Ethics and Vendor Relationships Marie C Frank, MPA, CPPB Director of Purchasing & Property Management Louisiana State University
Governing Law Louisiana Constitution Article 10, Section 21 Louisiana Revised Statutes Title 42
WHO does it apply to? Elected Officials Public Employees Immediate Family Members Legal Entities Private Entities
Who are Immediate Family? • Spouse • Parents • Children • Children’s Spouses • Spouse’s Parents • Brothers and Sisters • Brothers and Sisters’ Spouses
WHAT does it apply to?Thing of economic value Money Any thing having an economic value Both tangibles and intangibles No minimum value
WHY do we have to apply the Code of Ethics? Conflict of Interest Public Employees must be independent and impartial Governmental decisions and policy must be made without bias Public Office and employment can not be used for private gain Public confidence is critical
Conflicts of Interest • Section 1111A (1) • A Public servant may not receive any thing of economic value, other than compensation and benefits from the governmental entity to which he is duly entitled, for the performance of the duties and responsibilities of his office or position • Prohibition applies to receiving a thing of economic value from either member of the public or a private source.
ABUSES THROUGH PROCUREMENT • Award contracts without competition to friends or family • Favor one vendor through restrictive specifications • Providing information to only some vendors • Collusion or price-fixing • Falsifying certifications • Providing false statements of qualifications or experience • Accepting gifts
The BIG NO/NO -Gifts • Governed by LSA – R.S. 42:1115A (1) • A public servant may not solicit or accept, directly or indirectly, any thing of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person that: • Has, or is seeking to obtain, contractual or other business or financial relationships with the public servant’s agency.
Examples • Tickets/complimentary admission • Gift cards • Discounts • Trips • Transportation
WHO can’t we accept gifts from? • Contractors or Those bidding on contracts • Vendors or Those seeking to provide products • Recipients of grants or funding from the university
Mayor Ray Nagin and family went to Jamaica courtesy of Greg Meffert and NetMethods Published: Wednesday, May 06, 2009, 3:00 PM Updated: Monday, September 28, 2009, 3:58 PM David Hammer, The Times-Picayune
TEST • A vendor that does business with LSU offers to take you to a football game. Can you accept the invitation?
NOPE The employee cannot accept the ticket or trip to the football game because it is considered a thing of economic value and the company is either in a business relationship with the university or is seeking one.
ARE THERE ANY EXCEPTIONS? Promotional Items having no Substantial Resale Value • MUST be imprinted with a logo of a business or an organization • MUST have a minimal value • Examples: Pens, pencils, notepads, t-shirts, caps, key chains, cups, calendars. Flowers or a donation in connection with the death of an immediate family member of the public servant if the value does not exceed $100
Should you go to Lunch? • Food and drink must be consumed by the personal guest in the presence of the provider or representative of the company/organization that is providing. • The exception allows a public servant to receive transportation and entertainment which is incidental to the food and drink • Gift cards and gift certificates for food or drink are NOT part of the exception for food and drink.
Food and Drink • The limitation on the total dollar value of food and drink which a public servant may be given at a single event is $54 per public servant per event. • The food and drink dollar limitation is calculated by dividing the total cost of the food and drink by the total number of persons invited to the event. • DON’T FORGET!!! THE VENDOR MUST BE PRESENT THE ENTIRE TIME.
TEST • A vendor invites you to a tailgate party. Can you attend? • At the party, he offers you football tickets to the game. Can you accept them?
YES you can attend the tailgate as long as he is present. • NO you MUST decline the free tickets into the football game.
TEST • A company who does business with the university hosts a company Christmas Party which is catered and invites you to attend. Can you attend and can you accept any gifts that are distributed by the company as “giveaways”?
Yes and No • You can attend the party if the dollar limitation of the food and drink is not greater than $54 AND the vendor is present. • You can accept promotional items but they must have the company logo and be of minimal value.
LET’S GIVE THANKS • The week of Thanksgiving, a vendor sends a turkey or fruit basket to the office not addressed to anyone in particular. Can you accept?
NOPE • You must return the turkey or fruit basket. • Because you are a public servant and the vendor has or wants a business relationship with the university, you cannot accept anything of economic value. The turkey or fruit basket does not meet the exception of being consumed with the company representative. You can’t give it to any of your employees either because they are also prohibited from accepting it.
CAN I GET IN FOR “FREE”? • Can accept ONLY IF it is admission to a civic, non-profit, educational or political event, if the public servant is a honoree, giving a speech, or a panel member participating in a debate or discussion at the event. • DOES NOT INCLUDE professional, semi-professional or collegiate sporting events.
Educational and Professional Development Seminars and Conferences • Can accept admission, reasonable lodging, and transportation • Must be invited by the organization; • The sponsor cannot be seeking to influence legislation; • The University must give approval; • If the university pays for the expenses, no affidavit is required, and the university will seek reimbursement after the trip from the sponsor.
Prohibitions to Income CANNOT ACCEPT INCOME FROM A VENDOR IF YOU ARE: • An employee of the university; • An employee’s spouse; or • A legal entity of which the employee or spouse owns an interest greater than 25% May not receive anything of economic value for or in consideration of services which are performed for or compensated by a person from whom the employee is prohibited from receiving a gift.
Prohibited Transactions • A public servant, immediate family members and legal entities where ownership is exceeding 25% or exercises control • MAY NOT enter into, any contract, subcontract, or other transaction under the supervision or jurisdiction of the public servant’s agency.
Prohibited Transactions • No allowable minimum value • Apply to contracts or subcontracts even if awarded from a public bid, RFP or other competitive process • Donations of services and moveable property are allowed.
YOU CAN’T EVEN PARTICIPATE • An employee may not participate in a transaction involving the university in which the employee has a substantial economic interest. This includes: • Immediate family members • Any person in which the employee of his immediate family has a substantial economic interest • Any employee who is an officer, director, trustee, partner, or employee • Any person with whom the employee is negotiating or has a contract concerning prospective employment
WHAT IS “Participate”? • Approval • Disapproval • Decision • Recommendation • Rendering of advice • Investigation • Failure to act or perform a duty
TEST • Mary Louise is an employee of the Dept of Chemistry. Her son-in-law, Trey, wants to assist the department in developing a new website. Can Chemistry contract for Trey’s services?
NOPE • He cannot bid or enter into a contract with Chemistry because he is considered an immediate family member as defined by the Code of Ethics. It doesn’t matter whether Mary Louise supervises him or not. He can donate his services.
WHEN DO YOU REPORT A POTENTIAL ETHICAL VIOLATION? Must be in writing and signed Issue must have occurred within the past 4 years Agency heads are required to report any potential issues (Section 1161)
WHAT IS THE PENALTY? Censure Fine of up to $10,000 or amount of economic gain plus additional 50% Forfeiture of gifts and payment Potential Loss of Job
Ethics Training http://www.ethics.state.la.us/SeminarRegistration/