entered into between the State Ethics Commission (Commission) and Leon Stamps (Mr. Stamps) pursuant to section 5(d) 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 a preliminary inquiry pursuant to G.L. c. 268B, §4(a) into possible violations of the conflict of interest law, G.L. c. 268A, involving Mr. Stamps. At the conclusion of this inquiry, on November 9, 1989, the Commission found reasonable cause to believe that Mr. Stamps had violated G.L. c. 268A, §3.

The Commission and Mr. Stamps now agree to the following findings of fact and conclusions of law:

1.  Mr. Stamps has been the Auditor for the City of Boston since 1984.  As Auditor, he is an ex officio member of the three-person Retirement Board for the City of Boston.  The Retirement Board invests the funds (a total of approximately $780 million) contributed by city workers towards their pensions.

2.  Since 1979 the Trust Department of the State Street Bank and Trust Company has been the custodian of these funds for the City of Boston Retirement Board.  In the past two years the money has generated custodial fees of approximately $400,000 per year to State Street Bank.  In September of 1988, the City of Boston Retirement Board also transferred $70 million to a passive account at State Street Bank which generates approximately $70,000 in annual fees to the Bank.

3.  In 1987 and 1988, the Trust Department of the State Street Bank held its “Annual Master Trust Client Conference” in Arizona. Clients of the bank’s Trust Department were invited to attend these conferences, with all expenses (other than airfare) paid by the bank.

4.  In 1987 the conference was held at the Biltmore Hotel in Phoenix, Arizona from March 1, 1987 to March 4, 1987.  Over the three days, participants attended informational sessions in the mornings and were offered a variety of social events and entertainment in the afternoons and evenings.

5.  In 1988 the conference was held in Tucson, Arizona, from February 28, 1988 to March 2, 1988 and the agenda was the same.

6.  In both 1987 and 1988 the State Street Bank invited Mr. Stamps to attend and Mr. Stamps did attend both conferences. All of his expenses except for airfare, a total of $1,716.67, were paid by the State Street Bank.

7.  In 1987 Mr. Stamps obtained prior approval for the trip from the Mayor of the City of Boston, but did not inform him that the bank was paying all costs but airfare.  In 1988, Mr. Stamps obtained prior approval for the trip from the Mayor and informed him that State Street Bank would be paying all costs but airfare.

8.  Mr. Stamps did not consult the City Corporation Counsel prior to accepting the invitations.  Following press reports of the trips, at the advice of the Corporation Counsel, Mr. Stamps obtained a bill from State Street Bank for the two trips in the amount of $1,716.67, which the City of Boston then paid.

9.  Section 3(b) of G.L. c. 268A prohibits, other than as provided by law, a municipal employee from directly or indirectly receiving “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” the employee.[1]  The Commission may impose a fine of up to $2,000 for a violation of §3.

10.  By accepting invitations for two years to expense-paid conferences offered by a bank with which Mr. Stamps had dealings in his official capacity as a member of the City of Boston Retirement Board, Mr. Stamps violated §3(b).  There are no exemptions allowed by the statute.  Therefore, the fact that the Mayor approved Mr. Stamp’s attendance at the conference does not alter the findings here.  An appointing authority cannot exempt a subordinate from the prohibition against accepting gifts from public vendors.

11.  The Commission has found no evidence suggesting corrupt intent or an intentional or knowing violation of the law by Mr. Stamps. In view of the foregoing violations of G.L. c. 268A, §3 by Mr. Stamps, the Commission has determined that the public interest will be served by the disposition of this matter without further enforcement proceedings on the basis of the following terms and conditions agreed to by Mr. Stamps:

     (1) that the Commission be paid the amount of fifteen hundred dollars ($1,500.00) as a civil penalty for his violations of §3; and

     (2) that he 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 civil proceeding to which the Commission is a party.

[1] Jn the past, the Commission has considered entertainment expenses in the amount of $50.00 to constitute "substantial value." Public Enforcement Letter 88-1. See Commission Advisory No. 8 issued May 14, 1985. Moreover, for §3 purposes, it is unnecessary to prove that the gratuities given were generated by some specific identifiable act performed or to be performed. The prohibitions of this section are prophylactic in nature and apply where the parties act without corrupt intent and even though no official act is improperly influenced by the benefit conferred.  It is sufficient that the gratuities are given the official "in the course of his everyday duties for or because of official acts performed or to be performed by him and which could affect the gift giver." United States v. Standefer, 452 F. supp. 1178, 1183 (W.D. Pa. 1978), aff’d 610 F.2d 1076 (3rd Cir. 1976), aff’d on other grounds, 447 U.S. 10 (1980); See also United States v. Niederberger, 580 F.2d 455 (5th Cir. 1978); United States v. Evans, 572 F.2d 455 (5th Cir. 1978). As the Commission explained in Advisory No. 8:

[Even] in the absence of any specifically identifiable matter that was, is or soon will be pending before the official, §3 may apply. ...[W]here there is no prior social or business relationship between the giver and the recipient, and the recipient is a public official who 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.”