Advisory Opinion No. 08-04
Pursuant to Public Officers Law §§73 and 74, State officers or employees traveling on State business may be allowed to use for their personal benefit reward or bonus points offered to customers by common carriers and hotels. However, a State employee purchasing supplies and services for a State agency is prohibited from accumulating reward points resulting from such purchases for personal use.
The New York State Office of the Inspector General ("Inspector General") submitted a request for an Advisory Opinion to the Commission on Public Integrity ("Commission") concerning an interpretation of Public Officers Law §§73, 74, and 77.(1) The Commission issues this Advisory Opinion interpreting Public Officer Law §§73 and 74 pursuant to Executive Law §94(15).
The Inspector General presents two questions not previously addressed by the Commission.(2) The first is whether a State employee who travels on State business and at State expense, perhaps staying overnight at a hotel paid for by the State, and earns "reward" or "bonus" points from either a common carrier or hotel, may use such points for his or her personal benefit, such as for personal hotel accommodations, cruises, and merchandise. The second question is whether a State employee purchasing office supplies or services for a State agency, may accumulate reward points from a vendor of such supplies or services for his or her personal use.
Pursuant to Executive Law §94(15), the Commission renders its Advisory Opinion that, pursuant to Public Officers Law §§73 and 74, State officers or employees traveling on State business at State expense may be allowed to use for their personal benefit reward or bonus points earned in connection with such travel; consistent with our determination in Advisory Opinion No. 08-01 when such awards or points are offered to the general public. However, a State employee purchasing office supplies or services for a State agency is prohibited from accumulating reward points for personal use when purchasing goods or services for State use because doing so would violate Public Officers Law §§73(5) and 74.
The Inspector General set forth two scenarios for the Commission's consideration. First, State officers and employees may be required to travel as part of their official duties, which may necessitate overnight lodging. In these circumstances, the State officer or employee must use New York State approved vendors, such as rail services, airlines and hotels, whose rates have been approved by the State. These vendors are either paid by the employee's agency directly or by the employee directly. In the latter case, the employee is reimbursed by his or her agency.
In some instances, these vendors, such as hotels or airlines, may offer "reward" or "bonus" points to customers who use their services, which the customers can later redeem for reduced room rates, travel, merchandise or other things. The Inspector General asks whether a State officer or employee who incurs travel costs paid by the State and, pursuant to a generally available program of the vendor, also earns "reward" or "bonus" points, may use such points for his or her personal benefit or must these points be used only for official business.
Second, State agencies purchase office supplies and other items, as required, in the normal course of their operations. Many agencies designate one or more specific employees to order office supplies and other items for the agency. Such purchases must be from a State approved vendor. The vendor may offer "reward" or "bonus" points to customers who purchase supplies from them. Therefore, the State employee who is responsible for ordering the supplies may receive such points from the vendor. The Inspector General asks whether the State employee may retain and then redeem such points for personal use.
Public Officers Law §73(5), provides, in pertinent part:
No statewide elected official, state officer or employee, individual whose name has been submitted by the governor to the senate for confirmation to become a state officer or employee, member of the legislature or legislative employee shall, directly or indirectly:
(a) solicit, accept or receive any gift having more than nominal value, whether in the form of money, service, loan, travel, lodging, meals, refreshments, entertainment, discount, forbearance or promise, or in any other form, under circumstances in which it could be reasonably be inferred that the gift was intended to influence him, or could reasonably be expected to influence him, in the performance of his official duties or was intended as a reward for any official action on his part. No person shall, directly or indirectly, offer or make any such gift to a statewide elected official, or any state officer or employee, member of the legislative or legislative employee under such circumstances.
The Code of Ethics, found in Public Officers Law §74, sets forth the minimum standards against which State officers or employees are expected to gauge their behavior. It is directed at addressing the conflict or the appearance of a conflict, between the obligation of public service and private, often personal, or financial interest. Subdivision 2 sets forth the rule with respect to conflicts of interest:
No officer or employee of a state agency . . . should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest.
Following the rule with respect to conflicts of interest, Public Officers Law §74(3) provides standards of conduct that address actual as well as apparent conflicts of interest. These standards provide, in pertinent part:
(d) No officer or employee of a state agency . . . should use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others.
(e) No officer or employee of a state agency . . . should engage in any transaction as representative or agent of the state with any business entity in which he has a direct or indirect financial interest that might reasonably tend to conflict with the proper discharge of his official duties.
(h) An officer or employee of a state agency . . . should endeavor to pursue a course of conduct which will not raise suspicion among the public that he is likely to be engaged in acts that are in violation of his trust.
Personal use of travel bonus and rewards points
The Commission has looked to the Federal government and other states for guidance when analyzing legal issues (See, Advisory Opinion No. 08-01). In this instance, the Federal government and several states vary in their determinations of whether rewards earned by government employees during the course of official business may be redeemed for personal use.
On the Federal level, the Office of Government Ethics ("OGE"), the Executive Branch ethics agency, has concluded ". . . the general rule is that, notwithstanding that airlines or hotel bonus points may be offered to employees as a result of the government's contract with the airline or hotel, employees may not accept such benefits for personal use" (See, Office of Government Ethics Memorandum 99 X 1). OGE relied upon 5 USC §5702, which provides, in pertinent part, that " . . . awards granted under frequent travel programs offered by airlines, hotels, and car rental vendors, if accrued through official travel, shall be used only for official travel." OGE states further, however, that Federal agencies should defer to the GSA with respect to questions and regulations related to official travel.
The pertinent General Services Administration ("GSA") regulation states that "any promotional benefits or materials received from a travel service provider in connection with official travel may be retained for personal use, if such items are obtained under the same conditions as those offered to the general public and at no additional cost to the Government" (See, Federal Travel Regulation §301-53.2).
The State of Washington Ethics Commission concluded in Advisory Opinion No. 03-03 that State employees could personally use frequent flyer awards accrued through official State travel provided they had not participated in the selection of the carrier from which they received the frequent flyer miles. The State of Washington, however, does not preclude agencies within State government from adopting policies that vary from this opinion. The Washington Office of Financial Management ("OFM"), the agency that sets policy for the entire Executive Branch, has determined that ". . . the administrative costs associated with trading and collecting frequent flyer miles would exceed the benefits derived. Consequently, OFM concluded that it was inadvisable to implement a State policy requiring State employees to transfer frequent flyer credits earned while conducting State travel, to the State" (See, Washington Ethics Commission Advisory Opinion No. 03-03).
The Massachusetts State Ethics Commission, however, prohibits personal use of frequent flyer awards that accrue to the individual traveler (See, Massachusetts State Ethics Commission, Fact Sheet No 12: Guidelines for Public Employees Regarding Business Travel and Related Expenses). The Commission states that, ". . . the prohibition against individuals accepting frequent flyer points as part of a state, county or municipal government discount (government rates) is not intended to discourage public employees from continuing efforts to budget travel expenses efficiently." This policy allows a State agency to accrue the points for the travel of its employees if the vendor allows for pooling of rewards by a governmental agency. Similarly, the Pennsylvania State Ethics Commission concluded that ". . . any frequent flyer credits or award certificates received by the individual in connection with official travel, paid for by a government agency by which he is employed, are due to that activity and must be used for official travel only; the utilization of the credits for his personal travel is prohibited since such activity would constitute private pecuniary benefit obtained through the use of their authority or office" (See, Pennsylvania State Ethics Commission Opinion No. 90-015).
The State of Texas addresses this issue in Penal Code §39.02(d), which, in pertinent part, states that "travel discount awards . . . are not things of value belonging to the government for purposes of the criminal law prohibiting misapplication of a thing of value belonging to the government" [Texas Penal Code §39.02(d) (emphasis supplied)]. Therefore, personal use of travel awards accrued in the course of State business is not a crime. While Texas law does not prevent a State agency from adopting a policy requiring that such travel rewards be used for agency related matters, most, if not all, Texas State agencies allow their employees to use for their personal benefit any travel awards accrued by them as a result of State reimbursed travel [See, Texas Ethics Commission, A Guide to Ethics Laws for Officers and Employees, Part III, Abuse of Office (Revised April 27, 2004)].
In short, the laws and policies of the Federal government and the states are not uniform with respect to the issue of personal use of travel rewards accumulated as a result official government travel.
In applying Public Officers Law §§73 and 74, travel reward programs may qualify as gifts of more than a nominal value, as these terms are defined in the Public Officers Law (See, Advisory Opinion No. 08-01). Since the providers are pre-approved vendors for State reimbursable travel or purchasing, these "gifts" would be originating from "disqualified" sources. In Advisory Opinion No. 08-01, the Commission determined that acceptance of a "gift" from a disqualified source given in a discount program broadly offered to State employees would not violate Public Officers Law §§73(5) and 74(3)(d) and (e). The Commission determined that such a "gift" could not reasonably be seen as an attempt by the offeror to influence any governmental decision or to reward a State officer or employee for official action. The Commission also pointed out in Advisory Opinion No. 08-01 that such discount programs are offered to large segments of the population as a marketing tool. State officers and employees who accept such discounts would not be seen as having improperly exploited their government positions or engaged in conduct that could raise suspicion that they were violating the public trust (See, Advisory Opinion No. 08-01).
Consistent with our determination in Advisory Opinion No. 08-01, the Commission concludes that State officers and employees may accept reward points and similar benefits for their personal use that are awarded for their State sponsored or reimbursed travel expenses on the basis that travel rewards or points, which are offered to the general public, could not reasonably be seen as an attempt by the offeror to influence any governmental decisions or to reward any State officer or employee for any official action.(3)
Personal Use of Supply Vendor Reward Points
The second issue presented for the Commission's consideration involves State officers or employees who order office supplies for the agency from a particular vendor from whom the employee accumulates reward points, which the employee redeems for his or her personal use. There are several qualified vendors, but the employee uses only the vendor offering reward points. Although the method of purchase does not violate procurement rules, the Inspector General has asked the Commission to issue an Advisory Opinion as to whether this practice violates Public Officers Law §§73 and 74.
Acceptance of vendor reward points by a State officer or employee authorized to make purchases on behalf of the agency would violate both Public Officers Law §§73(5) and 74. As discussed above with respect to travel reward programs, such rewards for purchasing office supplies may qualify as gifts of more than a nominal value, as defined in the Public Officers Law §73(5). Since the vendors are approved by the State, these "gifts", consistent with travel rewards, would be from a "disqualified" source.
While we conclude that the acceptance of "gifts" in the form of travel rewards could not reasonably be seen as an attempt by the offeror to influence any governmental decisions or to reward any State officer or employee for any official action, we come to a different conclusion here. We find that the rewards offered to a State officer or employee for purchasing supplies for the agency could reasonably be viewed as a means of influencing or rewarding the State officer or employee in how he or she carries out his or her official purchasing duties for the agency. Under these circumstances, such rewards would constitute gifts that influence or reward a State officer or employee for his or her official actions. Therefore, the redemption of these rewards by a State employee eligible to receive them as a result of their purchasing responsibilities on behalf of the State agency would violate Public Officers Law §73(5).
We conclude that Public Officers Law §74 would also be violated because the State officer or employee would have a financial interest that is in substantial conflict with the proper discharge of his or her duties in the public interest. Specifically, Public Officers Law §74(3)(d) may be violated because the State officer or employee would be using his or her official position as the designated purchasing agent to secure an unwarranted privilege in the form of the rewards. The State officer or employee may violate Public Officers Law §74(3)(e), as he or she would be engaging in a transaction as a representative of the State with a vendor in which he or she has a direct or indirect financial interest, i.e. the accumulation of reward points, which might reasonably tend to conflict with the proper discharge of his or her official duties.
Therefore, the Commission concludes that a State officer or employee may not accept personal awards or points for State purchases transacted as part of their official duties.
A State officer or employee, traveling on State business, may use personal travel rewards offered by disqualified sources since they are broadly offered, not directly related to the official duties of the State officer or employee, do not reasonably appear to influence the official conduct or responsibility of the State officer or employee, and are provided at no additional cost to State government. A State officer or employee is prohibited from accumulating reward points for personal use when purchasing goods or services for State use. The availability of reward points offered by a particular vendor chosen by the State officer or employee could reasonably be viewed as influencing the decision of the State officer or employee in performing his or her duties and responsibilities regarding purchasing goods and services for the State.
Nothing contained in this Advisory Opinion shall prohibit any State agency from adopting or implementing its own rules, regulations or procedures with regard to the accumulation and redemption of travel rewards accrued through State paid travel that are more restrictive than set forth in this Advisory Opinion.
John D. Feerick,
Daniel R. Alonso
John M. Brickman
Andrew G. Celli, Jr.
Richard D. Emery
Daniel J. French
Robert J. Giuffra, Jr.
David L. Gruenberg
Hon. James P. King
Hon. Howard A. Levine
Loretta E. Lynch,
Virginia M. Apuzzo
John T. Mitchell,
Date: June 30, 2008
1. The Commission is not empowered to render an Advisory Opinion with respect to Public Officers Law §77, which applies only to members, officers, and employees of the Legislature. The Inspector General may wish to submit its request for an interpretation of Public Officers Law §77 to the New York State Legislative Ethics Commission.
2. The Public Employee Ethics Reform Act of 2007 created the New York State Commission on Public Integrity. The thirteen-member Commission assumed the powers and duties of the New York State Ethics Commission and the New York Temporary State Commission on Lobbying. See, Chapter 14 of the Laws of 2007. Executive Law §94(1) states that "[t]his section shall not revoke or rescind any regulations or advisory opinions issued by the state ethics commission and the temporary lobbying commission in effect upon the effective date," i.e., September 22, 2007.
3. Additionally, as discussed above, the Federal government and other states have acknowledged the practical difficulties and costs of oversight and accounting for travel rewards, such as when the travel involves co-mingling of private travel and official travel. Moreover, the policy of allowing public officials and employees to maintain travel rewards for personal use does not result in additional cost for the State beyond the official travel expense. The Commission is aware that some State agencies subject to its jurisdiction may not be required to use State approved vendors exclusively. In such instances, the Commission similarly concludes that the State officer or employee may accept reward points or similar benefits for travel, if such benefits are offered to the general public and are not intended to influence or reward any governmental decision or official action.