Connecticut Seal

Substitute House Bill No. 5021

Public Act No. 04-198

AN ACT CONCERNING LEGAL DEFENSE FUNDS ESTABLISHED BY OR ON BEHALF OF PUBLIC OFFICIALS OR STATE EMPLOYEES AND PENALTIES FOR INTENTIONAL VIOLATIONS OF THE STATE CODES OF ETHICS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective from passage) (a) Any public official or state employee who establishes a legal defense fund, or for whom a legal defense fund has been established, shall file a report on said fund with the State Ethics Commission not later than the tenth day of January, April, July and October. Each such report shall include the following information for the preceding calendar quarter: (1) The names of the directors and officers of the fund, (2) the name of the depository institution for the fund, (3) an itemized accounting of each contribution to the fund, including the full name and complete address of each contributor and the amount of the contribution, and (4) an itemized accounting of each expenditure, including the full name and complete address of each payee and the amount and purpose of the expenditure. The public official or state employee shall sign each such report under penalty of false statement. The provisions of this subsection shall not apply to any person who has made a contribution to a legal defense fund before the effective date of this section.

(b) (1) In addition to the prohibitions on gifts under subsections (j) and (m) of section 1-84 of the general statutes, as amended, and subsection (a) of section 1-97 of the general statutes, no public official or state employee shall accept, directly or indirectly, any contribution to a legal defense fund established by or for the public official or state employee, from (A) a member of the immediate family of any person who is prohibited from giving a gift under subsection (j) or (m) of section 1-84 of the general statutes, as amended, or subsection (a) of section 1-97 of the general statutes, or (B) a person who is appointed by said public official or state employee to serve on a paid, full-time basis. No person described in subparagraph (A) or (B) of this subdivision shall make a contribution to such a legal defense fund, and no such person or any person prohibited from making a gift under subsection (j) or (m) of section 1-84 of the general statutes, as amended, or subsection (a) of section 1-97 of the general statutes shall solicit a contribution for such a legal defense fund.

(2) A public official or state employee may accept a contribution or contributions to a legal defense fund established by or for the public official or state employee from any other person, provided the total amount of such contributions from any such person in any calendar year shall not exceed one thousand dollars. No such person shall make a contribution or contributions to said legal defense fund exceeding one thousand dollars in any calendar year. The provisions of this subdivision shall not apply in 2004, to any person who has made a contribution or contributions to a legal defense fund exceeding one thousand dollars in 2004, before the effective date of this section, provided said legal defense fund shall not accept any additional contributions from such person in 2004, and such person shall not make any additional contributions to said fund in 2004.

(3) Notwithstanding the provisions of subdivision (2) of this subsection, a public official or state employee may accept a contribution or contributions, in any amount, to a legal defense fund established by or for the public official or state employee from a relative of the public official or state employee or a person whose relationship with the public official or state employee is not dependent on the official's or employee's status as a public official or state employee. The factors that the State Ethics Commission shall consider in determining whether a person's relationship is so dependent shall include, but not be limited to, whether the person may be able to benefit from the exercise of official authority of the public official or state employee and whether the person made gifts to the public official or state employee before the official or employee began serving in such office or position.

Sec. 2. Section 1-79 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

The following terms, when used in this part and section 1 of this act, shall have the following meanings unless the context otherwise requires:

(a) "Blind trust" means a trust established by a public official or state employee or member of his immediate family for the purpose of divestiture of all control and knowledge of assets.

(b) "Business with which he is associated" means any sole proprietorship, partnership, firm, corporation, trust or other entity through which business for profit or not for profit is conducted in which the public official or state employee or member of his immediate family is a director, officer, owner, limited or general partner, beneficiary of a trust or holder of stock constituting five per cent or more of the total outstanding stock of any class, provided, a public official or state employee, or member of his immediate family, shall not be deemed to be associated with a not for profit entity solely by virtue of the fact that the public official or state employee or member of his immediate family is an unpaid director or officer of the not for profit entity. "Officer" refers only to the president, executive or senior vice president or treasurer of such business.

(c) "Candidate for public office" means any individual who has filed a declaration of candidacy or a petition to appear on the ballot for election as a public official, or who has raised or expended money in furtherance of such candidacy, or who has been nominated for appointment to serve as a public official, but shall not include a candidate for the office of senator or representative in Congress.

(d) "Commission" means the State Ethics Commission established in section 1-80, as amended.

(e) "Gift" means anything of value, which is directly and personally received, unless consideration of equal or greater value is given in return. "Gift" shall not include:

(1) A political contribution otherwise reported as required by law or a donation or payment as described in subdivision (9) or (10) of subsection (b) of section 9-333b;

(2) Services provided by persons volunteering their time;

(3) A commercially reasonable loan made on terms not more favorable than loans made in the ordinary course of business;

(4) A gift received from (A) an individual's spouse, fiance or fiancee, (B) the parent, brother or sister of such spouse or such individual, or (C) the child of such individual or the spouse of such child;

(5) Goods or services (A) which are provided to the state (i) for use on state property, or (ii) to support an event or the participation by a public official or state employee at an event, and (B) which facilitate state action or functions. As used in this subdivision, "state property" means (i) property owned by the state, or (ii) property leased to an agency in the Executive or Judicial Department of the state;

(6) A certificate, plaque or other ceremonial award costing less than one hundred dollars;

(7) A rebate, discount or promotional item available to the general public;

(8) Printed or recorded informational material germane to state action or functions;

(9) Food or beverage or both, costing less than fifty dollars in the aggregate per recipient in a calendar year, and consumed on an occasion or occasions at which the person paying, directly or indirectly, for the food or beverage, or his representative, is in attendance;

(10) Food or beverage or both, costing less than fifty dollars per person and consumed at a publicly noticed legislative reception to which all members of the General Assembly are invited and which is hosted not more than once in any calendar year by a lobbyist or business organization. For the purposes of such limit, (A) a reception hosted by a lobbyist who is an individual shall be deemed to have also been hosted by the business organization which he owns or is employed by, and (B) a reception hosted by a business organization shall be deemed to have also been hosted by all owners and employees of the business organization who are lobbyists. In making the calculation for the purposes of such fifty-dollar limit, the donor shall divide the amount spent on food and beverage by the number of persons whom the donor reasonably expects to attend the reception;

(11) Food or beverage or both, costing less than fifty dollars per person and consumed at a publicly noticed reception to which all members of the General Assembly from a region of the state are invited and which is hosted not more than once in any calendar year by a lobbyist or business organization. For the purposes of such limit, (A) a reception hosted by a lobbyist who is an individual shall be deemed to have also been hosted by the business organization which he owns or is employed by, and (B) a reception hosted by a business organization shall be deemed to have also been hosted by all owners and employees of the business organization who are lobbyists. In making the calculation for the purposes of such fifty-dollar limit, the donor shall divide the amount spent on food and beverage by the number of persons whom the donor reasonably expects to attend the reception. As used in this subdivision, "region of the state" means the established geographic service area of the organization hosting the reception;

(12) A gift, including but not limited to, food or beverage or both, provided by an individual for the celebration of a major life event;

(13) Gifts costing less than one hundred dollars in the aggregate or food or beverage provided at a hospitality suite at a meeting or conference of an interstate legislative association, by a person who is not a registrant or is not doing business with the state of Connecticut;

(14) Admission to a charitable or civic event, including food and beverage provided at such event, but excluding lodging or travel expenses, at which a public official or state employee participates in his official capacity, provided such admission is provided by the primary sponsoring entity;

(15) Anything of value provided by an employer of (A) a public official, (B) a state employee, or (C) a spouse of a public official or state employee, to such official, employee or spouse, provided such benefits are customarily and ordinarily provided to others in similar circumstances; or

(16) Anything having a value of not more than ten dollars, provided the aggregate value of all things provided by a donor to a recipient under this subdivision in any calendar year shall not exceed fifty dollars.

(f) "Immediate family" means any spouse, children or dependent relatives who reside in the individual's household.

(g) "Individual" means a natural person.

(h) "Member of an advisory board" means any individual (1) appointed by a public official as an advisor or consultant or member of a committee, commission or council established to advise, recommend or consult with a public official or branch of government or committee thereof, (2) who receives no public funds other than per diem payments or reimbursement for his actual and necessary expenses incurred in the performance of his official duties, and (3) who has no authority to expend any public funds or to exercise the power of the state.

(i) "Person" means an individual, sole proprietorship, trust, corporation, limited liability company, union, association, firm, partnership, committee, club or other organization or group of persons.

(j) "Political contribution" has the same meaning as in section 9-333b except that for purposes of this part, the provisions of subsection (b) of that section shall not apply.

(k) "Public official" means any state-wide elected officer, any member or member-elect of the General Assembly, any person appointed to any office of the legislative, judicial or executive branch of state government by the Governor or an appointee of the Governor, with or without the advice and consent of the General Assembly, any public member or representative of the teachers' unions or state employees' unions appointed to the Investment Advisory Council pursuant to subsection (a) of section 3-13b, any person appointed or elected by the General Assembly or by any member of either house thereof, and any member or director of a quasi-public agency, but shall not include a member of an advisory board, a judge of any court either elected or appointed or a senator or representative in Congress.

(l) "Quasi-public agency" means the Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Health and Education Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Connecticut Hazardous Waste Management Service, Lower Fairfield County Convention Center Authority, Capital City Economic Development Authority and Connecticut Port Authority.

(m) "State employee" means any employee in the executive, legislative or judicial branch of state government, whether in the classified or unclassified service and whether full or part-time, and any employee of a quasi-public agency, but shall not include a judge of any court, either elected or appointed.

(n) "Trust" means a trust in which any public official or state employee or member of his immediate family has a present or future interest which exceeds ten per cent of the value of the trust or exceeds fifty thousand dollars, whichever is less, but shall not include blind trusts.

(o) "Business organization" means a sole proprietorship, corporation, limited liability company, association, firm or partnership, other than a client lobbyist, which is owned by, or employs, one or more individual lobbyists.

(p) "Client lobbyist" means a person on behalf of whom lobbying takes place and who makes expenditures for lobbying and in furtherance of lobbying.

(q) "Necessary expenses" means a public official's or state employee's expenses for an article, appearance or speech or for participation at an event, in his official capacity, which shall be limited to necessary travel expenses, lodging for the nights before, of and after the appearance, speech or event, meals and any related conference or seminar registration fees.

(r) "Lobbyist" and "registrant" shall be construed as defined in section 1-91.

(s) "Legal defense fund" means a fund established for the payment of legal expenses of a public official or state employee incurred as a result of defending himself or herself in an administrative, civil, criminal or constitutional proceeding concerning matters related to the official's or employee's service or employment with the state or a quasi-public agency.

Sec. 3. Section 1-82 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) (1) Upon the complaint of any person on a form prescribed by the commission, signed under penalty of false statement, or upon its own complaint, the commission shall investigate any alleged violation of this part or section 1 of this act. Not later than five days after the receipt or issuance of such complaint, the commission shall provide notice of such receipt or issuance and a copy of the complaint by registered or certified mail to any respondent against whom such complaint is filed and shall provide notice of the receipt of such complaint to the complainant. When the commission undertakes an evaluation of a possible violation of this part or section 1 of this act prior to the filing of a complaint by the commission, the subject of the evaluation shall be notified within five business days after a commission staff member's first contact with a third party concerning the matter.

(2) In the conduct of its investigation of an alleged violation of this part, the commission shall have the power to hold hearings, administer oaths, examine witnesses, receive oral and documentary evidence, subpoena witnesses under procedural rules adopted by the commission as regulations in accordance with the provisions of chapter 54 to compel attendance before the commission and to require the production for examination by the commission of any books and papers which the commission deems relevant in any matter under investigation or in question. In the exercise of such powers, the commission may use the services of the state police, who shall provide the same upon the commission's request. The commission shall make a record of all proceedings conducted pursuant to this subsection. Any witness summoned before the commission shall receive the witness fee paid to witnesses in the courts of this state. During the investigation the respondent shall have the right to appear and be heard and to offer any information which may tend to clear him of probable cause to believe he has violated any provision of this part or section 1 of this act. The respondent shall also have the right to be represented by legal counsel and to examine and cross-examine witnesses. Not later than ten days prior to the commencement of any hearing conducted pursuant to this subsection, the commission shall provide the respondent with a list of its intended witnesses. The commission shall make no finding that there is probable cause to believe the respondent is in violation of any provision of this part or section 1 of this act except upon the concurring vote of four of its members.

(b) If a preliminary investigation indicates that probable cause exists for the violation of a provision of this part or section 1 of this act, the commission shall initiate hearings to determine whether there has been a violation of this part or section 1 of this act. A judge trial referee, who shall be assigned by the Chief Court Administrator and who shall be compensated in accordance with section 52-434 out of funds available to the commission, shall preside over such hearing and shall rule on all matters concerning the application of the rules of evidence, which shall be the same as in judicial proceedings. The trial referee shall have no vote in any decision of the commission. All hearings of the commission held pursuant to this subsection shall be open. At such hearing the commission shall have the same powers as under subsection (a) of this section and the respondent shall have the right to be represented by legal counsel, the right to compel attendance of witnesses and the production of books, documents, records and papers and to examine and cross-examine witnesses. Not later than ten days prior to the commencement of any hearing conducted pursuant to this subsection, the commission shall provide the respondent with a list of its intended witnesses. The judge trial referee shall, while engaged in the discharge of his duties as provided in this subsection, have the same authority as is provided in section 51-35 over witnesses who refuse to obey a subpoena or to testify with respect to any matter upon which such witness may be lawfully interrogated, and may commit any such witness for contempt for a period no longer than thirty days. The commission shall make a record of all proceedings pursuant to this subsection. The commission shall find no person in violation of any provision of this part or section 1 of this act except upon the concurring vote of five of its members. Not later than fifteen days after the public hearing conducted in accordance with this subsection, the commission shall publish its finding and a memorandum of the reasons therefor. Such finding and memorandum shall be deemed to be the final decision of the commission on the matter for the purposes of chapter 54. The respondent, if aggrieved by the finding and memorandum, may appeal therefrom to the Superior Court in accordance with the provisions of section 4-183.

(c) If the commission finds, after a hearing pursuant to this section, that there is no probable cause to believe that a public official or state employee has violated a provision of this part or section 1 of this act or that a public official or state employee has not violated any such provision, or if a court of competent jurisdiction overturns a finding by the commission of a violation by such a respondent, the state shall pay the reasonable legal expenses of the respondent as determined by the Attorney General or by the court if appropriate. If any complaint brought under the provisions of this part or section 1 of this act is made with the knowledge that it is made without foundation in fact, the respondent shall have a cause of action against the complainant for double the amount of damage caused thereby and if the respondent prevails in such action, he may be awarded by the court the costs of such action together with reasonable attorneys' fees.

(d) No complaint may be made under this section except within three years next after the violation alleged in the complaint has been committed.

(e) No person shall take or threaten to take official action against an individual for such individual's disclosure of information to the commission under the provisions of this part. After receipt of information from an individual under the provisions of this part, the commission shall not disclose the identity of such individual without his consent unless the commission determines that such disclosure is unavoidable during the course of an investigation.

Sec. 4. Section 1-88 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The commission, upon a finding made pursuant to section 1-82, as amended by this act, that there has been a violation of any provision of this part or section 1 of this act, shall have the authority to order the violator to do any or all of the following: (1) Cease and desist the violation of this part or section 1 of this act; (2) file any report, statement or other information as required by this part or section 1 of this act; and (3) pay a civil penalty of not more than two thousand dollars for each violation of this part or section 1 of this act.

(b) Notwithstanding the provisions of subsection (a) of this section, the commission may, after a hearing conducted in accordance with sections 4-176e to 4-184, inclusive, upon the concurring vote of five of its members, impose a civil penalty not to exceed ten dollars per day upon any individual who fails to file any report, statement or other information as required by this part or section 1 of this act. Each distinct violation of this subsection shall be a separate offense and in case of a continued violation, each day thereof shall be deemed a separate offense. In no event shall the aggregate penalty imposed for such failure to file exceed two thousand dollars.

(c) The commission may also report its finding to the Chief State's Attorney for any action deemed necessary. The commission, upon a finding made pursuant to section 1-82 that a member or member-elect of the General Assembly has violated any provision of part I of chapter 10, shall notify the appropriate house of the General Assembly, in writing, of its finding and the basis for such finding.

(d) Any person who knowingly acts in his financial interest in violation of section 1-84, as amended, 1-85, [or] 1-86 or section 1 of this act or any person who knowingly receives a financial advantage resulting from a violation of any of said sections shall be liable for damages in the amount of such advantage. If the commission determines that any person may be so liable, it shall immediately inform the Attorney General of that possibility.

(e) Any employee or member of the commission who, in violation of this part, discloses information filed in accordance with subparagraph (B) or subparagraph (F) of subdivision (1) of subsection (b) of section 1-83, shall be dismissed, if an employee, or removed from the commission, if a member.

Sec. 5. Section 1-89 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Any person who intentionally violates any provision of this part or section 1 of this act shall be imprisoned for a term not to exceed one year or shall be fined an amount not to exceed two thousand dollars, or both, provided no person may be found guilty of a violation of subsection (f) or (g) of section 1-84, as amended, and bribery or bribe receiving under section 53a-147, as amended, or 53a-148, as amended, upon the same incident, but such person may be charged and prosecuted for all or any of such offenses upon the same information.

(b) The penalties prescribed in this part shall not limit the power of either house of the legislature to discipline its own members or impeach a public official, and shall not limit the power of agencies or commissions to discipline their officials or employees.

(c) The Attorney General may bring a civil action against any person who may be liable for damages under the provisions of subsection (d) of section 1-88, as amended by this act. In any such action, the Attorney General may, in the discretion of the court, recover additional damages in an amount not exceeding twice the amount of the actual damages.

(d) Any fines, penalties or damages paid, collected or recovered under section 1-88, as amended by this act, or this section for a violation of any provision of this part or section 1 of this act applying to the office of the Treasurer shall be deposited on a pro rata basis in any trust funds, as defined in section 3-13c, affected by such violation.

Sec. 6. Subsection (l) of section 1-79 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(l) "Quasi-public agency" means the Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Health and Education Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Connecticut Hazardous Waste Management Service, Lower Fairfield County Convention Center Authority, Capital City Economic Development Authority, [and] Connecticut Port Authority and Connecticut Lottery Corporation.

Sec. 7. Subsection (a) of section 1-89 of the general statutes, as amended by section 4 of public act 04-38, is repealed and the following is substituted in lieu thereof (Effective July 1, 2004):

(a) Any person who intentionally violates any provision of this part shall (1) for a first violation, be guilty of a class A misdemeanor, except that, if such person derives a financial benefit of one thousand dollars or more as a result of such violation, such person shall be guilty of a class D felony, and (2) for a second or subsequent violation, be guilty of a class D felony, provided no person may be found guilty of a violation of subsection (f) or (g) of section 1-84, as amended, and bribery or bribe receiving under section 53a-147 or 53a-148, as amended, upon the same incident, but such person may be charged and prosecuted for all or any of such offenses upon the same information.

Sec. 8. Subsection (a) of section 1-100 of the general statutes, as amended by section 7 of public act 04-38, is repealed and the following is substituted in lieu thereof (Effective July 1, 2004):

(a) Any person who intentionally violates any provision of this part shall (1) for a first violation, be guilty of a class A misdemeanor, except that, if such person derives a financial benefit of one thousand dollars or more as a result of such violation, such person shall be guilty of a class D felony, and (2) for a second or subsequent violation, be guilty of a class D felony.

Approved June 3, 2004