Opinion No. 99-61

BEFORE THE NEVADA COMMISSION ON ETHICS 

IN THE MATTER OF A REQUEST FOR OPINION concerning the conduct of MICHAEL J. McDONALD, Las Vegas City Councilman

This matter came before six members[1] of the Nevada Commission on Ethics (hereinafter "Commission") for hearing on Thursday, July 20, 2000, pursuant to a written panel determination entered February 7, 2000, finding just and sufficient cause for the Commission to render an opinion in this matter on the issue of whether Councilman McDonald, by his conduct at the July 12, 1999, meeting of the Las Vegas City Council on Agenda Item 4, violated Subsection 2 and/or Subsection 3 of NRS 281.501.

The hearing was properly noticed.  Councilman McDonald was present with his counsel, T. Louis Palazzo, Esq., and was sworn as a witness.  Also present and sworn as witnesses were Steve Miller, who filed the request for opinion with the Commission; Steven Kalish, Regional Vice President of Republic Services; Robert Groesbeck, General Counsel to Republic Services in Southern Nevada; and Brad Jerbic, Las Vegas City Attorney. 

The Commission, after full consideration of the testimony of witnesses, and the evidence received into the record, makes the following Findings of Fact and Conclusions of Law:  

FINDINGS OF FACT 

1.     Michael McDonald is an elected member of the Las Vegas City Council.  He has served as a Las Vegas City Councilman since 1995. In his private capacities, Mr. McDonald owns a corporate marketing company and is employed as Vice President of Corporate Development for Las Vegas Color Graphics.  

2.     At the July 12, 1999, Las Vegas City Council meeting, Councilman McDonald participated in consideration of, and voted on, Agenda Item No. 4, a 15-year advance extension (to the year 2021) of the City's disposal service contract with Republic Silver State Disposal Service, Inc., (formerly Silver State Disposal Service), a subsidiary of Republic Services[2] (hereinafter "Republic").  

3.     Prior to the July 12, 1999, Las Vegas City Council meeting at which the disposal service contract extension was considered, Councilman McDonald sought legal advice from the Las Vegas City Attorney[3] regarding his disclosure and abstention obligations in connection with his relationships with officers and/or employees of Republic and/or its subsidiaries and campaign contributions he received from Republic and its principals, officers, employees, and/or subsidiaries.  Based upon Councilman McDonald's representations regarding such relationships, and a review of campaign contribution information on file in the city clerk's office, the city attorney advised Councilman McDonald that the relationships did not require disclosure and that the campaign contributions did not create any kind of conflict of interest that would require either abstention or disclosure. 

4.      Mr. Steven Kalish is employed by Republic as Regional Vice President for the western region.  He has served in that capacity since approximately May 1999. Mr. Kalish also owns a local Las Vegas tavern, Paddy's Pub.[4]  Mr. Kalish and his wife personally contributed $2,000 to Councilman McDonald's 1999 political campaign.  In addition, Paddy's Pub provided a $2,500 in-kind contribution to Councilman McDonald's 1999 political campaign for beverages served and services provided at a fundraiser at the Pub.  

5.      As a primary part of Mr. Kalish's job as Regional Vice President of Republic, and in his capacity as owner of Paddy's Pub, Mr. Kalish is very involved in the Las Vegas community.  In his business capacities, Mr. Kalish maintains a cordial relationship with many political officials in the Las Vegas community.  He has hosted many political fundraiser events at his tavern, Paddy's Pub, for many state, county and local political candidates, including the political fundraiser he hosted at Paddy's Pub for Councilman McDonald.  

6.      Mr. Kalish first met Councilman McDonald in July 1997 after Republic Services acquired Silver State Disposal Service (now, Republic Silver State Disposal Service, Inc.).  

7.      Robert Groesbeck is employed by Republic as in-house general counsel for Southern Nevada.  He has served in that capacity for approximately seven years. Mr. Groesbeck contributed $2,000 to Councilman McDonald's 1999 political campaign.  

8.      Mr. Groesbeck negotiated the contract extension between Republic Services and the City of Las Vegas.  During those negotiations, Mr. Groesbeck met with Councilman McDonald and his staff, and all other city council members and their staffs, excluding the mayor who did not participate in the negotiations because of a conflict of interest.  

9.       Mr. Groesbeck first met Councilman McDonald in late 1996 when Mr. Groesbeck served as a delegate to Senator Robert Dole and Councilman McDonald attended a political function for Senator Dole.  Mr. Groesbeck was formerly Mayor of Henderson, Nevada, and, in that capacity, knew of Councilman McDonald.  

10.      Because of the important impact on its business, it is Republic's policy to be involved in all political races, from the Governor down to the school board.  Republic, through its three subsidiaries, contributed approximately $30,000 (approximately $10,000 for each subsidiary company) to Councilman McDonald's 1999 political campaign.  

11.     Other than the campaign contributions, tickets to a UNLV basketball game,[5] and a bulldog,[6] Councilman McDonald received no gift or other contribution, monetary or otherwise, from Republic or any of its principals, officers, employees or subsidiaries. 

12.      Councilman McDonald's 1999 political campaign raised a total of approximately $700,000 in campaign contributions.  

13.      Councilman McDonald has no fiduciary or pecuniary interest in, or business relationship with, Republic or any of its subsidiaries, nor does he have any fiduciary, financial or business relationship with any principal, officer or employee of Republic or any of its subsidiaries.  Councilman McDonald has never received a loan or any other financial promise from Republic, any of its subsidiaries, or its predecessor.  Councilman McDonald, on behalf of any business which has employed him or in which he may have any interest, has never solicited business from Republic, any of its subsidiaries, or its predecessor. 

14.     No principal, officer or employee of Republic or any of its subsidiaries is personally employed in any capacity by Councilman McDonald or a member of Councilman McDonald's household, or related to him by blood, adoption, or marriage within the third degree of consanguinity.  

15.     On July 12, 1999, the primary authority interpreting the statutory phrase “commitment in a private capacity to the interests of others" with regard to the disclosure and abstention requirements of N-RS 281.501, Subsections 2 and 3, was the Commission's "Gates Opinion."[7]  The Gates Opinion, for the first time, broadened the Commission's interpretation of NRS 281.501(2)(c), "commitment in a private capacity to the interests of others," to include friendships as well as familial relationships and business pecuniary interests.  

16.      On September 3, 1999, Judge Jerome Polaha, in the District Court, Clark County, Nevada, entered an order in an unrelated matter[8] overturning the Commission's "Gates Opinion," finding NRS 281.501(2)(c) unconstitutionally vague.  

CONCLUSIONS OF LAW 

1.     Michael McDonald is a public officer as defined by NRS 281.005 and NRS 281.4365.  

2.     The Commission has jurisdiction to render an opinion in this matter pursuant to NRS 281.465, Subsection I (a); and NRS 281.51 1, Subsection 2(b).  

WHEREFORE, on motion duly made, seconded, and approved by majority vote,[9] the Commission renders the following Opinion:

OPINION

On July 12, 1999, NRS 281.501, Subsection 2, stated:

In addition to the requirements of the code of ethical standards, a

member of the legislative branch shall not vote upon or advocate the passage or failure of, but may otherwise participate in the consideration of a matter with respect to which the independence of judgment of a reasonable person in his situation would be materially affected by: (a) His acceptance of a gift or loan; (b) His pecuniary interest; or; (c) His commitment in a private capacity to the interests of others. It must be presumed that the independence of judgment of a reasonable person would not be materially affected by his pecuniary interest where the resulting benefit or detriment accruing to him is not greater than that accruing to any other member of the general business, profession, occupation or group.

On July 12, 1999, NRS 281.501, Subsection 3, stated:

A public officer or employee shall not approve, disapprove, vote, abstain from voting or otherwise act upon any matter:

(a) Regarding which he has accepted a gift or loan; (b) Which would reasonably be affected by his commitment in a private capacity to the interest or others; or (c) In which he has a pecuniary interest,

without disclosing the full nature and extent of the gift, loan, commitment or interest.  Such a disclosure must be made at the time the matter is considered. If the officer or employee is a member of a body which makes decisions, he shall make the disclosure in public to the chairman and other members of the body.  If the officer or employee is not a member of such a body and holds an appointive office, he shall make the disclosure to the supervisory head of his organization or, if he holds an elective office, to the general public in the area from which he is elected.

The Commission believes that it is the best policy for a public official to always make a full disclosure when, no matter what the nature of a relationship may be, a "commitment in a private capacity to the interests of others," or any other appearance of impropriety or conflict of interest, is suggested in a matter before a public official.  

However, the Commission must render its Opinions within the bounds of the law effective at the time the conduct in question occurred.  

The District Court in Clark County, Nevada, through Judge Polaha, ruled that the language of NRS 281.501(2)(c) and NRS 281.501(3)(b), "commitment in a private capacity to the interests of others," effective on July 12, 1999, is "unconstitutionally vague" as applied to relationships involving friends or acquaintances.[10] 

NRS 281.501(2), effective on July 12, 1999, otherwise requires abstention from voting when "the independence of judgment of a reasonable person in his situation would be materially affected by" his acceptance of a gift or loan [NRS 281.501(2)(a)] and/or his pecuniary interest [NRS 281.501(2)(b)].

NRS 281.501(3), effective on July 12, 1999, otherwise requires full disclosure in matters regarding which a public officer has accepted a gift or loan [NRS 281.501(3)(a)] and/or in matters in which he has a pecuniary interest [NRS 281.501(3)(c)].  

The Commission considered the issue of whether the total of the campaign contributions Councilman McDonald received from Republic and/or its principals, officers, employees, and subsidiaries (approximately $36,500) was a "gift" as contemplated by NRS 281.501(2)(a) and NRS 281.501(3)(a).

In a previous Commission opinion in an unrelated matter,[11] the Commission addressed the issue of whether particular campaign contributions were a gift "which would tend improperly to influence a reasonable person in the public officer's position to depart from the faithful and impartial discharge of his public duties." The Commission concluded, under the facts and circumstances in that matter, that the campaign contributions in issue would not improperly influence a reasonable man in the public officer's place, nor did they improperly influence the public officer.  The campaign contributions at issue were "a small percentage [six percent] of [the public officer's] total campaign budget."[12]  However, the Commission's opinion was based on more than the mere percentage amount.  

The record in Opinion No. 95-51 reflected that the campaign contributions at issue were all properly reported and there was no direct evidence of an express quid pro quo between the contributors and the public official. The Commission, however, was "not prepared to issue a blanket statement that properly disclosed campaign contributions will never qualify as a 'gift ... which would tend improperly to influence a reasonable person in his position to depart from the faithful and impartial discharge of his public duties.’”[13]  The Commission further stated:  

"As the test makes clear, the question is not whether money is a 'gift,' but rather whether the money would improperly influence a reasonable man. It is conceivable that a campaign contribution could be deemed to improperly influence a reasonable man depending upon the amount of the contribution, the identity of the donor, the timing of the gift, and other such factors.”[14]  (Emphasis added.)  

It is important to note that, effective October 1, 1999, the 1999 Legislature amended Subsection 3 of NRS 281.501 by adding the sentence, "This subsection does not require a public officer to disclose any campaign contributions that the public officer reported pursuant to NRS 294A.120 or 294A.125 in a timely manner."  However, the statute clearly does not prohibit a public officer from disclosing any campaign contributions that may appear significant enough in relationship to the public officer's total campaign budget to raise the question of the contributions' effect on the public officer's independence of judgment or that of a reasonable person in the public officer's position. Such cases may implicate the disclosure and abstention standards in Subsections 2 and 3 of NRS 281.501 and the guidance thereon provided in Commission Opinion No. 99-56, the "Woodbury Opinion."[15] 

The Commission finds no evidence that Councilman McDonald at any time accepted any gift or loan from Republic or any of its principals, officers, employees or subsidiaries, as contemplated by NRS 281.501(2)(a) and NRS 281.501(3)(a).  The Commission further finds no evidence that Councilman McDonald has, or at any time relevant hereto had, any pecuniary interest in Republic or any of its subsidiaries or predecessors, as contemplated by NRS 281.501(2)(b) land NRS 281.501(3)(c).  The Commission further finds no evidence to support a conclusion that the campaign contributions Councilman McDonald received from Republic and/or its principals, officers, employees and subsidiaries, in relationship to the total amount raised by Councilman McDonald's political campaign and in consideration of all of the facts and circumstances of this matter, had an improper affect on Councilman McDonald's independence of judgment in considering Agenda Item 4 at the July 12, 1999, meeting of Las Vegas City Council, or that they would have had an improper affect on the independence of judgment of a reasonable person in Councilman McDonald's position.  

In light of all of the above, it is the Opinion of this Commission that Councilman McDonald's participation in consideration of, and vote on, Agenda Item No. 4, a 15-year advance extension (to the year 2021) of the City's trash collection contract with Republic Silver State Disposal Service, a subsidiary of Republic Services, at the July 12, 1999 meeting of the Las Vegas City Council, was not a violation of either Subsection 2 or Subsection 3 of NRS 281.501.  

NOTE:  THE FOREGOING OPINION APPLIES ONLY TO THE SPECIFIC FACTS AND CIRCUMSTANCES DEFINED HEREIN. FACTS AND CIRCUMSTANCES THAT DIFFER FROM THOSE IN THIS OPINION MAY RESULT IN AN OPINION CONTRARY TO THIS OPINION.  NO INFERENCES REGARDING THE PROVISIONS OF NEVADA REVISED STATUTES QUOTED AND DISCUSSED IN THIS OPINION MAY BE DRAWN TO APPLY GENERALLY TO ANY OTHER FACTS AND CIRCUMSTANCES.  

DATED:  September 18, 2000. 

NEVADA COMMISSION ON ETHICS 

By:  /s/  James T. Russell, Vice Chairman