making local government more ethical

A Minneapolis Study of Conflicts on Development-Related Boards

An article on the MinnPost site this week brought to my attention a report done by the Minneapolis Ethical Practices Board (EPB) on conflicts of interest involving development-related boards (planning, zoning, preservation) in Minneapolis and in other cities (a copy of the report is attached; see below). The report provides some valuable information.

The Origin of the Study
According to the report, the EPB became aware of comments from citizens and members at development-related board and commission meetings about members' personal involvement in matters coming before them. In addition, an ethics complaint alleged a violation based on a planning commissioner's professional appearance before the commission after the commissioner had withdrawn from participation due to a conflict of interest.

The city's ethics officer, who is an assistant city attorney, spoke with the mayor about these issues on the EPB's behalf. The mayor and the EPB jointly directed the ethics officer to conduct a survey of best practices "in an effort to identify proposed changes to the Ethics Code and/or the Development Boards' by-laws and operating procedures to reduce the number of situations in which the actions of members with potential conflicts of interest give rise to appearances of impropriety."

This is exactly the sort of study ethics commissions should be doing. Such studies would be most useful, however, if they were made available online or, at least, sent to City Ethics to be made easily available to other cities and counties around the country. There is no reason for other local governments to do the same work themselves.

Results of the Study
The centerpiece of the report is on page 7:  a table showing three relevant conflict of interest rules from 13 selected cities in the midwest, west, and south. Almost all the cities (1) require full withdrawal from matters when a development board member has a conflict; (2) prohibit a member from addressing the board on behalf of anyone but himself; and (3) require that a member who withdraws should leave the room while the matter is being considered.

What I found even more interesting were the rules of three professional organizations. The American Planning Association's Professional Institute and the American Institute of Certified Planners have combined on a set of rules that require "planning process participants" to:
Make public disclosure of all "personal interests" they may have regarding any decision to be made in the planning process in which they serve, or are requested to serve, as advisor or decision maker.

Define "personal interest" broadly to include any actual or potential benefits or advantages that they, a spouse, family member or person living in their household might directly or indirectly obtain from a planning decision.

Abstain completely from direct or indirect participation as an advisor or decision maker in any matter in which they have a personal interest, and leave any chamber in which such matter is under deliberation, unless their personal interest has been made a matter of public record; their employer, if any, has given approval; and the public official, public agency or court with jurisdiction to rule on ethics matters has expressly authorized their participation.
What is happily surprising about these rules is (1) they apply to planning professionals acting as advisors; (2) they define withdrawal in terms of participation, not voting, and include both direct and indirect participation; and (3) they define "personal interest" more broadly than most local government ethics codes, at least with respect to the potential nature of benefits and indirect benefits from a planning decision. What they do not include are situations where a planning decision may benefit a board member's business associates.

The National Alliance of Preservation Commissions code of ethics states:
Commissioners and Staff should disclose all personal or financial advantages that might accrue to them, their business interests or family members either directly or indirectly from a recommendation or decision.

Commissioners and Staff who have an actual or apparent conflict of interest in a matter coming before them should recuse themselves entirely from deliberations and decisions.

Commissioners and Staff are obligated to utilize their knowledge and experience to make decisions and therefore should abstain from participating and voting only in cases of a bona fide conflict of interest.
These rules do not expressly include preservation professionals acting as advisors, but they do cover possible benefit to "business interests."

Considering that development is such an important area for government ethics, it is heartening to know that planning and preservation professionals have conflict rules that are better than most local governments have. I assume these rules are not enforced, and it is unlikely that there is much ethics training or advice available. But looked at critically, because neither group of rules is perfect, these rules should provide guidance for local governments looking for good and fair conflict rules.

Conclusions of the Report
I agree with the report's conclusion that Minneapolis should prohibit development-related board members from appearing before their board when they have a conflict. But I don't think this prohibition should be so limited. I think such board members (and their staff) should not be permitted to represent anyone before their board, or any development-related city board, at all. One must not only deal responsibly with a conflict by withdrawing from a matter, but one should also not create a conflict by appearing before one's board for any reason but representing oneself. And even this should happen extremely rarely. If one has more than a very occasional matter before one's board or other development-related boards, one should not sit on that board.

Although I found the study very valuable, I had trouble with the focus of its conclusions. Specifically, I was troubled by the fact that the report ignored the stated purpose of the study "to reduce the number of situations in which the actions of members with potential conflicts of interest give rise to appearances of impropriety."

The report looks at only one issue that might prevent such conflicts:  term limits. It finds that term limits do not reduce the number of conflicts, because conflicts occur early in a member's term just as much as they do later in a member's term.

There is another problem that leads some development-related members to have too many conflicts. Especially in a city the size of Minneapolis, these board members should not have more than a very occasional conflict, or it looks to the public like they are regulating their own industry in the name of public regulation.

The study shows the frequency of withdrawals on three development-related boards in Minneapolis. One planning commission member had to withdraw 36 times in three years (2010-2012). The numbers for three other members over this period were 12, 9, and 9. The numbers for the other two development-related boards were lower, but of course we don't know how many times members with possible conflicts failed to withdraw. Perhaps the planning commission has a better ethics environment, which encourages withdrawal.

What is most important in the report, regarding the frequency of withdrawals, is its acknowledgment that "membership [in the planning commission] has included various planning professionals from the community." As for members of the Heritage Preservation Commission, by law they are supposed to include:
If available, at least 2 registered architects;
If available, at least 1 licensed real estate agent or appraiser;
If available, at least 1 resident or owner of a landmark or property in a historic district;
If available, at least 1 member of the Hennepin County Historical Society.
In other words, those who are likely to have conflicts are not only allowed to sit on the commission, but are given special preference.

If Minneapolis, or any city or county, wants to reduce the number of conflicts, and the appearance to the public that development issues are decided by unelected development professionals regulating themselves, it should reduce the number of development professionals on its development-related commissions. Because their expertise if valuable, these professionals should be encouraged to provide advice and testimony to these boards. But they should not be making decisions that affect themselves, their clients and business associates, or their competitors.

For more on the issue of expertise, see my 2011 blog post on making use of expertise.

Robert Wechsler
Director of Research, City Ethics