28th Annual Report
January 1, 2006 through
december 31, 2006
General
statutory implementation
The State Ethics Commission met in regular session 9
times during Calendar Year 2006 and considered issues related to all areas of
its statutory mandate: financial disclosure, conflict of interest, lobbyist
disclosure and conduct restrictions, local government ethics laws, school board
ethics regulations, advisory opinions, enforcement matters, employee training,
lobbyist training and public information activities. It also met one time for the expressed
purpose of long term planning, at which meeting no other issues were
considered.
The State Ethics Commission, as directed in State
Government Article § 15-205, must administer the provisions of the Public
Ethics Law; prescribe and provide forms for each document required by the
Public Ethics Law; retain as a public record each document filed with the
Commission for at least four years after receipt; periodically review the
adequacy of public ethics laws; review each statement and report filed in
accordance with the Public Ethics Law and notify officials and employees of any
omissions or deficiencies; and publish and make available to persons subject to
the Public Ethics Law, and to the public, information that explains the
provisions of the Law, the duties imposed by it, and the means for enforcing
it.
The Commission is required to compile annually, by
March 1st, a list of entities doing business with the state during
the preceding calendar year and make this information available to individuals
required to file annual financial disclosure statements; to provide training
courses for public officials and for regulated lobbyists; and to submit to the
General Assembly an annual report on its activities.
In 1999, the Legislature added § 15-602(d) to the
Public Ethics Law, requiring the Commission to develop procedures under which
financial disclosure statements could be filed electronically and without
additional cost to the individual filing the statement. As funding became available in FY 2005,
electronic filing was developed and offered to all financial disclosure filers
for reporting year 2004. More than 6,000
of the 11,000 filers took advantage of electronic filing that first year. The improved efficiency resulting from the
electronic process permitted the Commission staff to complete the review of
more than 2,600 statements by the end of May 2005, a process that took many
months to accomplish in the review of paper forms. For reporting year 2005, more than 8,000
filers utilized the electronic filing system, and Commission staff reviewed
more than 4,000 financial disclosure statements for reporting year 2005.
In 2001, the Legislature added § 15-709 to the
Public Ethics Law, requiring the Commission to develop procedures under which
lobbying reports could be filed electronically without additional cost to the
individual who would opt to file electronically, and to make the filed reports
available for public inspection electronically.
In 2005, the Commission, working with its technology contractor,
developed a process by which regulated lobbyists could begin the registration
process and complete and submit all lobbying reports electronically and by
which the public would have immediate access to electronically submitted
reports. Electronic registration for
lobbyists became available November 1, 2005, and electronic lobbying reporting
for event reports and activity reports for the lobbying period of November 1,
2005 through April 30, 2006 was on-line before the end of calendar year
2005. During calendar year 2006, all
lobbying registrations, event reports and activity reports were either
submitted electronically or electronically input by Commission staff, and all
registrations and reports were available to the public electronically from our
website, http://ethics.gov.state.md.us.
The Commission staff continued to place substantial
emphasis on the training for public officials and employees and regulated
lobbyists. In its Strategic Plan, the
Commission asserted its commitment to education and training on its belief that
increased and improved education and training will lead to an increase in
advice responsibilities and a decrease in the volume of enforcement
actions. Commission staff has continued
to focus on providing training to smaller groups of employees at their
particular agencies, which has permitted the training to address the specific
ethical issues confronted by State employees and public officials in their
particular service to the public. This
has resulted in a marked increase in the requests for advice that come to the
Commission from employees and public officials.
During calendar year 2006, the Commission conducted 20 general ethics
training programs for agencies, boards and commissions, attended by 622 State
employees and public officials, focusing on conflicts of interest and the
electronic filing process for financial disclosure statements. The 20 training programs and 622 attendees
satisfying the mandatory training sessions required in the Public Ethics Law §
15-205(d). In addition, the Commission
staff conducted 18 additional training sessions addressing conflicts of
interest, electronic filing and procurement attended by an additional 979
members of public and special interest groups, bringing total number of
individuals who attended general ethics and conflicts of interest training to
1601. The Commission staff also
conducted six lobbying training programs, attended by 149 regulated lobbyists
pursuant to Public Ethics Law § 15-205(e), and two additional lobbying programs
attended by an additional 50 members of chambers of commerce and other
non-profit organizations. The lobbying
programs focused on electronic filing and general lobbying prohibitions and
reporting requirements.
After a year-long review, on December 5, 2006, the
Office of Legislative Audits completed and published the results of its
performance audit of the State Ethics Commission. The audit was limited in scope to the
financial disclosure program and the Commission’s enforcement process, and it
compared the
In June 2003, the Commission conducted a complaint
hearing on charges of lobbying violations by lobbyist Bruce C. Bereano. The Commission issued its decision and public
order on June 30, 2003, finding a violation of § 15-713(1) for being engaged
for lobbying purposes for contingent compensation. On December 28, 2004, the Honorable Raymond
Kane of the Howard County Circuit Court, in case No. 13-C-03-057038, upheld the
Commission’s decision and sanction of a 10-month suspension of Mr. Bereano’s
lobbying registrations. Mr. Bereano’s appeal of Judge Kane’s decision was heard
in the Court of Special Appeals on November 9, 2005. On November 9, 2006, the Court of Special
Appeals upheld Judge Kane’s decision. On
December 8, 2006, Mr. Bereano filed for reconsideration, and on December 29,
2006, the Commission filed its response to Mr. Bereano’s motion.
In April 2006, Governor Ehrlich appointed Paul
Vettori to fill the vacancy created by the expiration of Dorothy Fait’s term of
appointment. On September 25, 2006, H.
Richard Duden was nominated by Speaker of the House of Delegates, Michael
Busch, to fill the vacancy created by the resignation of Darryl Jones. The Governor subsequently appointed Mr. Duden
to a term ending June 30, 2009. In June
2006, Julian L. Lapides was elected by the other members as Chairman of the
Commission.
The Fiscal Year 2007 budget was approved for General
Funds of $623,194 and Special Funds of $126,884, for a total appropriate of
$750,078.
The audit, which began in 2005, involved a detailed
examination and analysis of the Commission’s financial disclosure program,
enforcement process and the Public Ethics Law itself. The Executive Summary stated, in pertinent
part:
The Office of Legislative Audits conducted a
performance audit to assess the adequacy
of the State Ethics Commission’s administration of the
with respect to the State’s Executive Branch employees. The audit had two stated
objectives, the results of which are summarized in the following two
sections.
Our audit disclosed that the structure of the
ethics oversight in
one of the most comprehensive financial reporting processes, with one
of the largest
filing groups in the nation. Coupling this with a comparatively small
Commission
staff size, a lack of sophisticated automated analysis tools (to review
financial reports),
and the centralized nature of the monitoring (in which State agencies
are not required
to take an active role), the result is weak oversight and a reduction
in the potential
effectiveness of the ethics law.
During the course of our audit, there were
indications that the Commission is
understaffed given its current responsibilities, especially considering
the comprehensive
annual reporting that is undertaken by a large number of public
employees and
officials (not to mention lobbyists, which were excluded from our
audit).
The audit contained eleven findings and
recommendations related to various aspects of the Commission’s performance in
the scrutinized programs to which it responded both in writing and at a hearing
before the Legislative Joint Audit Committee on December 14, 2006. A copy of the Findings, Recommendations and
Responses is attached to this Annual Report as Appendix E.
The Maryland Public
Ethics Law §§ 15-301 through 15-303 provides that the State Ethics Commission
may issue formal advisory opinions in response to requests from officials,
employees, lobbyists, and others who are subject to the Ethics Law. Formal opinions generally follow an
appearance before the Commission by the requestor, are published in the
Maryland Register, and are accessible electronically through State Documents in
COMAR Title 19A. The Commission’s
regulations, COMAR 19A.01.02.05, also permit the staff and the Commission to
provide informal advice. Informal advice
generally results in a letter or email to the requestor referencing prior
formal and informal Commission opinions addressing similar facts and issues.
The State Ethics
Commission is responsible for interpreting the Public Ethics Law. In late 1979, when the Commission was
established, most advice requests resulted in published formal opinions. During its first five years of operation, the
Commission issued a total of 205 formal opinions, and during the next five
years, another 128 formal opinions were issued.
As a result, there is a large body of published opinions available to
the Commission staff providing guidance in response to advice requests. During its twenty-eight years in existence,
the Commission has issued a total of 491 formal opinions. During the past five
years the number of formal opinions has decreased while informal reviews and
letter advice have increased. A major factor reducing the need for formal
Commission opinions is the large number of existing opinions that provide
guidance to the staff in responding to requests for informal advice, thus
expediting the advice process.
During calendar year
2006, the Commission issued three (3) formal published opinions. The first (Opinion No. 06-01) was the result
of a request of a President of a Board of County Commissioners regarding his
County’s Ethics Ordinance. He asked whether the conflict of interest provisions
of the County’s Ethics Ordinance were similar to the conflict of interest
provisions in Subtitle 5 of the Maryland Public Ethics Law and whether the
County was in compliance with the requirements of Section 15-804 of the Public
Ethics Law. The Commission devoted substantial time and staff resources to this
request in order to use it as a vehicle to discuss the Commission’s
responsibilities regarding the review and approval of substantive provisions of
county and municipal government ethics ordinances. Opinion No. 06-01 also addressed which
post-1979 amendments to the conflict of interest, financial disclosure, and
lobbying provisions of the State Law should be imposed on local subdivisions
and municipalities pursuant to the requirements of Sections 15-803 and 15-808
of the Law.
Opinion No. 06-02
addressed the procurement participation restrictions of Section 15-508 and its
application to members (and their employers) of a volunteer study group
established by a State agency. Specifically, the Commission advised the
Executive Director of the Maryland Health Care Commission (“MHCC”) that the
activities of the Primary Percutaneous Coronary Intervention (“PCI”) Data Work
Group, a volunteer group established by another Advisory Committee to the MHCC,
were sufficiently related to a proposed request for proposals to establish and
operate a PCI Data Center to be viewed as assistance in the drafting of the
specifications thus precluding members of the Data Work Group and their
employers from submitting proposals in response to the RFP.
Opinion No. 06-03 advised
a newly hired employee of the Maryland Institute for Emergency Medical Services
that she could continue to have part-time employment as a weekend ambulance
driver with a commercial ambulance service subject to certain restrictions
proposed by her agency. The opinion discussed the general restrictions on
secondary employment (§ 15-502) and the application of the Commission’s
exception regulations (COMAR 19A.02.01).
The Commission’s informal
docket, initiated in 2002, logs requests for advice resulting in informal
advice from the staff or Commission. The
log may include telephone advice or responses to routine questions from
individuals who either call, email or walk-into the office. The Commission and its staff provided
informal advice in the following subject areas during calendar years 2004
through 2006:
|
Subject
Matter of the Advice |
2006 |
2005 |
2004 |
|
Lobbying Registration,
Reporting and Conduct |
5 |
9 |
11 |
|
Secondary employment
Advice |
110 |
121 |
108 |
|
Participation Advice |
15 |
21 |
17 |
|
Procurement Restrictions |
8 |
15 |
6 |
|
Post-Employment Advice |
17 |
23 |
13 |
|
Gift Questions |
17 |
22 |
21 |
|
Other |
28 |
40 |
220 |
|
Total |
200 |
251 |
220 |
The number of informal
matters decreased in 2006 compared to 2005. The 110 informal secondary
employment requests considered in 2006 arose from the following Departments and
agencies:
DEPARTMENT |
2006 |
2005 |
2004 |
|
Department of Human
Resources |
45 |
33 |
40 |
|
Department of Health and
Mental Hygiene |
18 |
30 |
22 |
|
Department of
Transportation |
5 |
13 |
4 |
|
Executive Department |
1 |
4 |
5 |
|
Department of Agriculture |
1 |
1 |
3 |
|
University System of |
1 |
5 |
2 |
|
Dept. of Public Safety
& Correctional Services |
2 |