ASSEMBLY, No. 1298

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblyman GREENWALD

 

 

An Act concerning ethical standards for State officers and employees, special State officers and employees and members of the Legislature, reconstituting the Executive Commission on Ethical Standards and amending and supplementing P.L.1971, c.182.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. (New section) This act shall be known and may be cited as the "Comprehensive Ethics Reform Act of 1992."

 

    2. Section 2 of P.L.1971, c.182 (C.52:13D-13) is amended to read as follows:

    2. As used in this act, and unless a different meaning clearly appears from the context, the following terms shall have the following meanings:

    a. "State agency" means the office of the Governor, any of the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by or allocated to such department, the Legislature of the State and any office, board, bureau or commission within or created by the Legislative Branch, and, to the extent consistent with law, any interstate agency to which New Jersey is a party and any independent State authority, commission, instrumentality or agency. A county or municipality shall not be deemed an agency or instrumentality of the State.

    b. "State officer or employee" means any person, other than a special State officer or employee (1) holding an office or employment in a State agency, excluding an interstate agency, other than a member of the Legislature or (2) appointed as a New Jersey member to an interstate agency.

    c. "Member of the Legislature" means any person elected to serve in the General Assembly or the Senate.

    d. "Head of a State agency" means (1) in the case of the Executive Branch of government, except with respect to interstate agencies, the department head or, if the agency is not [assigned] allocated to a department[, the Governor,]or is allocated to but is not subject to the supervision or control of a department, the governing body or chief executive officer of the agency, and (2) in the case of the Legislative Branch, the chief presiding officer of each House of the Legislature.

    e. "Special State officer or employee" means (1) any person holding an office or employment in a State agency, excluding an interstate agency, for which office or employment no compensation is authorized or provided by law, or no compensation other than a sum in reimbursement of expenses, whether payable per diem or per annum, is authorized or provided by law; (2) any person, not a member of the Legislature, holding a part-time elective or appointive office or employment in a State agency, excluding an interstate agency, or (3) any person appointed as a New Jersey member to an interstate agency the duties of which membership are not full-time.

    f. "Person" means any natural person, association or corporation.

    g. "Interest" means (1) the ownership or control of more than 10% of the profits or assets of a firm, association, or partnership, or more than 10% of the stock in a corporation for profit other than a professional service corporation organized under the "Professional Service Corporation Act," P.L.1969, c.232 (C.14A:17-1 et seq.); or (2) the ownership or control of more than 1% of the profits of a firm, association, or partnership, or more than 1% of the stock in any corporation, which is the holder of, or an applicant for, a casino license or in any holding or intermediary company with respect thereto, as defined by the "Casino Control Act," P.L.1977, c.110 (C.5:12-1 et seq.). The provisions of this act governing the conduct of individuals are applicable to shareholders, associates or professional employees of a professional service corporation or of any other firm, partnership or association that provides professional services regardless of the extent or amount of their shareholder interest in such a corporation or of the amount of the assets or profits of the firm, partnership or association that they control.

    h. "Cause, proceeding, application or other matter" means a specific cause, proceeding or matter and does not mean or include determinations of general applicability or the preparation or review of legislation which is no longer pending before the Legislature or the Governor.

    i. "Member of the immediate family" of any person means the person's spouse, child, parent or sibling residing in the same household.

    j. "Code of ethics" means the code of ethics promulgated for the Executive Branch of the State Government or the Legislative Branch of the State Government pursuant to section 12 of P.L.1971, c.182 (C.52:13D-23), and any code of ethics adopted by a State agency pursuant to that section to apply to the particular needs and problems of that agency.

(cf: P.L.1987, c.432, s.2)

 

    3. Section 6 of P.L.1971, c.182 (C.52:13D-17) is amended to read as follows:

    6. a. No State officer or employee or special State officer or employee, subsequent to the termination of his office or employment in any State agency, shall represent, appear for, negotiate on behalf of, or provide information not generally available to members of the public or services to, or agree to represent, appear for, negotiate on behalf of, or provide information not generally available to members of the public or services to, whether by himself or through any partnership, firm or corporation in which he has an interest or through any partner, officer or employee thereof, any person or party other than the State in connection with any cause, proceeding, application or other matter with respect to which such State officer or employee or special State officer or employee shall have made any investigation, rendered any ruling, given any opinion, or been otherwise substantially and directly involved at any time during the course of his office or employment.

    b. For two years next subsequent to the termination of his office or employment, no State officer or employee or special State officer or employee shall represent, appear for, negotiate on behalf of, or provide information not generally available to members of the public or services to, or agree to represent, appear for, negotiate on behalf of, or provide information not generally available to members of the public or services to any person or party other than the State in connection with any cause, proceeding, application or other matter over which the State officer or employee or special State officer or employee had supervisory responsibility at any time during his office or employment. The provisions of this subsection shall not apply to any partnership, firm or corporation in which such person has an interest or is employed, or to any partner, officer, director or employee of such partnership, firm or corporation.

    c. For one year next subsequent to the termination of the office or employment of any State officer or employee or special State officer or employee who was subject to mandatory financial disclosure by law or executive order during the office or employment, no such State officer or employee or special State officer or employee, whether or not for compensation, shall knowingly make, with the intent to influence, any communication to or appearance before any officer or employee of the State agency in which such person served on behalf of any person or party other than the State in connection with any cause, proceeding, application or other matter in which an officer or employee of the State agency had the authority or responsibility to render a final decision or to take final action. For purposes of this subsection, "State agency" means: (1) in the case of a State officer or employee or special State officer or employee who serves in an agency that is a principal department or that is allocated to a principal department, the department and all entities allocated to the department; (2) in the case of a State officer or employee or special State officer or employee who serves on or in an independent State authority commission, instrumentality, or agency, the independent State authority, commission, instrumentality, or agency; (3) in the case of a State officer or employee or special State officer or employee appointed as a New Jersey member to an interstate agency, the interstate agency; and (4) in the case of a State officer or employee or special State officer or employee who serves in the Office of the Governor, the Office of the Governor. The provisions of this subsection shall not apply to any partnership, firm or corporation in which such person has an interest or is employed, or to any partner, officer, director of employee of such partnership, firm or corporation.

    d. Any person who willfully violates the provisions of this section [is a disorderly person, and] shall be subject to a [fine not to exceed $500.00 or imprisonment not to exceed six months, or both] civil penalty of not less than $100 nor more than $5,000. The Executive Commission on Ethical Standards and the Joint Legislative Committee on Ethical Standards shall have jurisdiction to initiate, receive, hear and review complaints regarding violations of this section by former officers and employees of their respective branches and, upon finding any person to have committed a violation of this section, to assess a civil penalty within the limits prescribed. A civil penalty imposed pursuant to this section shall be paid forthwith to the State Treasury for the general purposes of the State. Such penalty shall be enforceable in a summary proceeding under the "penalty enforcement law" (N.J.S.2A:58-1 et seq.). If the commission or joint committee, as appropriate, finds that the conduct of such former State officer or employee or such former special State officer or employee constitutes a willful and continuous disregard of the provisions of this section, it may bar such person from holding any public office or employment in this State in any capacity whatsoever for a period not exceeding five years from the date of its decision.

(cf: P.L.1987, c.432, s.4)

 

    4. Section 7 of P.L.1971, c.182 (C.52:13D-18) is amended to read as follows:

    7. (a) No member of the Legislature shall participate by voting or any other action, on the floor of the General Assembly or the Senate, or in committee or elsewhere, in the enactment or defeat of legislation in which he has a personal interest until he files with the Clerk of the General Assembly or the Secretary of the Senate, as the case may be, a statement (which shall be entered verbatim on the journal of the General Assembly or the Senate) stating in substance that he has a personal interest in the legislation and that notwithstanding such interest, he is able to cast a fair and objective vote and otherwise participate in connection with such legislation.

    (b) A member of the Legislature shall be deemed to have a personal interest in any legislation within the meaning of this section if, by reason of his participation in the enactment or defeat of any legislation, he has reason to believe that he will derive a direct monetary gain or suffer a direct monetary loss. No member of the Legislature shall be deemed to have a personal interest in any legislation within the meaning of this section if, by reason of his participation in the enactment or defeat of any legislation, no benefit or detriment could reasonably be expected to accrue to him, as a member of a business, profession, occupation or group, to any greater extent than any such benefit or detriment could reasonably be expected to accrue to any other member of such business, profession, occupation or group.

    (c) Upon a finding by the Joint Legislative Committee on Ethical Standards that a member has a personal interest in the enactment or defeat of legislation, it shall direct the member to withdraw sponsorship of, or withdraw from participation in, the enactment or defeat of the legislation. Upon a finding that a member of the Legislature who is or has been appointed chair of a committee has a personal interest in the affairs of that committee, the joint committee shall direct the member to refuse the appointment or to resign the position.

(cf: P.L.1971, c.182, s.7)

 

    5. Section 8 of P.L.1971, c.182 (C.52:13D-19), is amended to read as follows:

    8. a. No member of the Legislature or State officer or employee shall knowingly himself, or by his partners or through any corporation which he controls or in which he owns or controls more than 1% of the stock, or by any other person for his use or benefit or on his account, undertake or execute, in whole or in part, any contract, agreement, sale or purchase of the value of $25.00 or more, made, entered into, awarded or granted by any State agency, except as provided in subsection b. of this section. No special State officer or employee having any duties or responsibilities in connection with the purchase or acquisition of property or services by the State agency where he is employed or an officer shall knowingly himself, by his partners or through any corporation which he controls or in which he owns or controls more than 1% of the stock, or by any other person for his use or benefit or on his account, undertake or execute, in whole or in part, any contract, agreement, sale or purchase of the value of $25.00 or more, made, entered into, awarded or granted by that State agency, except as provided in subsection b. of this section. The restriction contained in this subsection shall apply to the contracts of interstate agencies to the extent consistent with law only if the contract, agreement, sale or purchase is undertaken or executed by a New Jersey member to that agency or by his partners or a corporation in which he owns or controls more than 1% of the stock.

    b. The provisions of subsection a. of this section shall not apply to (a) purchases, contracts, agreements or sales which (1) are made or let after public notice and competitive bidding or which (2), pursuant to section 5 of chapter 48 of the laws of 1944 (C.52:34-10) or such other similar provisions contained in the public bidding laws or regulations applicable to other State agencies, may be made, negotiated or awarded without public advertising for bids, or (b) any contract of insurance entered into by the Director of the Division of Purchase and Property pursuant to section 10 of article 6 of chapter 112 of the laws of 1944 (C. 52:27B-62), if such purchases, contracts or agreements, including change orders and amendments thereto, shall receive prior approval of the Joint Legislative Committee on Ethical Standards if a member of the Legislature or State officer or employee or special State officer or employee in the Legislative Branch has an interest therein, or the Executive Commission on Ethical Standards if a State officer or employee or special State officer or employee in the Executive Branch has an interest therein.

    c. Notwithstanding the provisions of section 4 of P.L.1971, c.182 (C.52:13D-15) and subsections a. and b. of this section or any other law to the contrary, a State agency shall not lease or purchase real property, title to which is held, in whole or in part, by a State officer or employee or special State officer or employee, who is subject to mandatory financial disclosure by law or executive order, or a member of his or her immediate family, by any partnership, firm or corporation in which the officer or emoloyee has an interest, or by a trust of any nature into which the officer or employee has placed control of real property regardless of whether or not the officer or employee has retained control of the trust assets or has knowledge of the management of trust assets. A State agency may acquire real property, the acquisition of which is prohibited by this subsection, only pursuant to the "Eminent Domain Act of 1971," P.L. 1971, c.361 (C.20:3-1 et seq.).

(cf: P.L.1987, c.432, s.5)

 

    6. Section 10 of P.L.1971, c.182 (C.52:13D-21) is amended to read as follows:

    10. (a) The Executive Commission on Ethical Standards created pursuant to P.L.1967, chapter 229, and as continued and established pursuant to P.L.1971, c.182, is continued and established in but not of the Department of Law and Public Safety and shall [constitute the first commission under this act] be independent of any supervision or control by the department or any board or office thereof.

    (b) The commission shall be composed of seven members, four of whom shall be public members appointed by the Governor [from among State officers and employees serving in the Executive Branch. Each member shall serve at the pleasure of the Governor], no more than two of whom shall be of the same political party. The other three members shall be appointed by the Governor from among State officers or employees and special State officers or employees serving in the Executive Branch and shall serve during the term of office and at the pleasure of the Governor appointing [him and until his successor is] them and until their successors are appointed and have qualified. Each of the Executive Branch members may designate an officer or employee under his supervision to act on his behalf. The Governor shall designate one public member to serve as chairman and one public member to serve as vice-chairman of the commission, both to serve as such at his pleasure. The public members of the commission shall serve for terms of four years and until the appointment and qualification of their successors, but of the first members appointed, one shall serve for a term of one year, one for a term of two years, one for a term of three years and one for a term of four years.

    Vacancies in the membership of the commission shall be filled in the same manner as the original appointments were made but, in the case of public members, for the unexpired term only. None of the public members shall be State officers or employees or special State officers or employees except by reason of their service on the commission.

    (c) Each member of the [said] commission shall serve without compensation but shall be entitled to be reimbursed for all actual and necessary expenses incurred in the performance of his duties.

    (d) The Attorney General shall act as legal adviser and counsel to the [said] commission. He shall upon request advise the commission in the rendering of advisory opinions by the commission, in the development of a uniform code of ethics, in the approval and review of codes of ethics adopted by State agencies in the Executive Branch [and], in the recommendation of revisions in codes of ethics or legislation relating to the conduct of State officers [and] or employees or special State officers or employees in the Executive Branch, and in the performance of any of its other duties under this act.

    (e) The [said] commission [may], within the limits of funds appropriated or otherwise made available to it for the purpose, may employ [such] other professional, technical, clerical or other assistants, excepting legal counsel, and incur [such] expenses as may be necessary for the performance of its duties.

    (f) The [said] commission, in order to perform its duties pursuant to the provisions of this act, shall have the power to conduct investigations, hold hearings, compel the attendance of witnesses and the production before it of such books and papers as it may deem necessary, proper and relevant to the matter under investigation. The members of the [said] commission and the persons appointed by the commission for such purpose are hereby empowered to administer oaths and examine witnesses under oath.

    (g) The [said] commission is authorized to render advisory opinions as to whether a given set of facts and circumstances would, in its opinion, constitute a violation of the provisions of this act, [or of] a code of ethics promulgated pursuant to the provisions of this act, or an executive order in which the Governor has granted the commission jurisdiction of its provisions. These advisory opinions shall be filed with the commission and shall be public records, but no opinion so filed shall contain the name of the person or persons who shall have requested the opinion. The commission is also authorized to develop methods to assist any State officer or employee and any special State officer or employee in understanding and complying with the obligations of that officer or employee under this act.

    (h) The [said] commission shall have jurisdiction to initiate, receive, hear and review complaints regarding violations, by any State officer or employee or special State officer or employee in the Executive Branch, of the provisions of this act [or], of any code of ethics promulgated pursuant to the provisions of this act or of any executive order in which the Governor has granted the commission jurisdiction. Any complaint regarding a violation of a code of ethics or such executive order may be referred by the commission for disposition in accordance with subsection 12(d) of this act.

    (i) The commission shall prepare and publish, prior to May 1 of each year, an annual report to the Governor and the Legislature.

    [(i)]j. Any State officer or employee or special State officer or employee in the Executive Branch found [guilty by the commission of violating] by the commission to have violated any provision of this act [or of], a code of ethics promulgated pursuant to the provisions of this act or an executive order in which the Governor has granted the commission jurisdiction of its provisions shall be fined not less than $100.00 nor more than [$500.00] $5000, which penalty may be collected in a summary proceeding pursuant to [the Penalty Enforcement Law (N.J.S.2A:58-1)]"the penalty enforcement law" (N.J.S.2A:58-1 et seq.), and may be suspended from his office or employment by order of the commission for a period of not in excess of [1] one year. If the commission finds that the conduct of such officer or employee constitutes a willful and continuous disregard of the provisions of this act or [of a], code of ethics promulgated pursuant to the provisions of this act or an executive order in which the Governor has granted the commission jurisdiction of its provisions, it may order such person removed from his office or employment and may further bar such person from holding any public office or employment in this State in any capacity whatsoever for a period of not exceeding [5] five years from the date on which he was found [guilty] to have violated any provision of this act, code or executive order by the commission.

    Notwithstanding the provisions of this subsection to the contrary, any constitutional officer subject to this act, a code of ethics promulgated pursuant to the provisions of this act or an executive order in which the Governor has granted the commission jurisdiction of its provisions may not be suspended or barred from office or employment but shall be subject to impeachment as provided in Article VII, Section III, para. 1 of the New Jersey Constitution.

    (k) The commission shall be assigned suitable quarters.

(cf: P.L.1971, c.182, s.10)

 

    7. Section 12 of P.L.1971, c.182 (C.52:13D-23) is amended to read as follows:

    12. (a) The [head of each State agency, or the principal officer in charge of a division, board, bureau, commission or other instrumentality within a department of State Government designated by the head of such department for the purposes hereinafter set forth,]commission shall within six months from the [date of enactment,]effective date of this amendatory and supplementary act, P.L. , c. , (now pending before the Legislature as this bill), promulgate and revise from time to time a code of ethics to govern and guide the conduct of [the members of the Legislature, the] State officers [and] or employees [or the] and special State officers [and] or employees in the [agency to which said code is applicable] Executive Branch of the State Government. Such code shall conform to the general standards [hereinafter] set forth in paragraphs (1) through (7) of subsection (e) of this section[, but it shall be formulated with respect to the particular needs and problems of the agency to which said code is to apply]. The head of a State agency may adopt a code of ethics, the provisions of which shall be at least as stringent as those of the uniform code, to apply to the particular needs and problems of the agency, provided that the State agency code of ethics is approved by the commission. Notwithstanding any other provisions of this section, the New Jersey members to any interstate agency to which New Jersey is a party and the officers and employees of any State agency which [fails to] does not promulgate [a] its own code of ethics shall be deemed to be subject to [a] the uniform code of ethics [the provisions of which shall be paragraphs (1) through (6) of subsection (e) of this section] promulgated pursuant to this subsection.

    (b) [A code of ethics formulated pursuant to this section to govern and guide the conduct of the State officers and employees or the special State officers and employees in any State agency in the Executive Branch, or any portion of such a code, shall not be effective unless it has first been approved by the Executive Commission on Ethical Standards. When a proposed code is submitted to the said commission it shall be accompanied by an opinion of] Prior to the adoption of a uniform code the Attorney General shall provide an opinion as to its compliance with the provisions of this act and any other applicable provision of law. Nothing contained herein shall prevent officers of State agencies in the Executive Branch from consulting with the Attorney General or with the Executive Commission on Ethical Standards at any time in connection with the preparation or revision of [such] codes of ethics.

    (c) A code of ethics shall be formulated pursuant to this section to govern and guide the conduct of the members of the Legislature, State officers [and] or employees or special State officers and employees in any State agency in the Legislative Branch[, or any portion of such code,] and shall not be effective unless it has first been approved by the Legislature by concurrent resolution. A State agency in the Legislative Branch may adopt a code of ethics, the provisions of which shall not be inconsistent with the Legislative Code of Ethics, to apply to the particular needs and problems of the agency, provided that the State agency code of ethics is approved in accordance with this subsection. When a proposed code is submitted to the Legislature for approval it shall be accompanied by an opinion of the [chief counsel] Legislative Counsel as to its compliance with the provisions of this act and any other applicable provisions of law. Nothing contained herein shall prevent officers of State agencies in the Legislative Branch from consulting with the [Chief] Legislative Counsel or the Joint Legislative Committee on Ethical Standards at any time in connection with the preparation or revision of such codes of ethics.

    (d) Violations of a code of ethics promulgated pursuant to this section or an executive order in which the Governor has granted the commission jurisdiction of its provisions shall be cause for removal, suspension, demotion or other disciplinary action by the State officer or agency having the power of removal or discipline. When a person who is in the [classified civil] career service is charged with a violation of such a code of ethics, the procedure leading to such removal or discipline shall be governed by any applicable provisions of the Civil Service [Law] Act and the Rules of the Department of [Civil Service] Personnel. No action for removal or discipline shall be taken under this subsection except upon the referral or with the approval of the Executive Commission on Ethical Standards or the Joint Legislative Committee on Ethical Standards, whichever is authorized to exercise jurisdiction with respect to the complaint upon which such action for removal or discipline is to be taken.

    (e) A code of ethics for officers and employees of a State agency shall conform to the following general standards:

    (1) No State officer or employee or special State officer or employee should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity, which is in substantial conflict with the proper discharge of his duties in the public interest.

    (2) No State officer or employee or special State officer or employee should engage in any particular business, profession, trade or occupation which is subject to licensing or regulation by a specific agency of State Government without promptly filing notice of such activity with the Executive Commission on Ethical Standards, if he is an officer or employee in the Executive Branch, or with the Joint Legislative Committee on Ethical Standards, if he is an officer or employee in the Legislative Branch.

    (3) No State officer or employee or special State officer or employee should use or attempt to use his official position to secure unwarranted privileges or advantages for himself or others.

    (4) No State officer or employee or special State officer or employee should act in his official capacity in any matter wherein he has a direct or indirect personal financial interest that might reasonably be expected to impair his objectivity or independence of judgment.

    (5) No State officer or employee or special State officer or employee should undertake any employment or service, whether compensated or not, which might reasonably be expected to impair his objectivity and independence of judgment in the exercise of his official duties.

    (6) No State officer or employee or special State officer or employee should accept any gift, favor, service or other thing of value under circumstances from which it might be reasonably inferred that such gift, service or other thing of value was given or offered for the purpose of influencing him in the discharge of his official duties.

    (7) No State officer or employee or special State officer or employee should knowingly act in any way that might reasonably be expected to create an impression or suspicion among the public having knowledge of his acts that he may be engaged in conduct violative of his trust as a State officer or employee or special State officer or employee.

    (8) Rules of conduct adopted pursuant to these principles should recognize that under our democratic form of government public officials and employees should be drawn from all of our society, that citizens who serve in government cannot and should not be expected to be without any personal interest in the decisions and policies of government; that citizens who are government officials and employees have a right to private interests of a personal, financial and economic nature; that standards of conduct should separate those conflicts of interest which are unavoidable in a free society from those conflicts of interest which are substantial and material, or which bring government into disrepute.

    (f) The code of ethics for members of the Legislature shall conform to subsection (e) hereof as nearly as may be possible.

(cf: P.L.1987, c.432, s.6)

 

    8. Section 13 of P.L.1971, c.182 (C.52:13D-24) is amended to read as follows:

    13. No State officer or employee, special State officer or employee, or member of the Legislature shall solicit, receive or agree to receive, whether directly or indirectly, any compensation, reward, employment, gift or other thing of value from any source other than the State of New Jersey, for any service, advice, assistance or other matter related to his official duties, except, with respect only to a State officer or employee or special State officer or employee and only if permitted by the code of ethics by which the officer or employee is governed, reasonable fees for speeches or published works on matters within his official duties and except, in connection therewith, reimbursement of actual expenditures for travel and reasonable subsistence for which no payment or reimbursement is made by the State of New Jersey. This section shall not apply to the solicitation or acceptance of contributions to the campaign of an announced candidate for elective public office.

(cf: P.L.1971, c.182, s.13)

 

    9. (New section) a. Every member of the Legislature, and each senior member of legislative staff as determined by the Joint Legislative Committee on Ethical Standards, shall annually file a sworn and duly notarized statement which is current as of five days prior to the date of filing. Each statement shall include the following information:

    (1) any occupation, trade, business or profession engaged in by the member, his or her spouse, and dependent children which is subject to a licensing or regulation by a State agency;

    (2) a list of all assets having a value of more than $1,000, both tangible and intangible, in which a direct or indirect interest is held by the member, his or her spouse, and dependent children, valued as of the statement date; provided, however, that when the value cannot be determined as of that date, a separate valuation date shall be specified for the particular asset. Where stocks and bonds are involved, there shall be included the name of the company or government agency issuing them, except that whenever such interest exists through ownership in a mutual fund or holding company, the stocks held by such mutual fund or holding company need not be listed; whenever such interest exists through a beneficial interest in a trust, the stocks and bonds held in such trust shall be listed only if the member has knowledge of what stocks and bonds are so held. Where more than 10% of the stock of a corporation is held, the percentage of ownership shall be stated. The list shall include any direct or indirect interest, whether vested or contingent, any contract made or executed by a government instrumentality. In the case of real estate interests, there shall be given the location, including municipality and block and lot number, size, general nature and acquisition date of any real property in New Jersey in which any direct, indirect, vested or contingent interest is held, together with the names of all individuals or entities who share a direct or indirect interest therein and the name of any government instrumentality that is a tenant of such property or that has before it an application, complaint or proceeding directly affecting such property. Assets of a member and his or her spouse shall be listed according to the following value categories:

    (i)               greater than $1,000, but not more than $5,000;

    (ii)  greater than $5,000, but not more than $25,000;

    (iii)             greater than $25,000, but not more than $50,000;

    (iv) greater than $50,000, but not more than $100,000;

    (v)              greater than $100,000, but not more than $250,000;

    (vi) greater than $250,000.

    The value of assets of the dependent children of the member need not be disclosed unless specifically requested by the Joint Legislative Committee on Ethical Standards. Disclosure of assets pursuant to this paragraph may be waived by the committee upon the establishment of a blind trust. The trustee shall be selected at random from a list of qualified financial managers prepared by the committee. In preparing the list the committee shall solicit the opinion of a major organization representing the interests of and largely composed of certified public accountants with respect to the qualifications of financial managers;

    (3) A list of all liabilities of the member, his or her spouse, and dependent children, valued by category in the same manner as required by paragraph (2) of this subsection, except liabilities which are:

    (i)               less than $10,000 and owed to a relative as defined in subsection d. of this section;

    (ii)  less than $1,000 and owed to any other person;

    (iii)             loans secured by a personal motor vehicle, household furniture or appliances where the loan did not exceed the purchase price of the item and the outstanding balance did not exceed $10,000 as of the close of the preceding calendar year; and

    (iv) revolving charge accounts where the outstanding liability does not exceed $10,000 as of the close of the preceding calendar year;

    (4) a list of all liabilities otherwise subject to disclosure pursuant to paragraph (3) of this subsection of the member, his or her spouse, and dependent children which have been forgiven by the creditor within twelve months of the statement date. For each such forgiven liability so listed, the name of the creditor to whom such liability was owed shall be stated;

    (5) a list of all sources of income of the member, his or her spouse, and dependent children including all compensated employment of whatever nature, all directorships or other fiduciary positions for which compensation has or will be claimed, all capital gains including a description of the individual sources of such gains, all contractual arrangement producing or expected to produce income including, but not limited to interest, dividends, royalties and rents. Statements shall provide the amounts and sources of income for the twelve-month period immediately preceding the filing date of the statement. The amounts of such income received shall be listed and valued by category in the same manner as required by paragraph (2) of this subsection. The amount of income of the dependent children of the member need not be disclosed unless specifically requested by the Joint Legislative Committee on Ethical Standards. Not required to be reported as a source of income are:

     (i)   cash gifts in an aggregated amount of less than $100 received during the preceding 12 months from a person;

    (ii)  non-cash gifts with an aggregated fair market value of less than $200 received during the preceding 12 months from a person; and

    (iii)             gifts with an aggregated cash or fail market value of less than $3,000 received during the preceding 12 months from a relative;

    (6) A list of any offices, trusteeships, directorships or positions of any nature whether compensated or uncompensated, held by the member, his or her spouse, and dependent children with any firm, corporation, association, partnership or business that either does business with or is licensed, regulated or inspected by a State agency.

    b. Each statement shall contain a certification by the member that he or she has read the statement, that to the best of his or her knowledge and belief it is true, correct and complete and that he or she has not and will not transfer any asset, interest or property for the purpose of concealing it from disclosure while retaining an equitable interest therein.

    c. The Joint Legislative Committee on Ethical Standards shall prescribe the form of the disclosure statement required to be filed by this section. Initial financial disclosure statements shall be filed within 90 days following the effective date of this amendatory and supplementary act, P.L. , c. (now pending before the Legislature as this bill). Thereafter, statements shall be filed on or before May 15th each year. The committee shall review each completed statement to determine its conformity with the provisions of this section and other applicable laws and shall file and maintain a copy of its for public inspection and copying in accordance with the procedures set forth in P.L.1963, c.73 (C.47:1A-1 et seq.).

    d. For purposes of this section, (1) "government instrumentality" means the Legislative, Judicial and Executive Branches of State government, including any office, department, bureau board, commission, council, authority or agency therein and any county, municipality, district, public authority, public agency or other political subdivision or public body in the State; and (2) "relative" means a son, daughter, grandson, granddaughter, father, mother, grandfather, grandmother, great-grandfather, great-grandmother, brother, sister, nephew, niece, uncle, or aunt. Relatives by adoption, half-blood, marriage or re-marriage shall be treated as relatives of the whole kinship.

 

    10. (New section) a. Notwithstanding the provisions of sections 4 and 8 of P.L.1971, c.182 (C.52:13D-15 et al) or any other law to the contrary and except as provided in subsection b. of this section, a State agency shall not lease or purchase real property, title to which is held, in whole or in part, by a member of the Legislature or federal elected official or a member of his or her immediate family, by any partnership, firm or corporation in which the member or federal elected official has an interest, or by a trust of any nature into which a member or federal elected official has placed control of real property regardless of whether or not the member or federal elected official has retained control of the trust assets or has knowledge of the management of trust assets.

    b. A State agency may acquire real property the acquisition of which is prohibited by subsection a. of this section only pursuant to the "Eminent Domain Act of 1971," P.L.1971, c.361 (C.20:3-1 et seq.)

    c. For purposes of this section, "interest" means (1) the ownership or control of more than 1% of the profits or assets of a firm, association, or partnership, or more than 1% of the stock in a corporation for profit other than a professional service corporation organized under the "Professional Service Corporation Act," P.L.1969, c.232 (C.14A-17-1 et seq.); and (2) the holding of the status of shareholder, associate, partner, or professional employee of a professional service corporation or of any other firm, partnership or association that provides professional services regardless of the extent or amount of shareholder interest in the corporation or of the amount of the assets or profits of the firm, partnership or association owned or controlled.

 

    11. (New section) a. Any code of ethics in effect on the effective date of this amendatory and supplementary act, P.L. , c. , shall continue in effect until the operative date of the uniform code of ethics, and on the operative date thereof the uniform code of ethics shall supersede any provisions of a code of ethics heretofore in effect that was formulated for a State agency with respect to its particular needs and problems, unless and until the State agency adopts a code of ethics to apply to the particular needs and problems of that agency pursuant to the provisions of section 12 of P.L.1971, c.182 (C.52:13D-23).

    b. With respect to any request for an advisory opinion or any complaint pending on the operative date of the uniform code or initiated after the operative date of the uniform code and involving a set of facts which would constitute a violation if committed prior to that date:

    (1) The procedural provisions of the uniform code shall govern, insofar as they are justly applicable and their application does not introduce confusion or delay;

    (2) The commission, with the consent of the person against whom a complaint is filed, may impose fines or penalties under the provisions of the uniform code;

    (3) The commission shall, if the violation is no longer a violation under the provisions of the uniform code, dismiss the complaint;

    (4) A State agency shall, if the violation is no longer a violation under the provisions of the uniform code, cease any disciplinary action based on the violation.

    c. In order to effect an orderly transition and ensure the continuous functioning of the commission, the term of each member of the Executive Commission on Ethical Standards in office on the effective date of this amendatory and supplementary act, P.L. , c. , shall continue until and terminate upon the appointment by the Governor of a replacement public member or Executive Branch member pursuant to subsection (b) of section 10 of P.L.1971, c.182 (C.52:13D-21). Any person serving as a member of the commission on the effective date of this act may, if otherwise qualified, be appointed as a member of the commission..

 

    12. This act shall take effect immediately, except that the amendments in section 3 of subsections b. and c. of section 6 of P.L.1971, c.182 (C.52:13D-17) regarding post-employment restrictions shall be operative with respect to persons who, on the effective date of this act, are State officers or employees or special State officers or employees 180 days after the date of enactment.

 

 

STATEMENT

 

    This bill would implement the most significant revision, strengthening, and expansion of the State's Conflicts of Interest Law since its inception. There are nine major provisions in the bill.

    1. The bill would impose new post-employment restrictions on Executive Branch officers and employees.

    Current law permanently bans a former State officer or employee or special State officer or employee from representing any party other than the State in any specific matter in which the officer or employee was "substantially and directly involved" while in government. This ban applies to all officers and employees. It also applies to any firm that the officer or employee joins after leaving government and to the partners and employees of the firm. This restriction would be retained in the bill.

    The bill would add a new two-year restriction on all State officers and employees and special State officers or employees to cover situations not covered by the existing restriction. A former officer or employee could not represent a party other than the State in any specific matter over which the person had "supervisory responsibility" at any time while in government. This restriction would be personal to the former officer or employee; it would not apply to the firm or its partners or employees.

    Current law does not address the issue of the appearance of a conflict of interest in the post-employment context. The bill would impose a one-year restriction that would apply to every State officer or employee or special State officer or employee who must file a financial disclosure statement. Approximately 1,000 people must file statements pursuant to Executive Order Nos. 1 and 9 (Florio -- 1990). Another 1,000 must file pursuant to the Casino Control Act, P.L.1977, c.110 (C.5:12-1 et seq.). During the one-year period, the person could not communicate with or appear before the agency the person formerly served in.

    2. The bill would close a loophole in the current Conflicts Law.

    Professionals who are employed in professional service partnerships are treated differently than professionals who are employed in professional service corporations. The bill would resolve this discrepancy.

     3. Greater financial disclosure would be required by legislators and senior legislative staff members.

    Among all elected and top-level appointed officials at any level of government in New Jersey, members of the Legislature have the weakest financial disclosure requirement. The statement they file reveals much less than the form filed by Executive Branch officers under Executive Order No. 1 (Florio -- 1990) and the form filed by local government and school district officials under the Local Government Ethics Law, P.L.1991, c.29, (C.40A:9-22.1 et seq.) and the School Ethics Act, P.L.1991, c.393, (C.18A:12-21 et seq.) respectively. The bill would require disclosures identical to those required under Executive Order No. 1. This provision would apply to all legislators and to such senior legislative staff as determined by the Joint Legislative Committee on Ethical Standards.

    4. Personal interest voting by legislators would be prohibited.

    Current law allows a legislator to vote on a bill in which he or she has a personal interest so long as the legislator discloses the interest and decides that the holding of the interest will not impair objectivity. This provision of the bill, which is identical to a bill currently pending sponsored by Senator Brown (Senate No. 67 of 1992), would bar a legislator from voting on a bill in which the legislator has a personal interest.

    5. The bill would ban the receipt of honoraria by legislators and clarify the ability of State agencies to ban the receipt of honoraria by their officers and employees.

    Legislators would be forbidden from accepting any honoraria. This is consistent with the recommendation of the bipartisan Ad Hoc Commission on Legislative Ethics and Campaign Finance Reform (AHC), which conducted numerous hearings and issued a series of recommendations in 1990. Also, the bill would ratify the current practice in some State agencies of banning honoraria except in very limited circumstances.

    6. New restrictions would be imposed on State agency leases.

    This provision of the bill is modeled on Assemblyman Russo's bill, Assembly No. 1072 of 1992, but would go further. That bill forbids agencies from entering leases where a legislator, his firm, or a trustee (even if the trust is a "blind trust") holds an interest in the property. Interest is defined as 10% or greater ownership.

    Under this bill, the leasing ban would extend to property in which the legislator's spouse or other immediate family member has an interest. Also, "interest" would be defined more broadly, as it now is in the law banning State contracts with State officers or employees, to mean 1% or greater ownership. Also, current law relating to Executive Branch officers and employees would be tightened to ban leases of property owned by officers and employees subject to mandatory financial disclosure. In order to avoid potential constitutional issues, the proposal would hold harmless current leases and would not require divestiture by those who are elected or appointed after a lease has been executed.

    7. The bill would reconstitute the Executive Commission on Ethical Standards to make a majority of the members public members.

     Currently, all seven members are State officers or employees. Under the bill, four of the seven would be public members. The other three would be State officers or employees.

    8. The enforcement powers of the Executive Commission would be clarified.

    The commission would have explicit authority to enforce the provisions of executive orders that give the commission jurisdiction and to render advisory opinions about such orders. An example of this type of order is Executive Order No. 1, which requires numerous officials to file financial disclosure statements.

    9. The bill would raise the maximum penalty for a violation of the ethics law, a code of ethics, or an executive order.

    Under the bill, the maximum penalty would be raised from $500 to $5,000. The minimum monetary penalty of $100 would remain.

 

 

 

The "Comprehensive Ethics Reform Act of 1992"; clarifies and strengthens ethical standards applicable to State officers and employees, special State officers and employees and members of the Legislature.