A Controversial Indianapolis Board Appointment: Perception and the Dilemma Between Competence and Conflicts of Interest

The new mayor of Indianapolis, Greg Ballard, who ran as a candidate who would bring ethics to city government, is already embroiled in a controversial ethics issue. He has appointed Robert T. Grand as chair of the Capital Improvement Board (CIB), which manages the city’s convention center and sports stadiums, including that of the Indiana Pacers, a basketball team owned by the Simon family. There is a good chance that the Pacers' lease will be renegotiated next year.

Grand, an attorney, represents the Simon family’s principal business, the Simon Property Group. His law firm lobbies for the Pacers and held a big fundraiser for Mayor Ballard. Grand was a leader of Mayor Ballard’s transition team. And he is also a lobbyist for many businesses and organizations.

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According to the firm’s website, Grand “is a member of the Governmental Services & Finance Department. He concentrates his practice in the areas of public finance and governmental regulation. In the public finance area, he counsels state officials, county officials, and mayors on various aspects of bond financing issues and also assists them with many aspects of economic development initiatives. ... His governmental regulation practice includes the representation of public and private clients before state agencies and the Indiana General Assembly. He also represents public and private clients before federal agencies and the U.S. Congress.”

It’s hard to imagine someone more qualified to be on a municipal board. It’s also hard to imagine someone with more actual and potential conflicts.

When Grand was approached, he recognized these actual and potential conflicts, and created a number of protections to solve the problem.

According to an article in the Indianapolis Star and the Advance Indiana blog, Grand and his law firm promised to:

• Notify the CIB any time a client of the firm is involved in "matters with or become adverse to the CIB."

• Abstain from taking part in deliberations or votes on such matters.

• Establish an "ethical screen" that precludes Grand's involvement in matters in which the firm represents the Pacers.

• Bar Grand's access to the firm's files on the Pacers.

• Bar access by firm attorneys to any materials Grand receives in his role as a member of the CIB.

• Deduct from Grand's compensation any share of firm income derived from representing the Pacers.

The same article quotes a politics professor and Common Cause policy director questioning this solution. The professor questions whether Grand would be able to fully participate in board matters, and the Common Cause policy director says that there is still the perception of conflict and of doing business as usual. “Couldn’t they just pick someone else?”

Mayor Ballard ran on a platform emphasizing ethics, but he just doesn’t get it. He doesn’t understand the central place of perception in ethics (in fact, the limitations on Grand and his firm do not appear to have been his idea). He doesn’t understand how important it is for people to see an ethical leader question his own decision and say, “You know, even though I think the man would make a great board chair, his perceived conflict of interest isn’t good for this city. I really meant what I said when I was running for office. I’m not going to do business as usual. I can find someone else to do the job. In fact, maybe the mayor shouldn’t even be appointing people to this board. Why should someone identified with the mayor be controlling the $74 million budget of an independent board? I’d prefer it if community organizations appointed CIB members, and if the board chose it own chair.”

Mayor Ballard should recognize this essential ethical dilemma: the most competent potential appointee is usually the one with the most conflicts. Competence is incredibly important, but one with less specific competence – a lawyer who works in a different field for unrelated clients – can be just as competent without the conflicts. Skills, whether they be legal or financial or managerial, are more easily applied to unknown areas than most people recognize. People on citizen boards are expected to take some time to get adjusted. That’s why most boards have staggered appointment schedules: so that there are always experienced people on the board to held break in the new members.