Gifts, Gratuities, and/or Tickets to Cultural or Sporting Events: Rules Regarding the Acceptance of

This content concerns ASU employees accepting gifts, gratuities and free admission to cultural or sporting events and addresses both the prohibitions on ASU employees accepting gifts or gratuities under certain circumstances as well as the statutory "entertainment ban" which sets out the parameters under which an ASU employee may accept free admission to a cultural or sporting event.

ASU employees must be careful about accepting gifts or gratuities. A gift or gratuity may be any benefit or thing that is voluntarily bestowed for little or no compensation. The kinds of gifts with which ASU employees must be concerned are those that may or appear to have an influence on the employee in the exercise of his or her duties. There are several state statutes and ASU policies that address the receipt of gifts or gratuities by public employees. In addition, there is a specific statute that addresses when a state employee may accept free admission to a cultural or sporting event. Violations of these laws include both civil and criminal penalties which range from employee discipline (including termination) to criminal prosecution.

Gifts and Gratuities

According to both statutory law and ASU Policies, university employees are prohibited from receiving any direct or indirect gift that would not legally and ordinarily accrue to the employee if the gift is of such a character that it may "manifest a substantial and improper influence" on the employee in the exercise of his or her official duties. See Arizona Revised Statutes ("A.R.S.") §§ARS38-504(A) and ARS38-505(A); ASU Policy on Conflict of Interest (ACD 204-08), Rules Five and Six. To that end, the primary ASU Policy on Gifts and Gratuities in PUR 104 (1) provides, in relevant part, as follows:

Prohibited Gifts and Gratuities

University employees shall not accept or solicit, directly or indirectly, anything of economic value as a gift, gratuity, favor, entertainment, or loan which is or may appear to be designed to influence official conduct in any manner, particularly from a person who is seeking to obtain contractual or other business or financial arrangements with the university (e.g., a vendor, who has interests that might be substantially affected by the performance or nonperformance of the employee’s duty).

This includes both present and potential suppliers and contractors to the university and agents working on behalf of suppliers and contractors.

The foregoing Policy suggests, however, that an ASU employee may accept a gift if it is not designed to influence or induce the exercise of official conduct:

Permissible Gifts and Gratuities

University employees may accept from vendors and others:

1. unsolicited advertising or promotional material such as pens, pencils, scratch pads, and calendars
2. occasional business lunches or food and refreshments of insignificant value
   and
3. other items of nominal or minor value (e.g., a box of candy or fruitcake) that are merely tokens of appreciation and not related to any particular transaction.

An employee must determine whether the gift or gratuity is or may appear to be designed to influence his or her official conduct. Other than offering examples (2) and implicitly suggesting some possible factors (3), the Policy offers no formula for ascertaining the purpose of a gift.

If you have a question about the propriety of a gift or gratuity, the safest practices are to decline the gift, pay for it yourself, or seek guidance from the ASU Office of General Counsel before accepting it.

Examples of Gifts and Gratuities

1. A potential vendor has submitted an offer to contract with ASU. The potential vendor invites a group of ASU employees to a dinner paid for by the potential vendor for the purpose of discussing the vendor’s contract offer. May the ASU employees accept the invitation?
   No. The invitation is targeted at and intended to influence the ASU employees' decision-making.
2. An ASU employee attends a conference sponsored by an ASU vendor or at which the ASU vendor has a display booth or table. The attendees include ASU employees as well as other vendor customers. The vendor display includes promotional items. All attendees are invited to take some. May the employee take any of the items?
   Yes. The circumstances suggest that the promotional items are not targeted at the ASU employee. Instead, the purpose behind the gift is to promote the vendor in general.
3. An ASU employee attends a free event sponsored by an ASU vendor. The event is open to many different people including some of the vendor’s other customers. While there the ASU employee enters into a raffle (which is free) in which all attendees are invited to participate. The raffle is intended to encourage people to attend. The ASU employee wins a valuable prize in the raffle. May the ASU employee accept the prize?
   Yes. The circumstances suggest that the prize is not targeted at influencing the ASU employee. The purpose behind the contest was to encourage people to attend rather than influencing their decision making. Further, assuming that the raffle contest was fairly administered, the chances of winning would have been equal for all people in attendance and was not targeted at any particular participant.
4. An ASU employee attends a conference sponsored by an ASU vendor. The attendees include ASU employees as well as other vendor customers. At the conference, the vendor invites the ASU employee and a representative of another of the vendor’s customers to a lunch for which the vendor will pay. May the ASU employee accept the invitation?
   It depends. The employee must consider whether the invitation is designed to influence the employee's decision-making. Although the inclusion of another customer may suggest that the invitation is not specifically targeted at the ASU employee’s decision-making, the employee should still consider the overall circumstances surrounding the invitation.
   If the employee is not able to determine whether it is appropriate to accept the gift, the safest practice would be to decline the gift, pay for it him or herself, or seek guidance before accepting the gift.
5. An ASU vendor has acquired seats at a table at a business or fundraising luncheon or dinner. A representative of the ASU vendor invites an ASU employee to attend the conference and be seated at the table. Is it appropriate for the ASU employee to accept the invitation?
   It depends. The employee must consider whether the invitation is designed to influence the employee's decision-making. Accordingly, the employee should consider the overall circumstances surrounding the invitation.

Tickets to Sporting or Cultural Events

ASU employees must be especially cautious before accepting tickets or paid admission to sporting or cultural events because there are special rules that govern gifts of that nature. In 2000, the Arizona Legislature enacted a law that is commonly referred to as the "entertainment ban." See A.R.S. § 41-1232.08. That law provides, in pertinent part, as follows:

41-1232.08. Entertainment ban; state and political subdivisions; exceptions; definition

A. * * * A state officer (4) or state employee (5) shall not accept an expenditure (6) or single expenditure (7) for entertainment (8) from a principal, (9) designated lobbyist, (10) authorized lobbyist, lobbyist for compensation, public body, (11) designated public lobbyist or authorized public lobbyist or any other person acting on that person's behalf.

The entertainment ban statute is difficult to interpret because many of the terms used in the statute are burdened with special statutory definitions. (See footnotes 3 through 10 above.) To summarize, the entertainment ban applies to an invitation if:

• The event or activity is predominantly sporting or cultural;
• There is an admission charge to attend the event that the ASU employee is not being asked to pay; and
• The person, entity, or government entity that is extending the invitation is a lobbyist, employs a lobbyist (12) or is a public body that employs a lobbyist.

Consequently, if a lobbyist or someone that employs a lobbyist offers an ASU employee a ticket to a sporting or cultural event, the safest practices for that employee are to decline to accept the ticket, to pay for it, or seek advice from OGC. Please note, however, that there is a specific statutory exception that permits ASU employees to accept free admission to any sporting or cultural event or activity, sponsored by an institution under the jurisdiction of the Arizona Board of Regents ("ABOR") (e.g., one of the State’s universities), in a facility that is owned or operated by an institution under the jurisdiction of ABOR A.R.S. § 41-1232.08(C)(3).

Examples of Tickets to Sporting or Cultural Events

1. A company sponsors a golf tournament and offers free admission or participation to an ASU employee. May the ASU employee accept the invitation?
   It depends. If the company is a lobbyist or employs a lobbyist, the ASU employee should either decline the admission or pay for it. If the company is not a lobbyist and does not employ a lobbyist, the entertainment ban will not prohibit the ASU employee from accepting the free admission. However, even if the entertainment ban does not apply, the gift may be prohibited if the offer is intended to influence the ASU employee in the exercise of his or her official duties (see discussion above).
2. A friend of an ASU employee, who works for a corporation that employs a lobbyist, offers the ASU employee a ticket to a Diamondback’s game. Is it permissible for the ASU employee to accept the ticket?
   It depends. If the ticket was purchased by or will be reimbursed by the friend’s employer, the ASU employee should either decline the ticket or pay for it. If, however, the friend purchased the ticket him or herself (not paid for or reimbursed by the employer), then the entertainment ban will not prohibit the ASU employee from accepting the ticket. However, even if the entertainment ban does not apply, the gift may be prohibited if the offer is intended to influence the ASU employee in the exercise of his or her official duties (see discussion above).
3. A company that employs a lobbyist invites an ASU employee to attend a fundraising event that will be held at an art museum. The company will pay for admission to the event. Does the entertainment ban prohibit the ASU employee from accepting the invitation?
   No. The entertainment ban does not apply. The event is a fundraiser, not a sporting or cultural event. The location of the fundraiser is incidental. However, accepting the invitation may still be prohibited if the invitation is intended to influence the ASU employee in the exercise of his or her official duties (see discussion above).
4. A colleague from Northern Arizona University ("NAU") offers an ASU employee a free ticket to an NAU cultural event. May the ASU employee accept the ticket?
   Yes. The entertainment ban provides a specific exemption that allows ASU employees to accept tickets from ABOR controlled institutions (e.g., NAU) for events sponsored by institutions under ABOR's jurisdiction (e.g., NAU).

Notes

(1) See also the ASU Code of Ethics for procurement activities (PUR 102) and other ASU Policies entitled "Gifts and Gratuities" in ACD 204-06 and SPP-813 which each refer to and rely on PUR 104.

(2) The specific examples are "unsolicited advertising or promotional material such as pens, pencils, scratch pads, and calendars" and "a box of candy or fruitcake."

(3) For example, factors include whether the gift is unsolicited promotional material, whether the gift is justified by a legitimate business purpose, and whether the gift is of "insignificant" or "nominal or minor" value.

(4) "State officer" means a person who is duly elected, appointed or retained through an election to any state office or a member of any state board, commission or council, and includes a member of the legislature. A.R.S. § 41-1231(22).

(5) "State employee" means an employee of a university under the jurisdiction of the Arizona Board of Regents. A.R.S. § 41-1231(21).

(6) "Expenditure" means a payment, distribution, loan, advance, deposit, or gift of money or anything of value and includes a contract, promise or agreement, whether or not legally enforceable, to make an expenditure that provides a benefit to an individual state officer or state employee and that is incurred by or on behalf of one or more principals, public bodies, lobbyists, designated public lobbyists or authorized public lobbyists. A.R.S. § 41-1231(6).

(7) "Single expenditure" means an expenditure that provides a benefit of more than twenty dollars to an individual state officer or state employee and that is incurred by or on behalf of one ore more principals, public bodies, lobbyists, designated public lobbyists or authorized public lobbyists. A.R.S. § 41-1231(19).

(8) "Entertainment" means the amount of any expenditure paid or incurred for admission to any sporting or cultural event or for participation in any sporting or cultural activity. A.R.S. § 41-1231(5).

(9) "Principal" means any person, other than a public body, that employs, retains, engages or uses, with or without compensation, a lobbyist. Principal includes any subsidiary of a corporation. A.R.S. § 41-1231(16).

(10) "Lobbyist" means any person, other than a designated public lobbyist or authorized public lobbyist, who is employed by, retained by or representing a person other than himself, with or without compensation, for the purpose of lobbying and who is listed as a lobbyist by the principal in its registration pursuant to section 41-1232. Lobbyist includes a lobbyist for compensation, designated lobbyist and authorized lobbyist. Lobbyist includes attorneys whose practice involves bonding, underwriters of bonds and investment bankers whose business includes bonding. A.R.S. § 41-1231(12).

(11) "Public body" means the Arizona board of regents, a university under the jurisdiction of the Arizona board of regents, the judicial department, any state agency, board, commission or council, any county, any county elected officer who elects to appoint a designated public lobbyist or any city, town, district or other political subdivision of this state that receives and utilized tax revenues and that employs, retains, engages or uses, with or without compensation, a designated public lobbyist or authorized public lobbyist. A.R.S. § 41-1231(17).

(12) The Arizona Secretary of State's website https://www.azsos.gov/block/lobbyists-forms-resources-block allows the public to search the public filings for the names of registered lobbyists and their principals (those for whom they work).