making local government more ethical

A City Pension Board Attorney's Fiefdom

I talk a lot about the importance of independent ethics commissions. But independence is not always a good thing for local government boards and commissions. Independence without oversight, transparency, and independent ethics enforcement easily turns into someone's fiefdom.

According to an article in the Detroit Free Press, Detroit's two pension boards (uniformed and general) have apparently turned into the fiefdom of their long-time counsel, Ronald Zajac. He helped them break away from city oversight, and has kept them fiercely independent ever since.

And fiercely loyal to him. Not only did the boards pay his law firm $420,000 last year (compared to the $186,000 paid by New York City's pension board to its counsel), but last year, just in case, the uniformed pension board gave him a five-year contract and changed the rule so that a unanimous vote is required to fire him. Dictators don't have it so good.

According to the article, Zajac doesn't just represent the boards. He brings deals before them, and does not disclose to the trustees who helped secure the deals. They depend on him and apparently do whatever he suggests.

And why not. He also offers trustees sports tickets and vacations, paid for by those doing or seeking business with the boards. And he makes no effort to give the boards ethics or transparency rules that might restrict them. However, in October, after the Free Press started reporting about the lack of ethics on the boards, the general employees board did pass some ethics rules.

Not only is there little transparency on the boards, but the uniformed board even tried to argue in court that it is not a public body and, therefore, is exempt from public records laws. The court didn't swallow that argument.

According to an article in today's Free Press, the Michigan Attorney Grievance Commission is investigating possible professional misconduct on the part of Zajac. Thank goodness there's some oversight, even if not from Detroit itself. Hopefully, the city's new mayor will give the pension boards the oversight taxpayers and city employees deserve. And maybe he can get the council to pass a law that voids the city contract of any professional who insists on a unanimous vote to get rid of him.

Robert Wechsler
Director of Research, City Ethics