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April 28, 2009

Illinois Ethics Laws Update

Summary
Executive Order No. 3 relating to state procurements, issued by former Governor Rod R. Blagojevich, has been rescinded by Governor Pat Quinn.

On February 11, we wrote to you about two new Illinois procurement and campaign contribution laws which became effective January 1, 2009. These were Executive Order No. 3 and Public Act 95-0971. On April 3, Governor Pat Quinn noted that Executive Order No. 3 had been issued as a result of the General Assembly override of the former Governor’s amendatory veto of HB 824 which came into law as Public Act 95-0971. He also noted that Executive Order No. 3 created uncertainty and confusion. The only significant effect of the rescission is that the political contributions prohibited by registered entities and their affiliates are less restrictive in the Act than that which were prohibited by the Executive Order. The remainder of this Memorandum repeats what was provided on February 11, with minor modifications due to the recession of Executive Order No. 3.

Public Act 95-0971 requires that every bid submitted to and every contract executed by the State contain a certification by the bidder or contractor that it is not required to register as a business entity with the State Board of Elections or that it has so registered. If required to register, there are restrictions on making contributions to political committees.

Entities Required to Register
The initial question for compliance is determining whether your hospital or any of its affiliates is required to register as a business entity. Entities which meet the following criteria are required to register:

It is important to note that if an entity is not currently required to register, but submits a bid or proposal to a State agency which bid or proposal, combined with prior bids, proposals and awards, would require registration, the entity must register prior to submitting the bid or proposal.

Bids, proposals and contracts include those with any State agency, but exclude (i) cost reimbursement contracts; (ii) purchase of care agreements; (iii) grants; and (iv) loans or tax credit agreements for economic development purposes. 

State agencies include all boards, commissions, agencies, institutions, authorities and bodies of the executive branch of State government, including colleges, universities and institutions under their jurisdiction, and public employee retirement systems.

Consequences of Registration
If an entity is required to register, then it and its affiliated entities and affiliated persons (including not for profits and political action committees) are prohibited from making a contribution to any political committee established to promote the candidacy of (i) the officeholder responsible for awarding the contracts to the registered entity or its affiliates, and (ii) declared candidates for that office.

Additional information may be found at the Illinois Department of Central Management Services (CMS) web site (click here).

A copy of the legislation may be found by clicking here.

You may also call either Jody Wittenberg or Mark Deaton if we can be of further assistance. Jody may be reached at 630-276-5627 or jwittenberg@ihastaff.org and Mark at 630-276-5466 or mdeaton@ihastaff.org.