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Problems with Obtaining a Job with a Contractor for One's Agency
Tuesday, August 5th, 2014
Robert Wechsler
The Stamford (CT) Advocate's Angela Carella wrote an
excellent column on Saturday about a post-employment (also
known as revolving door) situation in Stamford. Entitled "In Ethical Questions,
Appearances Matter," the column looks at the many problems with a
school board member taking a job with a company that manages the
school board's construction projects. He resigned his
position the day before he accepted the job.
When officials take jobs with businesses their agency oversees, they are seen as using their government service as a stepping stone to help themselves as well as the firms that do business with the government, a win-win deal for everyone but the public. The revolving door puts a question mark at the end of everything the official did in office: what was he giving away in order to get a personal reward? When he acted, advocated, and voted, was he thinking of his future or what’s best for the public?
One of Carella's most astute observations is that the situation was not cured by the school board member's decision not to attend a meeting where the school board voted on a 42% increase in the contractor's fee (partly to create the position the school board member has filled). One reason is that, despite withdrawing from the vote, he did not withdraw from participation in the matter. "[H]e had the opportunity in the months before — particularly as head of the Operations Committee that oversees [the contractor] — to influence board members' views of [the company's] performance as school facilities manager."
Another reason why the school board member's withdrawal from the vote was insufficient is that the company "could have felt pressure to hire him, otherwise risk angering someone holding a key position on the school board." In other words, the school board member was in a position to either make a deal with the contractor or, at least, be preferred due to the trouble he could cause if the job were given to someone else.
What Carells doesn't say is that, in terms of appearance, post-employment work opportunities are indistinguishable from gifts or bribes, although the quid pro quo is hard to prove without a sting operation. It's impossible to know if either or both of the parties to the employment contract were involved in misconduct. All the public knows is that it looks like they were, and that this appearance of misconduct makes it irresponsible for the school board member to have sought or accepted the job.
A third reason, which Carella doesn't mention, is that the school board member did not disclose his conflict, that is, he does not appear to have told his colleagues that he was talking with the contractor about the position the school board was voting on. He simply did not attend the meeting. By failing to do this essential element of withdrawal, he did not give the school board the chance to deal responsibly with the situation. This failure put the school board in the uncomfortable position of having done something that, to the public, looks inappropriate. Therefore, the school board should have reconsidered its decision and, I believe, cut from its increase in the fee by the amount that would have funded its member's position, whether or not he ended up taking it.
The Appearance of Impropriety
Carella concludes that what occurred "creates an appearance of conflict of interest, which can be nearly as damaging to the public trust as an actual conflict." In fact, it is just as damaging, because all the public can know is what appears from the facts and what can be inferred from what happened. No one will ever know what deals might have been made or what pressures may have brought to bear.
The appearance of impropriety is increased by the fact that "a week earlier, [the school board] cut 13 jobs, citing budget pressures." In a time of reduction in expenditures, it is more surprising that a contract was increased by 42% to create a job that was filled by a school board member. It makes the entire school board look like it was in league with the member who wanted the job, whatever might have been the case. The school board members may not have known that their colleague was seeking to fill the position, but the public cannot know what they knew. If they did not know, once they found out, the school board members should have at the very least insisted that their colleague not take the job.
Seeking the Right Advisory Opinion at the Right Time
It's good that the school board member sought an advisory opinion from the city's board of ethics. The problem is that he sought it only with respect to accepting the job. He does not appear to have sought it with respect to his disclosure of job negotiations or his participation in discussions about the increase in the contractor's fee.
Talking with Contractors About a Job
In fact, there is a question whether the school board member should have talked with the contractor at all. Some ethics codes expressly state that a job offer or even discussion of a job constitutes a conflict (in Seattle, for instance, this is in the basic conflict provision, §4.16.070(1)(a)). Some ethics codes instead require disclosure of any such discussion, and others prohibit any such discussion with a party to any matter before the official’s department, agency, or board. These rules allow job offers to be dealt with by withdrawing from matters involving the prospective employer or, when the matter has already moved forward, prohibiting any discussion with the potential employer at all. Since the school board member was involved in ongoing oversight over the contractor, most of these approaches would have prohibited discussion of a job with the contractor.
The ethics board unanimously allowed the school board member to take the job. But it did insist that he not represent the contractor before his board for at least one year. I hope this means that he cannot communicate with his former colleagues during that time, not just that he cannot appear publicly before them.
Provisions to Deal with This Situation
Like most jurisdictions, Stamford has a limited post-employment provision. It only applies to assisting or appearing with respect to matters an official participated in or that was pending during the time he had a city position. The City Ethics Model Code has a provision that somewhat deals with a situation like the one in Stamford:
Whether this language applies to this situation, the spirit of the provision definitely applies: it is not a responsible use of one's public office for someone who has been involved in making decisions regarding a contractor to take a position with that contractor, at least for a year or two after leaving public service.
Robert Wechsler
Director of Research-Retired, City Ethics
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When officials take jobs with businesses their agency oversees, they are seen as using their government service as a stepping stone to help themselves as well as the firms that do business with the government, a win-win deal for everyone but the public. The revolving door puts a question mark at the end of everything the official did in office: what was he giving away in order to get a personal reward? When he acted, advocated, and voted, was he thinking of his future or what’s best for the public?
One of Carella's most astute observations is that the situation was not cured by the school board member's decision not to attend a meeting where the school board voted on a 42% increase in the contractor's fee (partly to create the position the school board member has filled). One reason is that, despite withdrawing from the vote, he did not withdraw from participation in the matter. "[H]e had the opportunity in the months before — particularly as head of the Operations Committee that oversees [the contractor] — to influence board members' views of [the company's] performance as school facilities manager."
Another reason why the school board member's withdrawal from the vote was insufficient is that the company "could have felt pressure to hire him, otherwise risk angering someone holding a key position on the school board." In other words, the school board member was in a position to either make a deal with the contractor or, at least, be preferred due to the trouble he could cause if the job were given to someone else.
What Carells doesn't say is that, in terms of appearance, post-employment work opportunities are indistinguishable from gifts or bribes, although the quid pro quo is hard to prove without a sting operation. It's impossible to know if either or both of the parties to the employment contract were involved in misconduct. All the public knows is that it looks like they were, and that this appearance of misconduct makes it irresponsible for the school board member to have sought or accepted the job.
A third reason, which Carella doesn't mention, is that the school board member did not disclose his conflict, that is, he does not appear to have told his colleagues that he was talking with the contractor about the position the school board was voting on. He simply did not attend the meeting. By failing to do this essential element of withdrawal, he did not give the school board the chance to deal responsibly with the situation. This failure put the school board in the uncomfortable position of having done something that, to the public, looks inappropriate. Therefore, the school board should have reconsidered its decision and, I believe, cut from its increase in the fee by the amount that would have funded its member's position, whether or not he ended up taking it.
The Appearance of Impropriety
Carella concludes that what occurred "creates an appearance of conflict of interest, which can be nearly as damaging to the public trust as an actual conflict." In fact, it is just as damaging, because all the public can know is what appears from the facts and what can be inferred from what happened. No one will ever know what deals might have been made or what pressures may have brought to bear.
The appearance of impropriety is increased by the fact that "a week earlier, [the school board] cut 13 jobs, citing budget pressures." In a time of reduction in expenditures, it is more surprising that a contract was increased by 42% to create a job that was filled by a school board member. It makes the entire school board look like it was in league with the member who wanted the job, whatever might have been the case. The school board members may not have known that their colleague was seeking to fill the position, but the public cannot know what they knew. If they did not know, once they found out, the school board members should have at the very least insisted that their colleague not take the job.
Seeking the Right Advisory Opinion at the Right Time
It's good that the school board member sought an advisory opinion from the city's board of ethics. The problem is that he sought it only with respect to accepting the job. He does not appear to have sought it with respect to his disclosure of job negotiations or his participation in discussions about the increase in the contractor's fee.
Talking with Contractors About a Job
In fact, there is a question whether the school board member should have talked with the contractor at all. Some ethics codes expressly state that a job offer or even discussion of a job constitutes a conflict (in Seattle, for instance, this is in the basic conflict provision, §4.16.070(1)(a)). Some ethics codes instead require disclosure of any such discussion, and others prohibit any such discussion with a party to any matter before the official’s department, agency, or board. These rules allow job offers to be dealt with by withdrawing from matters involving the prospective employer or, when the matter has already moved forward, prohibiting any discussion with the potential employer at all. Since the school board member was involved in ongoing oversight over the contractor, most of these approaches would have prohibited discussion of a job with the contractor.
The ethics board unanimously allowed the school board member to take the job. But it did insist that he not represent the contractor before his board for at least one year. I hope this means that he cannot communicate with his former colleagues during that time, not just that he cannot appear publicly before them.
Provisions to Deal with This Situation
Like most jurisdictions, Stamford has a limited post-employment provision. It only applies to assisting or appearing with respect to matters an official participated in or that was pending during the time he had a city position. The City Ethics Model Code has a provision that somewhat deals with a situation like the one in Stamford:
An official or employee, or a member of his or her immediate family, may not accept employment with, or with the help of, (a) a party to a contract with the city, within two years after the contract was signed, when he or she participated personally and substantially in the preparation, negotiation, or award of the contract, and the contract obliged the city to pay an aggregate of at least $25,000; or (b) an individual or entity who has, within the previous two years, benefited directly from any decision made by, or based on advice or information supplied by, the official or employee or by a subordinate.Even this language does not contemplate this particular situation. Subdivision (a) does not apply, because the contract was more than two years old. However, its terms had just been changed to allow for the school board member's hiring, which is a major change under these circumstances. Subdivision (b) arguably does not apply because the school board member did not himself make decisions. However, as the chair of the school board's operations committee, the member had a significant role in overseeing the contractor's work and, therefore, could be seen as benefiting the contractor.
Whether this language applies to this situation, the spirit of the provision definitely applies: it is not a responsible use of one's public office for someone who has been involved in making decisions regarding a contractor to take a position with that contractor, at least for a year or two after leaving public service.
Robert Wechsler
Director of Research-Retired, City Ethics
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