Work on ethics law loophole; no exemptions from ‘gift’ cap

Even after the Office of the Public Auditor and the Office of the Attorney General raised their concerns about a bill raising the limit from $50 to $200 the nonmonetary value of gifts that government officials and employees can accept, the House Committee on Judiciary and Governmental Operations still came up with a version that fails to take into account any sensible recommendation from OPA to put more teeth into the Ethics Code Act.

Hopefully, the next time around, the JGO Committee chaired by Rep. Glenn L. Maratita will do a much better job in making sure the bill is not a waste of time, effort, and other resources.

House Bill 19-84 has been sent back to committee for further review. But some of the proposed changes do not make sense at all and have the potential to further erode public confidence in government.

A better idea is to scrap HB 19-84, authored by Rep. Joseph Lee Pan T. Guerrero (R-Saipan). In its place, a new bill should be introduced to put a plug on the ethics law loophole that’s been pointed out time and again, including more recently by Public Auditor Michael Pai.

This loophole in the Ethics Code Act is the lack of an aggregate limit on the value of nonmonetary gifts that government officials and employees can accept.

A meaningful amendment to the ethics law, as suggested by OPA, is putting an $85 threshold on the allowable nonmonetary value of gift, with an aggregate limit of up to $200 “in a calendar year” from any given entity. This is coupled with a requirement that all such gifts be reported to OPA, including penalty for failure to report.

The $85 takes into consideration inflation since 1992 when the ethics law was enacted. That means the value of $50 in 1992 is now equivalent to around $85, far less than HB 19-84’s original proposal of $200.

As the public auditor pointed out, while single nominal gifts may not seem as though they can cause influence or erode public confidence, in the aggregate they easily can.

“A $200 threshold with no aggregate limit could easily turn into a sum much more than a one-time meal of $150. This loophole is very concerning,” the public auditor said in a letter to the bill’s author, who is also a member of the JGO Committee.

The OPA letter is dated Oct. 14. Six days later, the JGO Committee completed its report.

Besides Maratita and bill author Guerrero, other JGO Committee members are Reps. Francisco S. Taimanao, Blas Jonathan “BJ” Attao, Anthony T. Benavente, Rafael Demapan, and John Paul P. Sablan.

The JGO Committee and other lawmakers must consider this, too: The federal government’s threshold for nonmonetary gifts is $20, as long as the gifts from one person do not exceed $50 in a calendar year.

Again, currently, a CNMI government official can accept $50 in nonmonetary gift or dinner from a casino investor, for example. However, nothing in the ethics law prohibits the same government official from receiving another $50 gift or dinner from the same casino investor during the following day, week, or month.

HB 19-84’s title is to increase the $50 cap to $200, but the committee version retained the $50 cap and now the bill title no longer matches the intent. Guerrero said the JGO Committee is addressing this. But again, it takes way more than just changing the bill title for the measure to make more sense.

There is also a plan to exempt the governor, lieutenant governor, lawmakers and other elected officials from the $50 cap. This is a bad idea.

These elected officials are the very first ones to be offered gifts, dinner and drinks by private interests, as well as visiting dignitaries. And even now, government officials and employees are already required to report anything they receive that exceeds $50 but we have not heard of anyone doing so.

OPA pointed out that the purpose of a low threshold is primarily to safeguard against the “appearance of impropriety rather than preventing actual influence peddling.”

Even innocent nominal gifts from regulated parties to their regulators carry risk of the appearance of impropriety, OPA said. These dangers, it added, “are only compounded when the limits are raised, especially if there is no aggregate limit or reporting requirements.”

While OPA acknowledges the difficult position that public officials find themselves in—between rejecting an innocent, well-intended gift and strict compliance with the law—OPA is nonetheless standing behind the 8th Legislature’s purpose in enacting the ethics law.

This is to ensure public officials are free from influence and potential conflicts of interest, to develop accountability and preserve public confidence in government.

If Northern Marianas College students or another entity were to conduct a survey today on whom people perceive or believe to be the most untrustworthy or most corrupt in the CNMI government, guess which government positions will come out on top of the survey list?