An Ethics Complaint to Bring Some Transparency to a Deal

Updates below (latest on August 11, 2009)
There's an interesting situation in Colorado Springs. According to an article in yesterday's Colorado Springs Gazette, an ethics complaint filed against the city's weak mayor alleged that the mayor was an investment adviser to a developer involved in a big deal between the city and the U.S. Olympic Committee for a new USOC headquarters. The mayor appears to have been the major mover putting this deal together, and did not declare any relationship with the developer. For a detailed history of the deal, see this Gazette article.

According to an article in the Colorado Springs Business Journal, the county district attorney's office is already investigating this developer. According to the article, one focus of the investigation is on funds that were moved into an account at the investment bank where the mayor works.

According to another Gazette article, the mayor says that a lawsuit filed by the developer prevented him from commenting on his relationship to the developer. In addition, he said, he can't talk about his clients. It's a requirement of his industry.

The banker who filed the complaint disagrees, according to the same article. "I'm in the financial business, and you can't take two steps without a disclosure or somehow making sure that you're not afoul of even the appearance of a conflict," he said.

In fact, a lack of transparency seems to be at the center of this entire controversy. The complainant is quoted as saying, "I don't believe that the original decision [on the development] and I strongly don't believe whatever subsequent decision is made to extract themselves from this mess should be made in private. ... So, if this complaint is in any way a lever to try and move that debate into a more public forum, I'm going to push on that lever."

In addition, the complainant says he twice asked the city attorney to explain why there wasn't a conflict, and he did not receive a response.

Generally, I don't think ethics complaints should be filed with ulterior motives. But transparency is an important part of government ethics, and if the mayor, council (on which the mayor sits), and city attorney's office refuse to even acknowledge the possibility of a conflict, not to mention deal with it responsibly, then an ethics complaint is the next step.

Unfortunately, the complainant's bank appears to have been on the losing side of the deal. The complainant denies this as a motivation, but the complaint certainly gives the appearance of sour grapes. It's too bad someone else, or an organization, didn't file the complaint instead.

Update (June 18, 2009): According to an article in yesterday's Gazette, the need for transparency is even greater than it appeared. The mayor has been saying that his relationships are not important because the U.S. Olympic Committee selected the developer for the USOC headquarters, not the city (ignoring, of course, the fact that conflicts apply not only to decisions, but to participation). However, "in a recent interview, the USOC's former chief executive officer, Jim Scherr, said it was the city's decision."

When two parties to a major transaction can't even agree on whose decision it was to select a developer, more transparency is certainly required.

Update (August 11, 2009): According to an article in yesterday's Colorado Springs Gazette, the ethics commission found insufficient evidence of a violation by the mayor.

Robert Wechsler
Director of Research-Retired, City Ethics

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