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IECDB AO 2019-05

August 29, 2019

Advisory Opinion

IECDB AO 2019-05

August 29, 2019

Ted Brown
Lice Clinics of America Quad Cities
927 40th Avenue
Bettendorf, IA 52722

Dear Mr. Brown,

Pursuant to Iowa Code section 68B.32A(12) and rule 351—1.2, the Iowa Ethics and Campaign Disclosure Board issues this opinion on whether it is permissible for Lice Clinics of America Quad Cities to offer complimentary services to public school district employees in Iowa. We note at the outset that the Board’s jurisdiction is limited to the application of Iowa Code chapters 68A and 68B, Iowa Code section 8.7, and rules in Iowa Administrative Code chapter 351. Advice in a Board opinion, if followed, constitutes a defense to a subsequent complaint based on the same facts and circumstances.

Background

You request this opinion in your capacity as the co-owner of Lice Clinics of America Quad Cities (LCAQC). You advise the Board that your clinic focuses on education, prevention, and eradication of human head lice. LCAQC is part of a nationwide network of clinics that uses special technology to eliminate a case of head lice in one sitting. Larada Sciences owns the patented technology and licenses each location to use it. Clinics pay Larada Sciences a per-use fee for each treatment using its technology.

You advise the Board that Larado Sciences recently introduced a program called Schools Without Lice – National Educator Partnership. Under this program, each participating clinic would offer free services to any employee of any school district. Clinics set their own prices but generally a screening costs $15-20 and treatment options range in costs from approximately $129 to $179 or more. Under this program, school district employees would be eligible to receive unlimited free services from a participating clinic for the duration of their employment with a school district. For example, if a teacher were exposed to lice at school, the teacher could go to a participating clinic and receive free screening to determine whether she contracted lice and if so the
teacher would be eligible for a free treatment to eradicate it. This free service is provided by Larada Sciences and the participating clinic: Larada Sciences waives its per-use fee for the treatment of a school district employee and the participating clinic foregoes any gross profits it would have otherwise received had the school district employee been charged for services.

You further advise that in general your target consumers are parents, grandparents and guardians of children who may have been exposed to lice and not school districts. Occasionally, you have sold products to schools and in a few instances school districts have paid your clinic for the treatment of a student. You do note that you often visit schools, especially school nurses, to
let them know about your clinic and services.  

Question Presented

Is it permissible for LCAQC to provide public school district employees with free
screenings and treatments?

Analysis

Iowa Code section 68B.22 is commonly known as Iowa’s gift law. The gift law prohibits a public official, public employee, or candidate or that person’s immediate family member from “directly or indirectly, accept[ing] or receiv[ing] any gift or series of gifts from a restricted donor” unless one of nineteen exceptions to the gift law applies.i A gift is “a rendering of anything of value in return for which legal consideration of equal or greater value is not given or received.” ii A “restricted donor” for a school district employee or official is defined as a person or entity that either:

           “a. Is or is seeking to be a party to any one or any combination of sales, purchases, leases, or contracts to, from, or with the agency in which the donee holds office or is employed. [or]      

            b. Will personally be, or is the agent of a person who will be, directly and substantially affected financially by the performance or nonperformance of the donee's official duty in a way  that is greater than the effect on the public generally or on a substantial class of persons to which the person belongs as a member of a profession, occupation, industry, or region.” iii 

With this legal framework in mind, we turn to your question. You have indicated that for the most part LCAQC sells its services to families and not school districts. However, to the extent LCAQC sells products or services directly to a school district, LCAQC would be a restricted donor to the employees and officials of that school district under paragraph “a”. 

The more difficult question is whether LCAQC is a restricted donor to employees whose school districts are not LCAQC customers. Under paragraph “b”, LCAQC would be a restricted donor to a public school employee who “directly and substantially affected [LCAQC] financially by the performance or  non-performance of the employee’s official duties in a way that is greater than the effect on the public generally” or on the lice-eradicating industry.iv

You said you often visit schools and school nurses in particular to let them know about LCAQC and its services. The purpose behind these visits is to give school district employees information about your clinic in order for the school employees to refer families whose children may be infected with lice to your clinic. The Schools without Lice – National Education Partnership program goes a step further by providing school district employees with free services at a participating clinic in order for a school employee to recommend the clinic
based on personal experience. School district referrals to a clinic would provide the clinic with a direct and substantial financial benefit. While teachers and school nurses may not be required to offer recommendations on how to eradicate lice, to the extent they are referring families to lice clinics or recommending lice-eradicating products, it would likely be in the course of 
their official day and part of their official duties. Thus, we are of the opinion that LCAQC would be a restricted donor under paragraph “b” to public school employees who are in a position to refer families to your lice clinic as part of their official duties. Due to the difficulty in determining exactly which public school employees may be willing to refer families to the clinic during the course of their official day or as part of their official duties, we believe the most prudent thing for LCAQC to do is assume every public school employee is a restricted donor. This position is consistent with the legislature’s intent for public officials and employees in Iowa to be “extremely cautious and circumspect about accepting a gratuity or favor, especially from persons that
have a substantial interest in the legislative, administrative, or political actions of the official or employee.”v

Having determined that LCAQC should consider itself a restricted donor to public school district employees in Iowa, the next question is whether there is an exception in the gift law that would allow school employees to accept a participating clinic’s offer of free screenings and treatments. There is no relevant exception so LCAQC would only be allowed to provide a nonmonetary item with a value of $3.00 or less to a public school district employee.vi

Conclusion

For the reasons stated above, we believe LCAQC should assume it is a restricted donor to all public school district employees in Iowa. Because there is no relevant exception in the gift law that allows a restricted donor to provide lice screenings or treatments to government officials or employees, we are of the opinion that Iowa’s gift law prohibits LCAQC from providing free screenings and/or treatments to Iowa public school district employees. 

BY DIRECTION AND VOTE OF THE BOARD

James Albert, Board Chair
John Walsh, Vice Chair
Jonathan Roos
Carole Tillotson
Mary Rueter
Elaine Olson


Submitted by Megan Tooker, Board Legal Counsel



i Iowa Code § 68B.22(1).
ii Id. § 68B.2(9).
iii Id. §68B.2(24)(a) and (b). A “person” means “any individual, corporation, business trust,
estate, trust, partnership or association, labor union, or any other legal entity.” Id. 68B.2(18).
iv Iowa’s gift law does not apply to private school employees.
v Id. § 68B.21.
vi Id. § 68B.22(4)(j).

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