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After State Law Makers Pass Watered Down Version of Ethics Reform Virginia Governor Terry McAuliffe Announces New Ethics Commission

2014 will be known as the year of scandals and public corruption in Virginia. On June 25, 2014 the Associated Press reported that a federal grand jury was investigating the circumstances surrounding the resignation of former Virginia State Senator Phil Puckett and whether he violated federal law by allegedly accepting a position on the Virginia tobacco commission in exchange for resigning his seat in the state general assembly. (See my blog post on July 9, 2014). Then on September 4, 2014, former Governor Bob McDonnell and former First Lady Maureen McDonnell were convicted in federal court of numerous felony counts related to public corruption while in office for allegedly accepting more than $177,000 in gifts and loans in exchange for official acts. (See my blog post on September 4, 2014). McDonnell became the first former governor of Virginia to be indicted and convicted of crimes related to official acts while in office. Former State Senator Puckett denies the allegations and former Governor Bob and Maureen McDonnell pled not guilty and have filed an appeal to their convictions. In light of these unprecedented scandals, many in Virginia thought that 2014 would be the year of ethics reform and that is exactly what law makers have given them, well sort of ethics reform.

On September 25, 2014, current Virginia Governor Terry McAuliffe announced that he signed an executive order creating the Commission to Ensure Integrity and Public Confidence in State Government. Executive Order 28 creates a 10 member commission, whose co-chairmen will include former Lieutenant Governor Bill Bolling (R) and former U.S. Congressman Rick Boucher (D). Governor McAuliffe has requested a report from the commission by December 2014 on suggested changes and improvements to Virginia’s ethics laws and policies, with the goal of influencing the 2015 legislative session which starts January 2015. Once the ethics recommendations are in, the commission will continue to meet through 2015 to create recommendations for reform in other areas including campaign finance reform, the selection and appointment of state court judges and rules regarding appointment to other state commissions. Governor McAuliffe was motivated to create this new commission in part because he believed Virginia law makers did not go far enough when the general assembly passed ethics reform in March of 2014.

Virginia’s new ethics law, which took effect on July 1, 2014, was a bi-partisan effort, but has been characterized by The Washington Post as partial ethics reform. The new rules place a $250 annual limit on gifts to public officials from any lobbyist or entity that hires a lobbyist to advance its interests. The $250 cap also applies to individuals or organizations that are seeking to do business with the state. Under the old rules, public officials could receive gifts in any amount, but were required to report gifts worth more than $50. The new law did not however alter the limit of intangible gifts to public officials, such as meals, transportation, and trips, which public officials can still receive in unlimited amounts. Thus, trips such as the one Dominion Power provided for law makers in 2013 to Augusta Georgia to the Augusta National Golf Club, would still be valid under the new law. Public officials are now required to file disclosure forms twice a year under the new law, instead of once annually. The new law also requires state officials to disclose gifts from immediate family members. In addition, Virginia public officials must identify and disclose businesses in which they own stock valued at $5,000 or more. The prior law required such disclosure of securities only when they were valued in excess $10,000.

Governor McAuliffe had hoped to set a trend by creating a $100 annual gift limit for himself, his family and his executive staff, which he instituted when he took office in January 2014. According to The Washington Post, Governor McAuliffe viewed the recent ethic reform as “too weak” and hoped law makers would revisit the issue in the 2015 session. Critics of the new legislation point to the fact that law makers missed an opportunity to add teeth to ethics reform by requiring all stock transfers above a certain threshold to be reported and they failed to set limits on intangible gifts such as meals, travel, and entertainment. Perhaps the new 10 member commission created by Governor McAuliffe, which includes many prominent Virginians, including: the CEO of the Girl Scouts of Virginia, the former president of the University of Virginia, the president of Hampton-Sydney College, the vice president for advancement at George Washington at Mount Vernon, a former state commissioner of the department of labor, a former member of the House of Delegates, and the former president of BB&T in addition to the co-chairmen, will be able to fill in the gaps for more comprehensive ethics reform.

Terry Eaton -
Attorney, Professor & Speaker

Terry Eaton is the Founder and Principal at the Eaton Law Firm, PLLC.  Mr. Eaton focuses his practice defending

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