By Bill Britt
Alabama Political Reporter
Over the last year, the new Alabama ethics law has caused some real and imagined confusion for educators. Over the same period, there had seemed to be little ambiguity for lawmakers and public officials such as legislators, mayors and related public officials.
However, recent information uncovered by the ‘Alabama Political Reporter’ cast some doubt as to if everyone is following the rules of “de minimis,” gift giving. Under the new law, public officials and state employees may only receive an item of de minimis value (that is, one that has no resale value or value to others).
In days just before the holiday season, the Montgomery-based investment banking firm The Frazer Lanier Company may have stepped over the line created by the new ethics law. According to the firm’s website, Frazer Lanier “is dedicated primarily to corporate and municipal finance. Since 1976, our company has served as an investment banker to thousands of corporations, cities, counties, states, local boards, and agencies throughout the United States”
One of the prime businesses of Frazer Lanier is to help municipalities structure and offer bonds to finance various local government projects.
In December 2010, Frazer Lanier sent tote-bag/briefcases to various government officials in the state. The individual cases have been estimated to be worth in the $75 dollar range.
(Pictures of the case can be seen at the beginning of this story.)
The case, embossed with the Frazer Lanier logo, was sent to a number of public officials, one was Greenville, Alabama, Mayor Dexter Mclendon.
Mayor Mclendon said he receive a package from Frazer Lanier in the weeks before Christmas. He said upon opening the box he was surprised to see a gift such as the embossed case from Frazer Lanier. “Frankly, I was shocked when I opened it,” said Mclendon. “I remember thinking, ‘What are they doing?’” Mclendon said that he has a lot of respect for Frazer Lanier but he did not understand their gift in light of the new ethics law.
“I think the ethics law needs to be clarified,” said Mclendon. “There are just a lot of questions.” He said that he immediately determined to send the case back but also called the city attorney and spoke with him about the situation.
Mclendon has been in public service for almost three decades and said, “No one is going to buy my vote with a lunch or a gift.” But it is those reservations that prompted the newly-elected GOP majority to pass sweeping ethic reform in the 2010 Special Session.
Mclendon said after receiving the gift he called Frazer Lanier’s office, “I called Bob Young,” said Mclendon. “I said, ‘Bob, did y’all check this thing out?’”
“Bob” is Robert H. Young, Jr., president of Frazer Lanier. According to the company’s website, Young has been an investment banker since 1972. Young has served as a member of the Auburn University Business School Advisory Committee, and as a Committeeman and Vice-Chairman on the District V Business Conduct Committee of the National Association of Securities Dealers.
Mclendon also stated that Frazer Lanier had been the lead in setting up bond issuance for the city of Greenville in the past.
Frazer Lanier’s client base has very large representation in state and local government.
It is not clear how many government officials were sent the tote bags but Mayor Gary Fuller of Opelika received a case as well.
Opelika city attorney Guy Gunter of Melton Gunter & Melton confirmed that Opelika Mayor Fuller received the gift in the weeks before Christmas. Gunter said the mayor called him with concerns about the case and he advised the mayor to return the gift promptly. He said that he and the mayor were cautious about the new ethics law and wanted to make sure that the mayor was in strict compliance.
While there remains some questions about the law, several legislators that were contacted for this story, but did not want to comment on the record, expressed the gift offered by Frazer Lanier appeared to break the law or at least compromised the spirit and intent.
In an opinion written by the Ethics Commission the following was stated concerning gifts.
“The prior Ethics Law had specific exceptions relating to not only promotional items, but seasonal gifts as well. The current exceptions limit that to items for presentation, promotional items, or items of de minimis value. The law does not define what de minimis is and the Ethics Commission will not arbitrarily establish an amount.
The test is whether or not the item being given has any resale value or value to others.
“Items such as plaques, certificates and other presentation items have no value to anyone other than the recipient of the award. Promotional items, such as coffee cups, ball caps, etc., have little or no monetary value and exist for the purpose of advertising, public relations, goodwill, etc. On the other hand, gifts such as turkeys and hams given as seasonal gifts, do have a monetary value. Due to the fact that the exception for seasonal gifts was removed from the Ethics Law during the Special Session, it is the Commission’s opinion that the practice of giving turkeys, hams, etc. to public officials during the holiday season is no longer permissible.
“Again, the only quantifier the Commission will put on what is and what is not de minimis is whether or not the item has any resale or monetary value.”
The legality of a gift according to the commission seems to rest on the term de mininis with regards to an item’s value.
At least two city mayors and their attorney’s had doubts about the gifts given by Frazer Lanier. The law’s shadowy definition may leave more wiggle room than the legislators has intended.
Robert Young, Jr. president of Frazer Lanier was contacted for this article and did not return the call as of its publication.
The following is a partial list of Frazer Lanier’s clients who may have received the same gifts as mayors Mclendon and Fuller, others may have also received them and returned them. It is not known at this time.
City of Tallassee
Lee County and Lee County School System
City of Opelika
City of Enterprise
City of Foley Utility Board
City of Auburn
City of Saraland
City of Tuscaloosa
City of Troy
City of Phoenix City
City of Opp
City of Cullman and Utility Board
City of Ozark
City of Demopolis
City of Tuscumbia
Gadsden Water Works
City of Roanoke
A more exhaustive list may be found at http://frazerlanier.com