Illinois Public Pension Fund Association. Introduction to the Illinois. Objectives
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1 Introduction to the Illinois Gift Ban Act Richard J. Reimer Richard J. Reimer & Associates, LLC 15 Spinning Wheel, Suite 310 Hinsdale, IL Copyright 1 Objectives Definitions related to the Gift Ban Act Exceptions to the Gift Ban Act Penalties for violations of the Gift Ban Act Importance of being familiar with your municipality s local ordinance Copyright 2 Prohibition on Gifts Article 3 and Article 4 pension funds were faced with new broad sweeping legislation in 2009 Most controversial portion of this new pension reform legislation is the newly created section, 40 ILCS 5/1-125, entitled Prohibition on Gifts It is necessary to review the legislative history of the State Gift Ban Act Copyright 3
2 History Initial State Gift Ban Act became effective January 1, 1999 Required that local governments to develop some type of ethics ordinance or rules and regulations Local government need not adopt all the provisions of the Act, but was required to adopt its own ethics ordinance or rules to be patterned on the Act When initially enacted, the State Gift Ban Act contained 23 exceptions Current State Gift Ban Act, 5 ILCS Section 430/10-10, et seq. became effective December 9, 2008 and contains only twelve exceptions Copyright 4 New Section of Gift Ban Act New section 40 ILCS 5/1-125 of the Pension Code adopts the portions of the Gift Ban Act, which is contained in the State Officials and Employees Ethics Act, and makes them applicable to Article 3 and Article 4, Pension Fund Trustees Key intent is honesty, transparency and integrity in decision making Copyright 5 Definition of Gift Any gratuity, discount, entertainment, hospitality, loan, forbearance, or other tangible or intangible item having monetary value including, but not limited to, cash, food and drink, an honoraria for speaking engagements related to or attributed to government employment or the official position of an employee, member or officer (5 ILCS 430/1-5) Pension fund trustees of Article 3 or Article 4 funds may not accept gifts Copyright 6
3 Definition of Prohibited Source A person or entity who: Is seeking official action by the board or a board member Does business or seeks to do business with the board or the board member Has interest that may be substantially affected by the performance or non-performance of the official duties of the pension board member Is registered or required to be registered with the Secretary of State under the Lobbyist Legislation Act (an entity not otherwise a prohibited source does not become a prohibited source merely because a registered lobbyist is one of its members or serves on its board of directors) Copyright 7 Definition of Prohibitions Prohibits any trustee of an Article 3 or Article 4 pension fund from intentionally soliciting or accepting any gift from any prohibited source No definition on what constitutes an intentional solicitation or acceptance of any gift Copyright 8 Exceptions Opportunities, benefits and services that are available on the same conditions and to the general public Anything for which the officer or member pays market value Any contribution that is lawfully made under the Election Code, or under the Act or activities associated with a fundraising event in support of a political organization or candidate Educational materials Gifts from a relative Anything provided by an individual on the basis of personal friendship unless the trustee has reason to believe that under the circumstances the gift was provided because of the official position or employment of the trustee, and not because of personal friendship Copyright 9
4 Exceptions Food or refreshments not exceeding $75.00 in value, per person, on a single calendar day, provided that food or refreshments are consumed on the premises on which they were purchased or prepared or catered Food, refreshments, lodging, transportation, and other benefits resulting from the outside business or employment activities of the trustee or spouse of the trustee, if the benefits have not been offered or enhanced because of the official position of the trustee, and are not customarily provided to others in similar circumstances Intra or inter-governmental gifts Bequests, inheritances, and other transfers at death Any item or items from any on prohibited source during any calendar year, having an accumulated total of less than $ Copyright 10 Adoption and Enforcement Penalties Adoption Section 5 ILCS 460/10-5 requires each governmental entity to adopt ordinance or resolution that is no less restrictive then Article 10 of the State Officers and Employees Ethics Act Penalties Intentional Violations Class A Misdemeanor Intentional Violations Business Offense - fine of at least $ up to $ Discharged or discipline of officer by appropriate jurisdictional authority Filing of false report alleging violation of Act Class A Misdemeanor Copyright 11 Points to Consider New law No reported court cases on what constitute a violation of Gift Ban Act Must obtain and review your local Gift Ban Act A municipality may adopt or maintain policies or ordinances that are more restrictive than those set forth in the Gift Ban Act When in doubt, error on the side of caution Copyright 12
5 Local Gift Ban Act Questions If you have questions concerning your local Gift Ban Act, contact your pension board attorney, your municipality or the municipal attorney. Copyright 13 Conclusion Definitions related to the Gift Ban Act Exceptions to the Gift Ban Act Penalties for violations of the Gift Ban Act Importance of being familiar with your municipality s local ordinance Copyright 14
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