Administration and Leadership, Columns

Managers Must be Cautious when Accepting Free Offers

Issue 3 and Volume 39.

A vendor that has a large contract with the city of Memphis recently invited me to speak at a symposium. The representative indicated the company would pay my travel, hotel and meals, and I’d receive an honorarium for speaking.

I politely turned down the request. I let them know I was honored they selected me, but others could raise an eyebrow at the arrangement.

I can hear the naysayers now: “Oh! So Ludwig gives them a nice contract and they give him a free trip with some payment at the end of it.” In short, I turned down the offer because it could be interpreted as a kickback.

Common business practices might appear as unethical kickbacks to others. MikhailMishchenko

EMS managers have to be cautious when accepting anything free from a vendor. Generally, going to lunch on the vendor’s dime is an acceptable business practice, but even this can be questioned for those who work in the public sector. Vendors taking you to the fanciest restaurant in town with over a $500 dinner tab, however, will most likely raise questions.

The idea of managers accepting gifts, gratuities and giveaways is a subject that comes with many varying opinions, but most state laws are pretty clear.

For example, the Florida state law says, “No public officer, employee of an agency, local government attorney, or candidate for nomination or election shall solicit or accept anything of value to the recipient, including a gift, loan, reward, promise of future employment, favor, or service, based upon any understanding that the vote, official action, or judgment of the public officer, employee, local government attorney, or candidate would be influenced thereby.”

According to Florida law, you can’t even go to lunch with a vendor who may be trying to sell you their product.

However, many states have exceptions to these laws. In the case of Florida, you can receive a plaque, an award or a certificate. Interestingly, Florida law does allow honorariums as an exception and doesn’t specify a limit.

Louisiana law gets pretty specific even with lunches. It states, “No person from whom a public employee is prohibited by R.S. 42:1111 or 1115(B) from receiving a thing of economic value shall give to such a public employee any food, drink, or refreshment the total value of which exceeds fifty dollars for a single event at which food, drink, or refreshment is given. The total value of the food, drink, or refreshment given to a public employee at any single event shall not exceed fifty dollars regardless of the number of persons subject to the provisions of this Subsection giving food, drink, or refreshment to the public employee at the single event.”

Many municipalities also have laws regarding what public officials can and can’t accept through their ethics policies. And some municipalities go as far as to require that the public official must submit a declaration form on anything they receive free from a vendor, including lunches.

Go to any EMS conference and, if you’re in the market to make a large purchase, you’ll probably be invited to dinner by a vendor. In their eyes, it’s good business. It’s an excellent opportunity to get you one-on-one to develop a relationship and sell their product. Nonetheless, managers should still be cautious—even those in the private sector.

Several years ago, I was made aware of a management mistake that cost an EMS manager his job. He took a free five-day trip to tour an ambulance manufacturer’s facility that included all travel, hotel, meals and entertainment. He did this without the approval of his Board of Directors. Later, he recommended the purchase of several ambulances from this manufacturer when it was the second-lowest bid.

Only after the contract was signed and the service took delivery of the ambulances did the issue come about that the manager had been provided an all-expenses-paid trip to tour the manufacturing facilities.

The EMS manager’s primary mistake was accepting the offer without notifying his Board. Five days was excessive for touring, and the word “entertainment” also sounded alarm bells. In his case, it included greens fees at a nice golf course.

Some EMS managers cover themselves by accepting these tours only after the award of the contract. They’re usually labeled as a pre-construction, mid-construction or a final acceptance meeting at the manufacturing facility. Traditionally these aren’t free junkets, but they can be a very productive trip to make sure ambulances are being constructed according to specifications.

It all comes down to transparency and ethics. EMS managers have to be ethical when accepting gifts from vendors and do so in a transparent manner. Any hint of hiding details or taking an excessive amount of gratuity can smack of an illegal or unethical event that will, at minimum, get you relieved of duty while an investigation is conducted.