WSR 04-18-019

PERMANENT RULES

EXECUTIVE ETHICS BOARD


[ Filed August 23, 2004, 3:24 p.m. , effective September 23, 2004 ]


Purpose: To revise and clarify current agency rules regarding board approval of noncompetitive contracts or grants between state agencies and state officers and employees.

Citation of Existing Rules Affected by this Order: Amending WAC 292-110-060.

Statutory Authority for Adoption: RCW 42.52.360 (2)(b).

Other Authority: RCW 42.52.120(2).

Adopted under notice filed as WSR 04-12-077 on June 1, 2004.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

Date Adopted: July 9, 2004.

Brian R. Malarky

Executive Director

OTS-7286.2


AMENDATORY SECTION(Amending WSR 01-13-080, filed 6/19/01, effective 7/20/01)

WAC 292-110-060   ((Compensation for outside activities and)) Current state officers and employees contracting with state agencies.   (1) ((The primary purpose of the Ethics in Public Service Act is to prevent conflicts of interest that impair the impartial and independent judgment of state officers and employees. A conflict of interest may occur when a state officer or state employee accepts compensation for outside activities, and acceptance conflicts with the performance of official duties on behalf of the state and the citizens of Washington. Conflicts of interest occur whenever a state officer or state employee has a beneficial interest in a transaction with the state; accepts outside compensation for the performance or nonperformance of an official duty; or, accepts or seeks outside compensation relating to a matter in which the officer or employee participated in an official capacity. A conflict of interest extends to those matters in which a state officer or employee exercises responsibility. Potential conflicts of interest relating to the receipt of compensation for outside activities may be resolved by seeking the review and prior approval of the executive ethics board.

(2) A state officer or employee may not receive anything of economic value under a contract or grant outside his or her official duties unless each of the following conditions is met:

(a) The contract or grant is legitimate and actually performed;

(b) The contract or grant is not within the state officer's or employee's official duties, is not under his or her supervision; is not created or authorized by the state officer or employee in an official capacity, and is not within an area of his or her official responsibility;

(c) The contract or grant is not performed for nor compensated by a person from whom the state officer or employee would not be able to accept a gift; and,

(d) The contract or grant would not require the disclosure of confidential or nonpublic information.

(3) A state officer or employee may not engage in a business or transaction or professional activity, or incur an obligation of any nature if such activities may conflict with the proper discharge of official duties.

(4) A state officer or employee may not enter into a contract or receive a grant, or have a beneficial interest in a contract or grant with a state agency unless all conditions in section two are met, and one of the following conditions are satisfied:

(a) The contract bid or grant application is awarded through an open and competitive bidding process and more than one bid or grant application is received; or

(b) If only one bid or application is received, or the process for awarding the contract or grant was not open and competitive, and the executive ethics board has advised that the employee's interest in the contract or grant is not in conflict with the proper discharge of the employee's official duties.

(5) Provided that the conditions in sections two and three are met, the following contracts are approved by the executive ethics board:

(a) A contract or grant whereby the state officer or state employee receives assistance through state programs or federal programs administered by the state when they are entitled to receive such assistance by law and on the same basis as similarly situated citizens, and when the officer or employee does not exercise discretionary judgement with regard to an assistance program for which he or she is otherwise eligible;

(b) A contract to perform teaching duties at a bona fide community college, vocational-technical school, or institution of higher learning, provided no state resources are used to perform the duties; there is no conflict with the performance of official duties; and the state officer or state employee did not use his or her official position to influence the contract of employment; and,

(c) A contract held by a spouse, in which the officer or employee has a beneficial interest, with a state agency, provided that the officer or employee did not participate in the contract.

(d) An employee who has a contract or grant or a beneficial interest therein which is approved by the board under section (5)(a)-(c) of this rule is not required to file a separate application for approval of the contract under section (6). However, the employee is responsible for determining that the criteria in sections (2) and (3) are satisfied.

(e) An employee who is awarded a contract or grant under section (5)(a)-(c) of this rule shall file a copy of the contract with the board. However, if the employee's only interest is a beneficial interest, the contract need not be filed with the board.

(6))) Purpose - The primary purposes of the Ethics in Public Service Act are to prevent conflicts of interest that impair the impartial and independent judgment of state officers and employees and the misuse of state position for private gain. Conflicts of interest occur whenever a state officer or state employee:

(a) Has a beneficial interest relating to a matter in which the officer or employee participated in an official capacity;

(b) Accepts outside compensation for the performance or nonperformance of official duties; or

(c) Accepts or seeks outside compensation from persons that they regulate or conduct state business with.

A misuse of state position occurs whenever a state officer or employee:

(i) Uses his or her official position to influence a contract award; or

(ii) Uses state resources to engage in private work that is not part of official duties.

(2) Applicable law, standards of review - RCW 42.52.020 prohibits financial and other interests that conflict with official duties. RCW 42.52.030 prohibits financial and beneficial interests in transactions involving the state. RCW 42.52.030(2) provides alternate conflict of interest provisions related to research and technology transfer agreements at certain institutions of higher education. RCW 42.52.160(1) prohibits the use of state resources for private benefit or gain. RCW 42.52.120(1) prohibits compensation outside of official duties unless certain conditions are met. RCW 42.52.120(2) requires prior board approval of noncompetitive contracts between state officers and employees and any state agency. RCW 42.52.120(3) requires that contracts approved by the board must also be filed with the board within thirty days of execution.

(3) Approval required - A state officer or employee must receive board approval before entering into, or obtaining a beneficial interest in, a contract or grant with a state agency only if the process for awarding the contract or grant was not open and competitive, or, whenever only one bid or application was received.

(4) Application for approval - State officers and employees seeking the approval of the board for a contract, grant application, or outside employment with a state agency shall provide the following information to the executive director no later than thirty days prior to the commencement of the contract:

(a) A description of current official duties and responsibilities;

(b) A statement of the work to be performed and((,)) a copy of the contract;

(c) The duration and dollar value of the contract, if applicable;

(d) A statement that no state resources will be used to perform the outside employment or to fulfill the contract or grant; ((and,))

(e) A description of how the work will be performed without the use of state resources; and

(f) A statement that the employing agency has reviewed or approved the outside contract under applicable rules or policies, except when requesting a conditional approval as provided in subsection (5)(b) of this section.

(((7))) (5) Approval process - The executive director shall review the contract or grant application terms and related documents and may determine whether there could be a potential conflict with RCW 42.52.120(1) or other applicable provisions of the Ethics in Public Service Act as noted in subsection (2) of this section. If the ((board secretary)) executive director determines:

(a) There would be no potential conflict under ((sections two and three of this rule)) RCW 42.52.120(1) or other applicable provisions of chapter 42.52 RCW, the executive director shall approve the contract or grant application.

(b) There would be no potential conflict under RCW 42.52.120(1) or other applicable provisions of chapter 42.52 RCW but the contract or grant has not been approved by the appointing authority pending a board review, the executive director may conditionally approve the contract or grant application; or

(c) There could be a potential conflict under ((sections two and three of this rule)) RCW 42.52.120(1) or other applicable provisions of chapter 42.52 RCW, the executive director shall refer the contract or grant application to the board for approval or disapproval.

(((8))) (6) Contract amendments - If a contract has been amended or the scope of work altered, and the effect of the amendment or alteration may create a potential conflict of interest under ((sections two and three of this rule)) RCW 42.52.120(1) or other applicable provisions of chapter 42.52 RCW, the employee must resubmit the contract to the board at least fifteen days prior to commencement of work under the amended or altered contract.

(((9) If)) (7) Series of similar contracts - If a state officer or employee anticipates receiving a series of substantially identical contracts or grants with a state agency is anticipated, ((the state officer or employee)) they may request that the board preapprove such contracts or grants. Preapproval shall be effective for the period of one calendar year, after which the state officer or employee shall resubmit the request.

(8) Exemptions, preapproved contracts or grants - An employee who has a contract or grant or a beneficial interest therein which is preapproved by the board under this section is not required to file an application for approval of the contract. However, the employee is responsible for determining that the contract or grant would not conflict with RCW 42.52.120(1) or other applicable provisions of chapter 42.52 RCW. Provided that the applicable conditions in RCW 42.52.120(1) are met, the following contracts are approved by the executive ethics board:

(a) A contract or grant whereby the state officer or state employee receives assistance through state programs or federal programs administered by the state when they are entitled to receive such assistance by law and on the same basis as similarly situated citizens, and when the officer or employee does not exercise discretionary judgment with regard to an assistance program for which he or she is otherwise eligible;

(b) A contract to perform teaching duties at a bona fide community college, vocational-technical school, or institution of higher learning, provided no state resources are used to perform the duties; there is no conflict with the performance of official duties; and the state officer or state employee did not use his or her official position to influence the contract of employment;

(c) A contract held by a spouse, in which the officer or employee has a beneficial interest, with a state agency, provided that the officer or employee did not participate in the contract;

(d) A contract that was received by an officer or employee of an institution of higher education to provide expert witness services in state litigation provided no higher education resources are used to perform the duties; there is no conflict with the performance of official duties; and the officer or employee did not use his or her official position to influence the contract; and

(e) A contract or grant that was received by an officer or employee of an institution of higher education or of the Spokane Intercollegiate Research and Technology Institute under conditions that complied with RCW 42.52.030(2). At the request of the institution the board may advise the institution if a specific contract or grant would raise significant conflict of interest concerns under applicable provisions of chapter 42.52 RCW.

(9) Filing required - Final contracts reviewed under this rule shall be filed with the executive director within thirty days of execution. An employee who is awarded a contract or grant preapproved under subsection (8)(a) through (c) of this section shall file a copy of the contract with the board.

(10) ((The executive director shall provide written notice of any action on a contract bid, grant application or request for outside employment within fifteen working days of the board's action.

(11) Final contracts reviewed under this rule shall be filed with the executive director within thirty days of execution.)) Filing exemptions - An officer or employee of an institution of higher education or of the Spokane Intercollegiate Research and Technology Institute who is awarded a contract or grant preapproved under subsection (8)(d) or (e) of this section is not required to file a copy of the contract or grant with the board. A copy of all expert witness contracts awarded under subsection (8)(d) of this section shall be maintained by the office of the attorney general subject to review by board staff. Those state institutions of higher education or the Spokane Intercollegiate Research and Technology Institute who award contracts or grants under RCW 42.52.030(2) shall maintain copies of all contracts or grants approved under subsection (8)(e) of this section. In lieu of filing the contracts with the board, these institutions shall provide the board by September 1 of each year a brief summary of all such contracts or grants awarded in the previous fiscal year.

[Statutory Authority: RCW 42.52.360 (2)(b) and 42.52.425. 01-13-080, 292-110-060, filed 6/19/01, effective 7/20/01. Statutory Authority: RCW 42.52.360 (2)(b). 98-04-001, 292-110-060, filed 1/21/98, effective 2/21/98.]

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