When a New Jersey state employee fills out the executive-branch financial disclosure form, do they have to list personal gifts from friends and family, or only gifts that are really compensation for some service?

Plain-English summary

Senior officials in the New Jersey executive branch (department heads, division leaders, board and commission members, the Governor's senior staff, and others) must file an annual financial disclosure statement under Executive Order 24 (Christie 2010). The form asks for, among other things, "all honoraria, lecture fees, gifts and other gratuities (cash or non-cash), and other miscellaneous sources of income."

State Ethics Commission Executive Director Susana Guerrero asked the Attorney General whether "gifts" on that form means every gift, including birthday and holiday presents from family and friends, or only gifts that constitute income.

Acting Attorney General John Hoffman, through the Division of Law, advised that "gifts" on the EO 24 form means gifts that are essentially compensation, in particular gratuities, that resemble payment for services rendered. Personal gifts from family or friends that are not income are outside the scope of the disclosure requirement. The reasoning relies on standard statutory-interpretation tools: words in a list take meaning from their neighbors, and "gifts" appears alongside honoraria, lecture fees, royalties, and rents, all of which are forms of compensation or investment return. The grammatical structure of the catch-all phrase ("gifts and other gratuities") signals that the gifts captured are gratuity-like.

The opinion does not address other ethical limits on accepting gifts. The State Ethics Commission's own gift rules (and statutes such as the Conflicts of Interest Law) impose separate restrictions on what state employees may accept. The narrow holding here is only about what the EO 24 financial disclosure form requires you to disclose.

What this means for you

If you are a state employee filing an EO 24 financial disclosure statement

The "gifts and other gratuities" line on the FDS captures items that have the character of compensation. Examples include:

• A bottle of wine, a gift basket, or a check given to you by a third party in connection with a speaking engagement, panel appearance, or service you provided
• A non-cash item given in lieu of an honorarium
• Anything offered in return for or in anticipation of some service you performed

It does not capture personal gifts from family or friends that are unrelated to your government service. A birthday gift from your sibling, a wedding gift from a friend, or a holiday present from your spouse is not a "gift" within the meaning of EO 24's financial disclosure requirement.

But, two cautions. First, this opinion is only about the disclosure form. The Conflicts of Interest Law and Ethics Commission gift rules separately restrict what state employees may accept from people regulated by, doing business with, or seeking to influence their agency. Those restrictions apply regardless of whether the item must also be disclosed on the FDS. Second, when in doubt, the safer move is to disclose. EO 24 imposes harsh penalties (removal from employment) for non-disclosure, and the gain from leaving an item off the form is small.

If you are an Ethics Commission reviewer or compliance officer

This opinion is the controlling guidance on the scope of "gifts" within the EO 24 financial disclosure requirement. When reviewing FDS filings, you should not flag personal gifts from family and friends that have no compensation character. You should flag items received in connection with services rendered (speaking, consulting, panels, advisory work, in-kind compensation) that the filer treated as ordinary "gifts" and omitted.

The opinion also notes that the Commission has not promulgated rules or advisory opinions on this question; the discussion here fills that gap.

If you are a department or agency ethics liaison

Train new senior staff on the distinction. The most common confusion is between (a) the EO 24 disclosure form, which captures income-style gratuities only, and (b) the broader prohibition on accepting things of value from regulated parties. The two regimes overlap but are not identical. A regulated party's gift may be both prohibited under the gift rules AND reportable on the FDS as a gratuity if it is connected to services you provided.

If you are a public-integrity journalist or researcher

When reading EO 24 financial disclosures, the absence of personal gifts is consistent with the Attorney General's interpretation, not evidence of non-disclosure. Conversely, a filing that lists honoraria-style gratuities tied to outside speaking or consulting work is exactly what the form is designed to capture, and should be cross-checked against the underlying ethics rules on whether the outside activity itself was permitted.

Common questions

Q: Does this mean I never have to report gifts from anyone?
A: No. You have to report gifts that have the character of compensation, in particular gratuity-style gifts that look like payment for services you rendered. Personal gifts from family and friends with no business or service connection are outside the form's scope.

Q: I gave a speech to a trade association and they sent me a $200 watch as a thank-you. Is that disclosable?
A: That has the character of an honorarium gift in return for a service you performed. Under this opinion, that is the kind of "gift" the FDS asks about, and you should disclose it. (The Conflicts of Interest Law and your agency's ethics code may also separately limit whether you could accept it.)

Q: My parents bought me a $500 birthday present. Do I list it?
A: No. It is not income and not a gratuity for a service.

Q: What if a regulated party gives me a holiday gift? Do I list it?
A: This opinion does not require disclosure of a non-income gift on the EO 24 form. But other rules likely prohibit you from accepting such a gift in the first place. The State Ethics Commission's gift rules, the Conflicts of Interest Law, and your agency code govern acceptance.

Q: Why does the form even mention "gifts" then if it only means gratuities?
A: Governor Corzine added "gifts and other gratuities (cash or non-cash)" in EO 1 (2006) as a catch-all to capture income-like gratuities not covered by the more specific honoraria and lecture-fee categories. The Attorney General reads the phrase in context, where it sits next to honoraria, royalties, and rents, all sources of income.

Q: What happens if I do not disclose a reportable gratuity?
A: EO 24 § V, ¶ 1 says non-compliance with the order is "good cause" for removal from employment or office. Take disclosure obligations seriously and consult agency counsel or the Ethics Commission on close calls.

Q: Has the State Ethics Commission issued separate rules on this?
A: As of this opinion, the Commission had not promulgated rules or issued advisory opinions on what constitutes a reportable gift under EO 24. The Attorney General's opinion is the operative interpretation.

Background and statutory framework

New Jersey's executive-branch financial disclosure regime is entirely a creature of executive order. There is no statute requiring disclosure of senior executive-branch employees' personal financial interests; instead, every Governor since at least Florio has issued an executive order spelling out who must file, what they must disclose, and what penalties apply (Florio EO 1 (1990); Whitman EO 2 (1994); McGreevey EO 10 (2002); Corzine EO 1 (2006); Christie EO 24 (2010)).

The current regime under EO 24 covers the Governor, Lt. Governor, principal department heads, division heads and assistant heads, in-but-not-of board leadership, the Office of the Governor's senior staff, and members of an extensive list of boards, commissions, independent authorities, and public corporations. The State Ethics Commission, established by statute, administers the FDS form and enforces the disclosure requirement.

EO 24 mandates disclosure of assets over $1,000, income, outside positions, liabilities, stocks, real estate, capital gains, and similar interests of the employee, spouse, and dependent children. The "income" definition includes a catch-all of "all honoraria, lecture fees, gifts and other gratuities (cash or non-cash), and other miscellaneous sources of income including, but not limited to, interest, dividends, royalties and rents."

The textual ambiguity here is real. Read literally, "gifts" might mean any gift. The Attorney General resolves the ambiguity using settled statutory-interpretation tools:

1. Plain meaning. "Income" in ordinary usage means a gain or recurrent benefit from credit, labor, or both. Personal gifts from family and friends are not income in the ordinary sense.

2. Words take meaning from neighbors (noscitur a sociis). When a list contains terms that share a common character, an ambiguous term in the list is read consistently with that character. The catch-all here pairs gifts with honoraria, lecture fees, royalties, dividends, interest, and rents, all of which are compensation-like or investment returns. The natural reading of "gifts" in that context is income-like gratuities.

3. Grammatical structure. "Gifts and other gratuities (cash or non-cash)" treats "gifts" and "gratuities" as conjoined and similar, which means the gifts captured are gifts that have the character of a gratuity (something given voluntarily over and above what is due, usually in connection with a service).

4. Avoidance of overbreadth. Reading "gifts" to mean every gift would sweep family birthday presents into a financial disclosure form designed to surface conflicts of interest in public service. That is not a reading that "logic, reason and the subject matter of the statute" support (Germann v. Matriss).

The result is a sensible, practical rule: the FDS captures gifts that look like income, not personal gifts from family or friends. Other ethics rules govern what state employees may accept; this opinion is only about what they must disclose on the EO 24 form.

Citations and references

Executive orders:
- Executive Order No. 24 (Gov. Christie, Apr. 27, 2010), current EO governing executive-branch financial disclosure
- Executive Order No. 1 (Gov. Corzine, Jan. 17, 2006): first to include "gifts and other gratuities" language
- Executive Order No. 10 (Gov. McGreevey, Feb. 28, 2002)
- Executive Order No. 2 (Gov. Whitman, Jan. 18, 1994)
- Executive Order No. 1 (Gov. Florio, Jan. 18, 1990)

Cases:
- State v. Rangel, 213 N.J. 500 (2013), words read in context of statutory scheme
- DiProspero v. Penn, 183 N.J. 477 (2005), plain-meaning interpretation
- Yates v. United States, 574 U.S. ___, 135 S. Ct. 1074 (2015) (Alito, J., concurring), words in a list have similar meanings
- Germann v. Matriss, 55 N.J. 193 (1970), avoidance of overbroad readings
- State v. Afanador, 134 N.J. 162 (1993), meaning controlled by associated words
- Davis v. Mich. Dep't of Treasury, 489 U.S. 803 (1989), words interpreted in context
- Deal v. United States, 508 U.S. 129 (1993), same
- Pine Belt Chevrolet v. J.C.P. & L., 132 N.J. 564 (1993), "and" carries conjunctive import

Source

• Original PDF: https://www.nj.gov/oag/oag/ag-opinion-2015-1.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

State of New Jersey
OFFICE OF THE ATTORNEY GENERAL
DEPARTMENT OF LAW AND PUBLIC SAFETY
DIVISION OF LAW

CHRIS CHRISTIE, Governor
KIM GUADAGNO, Lt. Governor
JOHN J. HOFFMAN, Acting Attorney General
JEFFREY S. JACOBSON, Director

25 Market Street
PO Box 112
Trenton, NJ 08625-0112

May 14, 2015

Susana E. Guerrero, Esq.
Executive Director
State Ethics Commission
28 W. State Street, Room 1407
P.O. Box 082
Trenton, New Jersey 08625-0082

Formal Opinion No. 1-2015

Re: Gifts requiring disclosure under Executive Order 24

Dear Ms. Guerrero,

You have requested guidance concerning the scope and definition of gifts that require disclosure on the financial disclosure statement (FDS) mandated for certain employees by Governor Christie's Executive Order 24 (Gov. Christie, Apr. 27, 2010) (EO24). Because both the Executive Order and the FDS identify "gifts and other gratuities" as a component of income, it is reasonable to conclude that the Executive Order requires disclosure on the FDS of "gifts and other gratuities" that constitute income. This limitation established by the language and structure of the Executive Order renders non-income gifts that employees might receive from friends or family outside of the disclosure requirements established by EO24.

The duty of designated public employees to disclose personal financial interests is entirely a function of executive order. The State Ethics Commission has not promulgated any rules concerning financial disclosure, nor has the Commission issued any advisory opinions on the question.

EO24's disclosure requirements apply to a broad swath of public officers and employees holding any of the specified offices or their equivalent in the Executive Branch of the State Government. EO24, at ¶ 6; see also, EO 1 (Gov. Corzine, Jan. 17, 2006), at ¶ 6 (same); EO 10 (Gov. McGreevey, Feb. 28, 2002), at ¶ 6 (same); EO 2 (Gov. Whitman, Jan. 18, 1994), at ¶ 6 (same). The financial disclosure requirement established in EO24 is similar in most respects to requirements established by previous Governors. See, e.g., Exec. Order (EO) 1 (Corzine); Exec. Order 10 (McGreevey); Exec. Order 2 (Whitman); Exec. Order 1 (Gov. Florio, Jan. 18, 1990). Over time, Governors have expanded the breadth of the disclosure requirement to additional public officers and employees. Presently, the disclosure requirement applies to an expansive list, including the Governor, the Lieutenant Governor, the head of each principal department, heads and assistant heads of divisions within those departments, the leadership of in-but-not-of boards or independent authorities, specified members of the Office of the Governor, and members of a long list of boards, commissions, independent authorities, and public corporations. EO24, at ¶ 6.

EO24 requires public disclosure of specified public officials' personal financial interests. As EO24 states, "public disclosure of personal financial interests of public officials serves to maintain the public's faith and confidence in its governmental representatives and guards against conduct violative of the public trust." EO24, at 1. To that end, EO24 provides "persons serving in government... the benefit of specific standards to guide their conduct," ibid., and establishes that the standards "be applied consistently to similarly situated officials in order to promote respect for those standards[.]" Ibid.

EO24 charges the State Ethics Commission with enforcing its terms. EO24, § V, ¶ 2, at 20. EO24 provides harsh sanctions for failure to comply with its requirements: "The failure of any regular or special State employee or officer covered by this Executive Order to comply with the provisions of this Executive Order shall constitute good cause for his or her removal from employment or office." EO24, § V, ¶ 1, at 20.

To facilitate public employees' financial disclosure obligation, the State Ethics Commission promulgates the FDS. EO24, at ¶ 1. The FDS gathers general and demographic information from reporting employees. The employee then discloses specified financial information for the employee, spouse, and dependent children. Pursuant to EO24, the FDS requires reporting of: assets valued at more than $1,000; income; offices or positions held in any firm, corporation, association, partnership, or business; liabilities; stocks and bonds held; any interest in closely held corporations or similar business entities; real estate interests; and capital gains.

The Executive Order does not define "income" beyond listing some of its constituent components. Because EO24 does not define its terms, standard maxims of statutory construction direct that we give words their ordinary meaning. State v. Rangel, 213 N.J. 500, 509 (2013) (observing that statutory interpretation begins "by looking at the statute's plain language, giving words 'their ordinary meaning and significance.'") (quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005)). In ordinary usage, income is defined as "a gain or recurrent benefit that is usually measured in money and for a given period of time, derives from credit, labor, or a combination of both[.]" Webster's Third New Int'l Dictionary 1143 (3d ed. 1993); see also, VII Oxford English Dictionary 805 (2d ed. 1989) (defining income as "that which comes in as the periodical produce of one's work, business, lands, or investments (considered in reference to its amount, and commonly expressed in terms of money)"). That definition is consistent with the itemized components of income. EO24 requires an employee to "list[] all sources of income of the public employee or public officer, his or her spouse or domestic partner, partner in a civil union and dependent children . . . ." EO24, § 1, ¶ 1(f). It includes "all compensated employment of whatever nature," "all directorships and other fiduciary positions for which compensation has or will be received," "all contractual relationships producing or expected to produce income," and "all capital gains." Ibid.

Relevant here, EO24 also includes a catch-all of potential sources of income:

all honoraria, lecture fees, gifts and other gratuities (cash or non-cash), and other miscellaneous sources of income including, but not limited to, interest, dividends, royalties and rents.

[EO24.]

The catch-all language broadly seeks to capture other sources of income not within the more specific categories above it. Governor Corzine's EO1 was the first financial disclosure executive order to include "gifts and other gratuities (cash or non-cash)" as a source of "income." EO1. Compare, e.g., EO10 (McGreevey), supra, at ¶ 1(f) (defining income to include "all honoraria, lecture fees and other miscellaneous sources of income including, but not limited to, interest, dividends, royalties and rents."); EO2 (Whitman), supra, at ¶ 1(f) (same).

Traditional tools of statutory construction instruct that "when a statute contains a list, each word in that list presumptively has a 'similar' meaning." Yates v. United States, 574 U.S. ___, 135 S. Ct. 1074, 1089 (2015) (Alito, J., concurring). This principle "avoid[s] giving a breadth to the more general words which logic, reason and the subject matter of the statute do not show was clearly intended." Germann v. Matriss, 55 N.J. 193, 221 (1970). In the same vein, "[t]he meaning ascribed to the words used in a statute may be indicated or controlled by the words with which it is associated." State v. Afanador, 134 N.J. 162, 172 (1993); see also, Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809 (1989) (explaining that courts interpret words "in their context and with a view to their place in the overall statutory scheme."); Deal v. United States, 508 U.S. 129, 132 (1993) (noting that "it is a fundamental principle of statutory construction (and, indeed, of language itself) that the meaning of a word cannot be determined in isolation, but must be drawn from the context in which it is used."); Rangel, supra, 213 N.J. at 509 ("We do not view words and phrases in isolation but rather in their proper context and in relationship to other parts of a statute, so that meaning can be given to the whole of an enactment.").

To give definition to "gifts and other gratuities" within the meaning of EO24, Rangel instructs that we evaluate the phrase in its context. We thus look to the other terms within the catch-all provision: honoraria, lecture fees, other gratuities (cash or non-cash), and other miscellaneous sources of income, including interest, dividends, royalties, and rents. Honoraria and lecture fees are, for example, money received for performing a service, such as speaking at an event. See, e.g., Webster's Third New International Dictionary, supra, at 1087 (defining honoraria as "an honorary payment or reward usually given as compensation for services on which custom or propriety forbids any fixed business price to be set or for which no payment can be enforced at law"); VII The Oxford English Dictionary, supra, at 356 (defining honorarium as "[a]n honorary reward; a fee for services rendered, esp. by a professional person."). Similarly, the balance of the specified sources, "interest, dividends, royalties, and rents", all connote compensation received either for services rendered or as a return on investment. See, e.g., Black's Law Dictionary, supra, at 580 (defining dividend as "a portion of a company's earning or profits distributed pro rata to its shareholders, [usually] in the form of cash or additional shares"); id. at 1528 (defining royalty as "a payment, in addition to or in place of an up-front payment, made to an author or inventor for each copy of a work or article sold under a copyright or patent," and additionally noting that "royalties are often paid per item made, used, or sold, or per time elapsed").

Additionally, the catch-all provision itself imposes a limited definition of gifts by its grammatical structure. As courts have recognized, "the word 'and' carries with it natural conjunctive import," Pine Belt Chevrolet v. J.C.P. & L., 132 N.J. 564, 578 (1993). By referencing "gifts and other gratuities (cash or non-cash)," the catch-all provision limits the disclosure of gifts to those that have the character of a gratuity. A gratuity is a "something given voluntarily or over and above what is due usually in return for or anticipation of some service." Webster's Third New International Dictionary, supra, at 992; see also, VI Oxford English Dictionary, supra, at 780 (defining gratuity as "a gift or present (usually of money), often in return for favours or services, the amount depending on the inclination of the giver"). Because subparagraphs (1), (2), and (3) of the income definition refer only to gifts that are "sources of income," they do not expand the scope of gifts subject to disclosure. Thus, EO24, by its terms, requires only disclosure of a gift of like character to a gratuity.

Interpreting "gift" within the context of the catch-all provision's entire list avoids the dangers of overbreadth discussed in Germann, supra. This danger is particularly acute where the provision mentions gifts only as one form of the broader category gratuity, which itself is limited by the overall category of income. This cautions against interpreting EO24 to require disclosure of gifts categorically different than gratuities. Thus, while including gifts within the definition of income creates some ambiguity, when evaluated in the context provided by other items in the catch-all provision and the provision's grammatical structure, it is reasonable to construe "gifts" within the meaning of EO24 to mean gifts received in return for services rendered, such as a speaking engagement.

Thus, tools of statutory construction and the plain language of the Executive Order suggest that the sensible reading of the Executive Order is to construe it consistent with other items that must be disclosed: that is, items received in return for performing some service, such as speaking at an event.

Sincerely yours,

JOHN J. HOFFMAN
Acting Attorney General of New Jersey
(via Jeffrey S. Jacobson, Director, Division of Law)