When's That Jet Picking Us Up for Dinner?

Legal Brief

Congratulations — your school district just approved a multimillion dollar capital project and it made front-page news. Now, vendors from all over are swooping down on unsuspecting school board members at conferences, inviting them to dinners, receptions and golf outings. They are offering the superintendent fully paid trips, including meals and accommodations, at vendor-sponsored events. You see a firsthand learning opportunity. Can you accept?

Nationwide, in every state, the rule is that board of education members as public officials, and school superintendents as public employees (“school officials”), are prohibited from taking gifts from companies doing business with their school districts. The intent is to prevent vendors from using their money to influence the independent judgment of the school district’s decision makers. But there are exceptions to every rule, and most states allow school officials to accept trivial or  de minimis gifts, like a trinket or a memento.

So when does the vendor-sponsored meal, outing or small gift become too much? That depends where you reside. In Alabama, board members and superintendents can accept meals up to $50 from vendors so long as they do not go over the annual limit of $250. In California, the annual limit is $440. Nevada requires school officials to report gifts from a single vendor that total more than $200 annually. Other states require financial disclosure statements from school officials to track vendor gifts, no matter the amount.

The problem is that vendors rarely disclose how much they spend on each person attending the event, and people rarely question the cost of the drinks, appetizers, dinner and entertainment. In some states, no law prohibits or limits gifts to school officials, but the school district’s code of ethics or conflict of interest policy may limit the amount of the vendor gifts.

Personal Liability

Is there a consequence for a public official accepting a gift in violation of the law or board policy?

There was for the public school administrator in Ohio who accepted two holiday hams from a vendor. The administrator faced criminal prosecution and personal liability because the vendor worked for the district.

In Florida recently, a superintendent lost her job, just two years away from retirement, after school board members criticized her for allowing employees to attend a vendor-sponsored dinner with transportation by personal jet. Even though the district did not have a clear policy preventing the gifts and the superintendent did not attend the outing, she was held accountable for lack of oversight and failing to report the situation to the board because the board had just awarded a contract worth more than $400,000 to the vendor. The educators involved received letters of caution, and each had to pay back the vendor. One teacher quit her job and went to work for the vendor.

Also, decisions to award contracts to vendors that sponsor events for school officials may have to be rescinded if there is an appearance of impropriety in the contract award. Outside vendors may also have a claim against the district if the decision makers are not committed to avoiding situations that may call into question the integrity of the district’s operations.

Financial Disclosures 

Are you doing enough as the school system leader to oversee the vendor interactions with your district’s employees? Be aware of what the law or board policy allows for vendor gifts. If a baseball hat exceeds the vendor gift limit, do not accept it. Think twice before private transportation arrives to take employees or board members to dinner. Make sure financial disclosure statements are given to the board.

In addition, you might converse with the vendor about expenditures — prior to accepting the gift or attending the function. Help other district staff understand what the law and/or policy allows. In this era of transparency and accountability, avoid the appearance of impropriety. If the gift could look like a bribe, do not accept it. Don’t let a vendor gift compromise your integrity or your position as the school leader.

When in doubt, contact your attorney and your state association for guidance.

Michele Handzel is school attorney with Capital Region BOCES in Albany, N.Y. E-mail: michele.handzel@neric.org