Dear Virginia: Do better
Monday, March 31, 2014 at 2:18AM
Jessica Tillipman in Bribery, Governor Bob McDonnell, Governor Terry McAuliffe, Kenya, Richard L. Saslaw, State Integrity Project, Virginia

Last summer, I wrote a series for the FCPA Blog about Virginia’s "Shamefully Inadequate Ethics Laws" (see here, here and here). I was not alone in criticizing what has been deemed one of the least effective ethics regimes in the country.

The State Integrity Project ranked Virginia 47th in the country for corruption risk and awarded the state’s shockingly lax ethics and anti-corruption laws a grade of "F."

To recap, Virginia has virtually no limits on the gifts and hospitality that may be accepted by government officials in the state.

The investigation and eventual indictment of former-Governor Bob McDonnell and his wife Maureen for violating federal corruption laws only further emphasized the need for reform. 

While the McDonnells have been charged with violating federal bribery laws, most of their extremely troubling actions (such as accepting $19,000 in tickets to a Redskins game suite from the Washington Redskins and almost $141,000 in other gifts -- such as Louis Vuitton shoes, golf clubs, iPhones and an engraved Rolex watch -- were completely kosher under Virginia's ethics laws.

This is because in Virginia, government officials can accept nearly anything, as long as they disclose it(Unless of course the "gift" is provided to a family member, in which case it may not only be accepted, it does not even need to be disclosed.)

Governor Terry McAuliffe, who campaigned on a platform that included ethics reform, has since issued an Executive Order that imposes a $100 gift cap on executive branch officers and employees (including himself).

It also covers gifts to family members, closing the loophole that the McDonnells exploited. While an important step, the executive order does not cover all government officials in Virginia.

Under pressure to enact ethics reform, the Virginia legislature has proposed several minimal changes to the state's ethics laws. Among other things, the proposed legislation includes a $250 cap on individual "tangible" gifts to officials and their immediate family members from lobbyists or people that do business with the state. 

What will this accomplish? Very little.

First, it may prohibit a government official from accepting an engraved Rolex, but it exempts the most common and troubling gratuities that are provided to government officials in Virginia: travel, meals, entertainment and other "intangibles."

And while the $250 individual gift cap is a modest improvement over the current limitless regime, it places no cap on the "cumulative dollar value" of gifts that a legislator may accept. (So, one $300 gift card is prohibited, but unlimited $200 gift cards are OK?)

As the Washington Post Editorial Board noted:

The bill is so slack it would be disingenuous to refer to it as "reform," as its advocates are fond of doing. In fact, it would do practically nothing to stanch the cascade of freebies to which Richmond's high and mighty evidently feel entitled.

Why can't Virginia pass modest reforms that would simply bring the state in line with the majority of other state ethics regimes? First, we are relying on officials to regulate their own behavior. We are asking them to cut-off their pipeline to lavish meals, trips and entertainment.

Second, it is attitudes like this, courtesy of Senate Majority Leader Richard L. Saslaw (D-Fairfax): "The absurdity is, you can’t legislate ethics. Either you’re dishonest or your not, okay?"

If that affront to logic doesn’t blow your mind, consider this: Even the gift restrictions in Kenya, a country ranked 136 out of 177 on the Transparency International Corruption Perceptions Index, are more stringent than Virginia's.

In Kenya, gifts worth more than 20,000 shillings (US$231) may not be accepted by an individual public officer.

It is astounding that while the DOJ actively pursues corruption cases abroad under the FCPA, government officials in Virginia continue to accept gifts and hospitality that would be prohibited by any respectable corporate FCPA compliance policy.

Can you imagine any competent CCO approving a request to spend thousands of dollars in travel and hospitality so that a foreign official and his family could attend a Notre Dame football game? Or a request to lend a foreign official free use of a company executive's Caribbean vacation home, valued at $18,000?

In Virginia, these gifts do not even raise an eyebrow. How can the Justice Department continue to extoll the virtues of clean government abroad when this galling behavior continues in its own backyard?  

Officials in Virginia have long declared near-immunity from ethical lapses because they can be trusted to do the right thing so long as the system is transparent (even though no one actually systematically reviews disclosure statements).  Yet recent high-profile scandals, objective anti-corruption studies and even public corruption prosecutions (VA ranked 10th in the country) prove otherwise.

It's time for officials in Virginia to stop talking about their honesty, trustworthiness and "commitment" to ethics, and actually pass meaningful reforms.    

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Jessica Tillipman is a senior editor of the FCPA Blog.  Follow her on Twitter: @JTillipman.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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