Handling the Updated Statements of Economic Interest

by Michael Castaldo, Jr.

As we recently reported in a Client Alert, the annual Statement of Economic Interests form required to be filed by public officials has changed. This Article details what has changed and how to navigate the newly updated Statements.

The Illinois Governmental Ethics Act requires certain elected public office holders, candidates, officials, and employees to file a “Statement of Economic Interest.” This requirement applies to all elected officials and candidates for elected office, all appointed members of a governing or zoning board, and all appointed members of boards or commissions with authority to authorize expenditure of funds. Certain government employees must also fill out a Statement if they are compensated for their services and are (or function as) the head of an administrative unit, have direct authority over contracts of $1,000 or more, have authority to approve licenses and permits, who adjudicate, arbitrate, decide, or review a judicial or administrative proceeding, who have authority to issue and adopt rule and regulations, or who supervise twenty more employees. Pension board members are also required to file a Statement.

Each local government must notify their local county clerk of the individuals who are required to file the form by February 1 of each year. The forms may differ slightly depending on locality.

Previously, the Statement of Economic Interest form required filers to list information about the following: a professional organization or individual professional practice from which the filer derived income in excess of $1,200 the preceding year; the nature of professional services rendered and the nature of the entity to which they were rendered (other than the government entity requiring the person to file) if the filer received over $5,000 in fees from the entity; capital assets which realized a gain of $5,000 or more; ownership interests held by the filer in entities doing business with the State of Illinois or the unit of local government requiring the individual to file if the interest was over $5,000 fair market value; and sources of income over $1,200 to the filer from entities that do business with the State of Illinois or the unit of local government requiring the individual to file.

Recently, however, the Illinois legislature enacted Public Act 102-0664, which requires additional financial interests to be disclosed in a Statement of Economic Interest. As of January 1, 2022, individuals who are required to file must now disclose the following:

  • Assets valuing more than $10,000 held individually or jointly with a spouse or minor child(ren);
  • Assets in trust regardless of whether distributions have been made; sources of income in excess of $7,500 annually for the filer and spouse (excluding the income from the position that mandates the filing of the Statement);
  • The transaction date of a sale or transfer that resulted in capital gains in excess of $7,500; creditors of a debt in excess of $10,000 owed by the filer or jointly with a spouse or minor child(ren);
  • The name of the unit of government for which the filer or spouse was an employee, contractor, or office holder not including the position for which the Statement is being filed;
  • Names of lobbyists who have an economic relationship with or are a family member of the filer; and
  • The source and type of gifts, individually or in the aggregate, in excess of $500 in the preceding year.

Importantly, the Act does not require the filer to disclose the specific dollar amounts or values of the financial interests reported. Campaign receipts do not need to be included in the Statement.

Additionally, the old Statement required disclosure of the source of gifts valuing over $500, while the new form requires information about the source and the type of gift. The older version required disclosures about a filer’s economic associations with compensated lobbyists. Now, filers must include this information as well as if a member of the filer’s family is a government lobbyist. The new form also requires information about the filers spouse and their employment in government, which was not previously required.

The new amendments to the Ethics Act also provide definitions of what constitutes an “asset,” “creditor,” “debt” and other helpful clarifications for individuals who are required to file a Statement. For example, an “asset” is now defined to include stocks, bonds, sector mutual funds, sector exchange traded funds, commodity futures, investment real estate, beneficial interests in trusts, business interests, and partnership interests. But, personal residences, vehicles, savings/checking accounts, securities issued by branches of government, Medicare benefits, inheritances, annuities, pensions, retirement accounts, and college savings plans are not assets.

The Statements of Economic Interests must be filed by May 1 of each year (May 2 for 2022). Certification of review by an ethics officer is required for State of Illinois officials, but that requirement does not extend to local officials unless a local ordinance or policy provides otherwise.

Compliance with the filing deadlines is important. If a covered individual does not file a Statement of Economic Interests by May 1, they will be subject to late filing fees. In certain cases, the intentional failure to file can result in forfeiture of the individual’s office or employment. Additionally, it is imperative to complete these forms accurately—any person who willfully files a false or incomplete statement may be guilty of a Class A misdemeanor. 5 ILCS 420/4A-107.

With these changes, it is imperative to take care in completing a Statement of Economic Interest. If you have any questions, we recommend you partner with your attorney.