Local Government Ethics Programs:
A Resource for Ethics Commission Members,
Local Officials, Attorneys, Journalists, and Students,
And A Manual for Ethics Reform
Director of Research
City Ethics, Inc.
City Ethics, Inc.
This book is licensed under a
Creative Commons Attribution-Noncommercial 3.0 Unported License.
© 2013 Robert F. Wechsler
Permissions should be requested from
Robert Wechsler, 16 Windsor Road, North Haven, CT 06473
[email protected], 203-230-2548, fax 203-286-1091
This book is licensed under a Creative Commons Attribution-Noncommercial 3.0 Unported License, see http://creativecommons.org/licenses/by-nc/3.0/
The Goals and Purposes of This Book
I. What Local Government Ethics Is and Isn’t
A. The Basics
B. Sources of Confusion
C. The Moral Development of Government Organizations
D. Why Local Government Ethics Is Important in the U.S.
II. What a Local Government Ethics Program Consists Of
III. Basic Conflict Provision and Withdrawal
A. Conflicts of Interest
B. Preferential Treatment
C. Withdrawal from Participation
IV. Other Conflict Provisions
B. Confidential Information
C. Representation and Appearances
E. Misuse of Government Property
F. Political Activity
I. Incompatible Offices
J. Transactions with Subordinates
K. Complicity and Knowledge
L. Appearance of Impropriety
M. Minor Provisions
N. State Ethics Laws That Apply Locally
O. Federal Laws That Apply Locally
P. Public Administration Association Codes of Ethics
V. Transparency: The Three Kinds of Disclosure
A. Transactional Disclosure
B. Annual Disclosure
C. Applicant Disclosure
D. Other Kinds of Disclosure
A. Procurement and Government Ethics
B. The Procurement Process
C. Procurement and Campaign Finance
D. Criminal Enforcement
E. Federal Grants Management Common Rule
VII. Guidance: Advice, Training, and Discussion
A. Government Ethics Advice
B. Government Ethics Training
C. Government Ethics Discussion
A. Ethics Commission Independence
B. Ethics Commission Staff
C. The Website
D. Annual Reports
E. Recommendations for Ethics Program Improvement
F. Public Relations
G. Relations with Law Enforcement Agencies
H. Rules of Procedure, Regulations, and Bylaws
I. Checklist of Ethics Commission Activities
J. Going Beyond the Call of Duty
A. Filing Complaints
C. Dealing with Complaints
E. Preliminary Investigations
F. Expanding a Proceeding, or Taking an Alternate Approach
G. Confidentiality and Transparency
J. Criminal Enforcement
K. Federal Enforcement
L. Legal Fees
X. Obtaining Information: Hotlines and Whistleblower Protection
A. Ethics Commission Initiative
C. Whistleblower Protection
D. Official Protection
XI. Ethics Reform
B. Origin Stories
C. Forms of Reform
D. Good Government Organizations
E. Doing the Work of Ethics Reform
F. Obstacles to Reform
G. Nontraditional Ethics Reform
H. Regional Ethics Reform
I. State Ethics Reform
XII. Ethics Environments
A. Healthy Ethics Environments
B. Unhealthy Ethics Environments
C. Improving an Ethics Environment
XIII. Obstacles to Overcome
C. Helplessness, Fear, and Feelings of Victimization
D. Blind Spots
E. Framing Ethical Misconduct
F. Misplaced Loyalty
I. Logical Fallacies
J. Confusion of Person and Office
K. Demand for Retribution
L. Demand for Expertise on Boards
M. Earmarks and Slush Funds
O. Non-Functioning Ethics Commissions
Q. SLAPP Suits
R. Complainant Sanctions and Legal Fees
S. Local Government Attorneys
T. Independent Agencies
U. The Legislative Immunity Defense
Appendix 1. Special Conflict Provisions
Appendix 2. Best Practices
Books of Interest
The Goals and Purposes of This Book
Twenty years from now, every local government in the United States will have a program that ensures that its officials and employees professionally handle their conflict of interest situations just the way they professionally handle financial, legal, and engineering situations. In other words, a local government ethics program. That is the goal of this book.
The reality today is that only a small percentage of local government in the United States have such a program or have even considered establishing such a program. The reality today is that the great majority of local government officials and employees have only a limited understanding of government ethics, and they have no trained, not to mention independent individual to turn to for ethics advice. Little disclosure of possible conflicts of interest is required, and there are few active ethics commissions, and even fewer with any staff, to provide oversight and enforcement.
Clearly there is a long way to go. But despite the length of this book, the way is clear and simple. For a truly clear and simple introduction, see the 27-page Local Government Ethics Programs in a Nutshell (http://www.cityethics.org/publications/LGEP-Nutshell), available as a separate e-book.
Here is the problem: an important part of being a professional local government official or employee is lacking, primarily due to a lack of understanding and to fiercely emotional reactions to what appears to be a questioning of one’s integrity. In other words, something that is professional in nature is seen as something personal in nature.
Here is the goal: a program that (1) trains government officials and employees to recognize their and others’ conflict of interest situations; (2) provides them with guidelines and advice on how to responsibly handle these situations; (3) requires them and those who seek special benefits from the government to disclose information necessary to recognize conflict of interest situations; and (4) enforces requirements for handling these situations.
And here is the way to get there: create or improve an ethics program so that it will do all these things and one more: be and appear independent of those officials and employees under its jurisdiction, so that it earns the public’s trust.
A conflict of interest situation involves the conflict between officials’ personal interests and their special obligations to the public to act in the public interest. The public cannot trust an ethics program to be protecting the public’s interests against the personal interests of officials if those officials (1) select those who run the government ethics program, (2) provide ethics advice to their colleagues and clients, (3) and enforce ethics rules against themselves and their colleagues and clients. If the public cannot trust a program designed to ensure the public’s trust that those who govern the community are not acting in their personal interests, then why bother with having a program at all?
You now know everything that is in this book. Except the details.
For most people who will encounter this book, it is a resource, a repository of information.
If you are on an ethics commission, and no one has given you much, or any, training, this is a place to get that training. However, be warned: what you learn here might lead you to turn your commission from a passive body that rarely meets into an active group of people who make their ethics program something to be proud of.
Ditto for administrators and public administration students. It would be great if a new generation of local administrators started out with a deep understanding of government ethics. There is a strong need for knowledgeable leadership in this area. It is the rare area where elected officials have proved to be better leaders than professional administrators.
If you are a government attorney, especially one asked to provide ethics advice or to counsel an ethics commission, this book will let you see that government ethics programs are far less law-centered than you thought, and that you should do what is necessary to get out of your role in the ethics program, except to encourage officials and employees to seek ethics advice from your city or county’s ethics officer.
If you are a journalist, this book will help you understand the ethics issues that arise in your area and ask the right questions.
This book is not a resource book in the way a dictionary or encyclopedia are resources. It is descriptive, as they are, but it is also prescriptive. It presents a vision of what a comprehensive, integrated ethics program should look like, and explains why it is important to have each of its elements. It tries to get readers to think more outside the box, to consider out-of-the-ordinary problems (such as institutional corruption) and out-of-the-ordinary remedies (such as debriefing). And it tries to get readers to think more inside the box, that is, focusing on the mishandling of conflicts of interest rather all sorts of other misconduct that are better dealt with in other ways.
This book provides two kinds of information: information about how things are and information about what a government ethics program should be, why it is important to do it this way, and how to get it done. Guidance is the most important element of a government ethics program, and it is also the principal goal of this book.
If you seek to reform your local government’s ethics program, this book can work as a manual. You will find all the information and tactics you need, both in this book and in places this book links to, including the City Ethics Model Code and the City Ethics blog, which deals in greater depth with situations in local governments across the country. The blog also links to other useful resources, including books, articles, essays, reports, advisory opinions, training materials, and ethics and court decisions. There is a whole chapter on ethics reform and another on obstacles to ethics reform, and how to get around them.
The facilitation of serious ethics reform at the local level is an important goal of this book. To do this, I present not only the reasons for and advantages of each element of a government ethics program, but also the arguments that will be made against each element (and reform as a whole), and the responses that should be made. It is important to anticipate, understand, and contend with the statements about government ethics that are made again and again, but which simply are not true (e.g., giving ethics commissions enforcement authority will lead to witch hunts against elected officials). It is also important to recognize language and omissions of language that, although seemingly minor, can seriously limit an ethics commission’s authority (e.g., not allowing ethics commissions to initiate investigations).
Equally important is the positive side: having a clear vision of what is most essential to a government ethics program, and why, so that priorities may be established. For example, ethics commission independence, in its many aspects, is the most important single characteristic of an effective ethics program. The second most essential characteristic is having an independent individual provide ethics advice in a professional and expeditious manner. Since only a small percentage of local government ethics programs have either of these characteristics, there is a lot of room for reform.
There are many obstacles in the way of good government ethics programs. In fact, there is an entire chapter of this book that examines these obstacles and offers ways to get around them. Some of the obstacles are psychological, some are based on preferred values, such as personal and group loyalty, and some involve protecting officials’ perks, prerogatives, reputation and turf. But the principal obstacle is ignorance. Information available free to all is the best antidote there is.
Local government ethics is at an early stage of development. For one thing, its practitioners have no association, no publication, no website (the closest thing, COGEL, the Council on Governmental Ethics Laws, consists primarily of state ethics professionals, with only a few local ethics members). Local ethics officers and ethics commission members do not get together online or off to discuss the issues that come before them. There are very few full-time local government ethics practitioners. Instead, the practitioners include many thousands of local government attorneys and officials, and smaller numbers of ethics commission members, gadflies, good government groups, and journalists, all dealing with each situation practically in a vacuum, with little or no knowledge of how things are done elsewhere, why things are handled (or not handled) the way they are locally, and how to change the local ethics program. It is rarely even recognized that there is such a thing as a local ethics program. This book will hopefully change this situation.
With this book available, officials will anticipate that there will be people who know the best practices and who can present the reasons why they are important to follow. Such people will identify alternatives to the status quo or to proposed amendments to the ethics code. Therefore, when ethics reform is in the air, it will be much harder for officials to do what is so common: look at the ethics codes in one or two nearby cities or counties, or at a state model, and draft a minimal ethics code.
This book explains why a weak ethics code with no real ethics program can be worse than no ethics program at all. A strong, comprehensive ethics program is what is needed, no matter what the size of the community. Small communities that can’t afford their own ethics officer can join together in a county or regional ethics commission to get the benefits of a strong ethics program, at little expense.
I believe that local government officials, with the knowledge of what a local government ethics program can be (and why it is so important) and with the help of well-informed good government groups and other local organizations, are capable of transcending the obstacles inside them as well as overcoming the obstacles others place in an ethics program’s path. But they first have to take the time to consider best practices. When the issues and best practices of government ethics are known and openly discussed, it is hard to ignore them.
This book begins with an introduction to government ethics, what it is and what it is not. It is important to narrow and focus the topic, because it is a topic with a limited scope that is often seen as encompassing much more. Because of misperceptions of what government ethics encompasses, too much is expected of government ethics programs and what they can provide is not sufficiently appreciated.
The second chapter describes what a government ethics program is. Too often, people think in terms of ethics laws, but they are only one part of an ethics program. When an ethics code is drafted, and nothing more is done, there is no ethics program, only the appearance of one.
The third and fourth chapters look at the most common ethics provisions, starting with the basic conflict of interest provision. Ethics provisions are guidelines for officials and employees to help them identify and deal responsibly with their conflict of interest situations and with the conflict of interest situations of their colleagues. Appendix 1 provides a list of unusual but valuable ethics provisions from local ethics codes across the country.
The fifth chapter considers the three principal kinds of disclosure, along with a few other kinds of disclosure. Disclosure helps officials focus on their possible conflict of interest situations before they become problematic, and it provides the public and the ethics commission with useful information regarding possible conflicts of interest. Disclosure goes beyond filling out an annual disclosure form. Officials and those seeking benefits from the government are required to make disclosures when certain events occur.
The sixth chapter looks at one area where a great deal of ethical misconduct occurs: procurement, the purchasing of goods and services by a local government. A chapter on land use, the other major area of ethical misconduct, will be added in the future.
The seventh chapter begins the section of the book on ethics administration. It looks at the most important part of ethics administration: guidance. This includes ethics training and ethics advice, the core of every government ethics program, as well as the discussion of ethics issues, both formally and informally.
The eighth chapter, which is all new, provides definitions for the Definitions section of an ethics code.
The ninth, tenth, and eleventh chapters deal with administration of an ethics program and with enforcement. These chapters include everything from selecting ethics commission members to creating useful websites to investigations, settlements, and hearings. With so much emphasis on ethics provisions, these areas are too often given little thought when ethics programs are created. And since many ethics commissions believe they exist only to respond to complaints and requests for advisory opinions, it is important for them to know about all the things they could, and should, be doing. Government ethics administration is a much more proactive thing than most people think.
The eleventh chapter considers how an ethics commission obtains information, including ethics hotlines, and how those who provide information can be protected. It also considers one of the most important powers an ethics commission needs to have: the ability to itself initiate an investigation and draft a complaint when it obtains information.
The last three chapters are the most special chapters in the book. They take the book beyond nuts and bolts and best practices. These chapters are more philosophical and yet very practical in the advice they supply.
The twelfth chapter considers all the ways in which ethics reform has and can be accomplished, as well as the ways some people try to prevent it from happening. This and the final chapter are essential chapters for good government groups and anyone else involved in creating or improving an ethics program.
The thirteenth chapter looks at ethics environments, the cultures in local government organizations that underlie most ethical misconduct. This chapter considers the characteristics of healthy and poor ethics environments, and provides a number of ways to improve an ethics environment.
The final chapter looks at the many obstacles that stand in the way of an independent, comprehensive government ethics program, including misunderstandings, fear, blind spots, the demand for retribution, non-functioning ethics commissions, backsliding, local government attorneys, independent agencies, and the legislative immunity defense.
About the Author
I wrote this book because, without such a book, those involved in local government ethics have nowhere to turn for information or guidance. As it was until now, anyone could say just about anything about local government ethics, and get away with it, because who is in a position to say otherwise? Since I have been writing about local government ethics for years in my City Ethics blog, I felt that it was my obligation to fill this void.
Like almost everyone in this field, I got into it in an unusual manner. I practiced law and then was a book editor, publisher, and writer. My first introduction to local government ethics was experiencing ethical misconduct: being the object of intimidation in my own town, by the people who ran my town’s government. This experience pulled me into town politics as a gadfly and into government ethics as a researcher.
I started by working with Connecticut Common Cause. I reviewed and graded all of the local government ethics codes in my state, and I wrote a long essay on the state’s forms of government and how to change them through the charter revision process. I wrote a model ethics code for Connecticut municipalities. And I testified before a state legislative committee to try to get the state involved in local ethics reform.
Then I went to work with City Ethics as its Director of Research. City Ethics is a nonprofit, nonpartisan organization that provides advice on local government ethics programs across the country. I started the only local government ethics blog in 2006 and wrote the City Ethics Model Code, its comments, and related forum essays.
I was also the first Administrator of the New Haven Democracy Fund, one of the few local public campaign financing programs in the U.S., from 2007 to 2012.
With respect to writing books, I was a book editor for seventeen years, and I am the author of Performing Without a Stage: The Art of Literary Translation, among other titles.
Technology now allows us to update books with far greater frequency than the every-so-many-years new hard-copy editions of the past. What you are reading is edition 2.0 of this book. It improves on the edition 1.0 in several ways:
1. It includes much more information on rules and regulations, and bylaws, and has added a chapter on definitions and a list of best practices.
2. It updates materials, based on new events, laws, and publications, as well as based on the blog posts I have written since edition 1.0.
3. I went through the entire book one more time, rethinking everything, improving the language, making corrections, and organizing the book better.
4. And I wrote a short overview called Local Government Ethics Programs in a Nutshell, which is available as a separate little e-book.
Topics to be added in future editions include lobbying, land use, transparency, and local campaign finance laws.
Not only do things change, but future editions also have the benefit of feedback and information from others. So please send me your feedback and information, and I will incorporate them in this ongoing project.
I am grateful to Mark Davies, Executive Director of the New York City Conflicts of Interest Board, for his feedback on this book as well as for his model code, (“Keeping the Faith: A Model Local Ethics Law-Content and Commentary,” 21 Fordham Urban Law Journal 61 (1993)), which was the basis for my City Ethics Model Code. Davies’ vision of government ethics programs is the inspiration for my vision and approach. I also thank Jim Kwalwasser for his critical observations.
I. What Local Government Ethics Is and Isn’t
Public service integrity always revolves around managing conflicts of interest. It entails balancing personal interest and obligations of service to the community. ... Where you stand directly influences what you see. We see things involving others with a clarity which escapes us when we have a personal involvement. Not infrequently, we do not see impropriety in our own actions, and cannot understand why others see personal interest.
—Beith Atkinson, then Senior Advisor, Trust and Values, New Zealand State Services Commission
A. The Basics
For the purpose of local government ethics, “ethics” is not the field of study concerned with being or doing good, what most people consider it to mean. It refers to the area of decision-making regarding conflicts between, on the one hand, the obligations government officials and employees have toward the public and, on the other hand, their obligations to themselves and their family, their business associates, and others with whom they have a special relationship. It involves not only the reality of these obligations, and of the underlying relationships, but also how these obligations and relationships appear to the public.
Government ethics is not about being “good” or “bad.” It is about acting responsibly and professionally, as a government official or employee, under certain circumstances and following certain rules and procedures. Government ethics laws provide minimum, enforceable guidelines to facilitate ethical decision-making. Government ethics programs provide training and advice to further facilitate ethical decision-making. Government ethics programs also require financial and relationship disclosure, which provides information to help the public, as well as officials, better determine if conflicts of interest might exist, so that they can be dealt with responsibly.
What is “bad” with respect to government ethics is the failure to provide guidelines, training, advice, disclosure, and independent enforcement, that is, the failure to provide a strong, comprehensive government ethics program. Once such a program is in place, government ethics is about being professional and responsible, following the rules and asking for advice whenever it is not clear how to deal with a particular situation, whether it is one’s own or one’s colleague’s.
The principal goal of a local government ethics program is to further the public’s trust that those who govern their communities are putting their personal interests aside in favor of the public interest. It is hard for a community to have social trust when its residents perceive officials using government to profit themselves and their friends and families. Without this trust, people tend not to participate in their government, even as voters, and they feel as if their government were something apart from their community, an organization designed to benefit its members and those with the right connections, rather than an organization that serves, manages, and supports the community. They also feel they are being taken advantage of and treated unfairly. This leads to very strong emotional reactions.
As Mark E. Warren has written, “a government viewed as corrupt cannot be trusted. And a government that cannot be trusted will be crippled in its capacity to lead.”
The opposite of trust is not distrust, which we need in order to keep our representatives accountable, but a lack of trust. A lack of trust causes people not to accept their government’s decisions as fair. A democratic government does not thrive when there is a lack of trust in those who govern it.
Two other important goals of a local government ethics program are (1) to stop ethical misconduct before it becomes criminal conduct, and (2) to establish best practices and a healthy ethics environment at the level where most elected officials learn the ropes. Local government is where the individuals who become our state and federal representatives too often experience their first poor ethics environment, learn the rules of the game, misplace their loyalty, and begin to feel a special entitlement. Therefore, effective local government ethics programs help to create healthy ethics environments in state and federal government organizations, as well.
1. Fiduciary Duty and Other Theories Behind Government Ethics
One reason that government ethics is described in terms of obligations is that government officials have a fiduciary duty or obligation toward the community for which they work (and which, in most cases, elected them or their appointing authority). The obligation government officials have toward the community, usually referred to as “the public,” is unlike any other obligation. Government ethics deals with conflicts between this special obligation and an official’s other obligations.
Government ethics codes don’t usually use the term “fiduciary duty.” An important exception is the first substantive provision in Chicago’s ethics code, which reads, “Officials and employees shall at all times in the performance of their public duties owe a fiduciary duty to the City.” Note, this duty is owed is to the city, not to the city government.
Government officials’ over-riding duty is different from that of a trustee to a beneficiary, which is the most common use of the term “fiduciary.” The difference is inherent in the forms of government in the United States. In many forms of government, officials are responsible to a king or a dictator, rather than to the public. Even in some democracies, such as Japan, government officials do not feel the same sense of obligation to the public. There is an old saying in Japan, kan son min pi, literally, according to Tomofumi Oka, “government personnel are respectable, non-government personnel are not respectable,” or “respect government officials, don’t respect the public.” In the U.S., on the other hand, government officials are required to respect and be responsible to the public.
Another way of understanding an official’s fiduciary duty is by looking at it from the point of view of the public. The public elects representatives who spend the public’s money and make decisions about their community that affect their lives. The U.S. version of this representative system can work only if the public has confidence that its representatives, and those appointed or hired by its representatives, are spending tax dollars and making decisions solely for the benefit of the community rather than for themselves or for those with whom they have special relationships.
The type of hiring, either as employee or as a contractor of subcontractor, is both unknown to the public and irrelevant to the hired individual’s fiduciary duty to the community. In fact, those who receive or spend public funds have the same duty, even if they were not hired by a government.
We cannot actually know much about the character of those who work in our local government, and we cannot expect our representatives, or those they appoint to office, to be as competent as we would like, or have as good judgment or vision as we would like, but we can at least expect them not to misuse their office to benefit themselves or those to whom they have personal obligations that conflict with their obligations to the community.
Because we cannot know the character or motivations of those who manage our communities, and because we cannot know how much their personal obligations affect their decisions, we can judge them only by their actions and their relationships. In other words, appearances matter a great deal. Appearances, in a government ethics context, are not something vague and abstract. They are the facts of what an official does and what relationships an official has. It is motivations and character that are vague.
Therefore, while appearance is central to government ethics, motivations and character are irrelevant. This is the most difficult thing for most government officials to understand, because what they see when they look at themselves is motivations and character, all those things that are invisible to their community. But when officials look at other officials, all they see is obligations, relationships, and conduct.
The duties and expectations that comprise the relationship between local officials and their community lie at the center of our form of government. These duties and expectations are supported and enforced by government ethics programs and, when there is bribery or embezzlement, they are enforced by the criminal justice system. The “contract” between a community and its government is based on what are referred to as “regime values,” that is, the values of our form of government, the ones to which elected and appointed officials take an oath of office, including the values stated in our federal and state constitutions, and in our city and county charters.
Although this book focuses on fiduciary duty as the principal basis for government ethics, it is important to recognize that there are other bases. In her 2012 law review article “Defining Corruption and Constitutionalizing Democracy” (Mich. L. Rev (Vol. 111)), University of Maryland Law School professor Deborah Hellman argued that defining legislative corruption requires a theory of the legislator's role in a democracy. This applies to other government officials, as well. She discusses three theories other than fiduciary duty.
1. Corruption as a Deformation of Judgment. We see this theory in the common ethics code phrase, “impairment of an official's judgment” (see my argument against the use of this phrase). The unspoken theory of the legislator's role that lies behind this view of corruption is that, for each decision they make, legislators should consider only reasons based on the merits. Any non-merits-based argument – or personal greed or an obligation to someone – that influences a legislator involves an improper impairment of the legislator's judgment.
2. Corruption as the Distortion of Influence. In this theory, the legislator is supposed to be responsive to constituents' preferences. Therefore, any responsiveness to some constituents' preferences over others', caused by undue influence, is a distortion of what is supposed to happen and is, therefore, corrupting. This is the theory behind gift rules that, like bribery provisions, mention “intent to influence,” or that use language like the following with respect to soliciting or accepting a gift:
under circumstances in which it could reasonably be inferred that the gift was intended to influence him, or could reasonably be expected to influence him
See my argument against gift provisions that require a show of intent to influence.
3. Corruption as the Sale of Favors. This theory says that anything a legislator does is okay, so long as the legislator does not exchange a vote or favor for something of value. This is the view of corruption clearly stated by the majority opinion in the Citizens United decision, where corruption is only “quid pro quo corruption.” This theory does not even recognize the validity of government ethics. Thankfully, this is true only in the context of campaign finance, which happens to be the focus of Hellman's article.
In a government ethics context, the Supreme Court has accepted a different theory of the legislator's role: a legislator casts a vote “as trustee for his constituents, not as a prerogative of personal power.” Nevada Commission on Ethics v. Carrigan, 564 U.S. ____, 180 L. Ed. 2d 150 (2011). What is especially different about this theory is that it is not a theory about legislators, but rather a theory about government officials.
In his book What Money Can't Buy (Farrar Straus, 2012), Michael Sandel raises another theoretical argument for government ethics. When it is perceived that there is a market for government access or favors, it degrades government “by treating it as a source of private gain rather than as an instrument of the public good.” Ethical misconduct taints our community. It makes us feel not only angry, but disgusted. This occurs when conduct that may be valued outside government, like the reciprocal giving of favors or helping one’s family members, is pursued in the context of managing a community.
Whatever the particular theory involved, what we can take from Hellman's paper is the recognition that “to define corruption requires articulating the standards of proper functioning of the institution or individual involved.” This is too often ignored. What drives ethics codes is often scandals, that is, the negative side, rather than the positive side: what we expect from our government officials and how we view the proper functioning of government.
2. The Values of Our Founding Fathers
It is worth considering what government ethics meant to our founding fathers. Those who became public leaders at that time sought to demonstrate their public virtue, which meant their ability to rise above the self-interest that absorbs the energies and limits the views of ordinary men. The character necessary for this purpose was a matter of both personal integrity and public reputation. A young man was considered to have the necessary public reputation to make him worthy of office when established gentlemen testified to his worth by supporting him as a candidate for political office or appointing him to a position of public trust, according to Gordon S. Wood in his book Revolutionary Characters: What Made the Founders Different (Penguin, 2006). Wood points out that Aaron Burr's treason was less his conspiracy against the U.S. government, than “his willingness to use politics for private gain.”
Thus, when we talk about the importance of government ethics, we are talking about an ideal that was being lived at the founding of our country. Unfortunately, the norms of our founding fathers were lost, to a large extent, during the Jacksonian period. These values came back into our culture through early twentieth-century Progressivism, which was led by people who thought of public service much as the founding fathers did. Although government ethics has deep roots in our culture, it co-exists with the culture of Jacksonian democracy, where the principal goal is to get what you can get.
3. Conflicts of Interest
We have conflicts among our obligations all the time. Our obligations are not something abstract; they are based on our personal and professional relationships. We can only fulfill our obligations to our children and our spouse, our parents and our siblings, our employer, partners, clients, customers, and other business associates, and our relatives, friends, pets, and neighbors at the expense of our other obligations, including our obligations to ourselves. We are constantly juggling these obligations, and those to whom we have obligations, including ourselves, are constantly disappointed in us because of the priorities we set among our obligations. These priorities are necessitated by our limited time, energy, abilities, and authority.
Conflicts in local government are a small subset of our daily conflicts. In our daily juggling of obligations, there are so many that we rarely think about them in any depth. Our principal solution to the problem is to have a schedule: getting ready in the morning, commute time, work time, meal times, food shopping time, times to drop off our children and pick them up, exercise time, time spent with spouse, children, and pets, leisure time, visits to our parents, vacation time, and sleep time. If we cannot schedule something or get to it on our to do list, it’s very likely to be put off or not accomplished at all.
But juggling obligations goes beyond the constant scheduling and prioritizing of our time. There are expectations placed on us, and we are pressured — lobbied, influenced — by everyone in our lives to give them and their interests a higher priority. His family, her family, his friends, her friends, spouse, children, boss, clients, and pets all have their ways of trying to influence how we prioritize our attention and our time, and how we make our decisions.
All these people and animals feel they have a right to our time and attention, and there are no rules to help us decide which to show preference to or to what extent. One good thing about government ethics is that it has a central rule: that no preferential treatment should be shown. A developer who gives large campaign contributions or promises tickets to big football games may not be given preferential treatment over a politically uninvolved citizen who doesn’t want water drainage from a proposed development to flood her property. Contractors must be selected by competitive bidding. Officials cannot hire their relatives. Nor can friends be given access to public works equipment unless everyone can (and everyone can’t).
Obligations, and the relationships on which they are based, work like stress does in our bodies. They don’t cause the disease of corruption, but they help undermine our immune system. Our natural selfishness is strengthened when we can tell ourselves that we are helping our family, friends, and business associates live a better life. Just as stress increases our susceptibility to disease, obligations increase our susceptibility to acting unethically, that is, to putting our obligations to others ahead of our obligations to the public.
Conflicts of interest that are not dealt with responsibly create stress in the relationship between a local government and the community it manages. From the point of view of citizens, when an official has a conflict of interest, does not disclose it, and does not withdraw from participating in the matter, he may purport to be acting as an official, but if it comes out, he will be seen as being an agent of whoever it is he has a special relationship with, whether it be his brother, his wife's company, his business partner, or himself. He will be seen as selfish and untrustworthy and, more important, the government that does not insist on him dealing responsibly with his conflict of interest will be seen as a bunch of people who are in it for themselves and their family and friends.
In other words, it’s less about the individual than it is about the government itself. If the public’s trust in one official were all that was undermined, it wouldn’t matter that much. But if there is not a strong ethics program, the entire government-community relationship suffers from the misconduct of one official. And, as everyone knows, it is rarely only one official who is at fault. Certain kinds of misconduct may be considered normal. And there are those who enable and those who know about each conflict of interest situation, but say and do nothing.
There are many ways in which conflicts of interest arise. Many simply exist, and become relevant only when a matter involving a family member or business associate comes before an official. For example, an official’s law firm represents a contractor. This is okay until the official has to deal with, or is in a position to influence, a contract the contractor has or wants. As soon as this happens, there is what I refer to as a “conflict situation,” and the official has to deal responsibly with the situation by following the procedures required by her local government’s ethics program. This usually involves disclosure of the conflict of interest and withdrawal from participation in the contract matter, that is, letting someone else, or the rest of the board, deal with the contract.
This is a lot easier than dealing with our everyday conflict situations, such as deciding whether to take the dog for a walk (you need the exercise as much as him) and let your wife do the dishes, or to instead show compassion for a spouse who’s just come back from a business trip and asking your son to walk the dog, while you help with the dishes.
And there is one other big difference. If you go for the walk, you might have to deal with an angry wife, but it’s your choice. In government, however, you have a paramount responsibility to the public. It is your duty not to work on the specifications of a contract (or talk to someone working on the specs) that might go to a contractor represented by your law firm, not because you can’t be trusted doing an honest job (how can anyone know this?), but because you owe it to the public to disclose the conflict of interest and deal with it responsibly, that is, in a manner that will preserve the public’s trust in a fair government that is not being used by officials to enrich their family or business associates.
Dealing responsibly with conflict situations is the central act in government ethics. The rest of a government ethics programs revolves around this: training and advising officials how to deal responsibly with conflict situations, requiring the disclosure of information relevant to conflicts of interest, and enforcing the ethics code when officials do not deal responsibly with their conflict situations.
Conflicts of Interest Created By Events
Other conflicts of interest are created by events. For example, a developer seeking approvals from a zoning board invites a couple of zoning board members for a long weekend at his Caribbean home. Or a contractor offers work to the accounting firm of a commission member while the commission is overseeing the contract. Or a government official asks a subordinate to enter into a business transaction with her.
In these instances, it is not enough simply to withdraw from the matter. The question is whether the gift, the work, or the transaction must be rejected, and whether or whom to alert about the offers.
Misuse of Office
Another way to look at ethical misconduct is in terms of misuse of office. Every official temporarily holds an office or position in a government. That office is supposed to be used solely for the benefit of the community. The authority that accompanies this office, but is its holder’s only because he holds that office, can do a great deal of good, as well as damage. When an official uses his office for the benefit of himself or someone with whom he has a special relationship, or to harm others, this is a misuse of office. It is this view of ethical misconduct that has caused many basic conflict of interest provisions, including the City Ethics Model Code’s, to start out with the phrase “An official or employee may not use his or her official position or office. . .”
This approach also makes it clear that government ethics is not just about voting. It is about the misuse of office in any way, for any purpose: making a call or sending an e-mail explaining one’s position on a matter where the official has a conflict of interest, making a speech to a community organization about the matter, even whispering in the ear of a colleague or subordinate at a meeting on the matter (this is why officials with a conflict of interest are usually asked to sit in the audience or leave the room).
Ethical misconduct not only involves the misuse of office for the personal benefit of oneself and others. It also causes officials to continue to act in their personal interest in order to hide what they have done, and to pull others into their cover-ups. This involves secrecy, circling the wagons, intimidation, dishonesty, denials, and personal attacks on anyone seen to be capable of making the misconduct public or getting the public to understand what is wrong with it.
The covering up of ethical misconduct often places pressure on others to engage in additional ethical misconduct. It can be like a snowball rolling downhill, to the point where no colleague has the courage to speak out even privately, or vote independently, even though they have an obligation to do so. It makes everyone complicit, even those who are merely trying to stay out of it.
In this way, ethical misconduct co-opts and corrupts others. This is the worst thing about it. And it is why it is so important to have a good, independent government ethics program, not just to enforce the laws, but to stop the snowball from rolling downhill and to prevent politicians from being able to create a smokescreen, or believe they can. No ethics code can do this. Only a full-fledged ethics program can.
This is why, unlike many in the good government world, I do not cheer when a local official is indicted. I see it as unfortunate and unnecessary. Lives are ruined and the public trust is undermined because simple, inexpensive ethics reforms were not instituted, or an ethics commission did not do its job.
The most common term in government ethics is “conflict of interest,” but I prefer not to use the “of interest” part of this term. The reason is that we don’t generally think in terms of “interests” except in the basic opposition of “personal interests” and the “public interest.” The public, officials, and people who seek special benefits from the government think more in terms of relationships, obligations, and biases than in terms of interests.
We don’t balance interests, we balance obligations. A developer gives a gift to an official not to create an interest, but to create a feeling of obligation. And citizens are angered by officials’ apparent biases toward individuals and companies, arising from special relationships, not something as vague as their “interests.” “Relationship” and “obligation” are words that are too often left out of discussions of government ethics. But these are essential words, and both provide more guidance than the word “interest.”
The word “interest” in “conflict of interest” also creates confusion because “interest” has a second important meaning and usage in government ethics. This is an “interest” in a company, which involves ownership, or an “interest” in a transaction, which means that an official, or someone especially important to an official, might benefit from a transaction with the local government.
In 2012, the Baltimore ethics board hired a law student as an intern to review financial disclosure forms. When asked if they had any financial “interest” in properties or entities that do business with the city, many officials filled out the form incorrectly. The intern wrote in her report, “The word ‘interest’ confused filers. Many expressed they did not receive any interest from their home.”
Not only is there a confusion of meaning surrounding the word “interest,” but there is also an issue of clarity. An “interest” in a transaction is far less concrete than the “benefit” someone gets, or may get, from a transaction. When it comes to gifts, this is even more clear. An official “benefits” from a gift from a contractor; it would be odd to say she has an “interest” in a gift.
A lot of the language in government ethics obscures rather than clarifies. It is language used by lawyers, not by ordinary government officials and employees, not to mention citizens. It is wrong to use such language, because an ethics code is intended to provide guidance to ordinary people. If only lawyers understand the language, the ethics code provides little guidance, there will be less compliance with the rules, and enforcement of ethics provisions will not be fair.
It is a serious problem in getting people to understand government ethics that both of its principal terms, “ethics” and “conflict of interest” do not clearly convey to the public, or even to government officials and employees, what the field is all about.
In this book, I use the terms “conflict” and “government ethics,” and I will speak as much as possible in terms of “obligations,” “benefits,” and “relationships” rather than “interests.”
5. Government Ethics and Politics
There is one very big exception to the rule that government office should not be used for the benefit of its holder and those to whom the holder has obligations. That big exception is politics. A politician (as opposed to an administrator or employee) is permitted to give precedence to her political obligations and to benefit her political career and her political colleagues, with some exceptions. Our democratic system allows an elected or appointed official to wear the additional hat of the politician.
Elected officials and their appointees often act to benefit their parties and factions, and their own political futures. Many elected officials do what they can to get re-elected or elected council president or mayor. And many mayors have their eyes on higher office. Board and commission members often think of running for council, or making sure their party remains in control of the government.
The results include partisan strife, patronage, a lack of transparency, and games played with the budget and with taxes. Although it undermines public trust, most of this is considered legal. In any event, it is not part of government ethics. Conflicts between political obligations and obligations to the public cannot generally be enforced by ethics commissions. They are dealt with in other ways, however, such as nonpartisan elections, the council-manager form of government, and limits on interference by elected officials with administrative matters, hiring, land use decisions, contracts, and grants.
6. Appearance of Impropriety
In politics, appearance is as important as reality. The same holds true for government ethics, but in a different sense. Government ethics is not about manipulating appearances, but rather about recognizing that the appearance of impropriety is damaging to the public trust. If a government official appears to have a conflict, even though the situation is not clearly prohibited by an ethics code provision, and that apparent conflict is not handled responsibly, it has the same effect on the public in terms of their trust in those who govern as it would if the conflict were prohibited by law.
As the Portland, Oregon Ethics Explanations and Examples pamphlet says, “Public service requires a continual effort to overcome cynical attitudes and suspicions about the people in government.” Considering not only laws, but also appearances, is part of this effort.
Many people say that the most important test government officials should use when faced with a possible conflict situation is either what their mother would think or how they would feel if their failure to deal responsibly with the conflict situation appeared on the front page of tomorrow’s newspaper. You can check and see what the ethics code says, but even if there’s nothing that would make your conduct a violation, it’s still important to think how one’s conduct would look, because that is what will affect the public’s trust.
Another way of looking at the appearance of impropriety is by acknowledging that, unlike how we see people we know well, the public sees government officials only from afar. The public lacks the usual cues that allow us to determine whether someone is telling the truth or is sincere about a position. All we can know is that the position benefits the official or someone with whom the official has a special relationship. We can hold our representatives accountable only through their acts as they appear on their face, because we cannot know their motives.
But since officials do know, or think they know, their motives, it is hard for them to see how their conduct appears, no matter what test they use. In order to handle a conflict situation responsibly, nothing is better than describing one’s situation to a neutral observer, to a government ethics professional if possible, to see how one’s conduct would appear to others.
It is also important to recognize that much conduct that appears improper, such as incivility, lying, love affairs, or drug use, is outside the province of a government ethics program. Government ethics programs are limited to dealing with conflicts. See below for a discussion of this.
When one talks about impropriety in a government ethics context, one is talking about fairness. Those who manage a community are supposed to be looking out for the community, that is, treating citizens as fairly and equally as possible. Preferential treatment not only benefits those in power and those with connections but, more important, it is unfair to others.
No one likes unfairness. Our dislike for unfairness is both deep and powerful. The reason for its power is that it is based on disgust. We feel about people who offend our values, especially people who do something we consider unfair, the same way we feel about rotten food. It’s not an accident that “corrupt” not only refers to someone who is using a government office to help himself and his associates, but also to something that is impure, that has become rotten or tainted. Our vocabulary for corruption comes right out of our vocabulary for spoiled food.
Jonathan Haidt's Moral Foundations Theory argues that there are six moral modules or foundations. Liberals, conservatives, and libertarians embrace different moral foundations. The only one of the six foundations that is equally common to all is fairness/proportionality, which is also the one most important to government ethics. Cooperation among individuals, especially across groups, depends on playing tit for tat, being fair. The result is that we feel very angry when we believe that people in power, who have obligations to all of us, do not treat us all equally.
A democratic system cannot function unless it is seen to be fair. When a local government appears to favor the families, friends, business associates, and major contributors of its officials, this undermines the public trust, and causes resentment along with less participation by residents in local government. Residents feel that their views and efforts are worthless in an unfair environment that favors people with connections they do not have. Residents stop being citizens.
Being fair to the community and its residents means making sacrifices, and this seems unfair to officials. Officials have to give up certain business and professional opportunities, such as seeking a contract or grant from the government, and they may not help their relatives and business associates in their business with the government. They have to give up accepting gifts from those seeking benefits from their government (although most of these gifts would hardly have been made if they were not in a position to influence policies and the provision of contracts, permits, and grants). Officials can benefit from government actions to the same extent others do, as taxpayers, senior citizens, or the like, but they cannot benefit in any special way. This is a sacrifice they must make if they choose to take a job or position in their local government.
Fairness/proportionality is also the foundation that officials most often use to justify their misconduct, both to themselves and, when caught, to the public. They say that they have sacrificed potentially higher pay in the private sector, or they are serving as volunteers, giving up their precious time for the community. But it is not unfair that officials are required not to use their office for their benefit or for the benefit of those with whom they have a special relationship. Government in a democracy has to act fairly, and not appear to favor its officials and employees, or those with special connections to them, at the expense of the community.
Officials also give up important rights. Their freedom of speech is curtailed, because they have to speak as officials, for the community, rather than for themselves. They have to treat citizens with respect, something citizens do not have to do to each other or to officials. There are many statements that, if they were to say them as officials, would hurt or anger individuals in their community, and cause tension in the community, or even violence. Even their spouses are no longer free to do whatever they want. This can be a difficult thing for government officials and their families to accept.
An important aspect of fairness is going through the formal processes, rather than following unwritten rules, which generally mean unfair, preferential treatment. Formal processes exist to make government action more fair, not, as many people think, to make a bigger, more expensive bureaucracy. Government ethics is just one of the formal processes that makes government more fair.
8. Minimum Requirements
“The worst thing you can do is read the [ethics] law like a lawyer and look for loopholes.”
—Richard H. A. Washburn, past training manager with the then New York State Commission on Public Integrity
The principal difference between a government ethics code and other ordinances is that an ethics code provides only minimum requirements, that is, the least that is expected from government officials. Ethics provisions are the floor, not the ceiling, as Judy Nadler of the Markkula Center for Applied Ethics puts it.
Other sorts of laws provide maximum requirements, that is, the ceiling on what is acceptable. Every aspect of a criminal law must be proved beyond a reasonable doubt, or there is no crime. Regulations make specific requirements, and no more is expected.
Ethics provisions are not meant to be viewed or interpreted the way other laws are. If an ethics code does not clearly state that certain conduct is a violation, that does not mean that the conduct is appropriate. It only means that it is not illegal.
There are two reasons for this. An ordinary ordinance is the way the government (that is, the community) regulates citizens. An ordinary citizen is expected to act in his or her own interest. An individual or company need only depart from that interest to the extent the community, through its government, requires. If certain conduct is not covered by local or state law, it is not illegal. Whether it is ethical or not is a personal issue. If someone finds a loophole, the government is supposed to get rid of it. Until it does, acting according to the loophole is legal. It only becomes an ethics issue if one or more officials decide to leave the loophole in to benefit those to whom they have personal obligations.
In contrast, an ethics code is the way the government (that is, the community) regulates those who serve the community in the government. Unlike ordinary citizens, those who agree to serve the community are not expected to act in their own interest. They are not expected to use their position to help themselves or those with whom they have special relationships. In other words, they have a special, overriding fiduciary duty to the community. If they find a loophole in an ethics law, they are supposed to get rid of the loophole and, until they do, not take advantage of it. If they take advantage of it, even if their conduct is legal, it is unethical, inappropriate, and harmful to the public trust in its government. And unlike ordinary citizens, public servants have a special duty not to act unethically.
The second reason why an ethics code provides only minimum requirements is that while ethics codes are meant to guide officials to act in the public interest, ordinary ordinances are not meant to guide, but to limit and define. Everyone knows it's wrong to kill people, but criminal laws divide killing into a number of different crimes. No one checks homicide laws to help them decide whether or not to kill someone.
People do check tax laws before they make business decisions. However, while accountants’ advice is intended to help clients get the best result consistent with tax laws, ethics advisers seek to help officials do what is best for the public.
An ethics code cannot look anything like a tax law. It has to have simple rules that are only minimum requirements, even though the requirements on a government official are greater than what these simple ethics provisions say.
The best example of a situation that is usually legal, but which should cause an official to withdraw from a matter, is when a close friend or romantic partner of an official is involved. Because it is difficult to define “friend” or “lover,” their involvement usually does not give rise to a conflict under an ethics code. But that doesn’t mean an official should vote on a grant to her boyfriend or a zoning permit for her best friend.
The principal extralegal standard is appearance of impropriety. If an official has a special relationship with anyone or any entity involved in a matter, it will look improper if the official has anything to do with it. If someone who seeks benefits from the government offers something to an official, it will look improper, so it should be rejected. If an official is not sure what to do, he should ask the ethics adviser.
The extralegal standards and concepts of government ethics are simple, but their application to a particular matter can be complicated. This is another reason why ethics provisions have to be only minimum requirements. If officials were required to seek ethics advice whenever they had a possible conflict situation, there arguably would not be a need for ethics laws at all.
Since in government ethics the appearance of impropriety is as much a problem, with respect to the public’s trust, as impropriety itself, a government ethics adviser will not interpret an ethics code narrowly, as lawyers do. An ethics adviser knows that ethics provisions are full of loopholes, but he views them as gray areas, rather than as opportunities to deal irresponsibly with what would appear to the public to be a conflict situation. He will say that the conduct would not violate the law, but that it would appear improper. He will say that the conduct would undermine the public trust, and he will provide advice regarding responsible ways of dealing with the situation. A government ethics adviser is creative not in getting around ethics laws, but in finding ways to deal responsibly with conflict situations while requiring the least amount of sacrifice from the official.
This attitude is recognized in Seattle by requiring that the ethics code be “liberally construed” for the public’s benefit.
This is in clear contrast to criminal laws, which are maximum rules that are to be narrowly construed for the accused’s benefit. With minor criminal laws, people go well beyond the limits of the law, knowing there is leeway. This is because criminal laws are all about enforcement, and citizens have no special obligations. Speeding laws are one example. The speed limit may be 55 mph, but a highway with this speed limit will generally go at 65 mph.
Ethics rules are different. If a gift limit is $100 aggregate per year from someone doing business with the city, that doesn’t mean that it’s okay for an official to go over the limit a bit. In fact, the responsible thing to do might be not to reject a $50 gift, because it would appear improper. The $100 limit is merely a guideline as to what would be considered a gift sufficiently small to be legally excepted from enforcement of the rule that no gifts should be accepted from people or entities that do business with the local government.
When faced with allegations of ethical misconduct, local officials often insist that they didn’t do anything wrong because they followed the law. They often say that they asked a local government attorney, and she said it was okay, as if it were a purely legal decision. If the decision involved a financial or engineering or management decision, in which law was only one aspect of the official's professional decision, would the official place all the responsibility for his decision on a lawyer? The legal aspects of a government ethics decision are only part of the story.
It is important for lawyers to recognize these distinctions. Normally, a lawyer will consider whether conduct is a violation of the law and, if it is not clearly a violation, she will tell her client the conduct is legal. That is not how a conflict situation should be approached.
Lawyers are paid to look for loopholes for their clients. But officials are not a government attorney’s clients; the city or county is the client. And it is not appropriate to use loopholes in an ethics code to a government official’s advantage. It is important to recognize that, even when conduct may be legal, taking advantage of a loophole can look worse than directly breaking a law, because it appears scheming. An official may plead non-illegality, but it appears that she and her collaborators were acting selfishly and intentionally, and this undermines the public’s trust in government more than one official’s ethics violation, which might have been inadvertent.
Since so many politicians are lawyers, and government officials who are not lawyers often consult with government attorneys about ethics matters, far too many government officials take a legalistic approach to government ethics. It is as if two languages were being spoken. Lawyers speak Law and government ethics professionals speak Ethics. The difference is that ethics professionals speak both languages, while most lawyers don’t even recognize that there are two languages. This may be the biggest problem in local government ethics, because the handling of so many conflict matters involve an attorney.
B. Sources of Confusion
There are several sources of confusion in government ethics. The principal source is the word “ethics,” which implies far more than conflicts. The next ten sections look at some of the other sources of confusion.
1. Personal vs. Professional Ethics
One important source of confusion is how people look at ethical decision-making in government. Is it dependent on an official having a good character, that is, being a good person who does the right thing? Or is it dependent on acting professionally, including consulting with an expert, that is, is it similar to other sorts of decision-making?
With effective training, in a healthy ethics environment, government ethics decision-making should be just another professional routine. Lawyers call their ethics rules “Rules of Professional Conduct.” Other professions have codes that tell them not how to be good, but how to be professional and responsible, how to fulfill their professional obligations to clients and patients.
Too rarely do you hear officials argue that they went through a professional ethical decision-making process and simply made a misjudgment. Or that they had no training in ethical decision-making, and didn’t know what to do. Many people would laugh if an official said she didn’t know how to do ethical decision-making in a government context, as if it were something every good person instinctively knows. If it were, there would be no need for government ethics programs. Or this book.
Instead of speaking in terms of professionalism, officials insist they’re good people, or people of good character, and their friends testify as to the official’s integrity. But what the official and her friends and colleagues believe about character and integrity is immaterial. What the public believes is what matters most when it comes to dealing with conflict situations. That is the professional way to look at it.
Conflicts Between Personal and Government Ethics
Sometimes personal and government ethics are in conflict with each other. Here’s an example. An official’s girlfriend represents a nonprofit seeking a grant from his board. The official is faced with making a personal ethics decision – whether to help his girlfriend get the grant (while taking the risk that his relationship with her might become an issue and thereby undermine the nonprofit’s grant and thereby harm his girlfriend) – or a government ethics decision – making sure his relationship does not appear to bias his participation in the approval of the grant and thereby undermine the public’s trust in his agency or body. As a government official, it is his duty to make a government ethics decision rather than a personal ethics decision. It also happens to be the easier decision to make.
The Integrity of Government Institutions, Not People
In his book Ethics in Congress (Brookings Institution Press, 1995), Dennis F. Thompson included a valuable description of a basic difference between personal and government (what he refers to as “legislative”) ethics:
Personal ethics originates in face-to-face relations among individuals. It is a response to the social need for principles to guide actions toward other individuals across the whole range of personal relations.
Legislative ethics originates in institutional circumstances. It arises from the need to set standards for interpersonal relations among people who may never meet and who must judge each other at a distance.
The function of personal ethics is to make people morally better, or, more modestly, to make the relations among people morally tolerable.
Legislative ethics serves to guide the actions of individuals, but only in their institutional roles and only insofar as necessary for the good of the institution. Legislative ethics uses personal ethics only as a means — not even the most important means — to the end of institutional integrity.
Government ethics relates to a public servant’s institutional role, the good of the institution, and the democratic process. It is not about personal ethics, character, or integrity, but about the institution’s integrity. Conduct that is praiseworthy outside of government, such as helping a family member get a job or returning a favor one has been given, is considered unethical in a government context.
This is so difficult for an individual to understand about himself that even government ethics professionals sometimes see their own conflict situations as personal rather than institutional. For example, in 2012 a complaint was filed with British Columbia’s ethics commissioner against the provincial premier. The ethics commissioner’s son was a close aide to the premier and had formerly worked for the premier’s then husband. Although eventually the ethics commissioner withdrew from the matter, turning it over to another province’s ethics commissioner, his first response was to treat it as a personal issue, saying:
“I don’t perceive a problem in making a decision in this case that will have nothing to do with my son’s career. If I had any difficulty, or felt that I in any way couldn’t handle this file like I do every file — on the basis that I will go where it takes me, and I will make the decision that needs to be made without, dare I say it, fear or favour — then I should pack it in.”
When officials talk about character and personal integrity, they should be reminded (1) that there is no way the public can know what their character is, and (2) that life is not that simple. By their nature, conflict situations put officials between a rock and a hard place. In a conflict situation, no one, no matter what his character, can satisfy all his obligations. He is going to have to hurt or disappoint someone. Government ethics takes the position that, with respect to official business, an official has an obligation to the public that overrides the official’s other obligations. This takes most of the pressure off an official. All an official need do is treat the matter as a government ethics matter, seek government ethics advice, and let all others involved know that she had no other choice. It is only when one has a choice, or acts as if one had a choice when one legally and ethically does not, that character becomes an issue.
In addition, the way we view character is fundamentally wrong. It is not the stable thing we think it is, formed at an early age and continuing throughout our lives, so that there are people of integrity and people without integrity. This view of character is important to people when they make judgments about trusting others, but it is inaccurate.
In their book Out of Character (Crown Archetype, 2011), David DeSteno and Piercarlo Valdesolo assert that “there lurks in every one of us the potential to lie, cheat, steal, and sin, no matter how good a person we believe ourselves to be.” They see character as a fluctuating trait, a balance between competing psychological mechanisms. When character is seen to involve balance rather than a steady state, we can see how vulnerable we are to suggestion and manipulation. “Character unfolds over time, but not in a slow or linear way. ... it's constantly oscillating to adjust to our needs, situations, and priorities.”
An important element of an individual’s response to a conflict situation is the character of the organization in which the individual functions, what I call its “ethics environment.” The values and unwritten rules of a government organization can make it hard for an official to act responsibly. Or they can make it easy. A good, comprehensive ethics program that has the full support of most high-level officials makes it hard for an official to misuse her office to help herself or others. A poor ethics environment makes an official feel like a chump if she doesn’t misuse her office, and like a rat if she tells someone he shouldn’t do something or reports misconduct to an ethics commission.
In our individualistic society, we easily understand harm done to individuals, such as the undermining of reputations, but we do not so easily understand harm done to institutions or communities. In any scandal, most of the talk is about personal misconduct, personal integrity, and personal reputation. The effect on the community's pride, citizens' participation in government, and the anger citizens feel is rarely discussed (the principal exception is the misuse of taxpayer funds).
If we lived in a sociocentric society, people would instead talk of the effects of ethical misconduct on the tribe and, possibly, how our ancestors would feel and act if we engaged in misconduct. We do talk of the Founding Fathers to buttress our arguments. But we don't talk of how our actions today would cause them agony and possibly lead them to take vengeance on us.
Despite that word “ethics,” a local government ethics program deals only with conflicts of interest, not other types of official misconduct and certainly not types of misconduct in which officials engage outside of their government role. And yet many local governments try to use an ethics program to deal with misconduct by officials such as incivility, dishonesty, and the like.
Regulating civility, honesty, and the like is very different from what an ethics program does. An ethics program’s priorities are training, advice, and disclosure. It is hard to train someone to be civil and honest, one cannot give them advice before they act uncivilly or do not tell the truth, and there is nothing to disclose.
In other words, while enforcement is the lowest priority in a government ethics program, it is the top priority in a program to regulate other kinds of misconduct. Since these other kinds of misconduct are more frequent than the irresponsible handling of conflict situations, this shifts an ethics commission’s priority to enforcement, greatly increases its cost, and turns an ethics program into a series of personal and/or partisan squabbles.
In addition, while government ethics enforcement is based on clear prohibitions and requirements, regulating incivility and the like means vague rules that are very hard to enforce fairly. One can argue for hours over whether an official acted without appropriate civility, or whether an official lied, made a misrepresentation, misstatement, or whatever. One cannot argue for hours over whether an official helped his sister get a no-bid contract.
This is why, non-conflict-related misconduct has no place in a local government ethics program. Such misconduct should be dealt with in a Code of Conduct that is enforced by supervisors and, on boards, by the chair. All boards that are run according to Robert’s Rules have disciplinary rules and a procedure for enforcing them (Chapter XX). If a chair cannot or is not willing to enforce disciplinary rules, he or she should be replaced.
Dealing with Conflict Situations Personally and Professionally
The personal things about ethical decision-making in a government context are (1) an official having the strength of will to act responsibly, or seek professional advice, when it seems that there is something to gain by acting irresponsibly. This is especially difficult when acting responsibly is not the norm in one’s organization, and (2) an official having the imagination to recognize that, in the long run, he may lose out far more by acting irresponsibly than he will by acting responsibly and sacrificing a potential benefit in the short run.
The most professional thing a government official can do, when uncertain whether he is in a conflict situation or how to deal with it, is to discuss the matter with neutral individuals, especially an ethics adviser. If the government has no ethics adviser, the next best thing may not be a government attorney, because they tend to take a legal rather than ethics approach to ethics laws, and they are often biased toward the officials they know and represent.
The encouragement of open discussion of the ethical aspects of decisions is the hallmark of a healthy ethics environment. Ethical teamwork is very much like any kind of professional teamwork. But first you must recognize that government ethics is not personal, but professional.
The Role of an Ethics Environment in Ethical Decision-Making
Officials need to be honest with themselves and each other about the quality of their ethics environment and how it affects their ethical decision-making. They need to consider what the norms of their organization are, that is, what others do and do not do, what they keep secret and what they are open about, and how afraid they are to talk with higher officials about their ethics matters or to report ethical misconduct. When they are uncomfortable with these norms, they need to ask themselves whether they are appropriate for individuals who have been given the authority to manage their community and, therefore, have special obligations to the public.
Officials also need to consider what their obligation is not only for handling their own conflicts, but also for helping those around them responsibly handle their conflicts when they are blinded by their obligations to those with whom they have a special relationship, or they are too caught up in the values or overwhelmed by the pressures of a poor ethics environment.
Bad People and Government Ethics
Sometimes, officials raise the issue of character to argue that no laws or program can do anything to stop people who lack character. This rings true to us. Bad people do bad things.
There are three responses to this. One is that no one is all or even mostly bad. Two is that ethics programs are not for the worst people, but for ordinary people, who need guidance in dealing with difficult conflict situations. And three is that the worst people do not act in isolation. They act either with the support or acceptance of their colleagues, or in opposition to their colleagues. A good ethics program takes away this support and acceptance, so that the worst people have to work alone and take a huge risk in order to misuse their positions to help themselves and others. People are less likely to engage in ethical misconduct when they know they cannot count on those around them to keep their conduct secret.
People who say that ethical misconduct is based on an individual's character are saying that it is unavoidable and unfortunate. They say that we are helpless other than by trying to enforce laws against it, and that clever people can find loopholes in them. When instead one sees ethical misconduct as an injustice – unprofessional, unfair, and damaging to the community, in terms of money, pride, participation, and the attraction of businesses – one sees how important (and possible) it is to prevent this misconduct through means other than mere enforcement.
2. Personnel vs. Ethics Issues
Agencies and departments often view conflict matters as personnel issues, especially when they involve employees. This view can lead to employee matters being excluded from an ethics commission’s jurisdiction, or at least from an ethics commission’s enforcement authority. In such an ethics program, when an ethics commission finds an employee has violated an ethics provision, the commission must turn the matter over to the employee’s supervisor.
Often ethics commissions are not even told about conflict matters. Instead, they are handled internally, either by an agency or department, by a police or fire commission, or by a local legislative body, when its members or staff are involved. Sometimes, as with employees accepting gratuities, this is reasonable, since for any individual employee tipping is a minor matter, but for an agency as a whole it can be a serious problem, requiring a clear rule and enforcement by supervisors. But more often, handling conflict matters internally is a matter of power and turf, where the agency, department, or body does not want an outside body involved in its affairs. “Personnel issue” is a justification, not an argument.
The handling of conflict situations does have a performance aspect to it. An employee who mishandles a conflict situation has acted unprofessionally. But if a local government has set up a government ethics program to provide guidance, oversee disclosure, and enforce ethics laws, the importance to a supervisor or personnel department of the performance aspect of such conflict situations must give way to the need for consistent ethics guidance, oversight, and enforcement.
The best thing for an ethics program to do is give supervisors, the personnel department, and union representatives special ethics training that will allow them to understand the value of independent, consistent ethics guidance and enforcement. In addition, the ethics commission and its staff should work hard to develop a good working relationship with those who deal with personnel issues. An important goal of this relationship should be to ensure that, when a gray-area question about authority arises, the two sides will discuss it and work out in a cooperative manner who has jurisdiction. If they cannot, there should be some formal way of determining jurisdiction. And that way should not include any local government officials.
3. Government vs. Administrative Ethics
The field of administrative ethics differs from government ethics in several important ways. One, administrative ethics focuses on government administrators more than on elected officials. Two, its concept of “ethics” includes not only conflicts of interest, but also integrity, honesty, civility, pride, accountability, compassion, respect, non-discrimination, obeying laws, taking responsibility, having good character, making good decisions, and considering all stakeholders. Conflicts are only a small part of administrative ethics.
Three, administrative ethics codes are primarily aspirational in character and in language. That is, unlike government ethics provisions, their provisions are not intended to be enforced. Instead, they are intended to show public servants how they should act.
The values of administrative ethics are incorporated in ethics codes drafted by professional associations such as the American Society for Public Administration (ASPA) and the International City-County Management Association (ICMA). The ICMA, a professional association for city and county managers, does have an enforcement mechanism. However, the provisions are primarily aspirational in character.
Most of the books and articles on ethics in government involve administrative ethics rather than conflicts of interest, as can be seen in this book’s bibliography. This is also true of most of the university courses in this field. This has created confusion, since the same word – ethics – is used. This confusion is responsible for some of the misunderstanding that administrators have about government ethics.
A principal reason that government ethics cannot cover the same ground as administrative ethics is that government ethics requirements are enforceable. Much ethical misconduct cannot be prevented through enforcement, at least without enormous expense and without turning the ethics process into a political and personal circus.
One form of ethical misconduct that is particularly difficult to enforce is bending the truth. Politicians bend the truth all the time. It isn’t that this is acceptable. It’s just very hard to enforce. Defending a misrepresentation leads to more misrepresentations and other forms of dishonesty. It can get really ugly. Truth is too slippery, and precious, a thing to enforce.
Another problem is that, if an enforceable ethics provision required all government officials to tell the truth, there would be ethics complaints filed on a weekly basis, and the ethics commission would spend so much time trying to deal with half-truths, distortions, mistakes, misspeakings, and false inferences that no one would volunteer to serve on the commission anymore.
In addition, ethics programs would be all about enforcement, with training, advice, and disclosure taking a back seat.
Some ethics codes do include aspirational provisions. This is acceptable, but only if the two are clearly separated from each other, and it is made absolutely clear that the aspirational provisions are unenforceable. The best practice is to place the aspirational provisions at the beginning of the code, in a Declaration of Policy or the like. It should be expressly stated that the prohibitions or requirements in a Declaration of Policy may not be the subject of complaints or advisory opinions.
If this is not done, ethics commission members may feel they are required to enforce the aspirational provisions. This makes officials feel that ethics enforcement is the sort of unfair, gotcha! thing they fear the most. When aspirational provisions were treated as enforceable by the District of Columbia ethics board in 2013, the respondent, a council member, correctly argued that several of these provisions were so vague that to enforce them would violate due process.
Placing what appear to be enforceable ethics provisions among aspirational provisions can be confusing. In 2012, Chicago added an aspirational Code of Conduct to its ethics code. The problem is that this Code of Conduct includes two important provisions that are commonly enforceable (and are otherwise enforceable under the ethics code): misuse of confidential information and misuse of city resources. It is confusing to have the same provisions in a section that is expressly unenforceable as well as in a section that is expressly enforceable.
Unfortunately, the ethics codes of some local governments consist primarily of aspirational provisions, and yet they are enforced. These codes, which focus on character and values, are not conflicts of interest codes, but they sometimes are part of what otherwise appears to be a government ethics program. It is important to distinguish these two kinds of code. Unfortunately, the term “conflict of interest code,” which better describes a true government ethics code, is used only by New York City and a small number of other local governments.
Albuquerque’s Ethical Public Service Act has an extensive aspirational section, written in the first person (e.g., “I do not lie cheat or steal, or tolerate those who do.”). The provisions on enforcement of aspirational provisions is worth sharing:
(A) The seven values of ethical public service . . . govern all actions of public servants. The seven values are guidelines for behavior, and do not by themselves create a basis for discipline or other consequences.
(B) For violations of the seven values that are not prohibited by a specific law or the prohibited behavior section of the Ethical Public Service Act, the consequences are the loss of personal respect and the diminished reputation of all public servants.
This is a responsible way to deal with aspirational provisions. Unfortunately, some of the enforceable provisions in the Albuquerque ethics ordinance are also aspirational, such as lying, and others involve areas of law other than government ethics, including criminal conduct, such as theft, and sexual and racial harassment. These are complex areas that should be left to the criminal justice system and personnel departments.
4. Influence vs. Pay to Play
The common view is that contractors, developers, and lobbyists seek to influence the decisions of government officials. To do this, they tempt officials in many ways, benefiting them directly through gifts and campaign contributions, and indirectly through giving business to their law firms and hiring their relatives. From this point of view, officials are relatively innocent victims who either do or do not give in to temptation.
Sometimes it is government officials who take the initiative. They seek to get something for themselves from contractors, developers, and their lobbyists. They misuse the power of their office to get a wide range of gifts, direct and indirect, legal and illegal, because they know that contractors, developers, and their lobbyists learn very quickly when and how they must pay in order to get the contracts and permits they want. From this point of view, contractors and developers are relatively innocent victims of extortion, commonly known as “pay to play.”
And sometimes those seeking special benefits from a local government get caught in the middle. Take a developer hired by a landowner who is in a rush to get a building built, whatever it takes. The developer knows that certain officials are happy to facilitate getting the project approved in half the usual time, if the right steps are taken. It doesn’t matter to the developer whether it is a matter of influence or pay to play. It’s just a matter of meeting a customer’s demands.
It is valuable to be able to differentiate among these situations. But it is more important to recognize that government ethics generally does not differentiate, because government ethics does not generally consider intent or motive. A gift is a gift, no matter who initiated it or why.
Some criminal laws, however, do distinguish between influence and pay to play. And people in different positions (officials, contractors, good government groups) often portray the same conduct very differently.
The biggest problem, from an enforcement perspective, arises from campaign contributions, because they cannot be prohibited (there are, however, some limits or prohibitions on contributions made by government contractors). But elected officials do have the opportunity to do something about this problem. What they can do is return contributions from those the public might see as seeking to influence them. They can even say at the beginning of a campaign that they will not accept contributions from any individual or company that is regulated by, does business with, or may be seeking to do business with the city or county. This might sound like a fantasy, but candidates actually do this.
Rejecting this important source of campaign contributions puts a candidate at a disadvantage. But those given such contributions are usually incumbents, so they already have an advantage. And they are in a position to push for public campaign financing, which makes the contributions of contractors and developers smaller and, therefore, of much less importance.
It is important to recognize that, when it comes to both influence and pay to play, the government official is in control. Gifts and contributions from those seeking benefits do not simply happen to officials. They can reject them and let it be known that they will reject them. Whether it is influence or pay to play, officials have a special obligation to the public not to create the appearance that their decisions are for sale.
There is a great deal of creativity wasted on the games of influence and pay to play, because bribe-taking is a serious crime. These games are very often the cause of ethical misconduct in local governments. They are especially prevalent in poor ethics environments.
5. Government Ethics vs. Crime
Most local government ethics program originate or are improved after local scandals that involve crimes such as bribery, fraud, and embezzlement, rather than after instances of mishandling conflict situations. Since most local governments cannot pass criminal laws, or have any effect on criminal enforcement, they turn to what they can do: ethics laws and ethics enforcement.
But since the impetus for change is crime, local governments often create criminal sanctions for ethical misconduct, at least when they can. The crimes are usually only misdemeanors, and yet sometimes they include the possibility of incarceration.
There are two principal problems with this confusion of ethics and crime. First, it ignores the fact that ethics programs are intended to stop ethical misconduct before it becomes criminal misconduct. Enforcement is not an ethics program’s principal goal; prevention is. Prevention is done primarily through training and advice, and through the creation of a healthy ethics environment, which includes transparency and the open discussion of ethics issues in every context.
Second, for most ethics violations criminal enforcement is overkill. There is no reason, for example, to bring in prosecutors to deal with officials who file their disclosure statements late; the pressure should come from their supervisors and board chairs, whose responsibility it should be that all their subordinates or board members file on time.
Ethics enforcement, when it is necessary, should be relatively simple, quick, and inexpensive, usually ending in a public settlement that provides guidance to other officials. It is much harder, and far more expensive, to bring a proceeding, and get a settlement, when the enforcing authority has to prove guilt beyond a reasonable doubt (the criminal standard of proof) and, in most cases, intent. This is why criminal cases are rarely brought for ethics violations. When they are, it is often for political reasons, since district attorneys, unlike independent ethics commission members, are political animals.
Ethics enforcement has a far lower standard of proof, much more relaxed presentation of evidence, and little or no requirement to prove intent. Therefore, ethics violations are far easier to investigate, and ethics laws are far easier to enforce. On the other hand, no one goes to prison and fines are relatively low. When penalties are too high, officials will fight for their lives, and the ethics program will be expensive, distorted away from its emphasis on prevention, and sometimes destroyed in order to prevent further enforcement and expenditures.
The difference between ethics and criminal enforcement can be seen in the difference between a gift and a bribe. Criminal law says that a gift intended to influence an official is a crime, but it is very difficult to prove that a gift was intended to influence. This usually requires that phones be tapped or individuals be wired. Ethics codes say that a gift from someone doing or seeking business with a local government is prohibited. No proof of intent or influence is required and, therefore, little investigation needs to be done or evidence presented. With such easy proof and an effective ethics program, influence and pay to play become difficult to pull off, so they are prevented. With only criminal enforcement, officials, contractors, and developers are only vulnerable to the rare sting, so there is less prevention and more scandals.
When there is no effective ethics program, ethical misconduct often leads to criminal misconduct. For example, a town commissioner in Florida started out using city stationery for personal business purposes, and moved on to unauthorized junkets, a phantom campaign worker, an undisclosed conflict that might have led to criminal charges had a reporter not forced disclosure, approval of an overpriced land purchase, and involvement with free tickets and missing funds at local festivals. And then the commissioner apparently turned a local business association into a family affair. First, she worked for it and arranged for a sizeable loan to the association from her brother. Then her daughter became the association’s president. The commissioner did not disclose her family’s involvement and voted on matters involving the association, including a grant that would have helped pay back her brother’s loan.
She is one of many politicians who has trouble separating the personal from the public. But she had no help with her problem, it eventually led to an indictment. A good ethics program would have helped her with her problem and prevented this. Criminal enforcement alone simply puts people in prison after they have seriously undermined the public’s trust in government.
Another confusion between government ethics and crime occurs when an ethics commission treats criminal behavior and other misconduct as if it were under its jurisdiction. An especially damaging example of this occurred in San Francisco in 2012, when four out of five ethics commission members found that the sheriff had committed “official misconduct” by bruising his wife's arm and pleading guilty to the crime of false imprisonment of his wife. Only the ethics commission chair understood the distinction between ethical misconduct and other misconduct, writing that the sheriff had clearly engaged in misconduct, but that it was not “official” misconduct because it was not committed in “relation to the duties of his or her office.” He asserted that, without this clear definition, the city risked confusion and ad-hoc future interpretations of “official misconduct.”
To determine whether an official’s conduct should be treated as an ethics matter, one should ask the question whether the conduct directly or indirectly involved government resources, those seeking special benefits from the government, or situations where the official, as an official, is wearing two conflicting hats.
6. Ethics vs. Compliance
Another common confusion is between government ethics and compliance programs. These programs take different approaches to and, for the most part, deal with different kinds of misconduct. With respect to ethical misconduct, they are complementary approaches that should work in concert, not in competition.
Compliance, which is the most common corporate approach to “ethics,” shares with government ethics an emphasis on rules, but the rules compliance focuses on are much broader, with special emphasis on such areas as accounting, procurement, and other administrative processes. Its principal rules can be found in the Federal Sentencing Guidelines for Organizations, and its principal purpose, besides preventing criminal misconduct, is decreasing the severity of fines against an organization, which are mitigated by up to 95% if a court finds that the organization had an effective compliance program.
In government, the focus of compliance programs is on waste, which is not an ethics issue; embezzlement, which is a criminal issue; and fraud, which is also a criminal issue. Compliance is the work of auditor and inspector general offices. As with criminal authorities, investigation and enforcement are more central to these offices than they are to a government ethics program, which emphasizes training, advice, and disclosure. A compliance program’s prevention primarily involves such things as accounting and procurement rules.
And yet often the two approaches are put in competition with each other or combined. After a scandal, the goal is to set up programs that make the public trust their local officials, and little thought is given to how well they’ll work together. It is true that inspector general offices often have better investigatory personnel, and they can be helpful in certain ethics investigations. But if they are not well integrated, an ethics commission and a compliance or inspector general office can step on each other’s toes, especially in terms of turf and priorities, and undermine their shared good government goals.
In addition, when there is talk of ethics reform, it is thought that an inspector general is enough. People do not understand or make clear the difference between what inspectors general and ethics commissions do, or how much less expensive a government ethics program is than criminal enforcement (although the costs of criminal enforcement against local officials are generally paid by the state rather than the local government, to taxpayers this distinction matters less than it does to local officials).
The work of ethics commissions and inspectors general do not overlap; they are complementary. An ethics commission and its staff provide training, independent advice, oversight of disclosure, and enforcement with respect to officials' conflicts of interest, all things an inspector general does not provide. An inspector general's office might do investigations for the ethics commission and might uncover ethical misconduct in other investigations, but that is its only possible role in government ethics.
7. Government Ethics vs. Judicial Ethics
Judicial ethics, like government ethics, deals primarily with conflicts, and many people, including judges, think that government ethics is pretty much the same as judicial ethics. But there is one very big difference: we expect judges to be impartial, to not have made their minds up on a matter before they hear it. However, we do not expect elected officials to be impartial. In fact, we often vote for candidates because they are partial, because they have the same positions we do.
Here’s an example. When the head of a local environmental organization opposed to development along the local river is elected to the council, opposing this development as a council member is not a reflection of his relationship with the organization, but rather it is the position he was elected to take. But the same relationship with this organization would be a conflict for a judge were an appeal of a decision on the riverside development to come before his court.
Some ethics codes use the language of “impartiality.” This is inappropriate. Officials’ impartiality is limited to individuals and companies with which it has a special relationship. It does not apply to policies.
8. Government Ethics vs. Legal Ethics
The difference between government ethics and legal ethics is even greater than that between government ethics and judicial ethics. Legal ethics does deal with conflicts, but with a much more limited range of them, compared with government ethics. And a lawyer can ask a client to waive a conflict.
Government officials can’t ask a client to waive a conflict; their client is the public. Only an ethics commission can waive a conflict.
As for government lawyers, they are held to a much broader range of ethics rules than legal ethics provides. Yet, government lawyers sometimes argue that they shouldn’t be subject to local government ethics laws because they have their own ethics rules and their own ethics program. However, their profession’s ethics rules are limited, and their profession’s ethics programs are self-enforced. Therefore, legal ethics rules and enforcement have no bearing on government lawyers’ conflicts. The one exception involves part-time government lawyers whose representation of clients other than a city or a county (including another city or county) might give rise to a conflict than can best be dealt with by a legal ethics program.
Other professions have ethics rules and programs, but no one says these should exclude them from the jurisdiction of government ethics programs.
An important government ethics issue is, Are government lawyers officials who happen to be lawyers, or lawyers who happen to be officials? I take the former position.
It is often argued that the democratic way to ensure accountability is to vote an official out when he has acted unethically. This argument is often used to oppose the creation of an ethics program. It is said that such a program is unnecessary: ethics enforcement is better done at the polls.
This is wrong for several reasons. One, citizens cannot act on what they don’t know. Without a good ethics program, there is no reason to believe that citizens will know about ethical misconduct. If accusations are made, there is no way for citizens to know if they are true or not, or make a correct determination of the truth. They may vote out officials who have done nothing wrong. In any event, most citizens don’t pay close attention to accusations made against officials, don’t have much understanding of government ethics, and are unlikely to remember what happened when the next election rolls around.
Two, there is no reason to believe that ethical misconduct will be the determining factor in many people’s voting decisions, as opposed to policies and the qualities of other candidates. And many candidates run unopposed or against a very weak opponent.
Three, voting an official out of office is a harsh sanction for most ethics violations. The polls argument assumes that someone who violates an ethics provision lacks integrity, rather than that she lacks good judgment and access to good ethics advice.
Four, most officials are not elected.
Five, with respect to officials who represent a district, an official’s constituents are not the only ones who have an interest in protecting the integrity of public offices. Every citizen of a city or county has an interest in having the officials who run their community act in the public interest. Therefore, it should not be up to district voters to enforce government ethics. They might very well benefit from their representative’s ethical misconduct, while the rest of the city suffers from it.
Accountability goes far beyond the ballot box. An ethics program is another important way to hold officials accountable.
It is important that an ethics program is independent in order to ensure that it is not seen as controlled and manipulated by people under its jurisdiction, especially high-level officials. An ethics program with a conflict at its heart will not be trusted by the public.
Most independent agencies and authorities are independent for a different reason. They are independent because their head is separately elected, because their jurisdiction is not the same as any one government (this is especially true of regional transit, water, and other authorities), because that’s the way these things are done (e.g., housing authorities), or for historical reasons (often because one official wanted to create a fiefdom for himself).
When these independent agencies and authorities insist on independence from independent ethics programs, they are asserting an authority that is not very relevant to the situation. It is true that an independent agency can create its own independent ethics program, but this is almost never done well. And if it is done, it is unreasonably expensive, since there is already an ethics program to which it could simply give jurisdiction over its officials and employees.
C. The Moral Development of Government Organizations
The way local governments deal with conflicts among their officials and employees shows their ethical maturity. James Bowman, in his book Ethical Frontiers in Public Management (Jossey-Bass, 1991), usefully applied Lawrence Kohlberg’s well-known stages of moral development to government organizations.
A Level 1 government, like a child, focuses on finding strategies to avoid punishment. It acts by manipulating situations, and uses victory as the justification for the tactics it uses. There is a strong feeling in a Level 1 government of Us vs. Them, and it is therefore marked by secrecy and paranoia. You’ve seen government officials acting like children, petty, squabbling, manipulative, deceitful, secretive, highly unprofessional. They’re usually part of a Level 1 government, what is usually referred to as a government with a poor ethics environment. They do what they can get away with, treating the law (not to mention constituents) as something to get around rather than something to respect.
A Level 2 government, like the average adult, conforms to common practices, takes direction from legitimate authority, and bases its ethics on the law. A Level 2 government is not opposed to its community, but rather sees itself as an important part of it. It seems to act professionally, but it is really acting conventionally, doing its job.
A Level 3 government is truly professional. Professionals think for themselves and they think critically. They rely on open discussion, participatory management, critical analysis, and consensus. Their ethics comes not just from the law, but also from universal principles, such as fairness and justice. A Level 2 government might implement an unfair law. A Level 3 government openly and honestly debates a law to determine if it is fair. It does more than what is common and required, opening government up and considering the ethical implications of everything it does.
Ethics programs are not only different in governments that are at different levels, but they are treated differently by officials. In a Level 1 government, if they exist at all, many officials treat them as obstacles. Council members and other officials are usually at war with the ethics commission or successful in keeping it under their control or even inactive. In a Level 2 government, the ethics program provides laws that are to be followed, but only to the letter. Lawyers are the most important players in the ethics program. The ethics code’s spirit is often ignored by officials. In a Level 3 government, the most important aspect of an ethics program is advice, because professionals want input from specialists to help them do their job right.
D. Why Local Government Ethics Is Important in the U.S.
Because the U.S. is considered one of the least corrupt nations on earth, it might appear that government ethics is a waste of time. Yes, people say, there are a few bad apples, but they don’t really spoil the pie, or even cost taxpayers all that much. And the reason that politicians aren’t trusted isn’t that they’re corrupt, it’s that they’re untrustworthy in general, and all they care about is themselves, while acting as if all they care about is the public.
It is this caring more about themselves than the public that is central to government ethics. Out-and-out bribery might be relatively low in the U.S. right now, but there are so many other ways for government officials to use their positions to help themselves and those close to them, often at the public’s expense. In fact, it’s more difficult to see corruption in the U.S. than it is in a developing country where officials will do nothing unless they are bribed. Here, everything happens behind the scenes. We don’t see manipulations of contract specifications, sweetheart deals with developers, or the pay-for-play hiring of officials’ family members by companies doing business with the city. We don’t understand how laws and procedures are used to prevent the enforcement of ethics codes. We have no idea whether our local governments are following best practices with respect to ethics advice and financial disclosure. All we know is that things don’t feel good or right.
It is important to recognize that corruption ( “the abuse of entrusted power for private gain,” according to Transparency International) is the norm, the default situation in government historically and internationally. There are and have been many cultures where the principal way to become rich is through political power. The U.S. political culture goes against historical precedent, for the most part, but in some cities and counties the culture is very poor.
Our political culture is precious, something we pride ourselves on and try to keep improving. It is also a beacon for others to follow to get out of their cultures of political corruption.
A hatred for government corruption was central to protests in the Middle East, as it was to the revolutions in Central and Eastern Europe in the late ’80s. Government corruption is a serious problem in China and India, and throughout most of the developing world. In most countries, as in the U.S. throughout most of its history, the norm has been to use government office to help oneself, one’s family and friends, and one’s business associates. When a nation’s or city’s culture accepts corruption, the whole barrel is bad, even if most of the people in it are good apples simply going along, or too afraid to oppose or disclose what others are doing.
Corruption is not a problem that simply gets better. It doesn’t necessarily go away as a country becomes richer or more advanced. In fact, in 2010, the U.S. fell out of the top 20 least corrupt nations, according to Transparency International’s Corruption Perceptions Index (by 2012 it was up to 19). Corruption can increase. It cannot simply be assumed that our governments, or those who govern us, will not become more corrupt. And it certainly cannot be assumed that our thousands of local governments have good ethics environments. In fact, people love to argue which is more corrupt, Chicago or Memphis, the local governments of Florida or New Jersey. The local governments of the U.S. are not where their citizens want them to be. Not yet. And backsliding is always a possibility.
The fact is that many more local governments have ethics scandals than have good, comprehensive ethics programs. There is more disclosure and access to damning information, but there is not more professional ethics guidance. And ethics training, where it exists, is still very limited. Most officials do not, therefore, understand government ethics, and they feel it is more a problem than a professional tool.
The result is that there is more to instill a lack of trust than there is to instill trust in local government. This makes it feel like things are getting worse (as polls show) when the reality is that things are getting better, only too slowly and in far too few jurisdictions.
It is important to recognize that poor ethics environments start at the local level. Most state and national elected officials start their careers running for local office. The values and habits they learn early in their career stay with them. Good ethics programs and healthy ethics environments at the local level could go a long way toward improving officials’ ethical behavior at all levels of government.
This is also true of those who seek benefits from government. They need to be trained and brought into local government ethics programs in order to learn that they too have obligations as citizens to keep our country from being corrupt.
Finally, it is important to recognize that government ethics is less about individuals than it is about institutions. Government ethics programs seek to create and maintain within our governments the conditions needed to promote the integrity of our democratic process and institutions. Not the integrity of individuals, but rather the effect both individual and institutional corruption have on the way our governments work and the way citizens feel about their governments.
Why Everyone Should Support Government Ethics
Americans tend toward three views of government: they think government is important to managing a community; they think it should be as small as possible; or they have specific problems with it, such as over-regulation. All three groups are naturally supportive of government ethics.
People who believe that government is important to managing a community usually believe that the public servants who represent and work for the community cannot legitimately deal with these matters unless they are committed to the public interest rather than to their personal interests.
People who believe that government is a necessary evil, and should be as small as possible, are generally more distrustful of government than pro-government people, and also more concerned with government officials sticking their hands into citizens’ pockets. Therefore, they are strongly supportive of efforts to ensure that public servants do not use government power and tax dollars to enrich themselves, their families, and their business associates.
Those who are more specifically anti-government, such as businesses that want less government regulation but support other government roles, generally favor local government ethics, because they want to work with government officials they can trust. The one exception is local businesses that receive favors from a local government run to further its officials' interests and the interests of their business associates and supporters. This is why, although business associations in larger cities are often important supporters, even leaders, of ethics reforms, in smaller cities, towns, and counties they are rarely supporters of effective ethics reform.
II. What a Local Government Ethics Program Consists Of
A local government ethics program is not just an ethics code and an ethics commission. Even in a town or small county, other elements are necessary to have an effective ethics program. The most important elements are training and advice. Without quality training and timely, professional advice, ethics programs are usually ineffective. They can also become (or, more likely, appear to be) the kind of gotcha! enforcement regimes that politicians fear.
Here are the essential elements of a local government ethics program, according to Mark Davies, longtime director of New York City’s Conflicts of Interest Board:
(i) clear and comprehensive conflicts of interest code, providing clear guidance to officials, employees, contractors, and citizens;
(ii) three kinds of sensible disclosure of interests: an annual disclosure statement, disclosure when a conflict arises (transactional disclosure), and disclosure when someone bids for business or requests a permit (applicant disclosure); disclosure is the democratic way of letting people know about possible conflicts of interest;
(iii) effective administration, featuring an independent ethics commission with teeth, which gives swift advisory opinions, which has a monopoly on interpreting and enforcing the code, which can give waivers for exceptions, and which provides training for all officials and employees, as well as for everyone who does business with the local government; and
(iv) whistle-blower protection so that government employees (the people who know what's going on) and others will be able to report violations without endangering their jobs and pensions.
Other important elements of an ethics program include oversight of the disclosure process; jurisdiction over agencies and over those who seek special benefits from or are regulated by the government, such as contractors, developers, and grantees; a hotline; and adequate, guaranteed funding. For larger jurisdictions , there are also lobbyist, campaign finance, and transparency laws, which may be administered by the ethics commission or by another office or body.
Most ethics programs are created or improved after a scandal occurs, often a scandal that has little or nothing to do with government ethics. The approach in such a situation is usually to start from nothing or from a limited program, and add something to it. Another scandal, another addition, without any idea of what a local government ethics program should look like, no vision of how the pieces work together or what the goals are, other than to put out a fire.
A better approach is to consider all the possible elements and laws, and then place the burden on officials to argue why each element and law should not be included, or should be included only in a limited form.
Some people say that an ethics program is an unnecessary increase in government bureaucracy or unnecessary because ethics decisions are obvious. Anyone who skims through this book will quickly realize that government ethics decisions are far from obvious. And government ethics programs are not expensive; in most cases they save money but, more important, they increase citizen trust and participation in government, and improve the reputation of a community, both of which are invaluable. Nor do ethics programs impose requirements other than the responsible handling of conflicts between personal interests and the public interest. The only conduct they regulate is the public conduct of public servants and of people and companies that seek special benefits from or are regulated by the government.
Nothing is more important to an ethics program’s success than a local government’s ethics environment.
What is an ethics environment? Its principal characteristic is leadership, both in the government and in the community. An ethics environment is greatly facilitated by leaders who believe that citizens’ trust in government is of paramount importance and who do what they can to help government officials and employees, as well as those who do business with the local government, deal responsibly with possible conflicts before they exist, when they become relevant to a particular matter, and after mistakes are made.
Besides leadership, nothing is more important to a healthy ethics environment than the open discussion of the ethics aspects of every matter. As with professional discussions of the best way to recycle, fix a bridge, or preserve open spaces, all officials and employees must know that they may openly and honestly discuss possible conflicts (theirs and others’) and disagree with their supervisors over how to handle them responsibly, hopefully causing the official to ask for ethics advice. This sort of discussion rarely occurs without the full support and encouragement of government leaders.
When a government organization has a healthy ethics environment, many people argue that there is no need for an ethics program. This isn’t true. Leaders understand that an effective ethics program is an important part of ensuring the professional handling of conflict situations, thereby preserving the health of the ethics environment. In addition, an effective ethics program will help preserve the healthy ethics environment as new leaders take office and as circumstances in the community change (e.g., a development boom or a major transit project). There is no better time to start or improve an ethics program than when there are responsible leaders who understand the value of a government ethics program.
In a healthy ethics environment, leaders are not afraid of an independent ethics program, because they understand that the best way to prevent investigations and ethics proceedings is to do everything possible to prevent officials and employees from acting in ways that create an appearance of impropriety. The best way to do this is through training, advice, and open discussion, not the prevention or crushing of an ethics program.
In an unhealthy ethics environment, government is closed and not trusted, citizens who have no direct interest in local government decisions tend to stay away and leave the work to those who do. When it is perceived that government is run by those with personal interests, this undermines participation all the more. The result is an unvirtuous circle that deepens the community’s lack of trust in its government and its unwillingness to participate in government.
A lack of ethics complaints is often considered to be a mark of a healthy ethics environment. It is not. Individuals, and especially government employees, are less likely to file ethics complaints when they believe an ethics program is not fair, is too weak or politicized, or is not supported by government and other community leaders. An ethics program that is controlled by politicians does not earn the public’s respect. People do not believe it is worth the bother, or the risk, to file a valid complaint when, at best, nothing will come of it and, at worst, there will be retaliation against them. And in an unhealthy ethics environment there is secrecy and fear, which make it unlikely that people will know about ethical misconduct and that those who know will dare to report it.
One of the most expensive parts of an ethics program is training. The more officials and employees who are trained and the more live training they get, the more the program costs.
But training, if done right, is also the best way to prevent the costs of investigating and enforcing, and the litigation that can arise from enforcement. It is the best way to prevent costs to taxpayers through ethical misconduct and the criminal misconduct it often leads to, and the cost to the community of having a poor reputation. And it is the best way to prevent the non-monetary costs to citizens, especially their lack of trust in their local government. Trust is a priceless commodity.
It is important with ethics training to put the most resources into training those who need it the most, that is, those who are in a position to make and influence important decisions: high-level officials, government attorneys, officials working in the areas of land use, procurement, licensing, and grants, and ethics commission members and staff. These individuals need live training that includes discussion. Those with less authority and, therefore, less occasion to put their personal interests ahead of the public interest, can more easily get by with videos or online interactive training.
Many local officials are resistant to ethics training, due to a false belief that people naturally understand ethics (and that attorneys’ ethics training is applicable to government ethics, which is not the case). This belief is closely associated with a misunderstanding of what government ethics is (see the previous chapter).
No one has a natural understanding of how to recognize and discuss ethics issues, how to deal responsibly with conflict situations (theirs and others’), or when to ask for professional ethics advice.
This is especially true of ethics commission members, who often receive little or no training. They do not have a natural understanding of how to deal with minor matters, how to investigate major political footballs, or how to interpret ethics provisions. Ethics commission members need a great deal of specialized training that goes far beyond what is provided to ordinary officials and employees.
The best ethics training consists of an introduction to the concepts of government ethics and the psychological mechanisms that prevent officials from dealing responsibly with their conflict situations. This general introduction should be followed by consideration of the elements and principal rules of the jurisdiction’s ethics program, and a comparative look at other ethics-related laws and bodies in the city, county, and state, including personnel and compliance offices, the inspector general or auditor, and criminal authorities.
Then active discussions of specific case studies should follow, using local and regional cases as much as possible, since these will mean most to the participants. Case studies should be approached from the point of view of both complaints and requests for advisory opinions, since the approach taken is different.
The most important thing an official should take out of an ethics training class is that, when she has a special relationship with anyone involved in a matter, or when she is offered a gift, or when she wants to make special use of government resources, she should ask the ethics officer what to do, just as she would ask a lawyer when faced with a legal question or an engineer when faced with an engineering question.
When it comes to particular situations, the most valuable way of providing guidance and preventing ethical misconduct is the provision of ethics advice by the ethics program.
There are two kinds of ethics advice: formal and informal. Many ethics codes provide for only formal advice, which requires a written request and consideration by the entire ethics commission. Formal advisory opinions are an important way for an ethics commission to interpret ethics provisions with respect to specific situations, since no ethics code can take the wide range of possible situations into account. These interpretations, when made public, provide more concrete guidelines to local officials than any ethics provision can supply.
But it can take a long time before formal advice is available to the individual who requested it, since an ethics commission usually does not meet more than monthly, and its members may need more than one meeting to deal with a difficult issue, especially if it has questions for the official requesting the advice.
Because of the long and uncertain response period, many officials and employees, faced with an imminent need to act, will not seek a formal opinion. What they need is an informal opinion, that is, quick but professional advice which applies only the situation at hand. This is best provided by an ethics officer who is not otherwise a government official.
One additional kind of advice that some ethics commissions employ is the general advisory opinion, that is, an interpretation of an ethics provision which has not been requested, but which the commission believes is important to clarify the ethics code in areas or with respect to situations where there seems to be some confusion among local officials. Such general advisory opinions are often a response to multiple requests for informal advice.
Conflicts of Interest Code
A conflicts of interest code, usually known as an ethics code, is the most visible part of an ethics program. In fact, many people think it is all there is to an ethics program. Pass a law and you’re done.
But a code is only one part of an ethics program, which is why I didn’t put it first in this chapter. In fact, a code all by itself is often nothing but window dressing for a local government with an unhealthy ethics environment. It can actually be worse than no ethics code at all, because people will come to see that there is no effective ethics program and that, therefore, the government that acted as if it were creating an ethics program is not to be trusted. Since ethics programs are intended to increase trust in government, nothing could be worse than this.
A conflicts of interest code should be both clear and comprehensive. It should begin with a series of ethics provisions, move on to disclosure requirements, and then describe the powers and responsibilities of an independent body that has a monopoly on the interpretation, administration, and enforcement of the code, including training and advice. The code should set out the process for dealing with ethics complaints and requests for waivers and advice. And finally, the code should bring together, not simply refer to the numbers of, all city, county, and state laws, rules, and regulations that relate to local government ethics, so that all ethics laws can be found in one place, and read in relation to one another.
A conflicts of interest code should use the simplest language possible, especially in the ethics and disclosure provisions (as opposed to the administrative and enforcement provisions). It is irresponsible to draft ethics provisions that cannot be read by the average local government official. An unreadable ethics code does not provide guidance, nor can it be enforced when violated by someone who honestly did not understand it or who dishonestly, but equally effectively, employs the defense of a lack of understanding. An unreadable ethics code quickly turns officials against an ethics program. They reasonably worry that it will be used to catch them unawares.
The language of an ethics code is not the only thing that makes it hard to read. It is also important to ensure that a code is organized so that the parts most useful to the ordinary official, that is, the ethics and disclosure provisions, go before the administrative and enforcement provisions. Definitions too should not go first, and they should be used for clarification alone, not to catch officials who don’t check the definition of every word in the provisions. This is why there should be no rules in the definitions section (although including exceptions is permissible). In the online ethics code, each word that is defined should be linked to its definition.
The aspect of ethics code readability that is most often discussed by local legislative bodies is the length of an ethics code. They tend to show a preference for a short ethics code. But all that really matters is the length of the basic ethics provisions, because these are the only ones that most officials will read (officials read the administrative and enforcement sections only when they need to, and since they are so procedurally oriented, they need to be as long as they need to be). The best way to keep ethics provisions short is to have few exceptions or to put the exceptions in the definitions section. Keeping an ethics code short and simple does not require the exclusion of any important ethics provision. Nor does it require the omission of helpful comments after each provision. Length is not really an important issue; simplicity and clarity are far more important. Ethics codes can be made even more user-friendly through the drafting of a handbook and through ethics training.
Most local conflicts of interest codes are ordinances, but some ethics programs and bodies are created pursuant to a charter provision. It is important to make sure that charter requirements are followed carefully. Too often, they are ignored.
Conflicts of interest codes are supplemented by ethics commission interpretations, advisory opinions, regulations, and rules of procedure. It is very useful to include with the relevant code provision links to each interpretation, advisory opinion, and rule or regulation, so that those covered by the code can find all relevant information in one place. Relevant state laws should be included in a local ethics code for the same reason.
There are nine essential conflict of interest provisions, and others that are highly recommended. These provisions are discussed at length in Chapters 3 and 4.
1. Conflict of Interest. This most basic provision prohibits the use of one’s position to do anything that may benefit an official or employee, his family, or his business associates, except to the extent a large segment of the community also benefits. It is important to define conflicts not in terms of interests, which are vague, but instead in terms of benefits and relationships, which are more concrete.
2. Withdrawal from Participation. Also known as recusal (the judicial term), withdrawal is what someone usually does to deal responsibly with a pre-existing conflict. Often withdrawal is seen as simply not voting on a matter, but it is far more than that. It means not discussing the matter, privately or publicly, directly or indirectly. It means not participating in the matter at all.
3. Gifts. Prohibiting gifts from those who seek special benefits from or are regulated or otherwise specially affected by the local government (usually referred to, in this context, as “restricted sources”) is the most important way in which an ethics program takes bribery and pay to play out of the criminal sphere, where it is difficult to prove. There is no reason for gifts to be given to officials or employees by those seeking something from the local government. Most gift provisions allow gifts worth no more than, say, $50 annually from a single source (which includes a firm’s principals and officers, as well as affiliated firms), but it is questionable whether officials or employees, or their immediate families, should seek or accept a gift of any amount from a restricted source beyond, say, a cup of coffee at a meeting. There appears to be a profession that thinks up ways to take advantage of exceptions to gift provisions.
4. Representation and Appearances. These two, closely related provisions prohibit government officials and employees from representing others before the local government or even elsewhere when it is against the interests of the government, for example, in a suit against the government. The reason there are often two separate provisions is that an appearance is a much more concrete act, easy to prove, and yet there are many instances where representation can occur without an appearance, and such representation creates just as serious a conflict situation as an appearance. Prohibiting just appearances leaves open a big area for abuse.
5. Confidential Information. This provision prohibits the use of confidential information to benefit oneself or others. It does not, however, prohibit the disclosure of confidential information when disclosure does not benefit someone. This is because (1) simple disclosure of confidential information is an administrative, not a government ethics problem; and (2) there are many instances where what is considered “confidential information” should be disclosed to the public. Because transparency is important to government ethics, an ethics code should have no provision that undermines transparency.
6. Post-Employment Restrictions. These provisions apply certain of the ethics provisions to officials and employees usually for a limited period of time after they have left their government positions. The provisions applied to former officials and employees are usually the representation and appearance provisions, the confidential information provision, and the conflict provision. The reason is that leaving government office to work for a company that did business with one’s board or agency makes it look as if the official was misusing his or her office to help the business, and was being rewarded for the favor.
7. Misuse of Local Government Property. This provision prohibits using or allowing others to use local government property for personal purposes, unless the use is generally available (e.g., use of the library, sports facilities, etc.). Local government property includes not only concrete things, such as vehicles and equipment, but also such things as expense reimbursements. This is the provision most often violated by ordinary employees.
8. Transactions with Subordinates. In a certain sense, this is involves the misuse of local government property, except that it involves people. Violations of this provision can be very injurious to individuals, and can have a serious effect on morale.
9. Complicity and Knowledge. Bad apples are not the norm in government ethics violations. Usually, there are multiple individuals involved, individuals who either know what is going on, and say nothing, or who are complicit in others’ ethical misconduct. This provision makes complicity a violation, and requires the reporting of ethics violations.
Lobbying, Campaign Finance, and Transparency Laws
Larger local governments often have ordinances that deal with lobbying, campaign finance, freedom of information, and open meetings. These areas of government ethics are dealt with only tangentially in this book. The reasons for this are (1) there is not a great deal of lobbying in small cities, towns, and counties; (2) these areas tend to be dealt with at the state level, and states either prohibit, or have to approve, local laws; and (3) the laws relating to these areas exist primarily in larger cities and counties. In some cases, local governments can supplement state law, making requirements that are stricter than state law, for example, requiring earlier publication of meeting agendas or banning campaign contributions from local government contractors and lobbyists. There also a few local government public campaign financing programs. Sometimes, an ethics commission has jurisdiction over these areas, but more commonly they are handled by other bodies or offices.
The disclosure of relationships (e.g., family members, employers, partners, and clients) and information that suggests possible conflicts (e.g., property and business ownership) keeps the wheels of an ethics program well oiled. That is, by disclosing relationships and possible conflicts, officials and those seeking benefits from a local government do three things, all of which are intended to avoid ethics violations.
One, by disclosing, officials remind themselves of possible conflicts at a time when it is easier to deal responsibly with them, because there is no pressure on the official and there is time to ask for an advisory opinion. Two, disclosure lets other officials (such as supervisors, fellow board members, and those providing oversight) and the public (including the news media) know about conflicts that might arise, so that when a conflict situation does occur, there is information available for these people to make sure the conflict is dealt with responsibly. And three, disclosure means that officials regularly participate in the ethics program, which helps create a good, active ethics environment in the local government.
There are three types of disclosure, and two sides to disclosure (by the official and by individuals and entities seeking benefits from the government). The three types are (1) annual disclosure of financial and personal relationships and ownership interests (which are to be updated when there is a new relationship or interest); (2) “transactional disclosure” of conflicts when a matter comes before an official who has a conflict situation; and (3) “applicant disclosure,” that is, disclosure of relationships to officials, direct or indirect, by an individual or entity seeking a contract, permit, license, or grant from the local government.
Since government ethics is all about conflicts, it is extremely important that there not be any conflicts in the ethics program itself. Officials under the jurisdiction of an ethics program have a conflict with respect to it. Therefore, they should withdraw from participation in the program, beyond training and requests for advice. That is what you do when you have a conflict.
Unfortunately, high-level officials rarely withdraw from an ethics program. High-level officials’ participation takes the form of selecting the members of an ethics commission and, sometimes, its executive director; making enforcement decisions; approving the ethics program’s budget; and, in the case of city or county attorneys, providing ethics advice and ethics commission representation. Sometimes, in fact, officials administer an ethics program themselves, alone or as part of a commission that also includes citizens.
In each case, such officials have many potential conflicts based on their own interests (in not being found in violation of an ethics provision) and their relationships with other officials, personally, politically, and sometimes financially. Whenever officials involved in an ethics program appear to act too indulgently toward other officials (or do not act at all, or appear to act to hurt their opponents), their involvement undermines the public trust.
In fact, high-level officials don’t even have to act in order to do this; if people do not trust the ethics program, they will not seek advice or file complaints at all. When an ethics program is inactive, this is often the reason.
This is why the independence of an ethics program from government officials is the single most important criterion for its effectiveness.
Fortunately, the trend today is to have ethics commission members selected by community organizations, to give the ethics commission full enforcement authority and a guaranteed budget, and to have the ethics commission choose its own staff, who have a monopoly of providing ethics advice. These are the elements that make an ethics program truly independent. And trusted.
Here is an interesting way to look at the enforcement of a conflicts of interest code, based on Jonathan Haidt’s book The Righteous Mind: Why Good People Are Divided by Politics and Religion (Pantheon, 2012). Although we humans are innately hierarchical, like the other apes, we made a political transition that allowed us to band together to punish alpha males who overly or improperly dominated our group. Weapons helped a lot, making physical strength less important. But language helped even more. Gossip was an effective way to keep people in line.
Ethics enforcement can be usefully seen as a formal, more fair and reliable form of gossip. It is one of the newer ways communities have developed to limit their oppression by leaders.
So, whenever there is a scandal involving misconduct by a high-level government official, the first thing everyone thinks of is enforcement of laws (although it does nothing to lessen gossiping). Training and advice are even more evolved ways of dealing with leaders who might put their self-interest ahead of the public interest, but the public hasn't caught up with this new idea yet. Nor have most elected officials.
The evolution from hierarchy to relatively egalitarian politics makes things more difficult and emotional when it comes to government ethics. If it were accepted that whoever fought successfully for leadership could do anything he wanted, the big gorillas in every community would hire and give contracts to their family members and supporters, and no one would complain. That is, after all, how dictatorships, and some political machines, run. There is even a name for this: kleptocracy.
As it is, elected officials sometimes come to feel like big gorillas, but they live in a culture where gossip (now made faster by the internet and its blogs) and the enforcement of ethics and criminal laws make reputation exceptionally important and worth fighting for, via accusations, intimidation, lies, and cover-ups.
It is also useful to look at a government ethics program as something owned by the public. It is the public, through an ethics officer, that effectively advises government officials how to deal responsibly with their conflicts. It is the public, through an independent ethics commission consisting of ordinary, nonpolitical citizens, that enforces the code. It is in the name of the public that an ethics program ensures that the public interest will take precedence over officials’ private interests.
If certain groups are excluded from an ethics program’s jurisdiction, the others will feel that the program is unfair. Therefore, an ethics program should have jurisdiction over all local government officials, including the local legislative body and those who consider themselves independent agencies, such as sheriff’s offices, law departments, housing departments, transit, water and sewer authorities, and the board of education (unless the state has an ethics system for boards of ed). An ethics program should also have jurisdiction over employees and board members of quasi-public and public-private agencies and authorities.
Government ethics rarely interferes with uniformed departments’ oversight mechanisms, nor do its provisions overlap with legal and other professional ethics enforcement. Therefore, uniformed departments, lawyers and other professionals should not be excluded from ethics jurisdiction.
There should also be jurisdiction over government employees, including union members, although the less responsibility they have, the more limited are the ways in which they can have conflicts. Many minor matters, such as gratuities given to teachers or sanitation workers, are best handled by the personnel department or by supervisors.
In addition, ethics administrators should have jurisdiction over former officials and employees, government contractors and vendors, consultants, businesses seeking permits, licenses, grants, and other favors from the local government, lobbyists, and anyone who aids or induces ethics violations. It is important to include all parties to each transaction, so that all parties are enrolled in the program. By doing this, it is in everyone’s interest to help officials deal responsibly with their conflicts. No one should benefit from officials’ ethical misconduct.
Local government has changed over the last twenty years or so. The change often goes by the name of “privatization” or “public-private partnership.” I like what George Frederickson calls it in his 2009 lecture “Searching for Virtue in the Public Life: Revisiting the Vulgar Ethics Thesis”: “the modern extended state,” the “vast public sea” in which governments float. This public sea includes entities with various “shades of publicness”: nonprofit and professional organizations, contractors and developers, lobbying firms, political parties, unions (public service, construction, and others), and watchdog groups, as well as single-purpose jurisdictions (school, water, transit, and sewer districts and authorities), public-private organizations of all sorts, charter schools, utilities and other public monopolies, tribes, and numerous quasi-governmental agencies.
All these entities are involved in the governance of our communities. They enter into contracts or take grants from our local governments, and they take managerial and service-delivery functions out of the hands of public servants. The result, in terms of government ethics, is the removal of patronage, nepotism, embezzlement, and other sorts of misuse of office out of what is traditionally considered government and into these other entities.
No matter how public or private these entities are, they are in involved in many complex conflict situations, which are too often outside the jurisdiction of any government ethics program, even when they involve governmental business or services and government funds. Being outside the jurisdiction of an ethics program does not only mean that ethics laws cannot be enforced against these entities and their officers. It also means that those work for these entities get no ethics training, have no access to ethics advice, do not provide disclosure, and are not subject to transparency or lobbying rules. In other words, they fall into a huge loophole in ethics laws. And the loopholes are growing bigger.
Frederickson says that “the rise of the modern extended state is the dominant feature of our public life and of contemporary public administration.” And yet it has been practically ignored by government ethics. This is a mistake.
State and Regional Programs
Several states have ethics programs that cover all or some local officials and employees. However, some of these programs are limited in their ethics provisions or in their ability to enforce, slow in providing advice, or limited in the disclosure they require. Therefore, although state programs are independent of local officials, a local ethics program can sometimes do a far better job. Florida is an example of a state where state jurisdiction over local government ethics has not prevented numerous scandals. The result has been a recent increase and improvement of local ethics programs.
Regional and countywide ethics programs are a good compromise between state and local programs. They allow local governments to keep ethics programs local while allowing for more independence in administration, sharing the cost of a professional ethics officer, and having experienced and trained ethics commission members.
For another, excellent encapsulated version of what is essential to a local government ethics program, read the statement of Mark Davies, executive director of the New York City Conflicts of Interest Board, to the Chicago Ethics Reform Task Force, dated February 14, 2012.
III. Basic Conflict Provision and Withdrawal
A. Conflicts of Interest
Conflicts are the central topic of government ethics, and dealing with them responsibly — usually by withdrawing from participation in a matter or rejecting the offer of a gift or a request to take improper action — is the central act in government ethics. The various issues and requirements in an ethics program have to do with different kinds of conflicts.
Conflicts involve personal relationships, with one’s family members, one’s employer and business associates, one’s colleagues at work, one’s friends, those seeking benefits from the government, and oneself.
Because it is impossible to define a “friend,” friends are rarely included in ethics codes, at least by name, but that does not mean that government officials are not expected to deal responsibly with conflicts arising from friendships. In government ethics terms, the term “friend” should be defined backwards. That is, someone to whom an official gives preferential treatment is a “friend.” Officials should not appear to be benefiting friends, because they shouldn’t be giving preferential treatment to anyone. The conflict is just as real because the relationship is just as real; the only difference is the ability to draft a clear definition.
There is nothing wrong with having relationships, or with having conflicts, at least up to a point. By the time someone becomes a mayor, she will know thousands of people in the community, and will feel she owes many of them favors (and even more will feel she owes them a favor). Family members, business associates, political colleagues and supporters, and friends will have sacrificed a great deal to help her get to the top. Money may be only a small part of what they have sacrificed, but they will most likely expect money or business in return.
Some favors can be paid back, in the form of political appointments, as opposed to regular jobs. But officials other than a mayor — and in council-manager forms of government not even the mayor — do not have the power to appoint anyone, or perhaps just an aide or two.
What about favors done for constituents? An official’s relationship with an ordinary constituent does not create a conflict. Doing a favor for a constituent that the official would do for anyone (and that is part of constituent work, that is, not helping someone get a contract or a zoning change, for instance) is not an instance of favoritism, but rather its opposite: doing one’s job. An official helping a constituent with whom she has no relationship will not be seen as putting her personal interests ahead of the public interest. See below for more on the provision of constituent services.
Although there is nothing wrong with having relationships, when those relationships lead to an apparent conflict between an official’s obligations to others and the official’s obligations to the public, the conflict must be handled responsibly. Usually, but not always, this means that the official must withdraw from participation in any matter involving those with whom he has a special relationship. Many think this only means abstaining from a vote. But withdrawal means far more than this. It means not discussing the matter with anyone involved or anyone in a position to influence the matter, directly or indirectly. See the section on Withdrawal in this chapter.
It is important to keep in mind that conflicts are more important at the local level not only because there are more personal relationships, but also because, in local government, ideology plays a far smaller role than it does in states and certainly in the federal government. At the local level there are differences in policy, but party and faction tend to be more about power than about ideology. And power includes the ability to hand out the “spoils” of government, that is, jobs, contracts, licenses, land use changes, and grants. Therefore, personal relationships, and the mutual favors that are part of every relationship, play a far more important role locally than they do at other levels.
For example, a U.S. senator who argues that America’s military must be strong enough to fight two wars at once is perceived as a neoconservative, not as someone who is favoring a brother who works for a military contractor. But a county commissioner who argues that the county needs a new courthouse will be seen as favoring a brother who owns the big local contractor that gets the bulk of the work on big projects such as this.
Because relationships with the most important people in an official’s life are involved in conflicts of interest, it is important to be sensitive to the strain that can be placed on an individual’s relationships when she becomes a government official. We need to have compassion for the feelings of someone placed in such a dilemma, caught between loyalties to the community and to one’s family, business associates, and friends.
Relationships are what conflicts are all about. It’s not about laws or catching people. It’s about what we know is important and what must not be allowed, as far as possible, to get in the way of fully acting in the public interest.
This is why conflicts cannot be managed in a purely legal way. They can only be managed by owning up to the full range of risks, of possible harm, discussing them with a neutral, professional ethics adviser and, when necessary, making serious sacrifices rather than creating a situation where the public will see you as acting for yourself, your family, or your clients instead of for them.
The Title of This Section of an Ethics Code
It’s easy to come up with a title for most sections of an ethics code: Administration, Enforcement, Definitions. But what do you call the ethics provisions as a whole?
The most common title for the ethics provisions section of an ethics code is “Standards of Conduct.” However, this is a term often given to personnel standards for conducting oneself on the job, involving relations among employees, not conflicts of interest. Some codes use the title “Conflicts of Interest,” which is good, but should actually be the title of the entire code (“Conflicts of Interest Code”). A reasonable alternative is the simple descriptive term “Code Provisions.” The City Ethics Model Code combines these two in its title, “General Conflicts of Interest Provisions” under Part A, which is called “Ethics Provisions.” But I also like the title “Duties,” which is the title used in the International Municipal Lawyers Association Model Ordinance. This most simple of titles gets across the message that these provisions involve the obligation to deal responsibly with one’s conflicts. “Obligations” would be an equally good title.
Despite the fact that conflicts are common and there is nothing wrong with having a conflict, many ethics codes expressly prohibit them. The basic conflict provision of these codes reads like this:
No person subject to this code shall have any interest, financial or otherwise, or engage in any business, employment, transaction or professional activity, or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his or her public duties or employment.
The problematic word in this provision is in the first line: “have.” If ethics codes are supposed to provide rules for dealing responsibly with conflicts, how can having a conflict be wrong in and of itself? You don't deal responsibly with bribery or theft or murder. That's why they're prohibited crimes. Conflicts are different. What is wrong is not having a conflict, but creating a conflict, for example, by investing in or going to work for a contractor or developer. Therefore, having a conflict should not be prohibited
By failing to understand government ethics, those who draft and pass code provisions such as this go far beyond what is necessary, or even desirable. The news media follows their lead, saying things like “The mayor has been accused of a conflict,” turning every minor conflict situation into a scandal, sometimes before it can be handled responsibly. Officials become defensive at the suggestion they have a conflict, rather than disclosing conflicts when they arise. Prohibiting conflicts turns officials against government ethics, and prevents the open discussion of ethics issues. Officials become afraid even to ask for advice, or they make sure they ask someone who will give them the answer they want, so that they have a good defense (or so they think) if their conflict becomes public.
New York City has a compromise position on this. Its conflicts of interest code prohibits holding an interest in a company doing business with the city, but if an official or employee already has such an interest, he may disclose it to the conflicts of interest board for a determination of what action is required (divestiture or otherwise) to deal responsibly with the conflict situation, under the following provision. Here is the language:
When an individual or public servant discloses an interest to the board pursuant to paragraph three of this subdivision, the board shall issue an order setting forth its determination as to whether or not such interest, if maintained, would be in conflict with the proper discharge of the public servant’s official duties. In making such determination, the board shall take into account the nature of the public servant's official duties, the manner in which the interest may be affected by any action of the city, and the appearance of conflict to the public. If the board determines a conflict exists, the board's order shall require divestiture or such other action as it deems appropriate which may mitigate such a conflict, taking into account the financial burden of any decision on the public servant.
The good thing about such a rule is that it draws the new official or employee’s attention to possible conflicts. However, it also makes a lot of work for an ethics commission and, if it is not handled well, may require divestiture where it is not really necessary. Except for high-level officials, it is questionable whether divestiture should ever be required, unless the conflict leads to frequent withdrawal, that is, when the conflict is ongoing.
Ongoing or recurring conflicts are the one situation where having a conflict itself is the problem: when the conflict becomes an issue, or will most likely become an issue, on a regular basis. For example, if a zoning board member’s husband is a big developer in town, every time that developer, or even a competitor, comes before the zoning board, the board member would be conflicted. Withdrawal is not sufficient where the conflict is recurring. A zoning board member cannot keep withdrawing and represent her community. In such a situation, the official should resign from her position.
But otherwise, resignation from a government job or position is usually unnecessary. In fact, it can send the wrong message: that having a conflict means you shouldn’t get involved in government at all. It is important to recognize that one can irresponsibly handle a conflict by doing too little or by doing too much. Responsibly handling a conflict has an important educational function, which should be taken into account in ethical decision-making. The educational function is much easier for an ethics adviser to recognize than it is for an ordinary government official or employee.
The best time to deal with recurring conflicts, if they are foreseeable, is before a position is accepted or before someone runs for a particular office. This is one reason why it is important to provide ethics training to candidates and new officials and employees, and to require them to file a disclosure form. The earlier a conflict is handled responsibly, the better for everyone involved.
For example, if a candidate has a contract that would be illegal the day he took office, and he is very likely to win the election, he can get the bid process going so that there is a new contractor doing the work as soon as possible after he is elected. It’s also important that a candidate make it clear during his campaign how he is dealing or will deal responsibly with his conflicts. To do this most effectively, he should seek ethics advice. (For more on ongoing conflicts, see the section on them below.)
Defining Conflicts in Terms of Benefits
Another mistake commonly made in drafting ethics codes is to use the language of “interests.” The public, officials, and people who do business with government think more in terms of obligations, benefits, and relationships. We don’t balance interests, we balance obligations. It may be a conflict of interest that is at issue, but it is the underlying relationships and the possible benefits to those with whom officials have special relationships, to whom they have special obligations, that we see. In other words, an interest in a transaction is far less concrete and understandable than the benefit someone might get from the transaction.
So this book will use primarily the language of “benefits,” “obligations,” and “relationships” rather than the language of “interests.” This difference becomes especially important when it comes to drafting an ethics code’s basic conflict provision. Here is the main part of the City Ethics Model Code’s conflict provision:
An official or employee may not use his or her official position or office, or take or fail to take any action, or influence others to take or fail to take any action, in a manner which he or she knows, or has reason to believe, may result in a personal or financial benefit, not shared with a substantial segment of the city's population, for any of the following persons or entities (no group of government employees may be considered “a substantial segment” for the purposes of this provision):
“Benefit” is generally considered to include its double negative sibling, that is, the removal of a detriment, obstacle, or disadvantage. Some jurisdictions expressly state this. It should also be pointed out up front that attempts to use one’s position to benefit those with whom you have a special relationship are damaging whether they are successful or not. Therefore, attempts are also prohibited. Again, some jurisdictions expressly state this.
The other magic word is “relationship.” It is special relationships, existing or created by gifts or offers, that are at the heart of all conflicts. The relationships covered by the basic conflict provision are enumerated after the colon, and are dealt with below.
Integrity and Appearance
When someone says she believes an official has a conflict situation that needs dealing with, many officials feel that their integrity is being questioned or that people are doubting that they can act in an unbiased manner. The official or a supporter says, “How dare you question my (his) integrity? I (he) would never do anything like that. I put my loyalty to my constituents ahead of loyalty to anyone or anything.”
Conflicts have little to do with integrity or character. Everyone has relationships with people who do business with a government, and everyone has obligations to others that conflict with their obligations to the public. In fact, people with unquestioned integrity can still put their self-interest or others’ interests ahead of the public interest, and they most certainly can be seen to be doing so.
Even individuals who think long and hard about ethical matters often make ethical decisions on an emotional rather than a rational basis. In fact, anyone who says, in response to questions about their conflicts, that they would never let a relationship, gift, or large campaign contribution affect their decisions is acting emotionally, not rationally or ethically. The reason is that anyone who has thought long and hard about government ethics knows that it is not the official’s belief in himself that matters, but the public’s belief in the official.
But there is something even more seriously wrong with an official referring to his integrity when someone raises the issue of a conflict existing. Mentioning personal integrity shifts the issue from the ethical conduct of a government official, which involves dealing responsibly with a conflict situation, to the individual’s character, whether he is a good or bad person. In other words, it is an excellent and popular way not to deal responsibly with a conflict, to consciously or unconsciously worm one’s way out of one’s responsibilities. Since no individual of unquestioned integrity would ever think of doing such a thing, then one of two things has to be true:
1. The official did not mean to worm out of dealing with the conflict, but when faced with an ethical decision, was not in control of his emotions. Therefore, there is no reason to believe he would act more rationally and responsibly when participating despite the conflict.
2. The official did mean to worm out of dealing with the conflict, and therefore his integrity is in question, and he is either lying about his character or believes it is different than it actually is.
Behavioral ethics studies, many of which are discussed in Blind Spots: Why We Fail to Do What's Right and What to Do about It by Max H. Bazerman and Ann E. Tenbrunsel (Princeton University Press, 2011), have shown that people tend to deal with ethical decisions emotionally, and then use their reason to justify what they have done. In addition, the authors show that people greatly misjudge how they will deal with an ethical decision, consistently believing they will do the “right” thing, but then doing what is in their self-interest.
In any event, where there is a good ethics program, government ethics does not require a great deal of ethical decision-making. Like many areas of government activity, there are rules to follow. When the rules do not clearly apply to a particular situation, an official seeks advice from the ethics officer or ethics commission in order to get a rational, disinterested approach to the situation. This takes the ethical burden off the official. This is why a good ethics program is more helpful to officials who want to handle conflict matters responsibly, those with integrity, than it is to anyone else.
What officials need to learn is that the part of government ethics where integrity most comes into play is in the setting up of a good ethics program, that is, one that provides quality training, and independent advice and enforcement. It is in recognizing that officials are not in the best position to deal with their own conflict situations, and then creating clear rules and an independent agency to deal with them, that officials can truly show that they are individuals of utmost integrity.
When the issue of an official’s personal integrity is raised, it is important to push the issue aside as quickly and respectfully as possible. The best way to do this is to explain that what matters is not an official’s integrity or her ability to be unbiased despite a conflict, but rather how the conflict situation appears to the public. And it is important to explain, as well, that the public cannot possibly know the level of an official’s integrity. The public can only know how responsibly an official has dealt with her conflict situation.
In order to deal responsibly with a conflict situation, an official has to go beyond her self-view, however true it might be, and accept the public’s necessarily limited view. It is hard to accept that what you yourself believe is immaterial. But that is the situation, and an official has to learn to accept it. It is much easier to accept if there is good ethics training and frequent discussion of ethics issues, where the importance of the public’s view of a conflict situation is acknowledged.
This is such an important concept that I will repeat it again, in a different way. It does not matter what a government official believes about his integrity, that is, about his capability to act without regard to his personal interests. Not only is this belief irrelevant to how he will actually act, but what matters most is what the public believes. Recognizing this difference between the personal and the public is at the very heart of what a public servant is, as the term itself makes clear when you stop and think about it. It is also at the very heart of government ethics.
Another way of putting this is, Having a conflict does not mean that when an official acts or votes, he will be corrupt. It means that if he acts or votes, he will appear corrupt.
Not only will he appear corrupt but, as James Madison said 225 years ago (in Federalist #10), “No man is allowed to be a judge in his own cause, because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity.” In other words, when officials act with a conflict, this does not necessarily mean that they lack integrity. But it does mean that their integrity will be corrupted, both in reality and in the eyes of the public. Every official who stands on his integrity should be read these wise words of Madison’s. And recognize how valuable it is to have an ethics officer to turn to for advice.
Impairment of Judgment
Some conflict provisions speak of relationships or employment that “impair (or, sometimes, “prejudice”) the judgment (or “the independence of judgment”)” of an official. Some conflict provisions add “could reasonably be expected to impair an official’s judgment.”
There are three serious problems with this language. One, it is vague. What does it mean to have one’s judgment “impaired” or “prejudiced”? When a conflict is defined this way, and there is no independent ethics commission, the determination of whether a conflict exists may depend on whether the official is in the minority or majority party or faction on the council or a board, or is popular with her peers, or has a good relationship with the city attorney if the city attorney is allowed to interpret an ethics code. In other words, when ethics provisions are vague, ethics enforcement is based on power rather than on clear rules that government officials and employees can be expected to follow.
Two, although people constantly question their memory, very few people ever question their judgment. And they certainly don’t think their judgment is impaired or prejudiced by their relationships with or obligations to others. Nor do they feel comfortable openly questioning the judgment of others.
As Max H. Bazerman and Ann E. Tenbrunsel point out in their book Blind Spots: Why We Fail to Do What's Right and What to Do about It (Princeton University Press, 2011), we naturally see the world from our point of view. Our self-serving judgments lead us to different conclusions than others have regarding what is a fair solution to a conflict situation. “[W]e tend to first determine our preference for a certain outcome on the basis of self interest, and then justify this preference on the basis of fairness ... This difference in the way information is processed isn't just strategic; it happens whether we want it to or not. Our minds actually absorb the information that is advantageous to us and ignore information that isn't.”
The result is that our judgment is clouded, for example, our judgment about whether our conduct would be viewed as unethical. And there is no way for an official to recognize that this is going on. The authors don’t even believe it can be taught. “Teaching individuals about the insidious influence of egocentrism has been shown to be effective at teaching them to recognize the egocentrism of others. Unfortunately, such training on egocentrism doesn't reduce the influence of egocentrism on our own behavior. While we recognize that others are egocentric, we don't believe the bias affects us — an egocentric interpretation of the egocentric bias!”
In other words, what people need is independent ethics advice, not rules that refer to the impairment of their judgment and proceedings in which officials argue that their judgment was not in fact impaired at all. This sort of discussion makes the ethics process look unfair, prevents little misconduct, and yet, due to the vagueness, catches some unsuspecting officials. This is not a good basis for a government ethics program.
The third serious problem is that the lawyers who draft such lawyerly language do not appear to have considered the vision of government ethics that lies behind this language. Is government ethics intended to prevent officials from having their judgment impaired? Having an unimpaired judgment sounds like something one asks of a judge, not an official. We expect our local officials, at least our elected and appointed officials, to have impaired judgments. That is, we expect them to have prejudices (e.g., for or against development), to be partisan, to do what we elected them to do. What we don’t want is for them to use the power of their office to help themselves and those with whom they have special relationships. None of this comes through when a basic conflict provision uses the judicial terms of impaired or prejudiced judgment.
Indirect and Indefinite Conflicts and Benefits
Most conflicts, like most relationships, simply exist. They become relevant only when a matter involving a related person or entity, for instance a sister or a business partner’s other business, comes before an official. These are the conflicts for which the basic conflict provision is intended.
Other conflicts are created by events. For example, a contractor invites a council member, with whom he has no prior relationship, to play golf with him at his country club. Or a developer offers business to the law firm of a zoning officer’s wife. These conflicts are treated in other provisions.
The simplest kind of conflict involves a direct financial benefit to the official. For example, a zoning board member’s company comes before his board and would benefit from or be harmed by the board’s decision. Or an official is offered a gift by a prospective contractor. These conflicts are relatively easy to see, understand, and handle responsibly.
But many conflict situations are much more complex. They involve different kinds of indirect and indefinite conflicts, which will be explored below. Most indirect conflicts are based on relationships between an official and the possible beneficiary of government action.
Indirect benefits appear to the public as no different from direct benefits. Wherever there are benefits and relationships, there is an appearance of impropriety that will seriously undermine the public's trust in its government.
It’s important to recognize that an official’s participation in a matter can benefit someone not just by putting money in her pocket or other concrete benefits, but also by preventing harm, such as a dump just behind her backyard. And there are even benefits that are not concrete, such as benefit to someone’s reputation in the community.
It is also important to recognize that a benefit does not require that there be a profit. A contractor who loses money on a contract still was put in a position to benefit from it. An official who uses government resources for her business is still benefiting, even if the business hasn’t broken even. The success or failure of an attempt to profit from one’s position is not relevant to whether there is an ethics violation.
De Minimis Ethics Violations
One of the biggest little problems in government ethics is filtering out situations where the benefit to an official was or would be very minor. Ethics violations based on minor benefits are called “de minimis” violations. Because it is impossible to define “de minimis,” determining this is usually left to the discretion of an ethics commission or ethics officer. Usually, they are permitted to dismiss a complaint based on a de minimis violation. The ethics commission may choose to send the official an educational or warning letter, or require an additional training session. Investigating, holding hearings, or reaching a settlement regarding allegations of de minimis violations wastes an ethics commission’s or ethics officer’s limited time and resources. Ethics administrators need to be able to use their judgment in deciding when not to investigate such allegations.
The place to provide this discretion is in the provision dealing with newly filed complaints. In other words, it’s not part of the description of a conflict; it’s part of the complaint procedure.
Some jurisdictions try to define “de minimis,” but no definition can anticipate all the forms minor benefits and violations can take. For instance, Boise uses the following definition in its disclosure section:
A pecuniary benefit is de minimis if it does not exceed the value of fifty dollars incidental to personal, professional or business contacts and involving no substantial risk of undermining official impartiality
This seriously complicates the issue, using a dollar figure that makes it appear concrete, but then bringing in such vague concepts as risk and impartiality. A dollar figure will seem high in some situations, but low in others.
But the real misunderstanding here is that de minimis refers to a benefit or to a violation. A de minimis benefit is still a benefit, and a de minimis violation is a violation just like any other. Whether something is de minimis is a question that arises when an ethics commission needs to determine whether or not an allegation is worth investing resources in or how to recommend to an official how to handle a conflict situation. The determination is specific to the circumstances and, with respect to complaints, also to the commission’s caseload and its current budget and staffing. The ethics commission is not saying that there would be no violation if the allegation were true, only that, even if it were true, it would not be worth investigating. Instead, a letter or training requirement is the best way to resolve the matter.
Seattle’s ethics code recognizes this in the following provision from its Purpose section:
This Code shall be interpreted and applied to allow inadvertent minor violations to be corrected and cured without full hearing in conformance with the spirit and purpose of this Code.
Philadelphia’s regulations offer a different look at what de minimis means:
The Executive Director may dismiss or suspend further processing of a complaint or other investigation if, in his or her judgment, the alleged violation is trivial, typographical or clerical, or in other respects a de minimis violation...
And here is the City Ethics Model Code language:
. . . if the Ethics Commission determines that an alleged violation is so minor that it is not worthy of investigation, then it will dismiss the complaint with notice to the complainant.
It’s worth noting that the Philadelphia regulation expressly requires the ethics board to “report regularly to the Board on the number and nature of complaints dismissed or suspended under this subsection.” Dismissals should not be taken lightly, especially when a true violation may be involved. One man’s de minimis can be another man’s serious violation. I’ve been involved in a few serious disagreements about the de minimis nature of an official’s conduct, taking different sides in different circumstances.
New York City’s rules allow the conflicts of interest board to refer a matter to an employee’s agency if it deems it a de minimis matter. This works especially well with gratuities, which are more of an administrative than an ethics matter. The acceptance of gratuities is often common within an agency or with respect to particular kinds of work, such as teaching or waste removal.
Rochester has an interesting procedure for determining whether an interest is minimal. This procedure effectively makes the ethics board chair an ethics officer for the purpose of quickly determining whether an interest is minimal.
This [recusal] provision shall not apply to any City officer or employee whose interest in the proposed or pending matter is minimal, provided that these procedures are followed strictly:
(i) The City officer or employee shall identify his or her interest, that is, the benefit or advantage that would be gained or lost if the City acts on the matter in various ways, and the underlying basis of it, such as ownership, an investment, a contract or claim, employment or a relationship, if any.
(ii) The City officer or employee shall completely and specifically describe and disclose his or her interest and its underlying basis, if any, in writing, to his or her immediate superior and the Chairperson of the Board of Ethics in advance of his or her participation in the matter.
(iii) If either the City officer or employee, or his or her immediate superior, or the Chairperson of the Board of Ethics thinks that the disclosure reasonably raises a question whether the interest is minimal, the question shall be submitted to the Board of Ethics for an opinion, prior to which the officer or employee shall not participate in the matter.
Failure to disclose property or abide by the opinion of the Board of Ethics shall make any participation of the officer or employee in the matter null and void.
Sometimes, benefits are certain and relatively direct, but the relationship between official and beneficiary is considered too remote to require the official to deal with it by withdrawing from the matter. For example, the beneficiary is a second cousin, the client of a business associate, or a close friend’s sister.
However remote the recipient of a possible benefit might seem to an official, the beneficiary may appear to the public as far less remote. Take this example from Los Angeles. An airport attorney, who reviewed the paperwork submitted by four companies bidding on airport concessions, was married to an attorney with a law firm that represented one of the bidders. The possible conflict involves a client of the official’s husband’s law firm, whom the husband does not himself represent. On first thought, this seems pretty remote.
But one cannot stop at this point, where the relationship is presented to make it appear remote. One must look at it from the public’s point of view. And one must look at it from the airport attorney's point of view. Not from how she would view the relationship after the fact, but how she might approach her job differently due to the relationship.
The airport attorney is charged with reviewing bids for the airport. One of the bids comes from a company represented by her husband's firm, that is, the bid was presumably written or reviewed by one of her husband’s colleagues, which is a close relationship. Let’s say the airport attorney finds something wrong with the bid. Does she say something and embarrass her husband's firm, possibly causing it to lose the client and blame the husband for what his wife did, or does she keep it under her hat and protect her husband and his firm? Is this conflict situation good for the public? And is it fair to put the airport attorney in this uncomfortable position?
Or let's say she finds a minor error in another company's bid. Does she suggest the bid be resubmitted or does she let it go? If she suggests resubmittal, it might look to the bidder like she's making life hard for the client company's competitors. On the other hand, she might feel she needs to appear extra fair and let an error go that she would normally consider serious enough to require resubmittal.
These are only two of the possible ways in which what might appear at first to be a remote conflict can have a direct effect on how the official approaches a matter, or how she is seen to have approached it if a controversy arises (and bidders are always looking for a good excuse to protest a bid, thereby costing the local government more time and money). This is why the official should recognize that, although not required to withdraw, it is best for the airport, the public, and herself if she lets someone else review the bids.
In addition, from the public’s point of view, which is the most important point of view, a spouse’s law firm is effectively the spouse itself. Although the firm does not directly benefit from the success of the bid, there is no remoteness to the airport attorney’s perceived bias in favor of the firm’s client and the firm’s work.
Benefits Shared with Others
What is known as “the class exception” to conflicts gives rise to serious disagreements. The class exception should be set forth right in an ethics code’s basic conflict provision, something like this:
... benefit not shared with a substantial segment of the city's population
That is, if a benefit is shared with a lot of people in the community, then it is not a special benefit and it should not be the basis of an ethics violation. For instance, there is no problem when a council member over 65 votes on whether or not to give seniors in the community a property tax break. Nor is there a problem when a planning board member who owns a house in town makes a decision that affects homeowners in general.
Where the disagreements occur is over how large a “substantial segment” of a city or county’s population is. Seniors clearly are a substantial segment, but what about elderly veterans or seniors with certain disabilities? Parents of school-age children are clearly a substantial segment, but what about parents of special needs children? Government employees? Teachers? Lawyers? Realtors?
Another consideration, which arises especially with budgets, is whether the matter at hand involves only the industry or profession in which an official or family member works, or whether it covers a much broader group or involves multiple issues. A budget benefits numerous industries and unions, but this should not mean that every council member involved in one of the industries or unions should withdraw from participation in budget discussions or votes. Only when a relevant item is being discussed should a council member withdraw.
A council member in Franklin, Virginia felt the city should stop charging interest on delinquent property taxes, since so many taxpayers were under financial duress. The council member happened to be one of those delinquent taxpayers. Does it matter exactly how many people owe back taxes? If so, what percentage would be enough? Twenty percent? Ten percent? Would it matter what percentage of council members were delinquent ? All of these are legitimate considerations in determining whether a council member has a conflict that requires withdrawal from participation in the discussion about charging interest. It is also important to consider whether the public will think the council member is merely thinking of his personal interest, rather than the public interest in collecting taxes from everyone.
Homeowners are a substantial segment, but what about downtown business owners, or business owners on a particular street? With respect to road improvement or transit decisions, how many people have to benefit from the improvements or a particular bus or subway stop in order to allow the participation of an official with a business on the road or the route, or near a stop?
These are not easy questions to answer, but they are important issues to raise when such a situation arises. If it’s a difficult decision to make, there is public concern, and it is too late to seek ethics advice from the ethics officer, the most responsible thing for the official to do is withdraw from participation in the matter. In some cases, limiting participation will be sufficient. But the best thing to do is to anticipate that it will become an issue, and seek advice from the ethics officer as early as possible.
This is an area where informal ethics advice and formal advisory opinions can be very useful in providing concrete guidance to a local government’s officials, and not only the one to whom the advice is given. If officials are not seeking advice, this is a good area for an ethics commission to anticipate problems and put together a memorandum or general advisory opinion using local situations and situations it finds in advisory opinions from other cities and counties, to let officials know how to deal with a situation depending on how they might specially benefit from it.
It is better to do this than to approach the problem in the form of one or more detailed exceptions, as many ethics codes do. For example, here is the Rhode Island exception provision, which applies to local officials:
A person subject to this code of ethics does not have an interest which is in substantial conflict with the proper discharge of his or her duties in the public interest ... if any benefit or detriment accrues to him or her or any person within his or her family or any business associate, or any business by which the person is employed or which the person represents, as a member of a business, profession, occupation, or group, or of any significant and definable class of persons within the business, profession, occupation, or group, to no greater extent than any other similarly situated member of the business, profession, occupation, or group, or of the significant and definable class of persons within the business, profession, occupation or group.
There might be many storeowners or lawyers in town, but how many gun store owners or land use attorneys? If there are two gun stores in town, should a council member who owns one of them participate in the consideration of a law regulating them, because his store won’t be any more affected than the other store? If there are five land use attorneys in town, should a land use attorney participate in matters that affect the practice of land use attorneys in town? All businesses, professions, and groups are not the same, and the situation their members may end up in do not lead to the same appearance of impropriety. It is better to make a class exception short and simple, and have the ethics officer and commission provide advice and build up a list of examples that make the exception increasingly concrete.
Transportation issues are probably the area that leads to the greatest amount of controversy regarding the class exception. The reason is that businesses depend on good transportation and parking nearby. One vote could mean hundreds of thousands of dollars a year for a business owner, and a remarkable number of local business owners, from retailers to realtors, sit on local government boards that deal with such issues.
With respect to issues that affect particular properties, a popular solution is to be mathematical and precise by including within an ethics code what is known as a “proximity rule,” that is, a rule that requires officials to withdraw from any matter dealing with property or improvements within a certain distance from property they own or rent (this can be extended to property their business or their immediate family owns or rents). But how many feet or yards do you choose? California uses 500 feet. Telluride, Colorado uses 150 feet, while Aspen, Colorado uses 300 feet. Any number that is chosen is basically random or, worse, intended to make officials withdraw in fewer situations, even where there is a clear appearance of impropriety (note that all these figures are low). For more on the proximity rule, see the Proximity section later in this chapter.
One kind of “substantial segment” that should never be excepted from a conflict rule is government employees. For example, if a company doing or seeking business with the government offers discounts or free tickets to all local government employees, not focusing the benefits on those who might directly benefit them, this should not be considered acceptable just because hundreds or even thousands of individuals benefit. Nor should a school board member be able to participate in a matter involving a spouse’s raise because the teacher contract gives raises to hundreds of other teachers, as well. In order to make it clear that government office is not being used for officials’ personal benefit, government officials should not accept special benefits or participate in giving government benefits to family members. The City Ethics Model Code expressly excepts government employees from the term “substantial segment” of a city’s population.
Sometimes there are conflicts that are unavoidable. For example, council members vote on their own salaries. They could ask a neutral individual or body to research council salaries in similar cities, and make a recommendation. But it is the job of council members to vote on budgets. It is important that it be done openly.
Sometimes, however, conflicts are declared to be unavoidable when a little thought and research would make it clear that they are not. For example, in Ohio in 2010 nearly everyone in government, including the inspector general, argued that state legislators must vote on pensions, despite the fact that many of them, or their spouses, had pensions coming to them besides their pensions as retired legislators. People said that government pension plan members are the same sort of class as taxpayers, drivers, and real-estate owners.
A bit of research would have shown state officials that ten states have separate pension plans for legislators, and ten other states do not provide retirement benefits to legislators at all. So to remove this conflict, Ohio's legislature could have followed the lead of these twenty states and chosen one or the other of these solutions. Voting for one’s own pension plan would have remained unavoidable (just like voting on one’s own pay), but the pension plans for the rest of the government (often including local pension plans) would be like any other matter, so that those with particular conflicts could withdraw. The number of legislators with an avoidable conflict would have been greatly reduced.
But sometimes an unavoidable conflict like a pension can be used to try to make an official look unethical. In 2013, the chair of a North Kansas City, Missouri hospital board of trustees testified that the city's mayor had a conflict with respect to selling the hospital, because he had a police pension, and the city would use proceeds from the sale of the hospital to cover its pension obligations.
It is true that a limited number of people have such pensions. Therefore, they are special personal benefits. What is not limited is the situations that may arise where the city raises revenue that might be used to shore up the city's pension obligations. Anything a city government does can be seen as helping the shore up its pension obligations. Therefore, if having a pension was considered a conflict, no one with a pension now or in the future could be in a position to make decisions for the city. Therefore, the argument for a conflict fails.
It is common for high-level officials at the federal level to put their investment assets into a blind trust, in order to prevent the appearance and, hopefully, the reality of a conflict when their activities may benefit or harm companies in which they hold stock. Blind trusts are much less common at the state level, and very rare at the local level. However, it is something that a wealthy official in a large city or county may want to consider. It is certainly not a perfect solution. It would be better to sell off stock in companies that do business with or are regulated by the local government. Anyone considering a blind trust may start by checking out the New Jersey guidelines for setting up a blind trust (Appendix F).
For those who want to create a blind trust, or a law requiring blind trusts for high-level officials, here are five important safeguards that should be seriously considered. They are derived from Phil Claypool’s March 2013 analysis (pages 3-4) of a Florida blind trust bill.
1) The trustee should be prohibited from investing trust assets in business entities that the trustee knows are regulated by or do a significant amount of business with the official's agency.
2) The trust should contain only readily-marketable assets, so that the trustee is able to sell the assets originally put in the trust by the official. How can a conflict be eliminated if the official knows that a particular piece of land or partnership interest is still owned by the trust (and thus still benefits the official)?
3) The terms of the trust should be reviewed and approved by the ethics commission, as to whether they meet the requirements of the law.
4) The public should be informed of what assets are being placed in the trust.
5) The trustee should be required to provide a guarantee that he or she is aware of the requirements of the blind trust law and will comply with them, so that the law can be enforced against a trustee who passes information to the official.
Robert’s Rules and Common Law Conflicts
Even if there is no conflict provision in your local ordinances or state statutes, there is a conflict provision in Robert’s Rules, which generally applies to local board and commission meetings. Here is the language, from §45 (Voting Procedure), in the first subsection on Rights and Obligations in Voting (Perseus Publishing, tenth edition, pp. 394-395):
No member should vote on a question in which he has a direct personal or pecuniary interest not common to other members of the organization. For example, if a motion proposes that the organization enter into a contract with a commercial firm of which a member of the organization is an officer and from which contract he would derive personal pecuniary profit, the members should abstain from voting on the motion. However, no member can be compelled to refrain from voting in such circumstances.
This is a very limited provision (it recognizes only direct conflicts, and withdrawal is voluntary rather than required, and it is limited to voting), and certainly not a replacement for a conflict provision, but it is important to know about when a conflict arises in a local government body where there is no applicable law.
There is also something known as common law conflict of interest law, which is essentially case law on conflicts that is not based on statutory construction and, in most cases, precedes the writing of ethics codes (only a few existed before the mid-70s). Since the common law conflict law has been superseded in most jurisdictions by ordinances and statutes, and since it requires a lawyer to figure out what the requirements and prohibitions are, it is rarely taken into account by local governments. It too is something to be aware of more than to make use of.
2. Indirect Benefits
“There is ... no good reason to believe that connections that are proximate and explicit are any more corrupt than connections that are indirect and implicit. The former may be only the more detectable, not necessarily the more deliberate or damaging, form of corruption.”
—Dennis F. Thompson, Ethics in Congress
Harder to see, understand, and handle are conflicts that involve indirect benefits, that is, benefits that do not go directly to an official or employee. There are so many different kinds of indirect benefit that it is very difficult to include all of them in an ethics code. The most common indirect benefit is a financial benefit to an official’s household or immediate family member. It’s easiest to see how this benefits the official, because whatever benefits one’s household benefits oneself. But an official also benefits when other close family members benefit, when her business or employer benefits, and when others with whom she has a special relationship benefit. There are indirect financial benefits, there are favors done that are part of every relationship (without any specific quid pro quo), and there is the direct benefit of helping someone who matters to you. From the public’s point of view, indirect benefits go to those who are important to an official, when it should be the public, and only the public, that receives the benefits of government decisions.
Benefits to a Spouse
Benefits to officials’ spouses have become much more common in recent years, because women have increasingly become business owners and professionals as well as local government officials. The public feels that a financial benefit to an official’s spouse, as a benefit to her household, is the same as a financial benefit to the official herself. This is the easiest of indirect benefits to understand.
However, many officials do not accept this clearest of indirect benefits. Instead, they argue that government ethics should not extend to a spouse’s business or to any benefits a spouse might receive even outside of his business, for example, gifts. This might be a good argument if the public’s point of view could be ignored and if officials had no fiduciary duties. But when an individual seeks public office, she must work with her spouse to fulfill her obligations to the public, which can mean either withdrawal from matters involving her spouse or sacrifices on the part of her household, from not bidding on a contract to not accepting legal work from a developer.
The most extreme form of the argument against considering benefits to one’s spouse as creating a conflict situation was made to me by an officer of the Michigan Townships Association. She wrote that, “Several court cases and Attorney General Opinions indicate that a public official will not have a legally recognized conflict of interest when the person who may be affected by the decision, financially or otherwise, is the spouse or other family member of the public official. These rulings are based on the principle of law that a spouse or other adult family member is considered an independent person entitled to own, retain and enjoy his or her own earnings separately. (Public Act 216 of 1981, MCL 557.21; Thompson v. School District No. 1 of Moorland Township, 252 Mich. 629 (1930); Rupert v. Van Buren County, 296 Mich. 240 (1941); Michigan Attorney General Opinions 316, 4869, 6151, 6206, 6630, 6736).”
These cases and opinions are based on a statute recognizing that a married woman’s income are hers alone. But government ethics does not seek to take money away from a married woman (or man). It seeks to have government officials deal responsibly with conflicts. Conflicts are based on relationships, and there is no closer relationship than a married couple, especially in the financial sense. The legal recognition of a woman’s right to her income is irrelevant to dealing responsibly with conflicts.
As I show in my blog post on this situation, I do not believe that the Townships officer properly applied this reasoning to the situation she was writing about, nor did she properly cite the attorney general opinions. In other words, she was wrong about the application of the women’s income statute to conflicts of interest in Michigan.
I have not seen such laws used in this context in other states. However, local government officials across the nation argue that their spouse’s affairs are not their own, that a spouse should not suffer by, for example, losing business or not having the opportunity to apply for a job that has to be approved by the official’s board.
An argument elected officials sometimes make is that voters knew what their spouse did when they ran for office. This simply isn’t true. Outside of very small towns, few voters even know what a candidate does for a living. And even if they know, they don’t know what the ramifications might be with respect to conflict situations.
Another argument that is made is that the official and his spouse keep their money separate. Does that mean that when the spouse pays for a new furnace, it doesn’t keep the official warm at night? First of all, no one knows how another household’s finances work. And second, the directness of the benefit is only one issue. Even if an official and spouse are living apart and have no children, they may have an important personal relationship that creates an appearance of impropriety.
The public understands that it is wrong for an official to use her office to help her spouse’s business or to get her spouse a job, no matter what their household finances are or how independent a person the official’s spouse is. This is why ethics codes do not distinguish between the financial situations of spouses, although many do distinguish between children and other family members living in or outside the official’s household.
It is the areas where the public understands government ethics more than officials (or, at least, more than officials let on) that cause the most controversy. This is because, when these controversies arise, too few officials take into account the appearance of impropriety that accompanies their conduct.
A typical conflict situation involving a spouse is where one spouse is a member of the school board and another is a teacher. This situation also occurs when a member of a local legislative body is married to a local government employee who is a union member. The board member is conflicted when labor negotiations come before them. It is a more difficult question if one spouse teaches in a different town than where the other spouse sits on the school board. There is no direct conflict, but the unions of the two towns may have the same umbrella union and the same negotiators, and the teacher’s dues go to the same union. The teacher himself may have, or be seen to have, a bias toward his umbrella union and its negotiator, but would the teacher’s spouse? This is a question that should be determined either by an ethics officer or commission or, if there is no ethics program, at a public meeting of the school board. And this should happen when a teacher’s spouse is elected to a school board, not at the time that labor negotiations first are discussed by the board.
Other Spousal Conflicts
From the public’s point of view, there is little difference between official and spouse. Yes, a spouse has his or her own opinions and work, but couples usually support each other and work together toward common goals. When a spouse does something an official is not allowed to do, it appears that the official is acting through the spouse.
Take the case of a St. Charles, Illinois school board member whose spouse was an officer of a group promoting a referendum to build a school in the official’s district. The wife wore two hats: the hat of school board member's spouse and the hat of major school referendum supporter. To someone who opposes the referendum, it looks as if the husband is pushing for it through his wife, no matter how independent she might actually be. The appearance is of a government official manipulating public opinion indirectly, since by law he could not do it directly.
This is not a problem that can be solved through withdrawal. Although the spouse is an independent individual, as the spouse of an official she should also deal with her conflict responsibly and stop being so involved with the referendum. The fact that no ethics commission would have jurisdiction over her or that she is allowed to express her own views does not mean that she has no obligations or that it is right for her to get so involved with a matter so close to her husband’s official work. If she insists on leading the movement in favor of the referendum, it puts her husband in the position of having to resign and promise not to run in the next election. Then there would be no conflict, and the spouse would be free to do and say anything she liked.
Benefits to Immediate Family
Unless a relative lives in the official’s household, a financial benefit to the relative does not as directly, financially benefit the official as a benefit to a spouse does. This is why many ethics code apply only to benefits to an official’s household.
But there are ways in which benefits to family members who do not live in the household provide direct benefits of a different sort. There is (i) the satisfaction of benefiting family members, (ii) the lessening of the need to pay for care to parents or help to children (help with school costs, a mortgage down payment, etc.), and (iii) in the case of parents and sometimes siblings, money can come back to the official in the form of a future bequest, or at least there is an expectation that this will happen.
Even where there does not appear to be a possible financial benefit to the official, where there is a benefit to someone with a close relationship to the official, there is an appearance of a misuse of office to benefit one’s close relative, at the expense of others and possibly of the public interest. Conflicts, after all, are based on relationships, and these are usually the closest relationships of all. Even when the benefit is indirect, it seems no different to most people whether an official is giving a position or contract to a spouse, a sibling, a parent, or an adult child.
Officials look at their immediate families very differently. One important pillar of family relationships is mutual aid. It is often hard to see how being a government official should be an obstacle to helping one’s family just as one would in any business or profession. This is especially true when everyone around you is getting their children and siblings jobs or connections with their companies or with companies they do business with.
Parents are rarely the beneficiary of an official’s decisions, but it does happen. For example, the mother of a Columbia, South Carolina council member obtained a federal low-interest loan, administered by the city, to purchase an office building without disclosing her relationship to the council member. Since the federal empowerment zone conflicts of interest policy expressly included both direct and indirect benefits, when her relationship was discovered, she was forced to pay back the loan. But she wasn’t happy about it, even though she had clearly violated the provision. She said, “This has nothing to do with who we know or who we’re related to. We’re citizens of Columbia.” Yes, but citizens of Columbia saw her as a council member’s mother.
Benefits to Other Family Members
Although most government ethics codes limit conflicts to household members or immediate family members, this is not how the public sees it. Their view of close relations does not stop at the boundaries of the old-fashioned nuclear family. It includes step-family members, in-laws, aunts and uncles, nieces and nephews.
That is why many ethics codes, including the City Ethics Model Code, include additional family members. The City Ethics Model Code includes all children, whether children or adult, in the home or on their own, as well as domestic partners, siblings and step-siblings, step-children and foster children, parents and step-parents, nieces and nephews, uncles and aunts, grandparents and grandchildren of the official, spouse, or domestic partner. The code also includes the employer or business of any of these people.
This list may seem too long, and it may seem unfair to include a spouse’s family. But remember: the brother-in-law is the archetypical individual helped by a government official. And yet government officials in most jurisdictions can legally give their brothers-in-law contracts or get them government jobs.
It’s hard to know where to draw the line. For example, there are two kinds of brother-in-law. Helping a sister’s husband is helping a sister, who is immediate family. Helping a spouse’s brother is not helping a spouse, at least not financially or directly (but since one lives with a spouse, it could be argued that it is more directly beneficial to a government official to make one’s spouse happy than it is to make one’s sister happy). In New York City, among other jurisdictions, an official may not benefit the first kind of brother-in-law, but may benefit the second kind of brother-in-law. This is not a very satisfactory way to draw the line. In the public’s view, a brother-in-law is a brother-in-law, even if it’s a step-sister’s husband or a spouse’s step-brother.
No law can really do justice to the variation in step-relationships. Some people grow up with their step-siblings from the day they’re born. Others don’t acquire step-siblings until they’re middle aged, and they hardly know them. But to the public, reading a headline about an official giving a no-bid contract to a step-sibling, such differences don’t matter at all. The difference is personal, not public. The public would be forced to take the official’s word for the closeness of the relationship, under circumstances where the official might be under pressure to exaggerate the distance of the relationship in order to help her step-sibling.
To leave out domestic partners and step-family is to ignore the modern family. Sticking your head in the sand is not a good thing to do when it comes to government ethics. In fact, there are special family relationships that can be primarily financial in character, but which are left out of ethics codes (except a proposed Wayne County, Ohio provision): “a former spouse or an individual with whom the public servant has had a child in common.” These are people to whom officials owe alimony and/or child support. A government benefit could save such an official a lot of money. And the relationship may be a close one.
Sometimes an ethics code can be too modern. For example, Broward County, Florida is one of the relatively few jurisdictions that allows domestic partners to be formally registered. But then it limits ethics jurisdiction to registered partners, effectively encouraging officials not to register their domestic partners if that might cause problems with conflicts down the road.
Grandchildren and grandparents might seem out of place, and usually they won’t be a factor because of the age difference. But when there are grown grandchildren, we all know the place they have in a grandparent’s heart. If the grandchild is too young, then there won’t be any conflict situations, and there’s no problem.
Family members are perceived by the public as being principal beneficiaries of government officials. After all, in many countries family expect to be hired (as employees or contractors) by those who take office, and it would be a serious blow if they were not hired. It may even be the reason a family member runs for public office. Such family relationships are still the norm in many uniformed departments, and it is this situation that is the principal reason nepotism is not prohibited in every local government.
So when a family member, even one not on the conflicts provision list, comes before an official, the responsible thing for the official to do is withdraw from the matter. It’s not worth insisting on one’s distance from a relative. Family relationships are seen to be so strong that, even when they aren’t a factor for an official, the official needs to accept how the public views the relationship.
Some local governments, and even the Missouri constitution, follow the International Municipal Lawyers Association Model Ordinance and include as “relatives,” generally or only in such instances as gift-giving, anyone within up to the fourth or even fifth degree of consanguinity. This term is inappropriate in an ethics code because of its unfamiliarity, its difficulty, and its legal role for determining incest, not to mention its extension of conflicting relationships to distant relations. To be in the fifth degree of consanguinity, two individuals’ first common ancestor must be no more than a total of five generations away. For example, if my grandfather (two degrees) is your great-grandfather (three degrees), there are five degrees of consanguinity between us. Another reason consanguinity is not appropriate to government ethics is that, because consanguinity is intended for the purpose of defining incest, it does not include relationship by marriage. However, relationship by marriage is relevant to government ethics.
The closeness of a particular relationship can be relevant when the relation is a relatively distant one, but the relationship is close. For example, a deputy mayor in St. Petersburg, Florida was involved in the purchase of property for the city from his grandfather’s second's wife's daughter, whom the deputy mayor called “Aunt.” This relationship would not be considered close enough to merit full withdrawal from the matter, but it would require that the deputy mayor not consult with his “aunt” about the matter (which he did) and that everyone be extra careful about following the procedures. As with so much in government ethics, dealing responsibly with a possible conflict is often not cut-and-dry. If there is a relationship of any kind, following the formal process and staying at arm’s-length from the matter becomes especially important, so that there will not be an appearance of preferential treatment.
Many people feel family loyalties are important, and there is no reason why they should be thrown aside just because you work in government rather than in a business. There are many ways in which family relationships can be harmful to government, some of which are mentioned above and some of which are mentioned in the section on nepotism in the next chapter. But one that should be emphasized is that helping family members is often the start of a pattern of behavior that extends to other special relationships. Just because we have a warm place in our heart for family relationships does not mean that they should be the basis of decisions regarding contracts, permits, grants, licenses, or jobs.
Nepotism, which will be dealt with later, is a subcategory of indirect conflicts. There are two aspects to nepotism that distinguish it: hiring and promoting, and supervision. An official’s participation in hiring or promoting or giving a relative a raise (when this is done alone, not as part of a board or commission) is no different than giving a relative any special benefit. It is simply dealt with differently under nepotism provisions.
Supervising a relative is a different story. There may be no financial benefit from an official supervising a relative, if others are left to decide on hiring, promotion, and raises, but since the people making these decisions would also likely be supervised by the official, they do not appear truly independent, nor do their decisions appear independent and unbiased. They are also put in a tough, conflicted position themselves.
Supervision of a relative adds another kind of misuse of office, which is very important despite the fact that the public interest is not directly affected. Supervision of a relative often means that fellow employees will feel that they are not being treated fairly. This undermines morale in the department or agency. And poor morale means poor government service, which is not in the public interest.
The Flip Side of Favoritism
This is a good place to introduce the flip side of conflicts and favoritism. The flip side is like the dark side of the moon: no one sees it. The assumption behind prohibiting participation in matters that involve relatives is that officials will be seen as favoring their relatives over others. But there are family members we can’t stand or, at least, have little respect for. The last thing we’d like to do is give a contract to our good-for-nothing nephew, or a job to that uncle who’s always treated our mom so badly.
There are two important things to think about with respect to this situation. One, advocating or voting against a relative you hate is also favoritism. And two, is it really in anyone’s interest to be involved in a lose-lose matter such as this? If you vote or speak out against your nephew, your sister will hate you. If you bite the bullet and vote for him, you’ll hate yourself and you’ll be doing harm to your community.
This leads us to one of the most important facts about government ethics: it protects the official as well as the public. It protects the official who has no respect for his nephew, or who disagrees with his own employer’s lack of concern about the environment, or who wishes his law firm had never represented that bastard. It also protects the official who might lose his reputation by making a stupid, selfish decision. It just takes one decision that appears self-serving to lose not only a position, but the respect of the community necessary to push for what you think is important. The requirement to withdraw when an official is stuck between a rock and a hard place (another way of describing a conflict) is a good thing not only for the public, but also for the official.
Benefits to an Official’s Business
With elected officials and members of boards and commissions, financial benefits to an official’s business (the language for this in the City Ethics Model Code conflict provision is “outside employer or business”) are often a bigger problem than direct benefits. Full-time government employees generally do not have businesses; in fact, they are not allowed to in many jurisdictions. Therefore, this is less of a problem for them.
The easiest cases, because the benefits are the most direct, involve the situation where an official who owns a business or is a substantial partner in a business would benefit directly from any business the company does with the local government, or from any contracts permit, grant, license, or other benefit it receives. Although some courts will not look through the “corporate fiction” that a company is, this is done for the purposes of government ethics, because the public certainly sees through the corporate fiction.
Similarly easy is the case of an official who is a lawyer, accountant, or other professional who either works solo or is a partner with a small firm. Anything that may directly benefit the firm, or indirectly benefit it via a client, gives rise to a conflict situation.
Beyond these easy cases, there are numerous, more difficult cases. For example, an official who works for a company, but has no ownership interest in it, does not directly benefit from the benefits that company obtains from the local government, unless she gets a commission on sales in which she participates or a bonus related to such sales. There may be no direct benefit to the official, but using one’s position to help one’s company get a local government contract or permit certainly puts you in good stead with the bosses, raising the likelihood of a raise or promotion. Companies hire former officials to use their contacts to get more business. Having a current official is even more valuable, at least if there is no ethics program to prevent the official’s participation in any matter involving the company.
In addition, the company’s employee, even when her benefits are speculative, is caught between loyalty to her employer and fellow employees, and the obligations that come with public service. Even without a clear benefit, this is a classic case of conflict of loyalties.
And the public’s view of the situation is the same. Even when there is no money directly or indirectly involved, the public sees the employee-official as someone bound to help her employer. And it isn’t just about feelings of loyalty. The public knows how hard it would be for an employee to speak out or vote against her employer’s interests, even if she wanted to. It is clear that an official cannot be expected to act fairly, without bias, in a matter that involves her employer.
As clear a conflict as this might appear, many ethics codes do not expressly cover this situation. And those that do generally do it via an Incompatible Employment provision, like this:
No person subject to this code shall accept other employment which is incompatible with the proper discharge of official duties or will impair his or her independence of judgment as to his or her public duties or employment.
The problem with this language is that it prohibits conflicts rather than requiring officials to deal responsibly with their conflicts. Those who draft and pass such language do not recognize that conflicts themselves are not the problem. As I said at the beginning of this chapter, there is nothing wrong with having conflicts, at least up to a point. Because conflicts do become a problem after a certain point, those who want an employment provision should instead choose language such as the following:
No official or employee may engage in any private employment, including the provision of any business, commercial, professional or other types of services, when the employment can be reasonably expected to require more than sporadic withdrawal.
The other advantage to this language is that it refers directly to the problem — the necessity to withdraw too often — rather than to the idea of impairment of judgment. Few people believe their judgment can be impaired, and most people would feel uncomfortable alleging the impaired judgment of their colleagues. And “incompatibility” is a vague term that allows officials to insist to themselves, and honestly to the public, that there is nothing incompatible about their employment at all, because they have the integrity to make the best decision for the city. (See above for a discussion of impairment of judgment language.
Another problem with incompatibility provisions is that they often require the official to choose between her government position and an outside job on which the official depends. There are many occasions where it is necessary to make this choice, but this should not be the default way to deal responsibly with employment conflicts.
What exacerbates the problem caused by incompatible employment provisions is that its underlying belief that conflicts are themselves the problem is usually picked up by the news media, causing them to seriously criticize an official with a conflict, thereby undermining public trust and escalating an ethics situation before the official has had an opportunity to deal with the conflict in a responsible manner.
It is better to focus on dealing responsibly with conflicts, than on employment itself. For example, Seattle requires withdrawal by officials who work for, rather than own or lead, companies seeking benefits from the local government:
[Officials may not] participate in a matter in which a person that employed the Covered Individual in the preceding 12 months, or retained the Covered Individual or his or her firm or partnership in the preceding 12 months, has a financial interest
Baltimore goes beyond ownership of or employment by a business to include other relationships, such as (1) the situation where an official “has applied for a position, is negotiating employment, or has arranged prospective employment” with a company doing business with the local government; (2) a contractual relationship between an official and the company doing business (but only where “the contract could reasonably be expected to result in a conflict”); (3) a financial relationship between an official’s company and a company doing business (for example, where the official’s company is partially owned by a company doing business); and (4) the situation where an official has an interest in a firm, and a company doing business has an interest in the same firm. These relationships are problematic even where the official’s close family member is involved rather than the official, as long as the official knows. Dallas has a similar provision, which is included as part of the basic conflict provision.
This detailing of indirect benefits is highly useful. Usually, as in the City Ethics Model Code, the detail appears in the definition of “outside employer or business” or whatever equivalent term the ethics code uses. This makes the ethics provisions less overwhelming. But it is valuable to provide this level of detail either in the code, or in comments, regulations, or a general advisory opinion, so that officials are given as clear guidelines as possible for this difficult area of business-related indirect benefits. But every official should be told that, no matter how great the details or numerous the examples, they may face situations that were not anticipated, and should seek advice about them.
There is another sort of indirect benefit that is harder to prohibit. To appreciate this sort of indirect benefit, it is valuable to look at benefits to businesses not just in terms of conflicts, but also in terms of pay to play. In the case of an official who owns a company, pay to play occurs when an official makes it known (often without any direct communication) that business should be directed to the official’s company if people want the official to support its developments, contract applications, grant requests, and the like. When the official has direct influence over matters involving these people, a well-written conflict provision should prohibit the official from participating in a way that would be helpful to these people. However, the language usually excepts retail customers, since there are usually so many of these. It is difficult to prevent companies seeking benefits from the government from choosing to eat at the mayor’s restaurant.
Another difficult situation is when the official’s influence over matters is not direct. Consider this example, from Broward County, Florida. A county supervisor wants to take a sales job with a company that provides private clerical workers and emergency dispatchers to local governments. This means that the supervisor would spend his time selling a product to other local officials in the area. He says he will be “as hands off as possible” in his own county, “limiting himself to making preliminary introductions between city officials and company executives.” But these are city officials with whom he works and over whom he has some sway, due solely to his government office.
Let's assume that he will never say a word to anyone in his county about his company. It would still be known that he would look kindly on a city that outsourced work to his company, and not so kindly on a city that outsourced work to a competitor. Officials who spoke out against outsourcing work to his company might worry about being seen as speaking out against the supervisor, who might affect funds going to the city. And those who supported outsourcing to his company would be seen as the supervisor’s supporter. In this way, there would be an appearance of impropriety even without any active participation on the official’s part. The side job could end up becoming a political football, increasing partisan tensions and undermining the relationship between the county and the cities within the county.
With respect to sales in neighboring counties, a high-level local government official is given many opportunities to develop relationships with other high-level officials in the region, through political parties, regional bodies, local government associations, etc. These relationships are formed only due to the individual's office.
To choose a side job that allows an official to take advantage of these relationships is using one's office for one's own financial benefit. An ordinary individual would have much less of a chance to get a foot in the door, not to mention make a sale. A county supervisor is attractive to such a company not only because of any sales prowess he may have, but because of the personal and professional relationships that non-officials would not have.
Atlanta goes one step further in dealing with such outside employment, for certain high-level officials. It prohibits them from taking any outside employment, unless they obtain approval from the ethics board. In effect, this is a waiver process, except that it does not appear that the official has the burden of proof. Here is the language:
§2-820(d). Commissioners, deputy commissioners, department heads, chief operating officer, deputy chief operating officers, chief of staff, deputy chiefs of staff, bureau directors, and employees of the office of the mayor who report directly to the mayor shall not engage in any private employment or render any services for private interests for remuneration, regardless of whether such employment or service is compatible with or adverse to the proper discharge of the official duties of such employee. However, the employees named in this paragraph may engage in private employment or render services for private interests only upon obtaining prior written approval from the board of ethics in accordance with this paragraph. ... City employment shall remain the first priority of the employee, and if at any time the outside employment interferes with city job requirements or performance, the official or employee shall be required to modify the conditions of the outside employment or terminate either the outside employment or the city employment.
Here is yet another kind of indirect benefit to an official’s business. Just as officials have parents and siblings and children, the companies they own or manage also have parents and siblings ( “affiliates”) and children (“subsidiaries”). These should be treated just like they were the official’s company. An official who works for rather than owns a company may have no direct relationship whatsoever to a parent, affiliate, or subsidiary company (although who is to know?), and yet not only is there an appearance of impropriety, but also there might very well be an indirect benefit to the official, because helping a related company is often a way of furthering one's career. Money is, after all, fungible. There's no telling whether the benefit did not actually go to the official’s company, using the subsidiary, affiliate, or parent as a conduit.
Even nonprofits can be related in ways that make a relationship indirect, or more indirect. For example, in 2009 the mayor of Brookings, South Dakota worked for the South Dakota State University Foundation, raising money for the university, which is his city's major employer and gets money from the city. The city attorney said that there was no conflict of interest with respect to matters involving the university, because the mayor did not directly report to the university. But who else but an attorney would make this distinction? Conflicts need to be handled responsibly from the point of view of the public, not from the point of view of an attorney.
Or consider a situation in the Unified Government of Wyandotte County and Kansas City, KS (“UG”), where a UG commissioner was the paid director of a community development organization that received funds from the government. When the commission passed a new ethics policy that barred the commissioner from voting to benefit her organization, the organization created a separate entity to receive UG funds. This was considered acceptable, because indirect benefits were not covered by the ethics law.
To the public, whether the organization breaks into two or twenty different corporations doesn't matter. In fact, creating a new entity in order to allow the commissioner to keep her job looks like a sneaky way to accomplish what the law prohibited. This should not be an acceptable way to handle a conflict situation.
In government ethics, these technical distinctions do not hold water. Indirect business relationships are generally no different, and are seen as no different, than more direct business relationships. The situation of related companies, profit or nonprofit, shows how important it is to have a conflict provision include indirect benefits in an open-ended way.
Some ethics codes include government agencies under the definition of “business entity,” so that an official is required to withdraw from a matter involving a government agency that employs someone with whom he has a special relationship. It is true that an official may be seen as biased with respect to a vote on a union contract when an immediate family member, especially a spouse, is a member of the union. However, it does not seem right to keep a council member out of every matter involving the school system.
There's an important difference between a situation where a family member works for a contractor seeking a contract, and one where a family member works for an agency that is part of the same government. An official who helps a family member's company get a contract is seen to be favoring the family member, because (1) it will be a feather in the family member's cap, and (2) companies seeking government approval may hire such family members in order to get what they want.
On the other hand, approval of a new information system has nothing to do with a customer service representative in the IT department who happens to be a council member's sister. However, a 50% increase in the IT budget might be seen as a way to get the sister a good promotion.
In other words, each situation needs to be considered separately. There is no rule that can apply across the board. And yet there has to be a rule.
There are two approaches that can be taken. One is to have the conflict provision apply to government agencies, and require officials to seek a waiver from the ethics commission relating either to each family member in the government or, where the ethics commission feels this is not sufficient, for each matter or sort of matter that relates to the family member's agency or department. This allows an ethics commission to require withdrawal with respect to an agency budget, but to allow participation on other agency issues. Or it could, say with respect to the head of a program in a department, prohibit participation only with respect to that program, and provide a waiver with respect to other matters.
The other approach is to allow high-level officials to participate in matters involving their family members' departments or agencies, unless the family member is an appointee or a member of a certain civil service class or higher, that is, someone who can be assumed to have sufficient influence in the department or agency. However, whenever a matter involves the department or agency of a lower-level employee, the official is required, or strongly encouraged, to seek ethics advice from the administrator, in order to make sure there would not be too strong an appearance of impropriety under the particular circumstances.
These approaches appear to be the same, in that they give discretion to the ethics commission and take the onus of looking like one is helping one's family members off the official's shoulders. But there are two important differences. One is that a waiver process usually requires a public consideration and vote. Informal ethics advice does not. Two is that a failure to request a waiver is a violation of the law, while a failure to seek advice, unless it is required, is not. Since the law allows participation unless the official chooses to withdraw, there can be no ethics violation. The more thoughtful officials, and those concerned about their reputations, would seek advice; others would not.
Therefore, I prefer the waiver approach. This works well in the context of close family members, because there aren't too many of them.
Benefits to a Public Company in Which an Official Owns Stock
Stock ownership in a public company is very different from ownership of a company. Very few people have a substantial interest in a public company, to the extent that it can be considered their company. And yet the success of such a public company does have special meaning to someone who holds a large dollar amount of that company's stock (even if that amount is large only for the individual, not for the corporation). Ownership of what to an official is a substantial amount of stock can both bias them toward a company and make them appear to the public as biased toward the company. This is why, especially at the federal level, high-level officials often create blind trusts, so that they do not know their stock ownership.
It is common to include in the definition of an “outside business or employer” a public corporation in which the official or employee's ownership interest is more than either (i) stock valued at $10,000 or (ii) five percent of the outstanding stock. In effect, this is a definition of what constitutes a de minimis stockholding. With respect to public companies, a percentage alone is insufficient, because very few people directly or indirectly (through their businesses and close family members) own even 1% of a public company.
It’s good to have guidelines, but I think it is better for an ethics officer or ethics commission to decide in specific situations whether stock ownership is de minimis. In making this determination, an ethics officer can advise an official to either disclose and not withdraw, disclose and withdraw, or sell the stock.
Another consideration is how much a certain matter means to a public company, in terms of how it might affect the price of its stock. Very few local government matters will do this, and it is the effect on a company’s stock price that would most benefit a stockholding official. The one exception is where a decision would set a precedent that might have repercussions across the state or the country, for example, a large city’s decision about billboards or cable television.
Whatever the rule, it is important for officials to look at their stock portfolio when they take office, and to consider any stock purchase they make while in office, in terms of how it might appear to the public. For example, a council member should not have stock in any cable company if the city is involved in contracts with cable companies, or in any company that owns billboards, if these are regulated by the city. Similarly, a planning commissioner should have no holdings of stock in development companies that might come before them (and they might be seen as biased against the company’s competitors).
In 2013, a Los Angeles council member who owned stock in a large billboard company said that he did not realize the company whose stock he owned had a billboard division. He thought the company just owned radio stations. However, googling “Clear Channel” tells you immediately, without even opening a webpage, that Clear Channel has two divisions, media and outdoor advertising. Therefore, the council member had reason to believe that Clear Channel Outdoor was part of Clear Channel Communications. And a high-level official should have a positive obligation to determine whether his stock ownership might create conflict situations.
One of the reasons financial disclosures are required annually is to remind officials of their ownership interests and cause them to consider the conflicts that may arise from them. Not checking even the principal activities of a company is negligent. It should not be accepted as an excuse for failing to disclose the ownership and deal with it responsibly.
But let's say you own General Electric. Even people who work there don't know all the businesses it owns. This is where it's important to have applicant disclosure. If a division of General Electric wants something from one's board, it should be required to disclose that it's owned by General Electric. If this is done, then officials will be in a better position to know whether they might have a conflict. This is even more important when it comes to developers, who often create a special company for a particular project. They should be required to disclose the principals of this company and its relationships with other companies.
As it turns out, the Los Angeles council member realized his small stock holdings weren't worth the bother and disposed of them before an opposing mayoral candidate raised the issue. It is best if these decisions are made as soon as possible.
Benefits to an Official’s Client
Many elected local officials are attorneys, or other professionals, whose firm has clients that are or may soon be seeking special benefits from the local government. The professional-client relationship is a very close one, and it is ongoing. That is, it does not matter whether the client is currently seeking, say, a zoning permit. If the client is a developer, its lawyer or architect will be, and appear to be, biased toward that client with respect to issues involving zoning as well as with respect to planning decisions that may affect the developer’s future projects.
An attorney nominated to be chair of the new District of Columbia ethics board in 2012 said about his firm’s representation of clients before the city, “I would recuse myself from Board consideration of any matter involving the specific government employee or official with whom the firm is negotiating or requesting relief.” The problem with this apparently responsible handling of such situations is that the world does not consist of a law firm’s current matters and isolated government officials in the midst of a negotiation. Conflicts of interest are the result of relationships, and relationships are ongoing series of contacts and mutual favors. It is important for lawyers to cultivate relationships with those who may be of use to their clients not only now, but in the future.
A negotiation with an assistant agency director will affect one's relationship with the director and with others in the agency. An ethics proceeding, and even an advisory opinion, will affect one's relationship with the official who is the respondent, and with officials who request an advisory opinion. A matter handled by one's partner or associate also affects one's relationship with the officials involved in the matter.
Every individual sits in the midst of a web of relationships, where direct and indirect, past, present, and future, all matter equally. And this is the way people view the world and how they determine whether government officials are using their offices to help themselves and those with whom they have special relationships. Separating pieces out of the web is not a realistic or responsible way to deal with conflict situations.
A lawyer who will be seeking benefits from officials for his clients will be thinking of the beneficial and harmful effects on future clients (and, therefore, on himself and his firm) of his interactions with officials. And the lawyer will be seen as thinking this way whenever he acts in his role as ethics commission member in a way that could be considered showing favoritism to an official (in the member's questions, in his support for or opposition to an investigation, in his vote on probable cause, in his participation or lack of participation at a public hearing, in his final vote).
Understanding how relationships work, citizens have every reason to believe that an attorney sitting on an ethics commission would act in such a way as to protect his clients by not undermining his relationship with any official before whom he or his firm might represent someone in the future. One owes this to one's clients. This does not make the individual bad; it merely recognizes the obligations that arise from an attorney’s relationships with his clients.
“Firewallsm,” also known as “Chinese walls,” are one way local officials seek to separate themselves from their co-owners or partners, so that their firms or companies can do business directly or indirectly with the local government (by “indirectly,” I refer to business down via clients of lawyers, accountants, and other professionals). A firewall is intended to separate the official from both involvement and information regarding a matter where there would otherwise be a conflict.
Firewalls can also be used within government offices. In this situation, the firewall is placed between an official and staff in his office who are working on a particular project where he has a conflict. Another internal use of the firewall is to allow an elected official to separate her legislative activities from her campaign fundraising, so that there will not be an appearance of impropriety regarding who gives money and how the legislator votes and otherwise acts. Usually the wall is placed between legislative and campaign staff members.
There are four principal problems with firewalls. The first and most important is the fact that there is no way for the public, or anyone else, to know whether the firewall is actually in place or not. Firewalls are completely self-enforced. They work on the honor system. A firewall is more of a screen than a wall, something the official can easily peek over, around, or through, or simply slide out of the way.
It is difficult to keep a firewall in place even if you honor it completely, because it goes against the propensity of business and political colleagues to discuss matters, to pass on information, directly and indirectly, to protect and inform and support each other. You can say that your left hand doesn’t know what your right hand is doing, but that is just an expression. You do know what your right-hand aide is doing and saying, even if he doesn’t tell you directly. Politics and government management are simply too much about communication to ensure that matters behind a firewall will not be communicated in one form or another. Even what is left unsaid can speak volumes.
The second problem is that, although in theory a firewall deals with the appearance of impropriety, in fact it does not. Because it cannot be seen or enforced, because it is a screen rather than a wall, a firewall does not satisfy many people’s suspicions. In fact, it can look like worse than nothing, that is, like a ruse or a cover-up. A firewall cannot work unless the people involved are already trusted. This solves nothing when an official is considered untrustworthy, or where there is a general lack of trust in the local government.
And if it turns out that the firewall wasn’t in place after all, the scandal becomes that much worse. This happened in San Diego, when an agency president said she was not involved in a project, and the agency chair found out that she was involved. The agency chair found himself in the untenable position of either trying to push this fact under the rug to protect his agency’s reputation (a common “solution” to problems in San Diego at the time) or disclosing the fact and causing a big scandal.
The third problem is that, even to the extent it keeps things above board, a firewall ignores the fact that benefiting your business associates or contributors is a problem even if you personally are not directly involved. The public sees an official’s aides and business partners as effectively acting in the official’s interest. So it doesn’t matter what the official actually knew or said or did.
And when it comes to a firewall that is intended, among other things, to separate a former official from the money earned by his law firm for a case he dealt with, behind the firewall, as an official, how is this separation actually accomplished? Partner percentages are not just the results of mathematical computation. They also have a lot to do with power in the firm, with an official’s ability to bring in business, whether he participated in the matter or not. In other words, there is no way to calculate whether or not an official was rewarded for bringing in a client seeking benefits from the government or for attorney fees paid by the official’s government, if the firm is representing it.
Firewalls can be a way not to protect the public, but rather to allow an official’s firm to have its cake and eat it, too. Without the firewall, the official’s firm would not be able to represent many clients in many matters, and there would not be any incentive in either hiring government officials or supporting partners in their attempt to become government officials. The availability of the firewall thereby allows there to be far more conflicts in local government than would otherwise be possible, and far more opportunities for government officials to use government service to get business for their firm.
Firewalls can work with investments in the form of blind trusts, but at the local level officials don’t deal very often with the sort of national firms in which people own stock, so this isn’t as much of an issue as it is at the national or even the state level.
Firewalls don’t really work. They do not succeed, from the public’s point of view, in making a deal look like something other than a way of benefiting yourself and your business partners.
Benefits to an Official’s Business Associates
A serious appearance problem is created when an official’s decisions financially benefit a business associate, that is, someone with whom an official has a special business relationship, as a client, partner, vendor, or whatever. There are reasons for this that go beyond mere favoritism to a friend. One is the fact that officials benefit from improving their relationship with business associates. An official helping a business associate often leads, in the future, to the business associate helping the official, for example by sending her a client or customer. This is the way business works, and everyone is aware of this.
A second reason is that there might be a more direct benefit. Business associates often share profits based on their whole range of projects or clients. Even if an official is not directly involved with a particular project or client, the business associate’s profits from this project or client may be shared with the official, especially if the official had a role in benefiting the project or client. Essentially, one never knows the basis of business associates’ dealings with each other, so one must assume there are mutual benefits whenever one of them receives a benefit partially from the other’s involvement.
Of course, the closer the relationship, that is, the more projects and clients the official shares with the business associate, the more likely there is to be mutual benefit. If they were only involved once in a minor project or shared one relatively minor client, one cannot assume a mutual benefit. Nor will there be a serious appearance of impropriety.
Often with the help of lawyers, officials can be very clever when it comes to creating what appears to be an arm’s-length relationship with a company owned by a business associate. Take the sheriff of Lafourche Parish, Louisiana. In 2009, when the matter came before the state Ethics Adjudicatory Board, he co-owned an ignition interlock device sales company. The device, which prevents drunken individuals from starting their cars, is required to be used by certain people who have DWI charges against them. In order for there not to be a direct conflict, the individual with whom he co-owned the company started a separate company to do business in Lafourche Parish, and the sheriff didn’t get a penny from the sales of this separate company. But that did not prevent the sheriff from benefiting the co-owner and, possibly, indirectly, and apparently himself.
Here's how it worked. When you were ordered to obtain one of these devices, you asked where you could get one. The deputy at the jail told you to go to the Chevrolet dealer or the co-owner's company. You went to the Chevy dealer, who didn't sell the devices (the sheriff's company had an exclusive distribution agreement), and the Chevy dealer gave you a number to call: the sheriff's cellphone number. This does not pass anyone’s smell test. It creates an ugly appearance of impropriety.
But in a very legalistic opinion, the state board unanimously found that the sheriff “did not use his office to make money selling devices designed to keep drunken drivers off the road.” And it dismissed the case. The only consideration was directly profit, ignoring all the considerations involved in benefiting business associates. This is why it is important to include in a basic conflict provision any action benefiting one’s business associates, not only a business one owns with someone. If the benefit would be small or remote, the official can ask for a waiver.
Chicago has a provision that is much like a nepotism provision, at least in terms of hiring (and contracting), that applies not to relatives, but rather to those with whom the official has a business relationship:
§2-156-111(b). No elected official, or the head of any City department or agency, shall retain or hire as a City employee or City contractor any person with whom any elected City official has a business relationship.
Another kind of business relationship is where the official or employee acts effectively as a representative of the business, bringing it clients and usually getting a percentage of the action or a finder’s fee. The most common example of this is a first responder who recommends a towing company. For example, there was a finder’s fee of $300 per customer in Baltimore in 2010, when over thirty police officers were charged with taking kickbacks. More macabre is the coroner who recommends a funeral home. These relationships can greatly increase an official’s income at the expense of people in the midst of a crisis. The first responder or coroner tells himself he’s providing a service, but in fact he is providing himself with a second income. Officials are already paid for providing services to citizens.
Generally, a landlord-tenant relationship is not considered a business relationship, at least if the tenant is paying a fair market value for the lease. But there are instances where an appearance of impropriety arises from a landlord-tenant relationship. For example, in 2009 a pension fund manager and a pension fund board member in Los Angeles rented apartments in the same building, owned by an investment company whose funds the pension board decided to invest in. Despite paying apparently fair rents, it looked fishy that two pension fund officials, both of whom came to the city from the state pension fund, found apartments in the same building owned by a company seeking business from their board. Since there can also be an argument over what is a fair market value for the lease, it is best if officials do not rent from anyone doing business with their board or agency and, if they do, that they withdraw from matters involving them.
A suit can place an official in a relationship with another official or a citizen that would require withdrawal if a matter involving that other official or citizen were to come before him. But usually, there has already been a special relationship, and that relationship forms the basis for the suit. For example, a partner in a business sues his partner, who happens to be an official. But there are instances where the relationship that existed would not necessarily have created a conflict on its own. For example, a normal landlord-tenant relationship. However, if an official were sued by a landlord for failure to pay rent, the suit would create a special relationship that required withdrawal, because it would be perceived by the public that the official might either act to harm the landlord or use his position to effectively pay the landlord what was owing in rent.
The fact that a suit creates a special relationship can, like most things, be abused. For example, an individual could create a special relationship by suing an official and, thereby, prevent her from being able to participate in a matter involving that individual. This happened in Harlingen, Texas in 2009, when the city attorney sued a city commissioner for defamation and then accused him of having a conflict that would prevent him from “taking part in any discussion or vote as a commissioner, that pertains to any personnel issue regarding [the individual’s] position as city attorney.” Once the commission agreed with the city attorney on a retirement contract, the city attorney withdrew the suit.
To make this situation worse, the city attorney was the city’s ethics administrator.
Other Indirect Beneficiaries
The basic City Ethics Model Code conflict provision includes a list of those whose receipt of a benefit leads to an official’s conflict:
1. himself or herself;
2. a member of his or her household, including a domestic partner and his or her dependents, or the employer or business of any of these people;
3. a sibling or step-sibling, step-child or foster child, parent or step-parent, niece or nephew, uncle or aunt, or grandparent or grandchild of either himself or herself, or of his or her spouse or domestic partner, or the employer or business of any of these people;
4. a person with which he or she has a financial or business relationship, including but not limited to:
a. an outside employer or business of his or hers, or of his or her spouse or domestic partner, or someone who works for such outside employer or business;
b. a client or substantial customer;
c. a substantial debtor or creditor of his or hers, or of his or her spouse or domestic partner;
5. a person or entity from whom the official or employee has received an election campaign contribution of more than $200 in the aggregate during the past election cycle (this amount includes contributions from a person's immediate family or business as well as contributions from an entity's owners, directors, or officers, as well as contributions to the official or employee's party town committee or non-candidate political committee); or
6. a nongovernmental civic group, union, social, charitable, or religious organization of which he or she (or his or her spouse or domestic partner) is an officer or director.
As you go down the list, the beneficiaries become less commonly found in ethics codes. The first four are relatively common. Clients and substantial customers, substantial debtors and creditors, should be included, because they have very important financial relationships with the official, but often they are not. Think how it would look to you if an official became involved in decisions involving someone to whom he owed a substantial amount of money, or someone who owed him a lot of money and was far more likely to pay it if he got a job or contract. Think how it would look to you if an architect’s or realtor’s developer client came before the zoning board on which the architect or realtor served.
Large campaign contributors are a group that citizens generally feel give to local politicians in order to obtain favoritism in their dealings with the city or county. A large contribution creates an obligation, even if it is not specific to one matter or vote. Making large contributors have to give up the politician’s participation in matters relating to them prevents the serious appearance of impropriety that arises from the official’s obligations to large contributors. But few local legislatures are willing to pass such a provision, because it would make it much harder for their members to raise campaign funds. The best known local provision is that in Westminster, Colorado, a city of 110,000 (see my blog post on its approach). New Jersey has a similar rule for state officials, §19:61-7.4(c), which requires withdrawal through to the end of the official’s term in office. See below for more information about treating campaign contributions as giving rise to conflicts.
Another area where citizens see a strong appearance of impropriety is when officers of local organizations vote on matters involving their organizations. Yes, they rarely receive any financial benefit from such a vote, but someone who becomes an officer of an organization is usually seen as very committed to it, and will be seen as doing whatever is in its interest, often with as much loyalty as to their own business or employer.
However, when the organization is limited to a particular matter (as opposed to, say, a chamber of commerce), such as the environment or supporting a particular development, it often happens that an officer of the organization runs for government office in order to get the result the group is seeking. In this case, there is no conflict, because the official was elected in order to further the organization’s cause. But otherwise, it is a bad idea for an official (especially an unelected official) to be or become an officer of an organization that itself will have matters, or whose members (especially they are members based on their business interests) will have matters, that are likely to come before the official. The official should remember that, despite his or her opinions, it is important to be seen as representing the entire community, not an organization within the community.
Benefits to Friends (Cronyism)
Because it is impossible to define a “friend,” friends are rarely included in basic conflict provisions, at least by name. However, that does not mean that conflict situations do not arise from relationships with friends. Government officials should deal responsibly with these conflict situations. In fact, in government ethics terms a “friend” could be defined as anyone to whom an official gives preferential treatment. There is even a special word for this, especially when jobs and contracts are involved: cronyism.
Even though there are few laws against cronyism, it causes a lot of anger and undermines trust. To the public, it means that to get a good job in or contract from the local government, you have to have a personal or political relationship with elected officials. It also sends the message that friendship is more important than competence. In other words, officials do not share the public’s interest in effective government.
In addition, everyone knows that when you give a friend something, he is obligated to give something back. This means that giving a plum position or contract to a friend, at the public’s expense, will probably end up benefiting the appointing official(s) somewhere down the road.
Here is one law against cronyism, which also includes nepotism, but is limited to employment, leaving out contracts, grants, licenses, and permits. It’s from Oakland, California:
No official, manager or employee may engage in cronyism and/or attempt to influence the City or any official, manager or employee, to hire, promote, or change the terms and conditions of employment of any individual with whom that person has a family relationship, consensual romantic relationship or cohabitant relationship.
Cronyism is defined by Oakland as “participating in any employment decision that may be viewed as a conflict of interest, such as one involving a close friend, a business partner, and/or professional, political, or commercial relationship, that would lead to preferential treatment or compromise the appearance of fairness.”
This provision is problematic. “Close friend” is not defined, or definable, and political relationships are outside the province of government ethics. In addition, the phrase “compromise the appearance of fairness” is vague and aspirational. It is the sort of thing one might be told by an ethics officer when asking for advice, but not language that can be enforced. But what it prohibits is definitely conduct an official should not engage in, whatever his local ethics code says.
Here’s a case that shows another way of looking at the effects of friendship on the way things work in government. In Sparks City, Nevada, a council member voted for a hotel/casino development, for which his close friend and past campaign manager acted as a consultant. Although voting for the development would not even necessarily benefit the consultant, if looked at from a different perspective, there appears to be a serious conflict. What better way to get a council member’s vote than to hire his buddy as a consultant, and what better way to get your buddy work than to let people believe that hiring the buddy was a way to your heart? This sort of win-win deal happens all the time, and everyone knows it. But it is difficult for an ethics code to prohibit.
If you think the situation in Sparks City was minor, think again. The case went all the way to the United States Supreme Court in 2011. (For more about this case, see below.)
As I said above, ethics provisions should be viewed as minimum requirements. Just because conduct is not prohibited, that doesn’t mean it’s responsible behavior. That doesn’t mean it won’t undermine the public’s trust in their local government. This is why it is so important than government leaders make it clear, by word and example, that cronyism and other benefits to friends are not acceptable behavior, and explain why they are not expressly prohibited in the local ethics code. This is also a good example to include in a training program.
An ethics commission, especially when faced with complaints that involve cronyism, can make recommendations to the local government’s governing body, or a charter review commission, to institute hiring, procurement, and zoning practices that will create serious obstacles to cronyism. An ethics code is not the only place to deal with certain kinds of ethical misconduct.
Take hiring, for example. Especially in larger jurisdictions, there are appointment procedures that are hidden and obscure and, therefore, prone to being used to favor those with personal and political connections to high-level officials. Consider the case of property receivers in New York state, who are effectively government consultants providing oversight of distressed properties. They are selected by elected judges, they do very little but hire managers, and they get sizeable sums of money. They are not chosen randomly from an approved list of individuals with the proper credentials. Most of them are campaign contributors or have a special relationship with a high-level official at the local or state level. Most troubling is the fact that no one knows how much these supposed providers of oversight work or how exactly they are chosen. When a process such as this is hidden in the shadows, an ethics commission can do a great service to the public by holding a hearing on the process and asking both appointers and appointees pointed questions. As a result, officials are more likely to feel they have to make the process more fair, transparent, and cost-effective.
Benefits to Other Officials
Oddly, despite the serious appearance of impropriety they cause, it is rare to find in conflict provisions the inclusion of indirect benefits to other local government officials and employees, that is, to those with the special relationship of colleague. Milwaukee does expressly includes “other city employes” (sic) in its conflict provision. But for some reason it still does not include city officials. And the term “other city employe” does not include the police and fire departments.
The argument against including officials and employees as indirect beneficiaries is that, although it is clearly an ethics violation for a city employee to get a special benefit, it is that employee who is responsible, not the official or employee who helped that employee get the special benefit. I would agree wholeheartedly, as long as there is a complicity provision, that is, a provision that holds officials and employees responsible for aiding their colleagues in their ethics violations (see the section on complicity provisions in the following chapter).
A complicity provision does the same thing as including colleagues as indirect beneficiaries, and I believe it’s a better way to handle the problem. Otherwise, even when a colleague is seeking an appropriate benefit, an official would not be permitted to be involved in approving it.
Ethics codes should also have provisions prohibiting transactions between officials or employees and their subordinates (see the section on this provision).
Benefits to Members of Associations
Sometimes actions by an official benefit an individual or entity (or multiple individuals or entities) with whom the official may have no direct relationship and yet, as a board member or high-level employee of an association of which the individual or entity is a member, there is a special indirect relationship. Such associations include trade associations, unions, and chambers of commerce. Professional associations are generally a different story, unless the matter involves rules that apply to a particular profession.
If, say, the executive director or president of a local chamber of commerce sits on the council, and the chamber is pushing for a transit project that will help its members, it looks to the public as if the council member is favoring his association’s members and that he is acting not for his constituents but for those who pay his salary or those who elected him president. The situation is worse if the official is paid by the association. If the official had been a local business owner before being elected, then he could be expected to support projects that benefit business owners in general. But if his livelihood depends on pushing the association’s causes (and he might even act as its lobbyist, even if not on this matter), this presents a serious conflict.
In addition, paid association positions are often used to reward officials for supporting their goals. The appearance that this might have been how the council member got his job further undermines public trust.
If an official wants a paid position with an association, he should be prepared to withdraw from matters involving association members and matters that the association is involved in as a special interest group.
Too often, chambers of commerce are seen as organizations that care about their communities. And they often are major supporters of good services and good government. But it cannot be forgotten that they are an interest group, with goals that are often very different from those of ordinary citizens.
Unions are another sort of organization that can cause officials problems. Union officers need to pay close attention to perceived conflicts. In Lorain, Ohio, in 2010, a firefighter who retired and became an officer of the local firefighter association, was a council member who participated in a matter that involved saving the jobs of four firefighters. Since it is in the interest of the firefighters association to preserve the jobs of its member firefighters, there is clearly a conflict in the eyes of the public. By voting on this matter, even if the ethics code did not clearly prohibit it, the council member brought not only himself into disrepute, but also the council, the firefighters, and their union (one commenter on the Morning Journal website, “What do you expect from the UNION brotherhood?”). Such a vote is not worth the harm that it does. Its legality means little.
It is important to recognize that, when an official or employee sits on an association or other sort of board as a representative of her government, there is no conflict, because the official or employee is representing her constituents in both her roles. She wears the same hat on both bodies. This situation commonly occurs with local government associations and with regional and sometimes state boards, especially those relating to transportation, development, and ports.
Benefits to Local Government Associations
There is one very special sort of association which can cause some serious conflict problems: the local government association. The best-known ones are statewide associations whose members are generally the CEOs of local governments. But there are also associations of managers, clerks, assessors, police and fire chiefs, and other professional groups. And there are regional (within a state or among states) and national associations, as well. These associations have several purposes, including education, sharing information, and lobbying jointly for local governments.
Even though the association’s board members are there as representatives of their local governments, that is, with no conflict because of their board membership, the associations can be abused. Abuse of these associations is important because of how these associations are funded: by dues that come out of city and county budgets. Therefore, a member or staff member of one of these associations has exactly the same obligations with respect to use of association funds as any local government official has with respect to city or county funds.
Here’s one instance of how problems can arise. A 2010 state auditor report on the Kentucky Association of Counties found a “self-serving” culture that resulted in more than $3 million in excessive or questionable spending over a three-year period, including “$334,300 to pay board members for meetings, $278,154 for legal defense for convicted officials, $247,944 for a sports advertising contract, $83,000 for donations and sponsorships, and $12,600 for use of two condominiums.”
Another state auditor report, this time of the Kentucky League of Cities, found a “staff-driven” organization with weak board oversight and inadequate policies governing ethical conduct, compensation, spending, conflicts of interest and procurement. “This lack of oversight resulted in executive staff receiving unprecedented salaries and exorbitant retirement bonuses that cost more than $500,000; spending more than $350,000 in excessive or questionable spending; and developing numerous conflicts of interest – including inappropriate relationships with KLC vendors.” Here is a selection of KLC conflicts that were found:
$1.4 million for legal services with a law firm where the spouse of KLC’s executive director is a partner.
$28,600 at a restaurant owned, in part, by the spouse of the executive director.
Several family members of the chief insurance services officer either currently work or previously worked for vendors of KLC.
In other words, high-level local officials did not institute any ethics program in the KLC, nor did the board of either association responsibly manage the expenditure of taxpayer funds, in one case primarily benefiting officials, in the other case primarily benefiting staff employed by a board of officials.
Officials should be required by their respective local governments to take full responsibility for management of local government associations and to ensure that they have an effective ethics program. The official who represents each local government should make an annual report to its local legislative body, as part of a request for the budget item pertaining to association dues and fees, on the local government association’s budget oversight and ethics program. Any official who is a board member of an association that misspends money or engages in ethical misconduct should be held responsible for it as if he had engaged in the misconduct himself. If he benefited financially, he should make full restitution.
Local government associations can also be used to persuade or pressure state representatives not to pass strong ethics laws or programs that apply to local officials. This appears to the public to be not in the public interest, but rather in the officials’ personal interests. The responsible way to handle this conflict is for such associations to give their opinion (and dissenting opinions) publicly, expressly recognizing that their members have a personal interest in the result of the legislation and that, therefore, they should not confuse their conflicting roles by in any way lobbying privately or otherwise using their influence privately with respect to local government ethics laws.
Another problem with many local government associations is their associate members or corporate partners. These are primarily companies that do business with local governments and seek to influence association members and obtain their business. Local government associations should have nothing officially to do with such businesses except, perhaps, selling them exhibit space at conferences (and there should be limits there, as well). Associations should not sell advertising or website space to those who do business with their members, and they should not take money from such businesses in any other way. If it would create an appearance of impropriety for a restricted source to give a mayor or council the money for its association dues, the same money should not be given directly to the association, thereby lessening the dues or, even worse, providing pay, services, or perks to the officials who are representing their local governments or those with whom they have special relationships.
Beyond the issue of the conflicts involved in vendor payments to local government associations is the opportunity they provide for pay to play, that is, the fact that a local government association can use its position to pretty much require advertising and other payments from those who want to do business with its members.
It may sound helpful for an association to have a contractor or developer advisory committee, to get input on policies from the businesses’ point of view, but chambers of commerce and other business, trade, and professional associations serve this role already. The more arm's-length the relationship between government officials and those they do business with, the better.
Local government associations need to face their conflicts and deal with them responsibly, just as their members do.
Our political system does allow one kind of personal benefit: political benefits. An elected official is allowed to do just about anything to benefit her career and her party’s fortunes. She can make misrepresentations, break promises, take popular positions that are harmful to her community, and run an ugly campaign. She can hire the most incompetent aides, even the children of her biggest supporters. She can throw her personal support to other members of her party or faction.
Elected officials’ personal political interests are involved in almost every discussion and vote they participate in. Their desire to get re-elected, or become the mayor, is irrelevant for government ethics purposes. In our society, politics for politics’ sake is not above reproach, but it is above government ethics, at least in terms of what is legal.
In other words, there is, legally, no conflict between an official’s obligations to her community and her obligations to her party or even her obligations to her own political career. That doesn’t mean that she can hand out regular jobs or contracts to party members without their having to go through the formal processes required for a position or contract. But she does not have to withdraw when a party colleague or political supporter’s son is up for a job or a contract (however, in some jurisdictions, a large political supporter is considered to be a close relationship for the sake of voting).
When there are job or contract requirements, these politically connected individuals must meet the requirements, take the tests, or file a bid. But ethics laws cannot themselves set standards, require tests, monitor, or set up procurement systems. These are the work of personnel and procurement rules, practices, and departments. Personnel and procurement rules and practices can limit hiring and contracting with people who lack the necessary background, the cronies most damaging to the public interest, those who create waste and can get the local government into serious trouble. Fortunately, these are also the cronies most people find most objectionable. Good procurement practices, including competitive bidding and the exclusion of both officials and contractors from the process of writing specifications, take the opportunity for much damaging political favoritism away from elected officials.
It’s important for ethics commissions to recognize that, just because these hiring, procurement, and land use rules and practices have no place in an ethics code, this does not mean that the ethics commission cannot make recommendations to the local government's governing body, manager, or charter review commission, to institute hiring, procurement, and zoning practices that will create serious obstacles to damaging political favoritism and other behavior that is outside the commission’s jurisdiction.
But the fact is that political favoritism itself is acceptable under many circumstances. And when it comes to professionals seeking to do work for a government agency, because they are usually not subject to procurement rules, political favoritism is, in many places, the norm.
The Government as Competitor
There are times when the benefit being sought by an official is not a contract, permit, license, or grant from her own government, but is still problematic. This is the case when the official is competing with her government for a benefit that is coming from the state or federal government, or some other entity. For example, a program run by the mother and sister of a Bridgeport, Connecticut school board official (the program was associated with the church for which he was minister) was competing with the school board for a state preschool contract. This situation should be handled just as responsibly as it would be were the contract with the school board itself.
The Desire for Good Relations
In 2009, a police watchdog group in Riverside, California filed an ethics complaint asking that the chair of the city's Community Police Review Commission be removed because the private ambulance company he works for has large contracts with both the city and the county, and therefore it is in the commissioner’s interest as an employee of the company to “maintain good relations” with the city and county governments. This presumably would make the commissioner less likely to do anything that would anger city or county officials.
At first thought, this might seem absurd, especially when applied to an employee. But it is true that many board members have an interest in maintaining good relations with the local government for a variety of reasons. Some are involved in businesses that have or desire contracts with or grants from the government, others are professionals with clients who do business with the government, and others are applicants for everything from building inspection approvals to zoning changes.
Each such board member has reason not to rock the boat too much, not to take a strong stand against those in power and their supporters. And in communities where the same people have been in power for years (especially smaller communities), this extends beyond those who do business directly with government. Anyone who does business in town may fail to oppose those in power for fear that they may lose business as a result. Sometimes this fear is implicit, but sometimes it is the result of active intimidation.
However, like politics, the desire for good relations is another accepted, although problematic, interest that often conflicts with the public interest, but which is beyond the scope of a government ethics program, both because it is too vague a concept to enforce and because it is too common and tacitly accepted.
Indirectly Providing Benefits
There is another form of indirect benefit: benefits made in an indirect fashion. For example, an official may benefit herself or others not by participating in a matter or voting for the benefits, but by trading votes with her colleagues to get votes on a matter in which she has a personal interest, while not voting herself. In some cases, the trade will involve matters where colleagues have a personal interest. For example, you vote for my brother to get a contract, and I’ll vote for your sister to get a contract. When this occurs, withdrawal by the conflicted official is meaningless.
Similarly, an official may have a subordinate act in his stead. The subordinate will do what is necessary to please his supervisor. Or an official might have a business associate or family member act on her behalf, so that the official is officially only wearing the hat of an official.
In the alternative, the benefit might not go directly to someone with whom the official has a special relationship, but rather to an intermediary, who then benefits the official, often in a way that has nothing to do with the original transaction. For example, the intermediary might be a subcontractor or client that, in return for a subcontract or piece of a deal, agrees to give a job to an official’s son. Games can also be played with parents, affiliates, and subsidiaries of companies, so that special relationships are lost in the shuffle and there would appear to be no conflict.
This is why a conflict provision should include the phrase “directly or indirectly.” An alternative to repeating this phrase throughout an ethics code is employed by San Antonio:
§2-51(b). A city official or employee shall not violate the provisions of this code of ethics through the acts of another.
Using someone to accomplish what might be discovered if one did it oneself can be triply unethical. It violates a provision, it does it in a sneaky manner, and it often abuses one’s power over another individual, co-opting them into a scheme to violate the law. This is as bad as ethical misconduct gets.
Another form of indirect benefit involves giving a benefit to someone completely unrelated, but which changes the rules in a way that would benefit an official. One common example is a change in pay or perks to members of one union local that will likely have an effect on the negotiations involving an official’s related local. Another example is a sale of county water to a reseller of water that will affect the price that an official who owns a water reseller will get when his company’s contract comes up for renewal. The official can withdraw from participation in the sale of water to his company, but by participating in sales to others in the same situation, he can ensure a better deal for his company or, at least, be seen as doing this.
To deal with all these situations, it is important that, in one way or another, an ethics code includes indirect action to benefit someone (including oneself).
There is another way for officials to indirectly benefit themselves or others. This sort of conflict is based on the official’s authority over the agency handing out the benefit, often an agency that is independent and not even subject to the ethics code. This odd type of conflict is usually ignored. But in 2013, San Antonio’s mayor recommended a good way of dealing with it. The proposed reform would prohibit city officers (mayor and council members) from having a financial interest in a contract or other transaction with an entity whose governing body is selected or nominated by the mayor, the council, or single council members. In other words, an official is not allowed to obtain benefits not only from his agency, but also from an agency whose governing body has members the official selected, individually or along with other council members.
Too often, the conflicts of high-level officials are limited to city or county transactions. But independent agencies and authorities are often controlled by such officials' appointees, and this relationship can lead to ugly scandals.
3. Non-Financial Benefits
Most indirect benefits are part of a larger category of benefit, the non-financial benefit. That is, although indirect benefits usually benefit someone financially, the official or employee himself does not benefit financially.
Many ethics codes limit conflicts to situations where there is a financial benefit to the official, and others limit conflicts to situations where there is a financial benefit to the official, a member of the official’s household, or the official’s business or employer. The assumption is that the official will benefit in a financial manner by money coming into the household, the business, or the employer, since an employer will favor an employee that helps the business, either directly via a commission, bonus, or partnership share, or indirectly through a raise or promotion.
Other ethics codes limit conflicts to direct or indirect financial benefits, without more detail, which can make it difficult for officials to know which situations involve indirect benefits. These are the situations where the official should ask for advice. However, such a conflict provision makes it hard to enforce violations in the gray area where it is not clear whether or not a benefit is indirect, especially if there is not an ethics adviser to provide timely advice. Having an ethics officer and publishing advisory opinions regarding the gray areas provides guidance and allows for better enforcement.
The fact is that even some important direct benefits are non-financial, such as benefits to one’s reputation. Nothing is more valuable to an elected official, or to most people for that matter, than their reputation in the community.
In addition, most people get a direct emotional benefit from helping a family member or a friend. Yes, officials also get an emotional benefit from helping their district get a new playground, but that is not favoritism, it’s part of their job.
Another kind of non-financial benefit can be seen in the common situation where a council member is asked to vote on the appointment of a family member to a board or commission whose members are not paid. There is no immediate financial benefit in this matter (although service on an important board can lead to business opportunities down the road), but there is a conflict here which should be handled by withdrawing from participation in the matter. The conflict is the basic one of wearing two hats, one of official, the other of family member. Whenever an official votes for the family member, the public will assume the official is wearing his family member hat, and that, therefore, family members and others with connections are preferred over ordinary citizens. That is a terrible message to send.
There are other types of non-financial benefit. For instance, a council member in a small California city voted on whether or not to unseal two confidential memos written by the city attorney on the subject of whether the council member had a conflict. The council member clearly had a personal interest in the outcome of this vote, but in the midst of a discussion about conflicts, somehow this benefit was overlooked because it was non-financial in nature.
Or take this case, from Tacoma. Before taking office, a council member worked on drawings submitted to the city in a bid to renovate the city's baseball stadium. He was not paid for his work and would not, presumably, receive any money were the bid to be accepted. And yet there would be an appearance of impropriety when someone advocates for a bid he worked on, whether or not any money was involved. Not only would he be seen to favor a bid he worked on, but it would be a reasonable assumption that if the council member approved the bid, he would be more likely to get paid work from the architect who hired him. It is the relationship with the company bidding that matters, more than the amount of money he was paid.
Sometimes non-financial conflicts are worse than many financial conflicts. Here’s an example from a town in Connecticut. Someone brings a censure motion against the town’s first selectman (effectively the mayor) to the board of selectmen, which has three members. The first selectman, who chairs the board, refuses to let the censure motion be considered, even after the person who made the motion says he has a conflict and should not do this. The law in the town supports his view, because it only recognizes financial conflicts. But no one would agree that he did not benefit by preventing the censure motion from being considered, especially at a televised meeting.
Here’s another serious non-financial benefit issue. Community TV companies may be nonprofit, but they can be very politicized. The committee that oversees this sort of company is often appointed by, or includes, officials that they film, and the company manager is often politically active, chosen for her political affiliation or required to back the party in power. This can lead to videos that are seen as damaging by the party in power going missing or lacking audio or being shown less often. However, the benefit to officials is not financial. These nonprofits should be as independent as possible from politics, for example by prohibiting politically-involved officials on the oversight committee, so that when videos do go missing, there isn't a question whether it was negligence or an official trying to hide something from the public.
These are the reasons why the basic City Ethics Model Code conflict provision covers both financial and non-financial benefits, using the language “may result in a personal or financial benefit,” defining “personal benefit” as “benefits other than those that are directly financially advantageous.”
There are also non-financial interests based on relationships and actions that, although there may not be direct benefits, are based on mutual interests and benefits, and create a serious appearance of impropriety. For example, a council member who files an affidavit on behalf of a developer suing the city should not participate with respect to that suit. Nor should a council member who is a fellow party officer of a contractor participate in matters that involve that contractor. Withdrawal would not be required by most ethics codes, but it would be the responsible way to handle the situation.
However, it is important to recognize that some personal interests do not involve benefits that are considered in government ethics. The principal interest of this kind is a political interest, discussed above.
The same thing goes for ideological interests. The fact that a council member has a strong interest in preventing a development from being built, due to environmental issues, cannot prevent that council member from participating with respect to that development. In fact, it is likely that the council member was elected for these very views.
Similarly, an official’s views of other officials, or even desire to see another official be removed, is not an interest that is relevant to government ethics. It might be a great benefit to the official to get rid of someone who is a thorn in her side, but unless the replacement has a personal relationship with the official, this is not a benefit relevant to government ethics.
In 2009, an Indianapolis council member filed an ethics complaint against the mayor, city attorney, and communications director because they all sat on the board of a nonprofit that received substantial funds from the city. The council member knew that the city’s ethics code did not cover non-financial benefits, and the complaint was dismissed, but the council member felt it was an effective way to express his concerns about high-level city officials self-dealing even in ways that brought them no direct financial benefit. One of the officials resigned from the board, and possibly the complaint will lead to a change in the city’s definition of a conflict to include non-financial benefits.
The value of an unpaid nonprofit position can be seen from a 2012 Oklahoma case. The unpaid CEO of a social service agency, who was also a member of a state human services board that approved contracts to social service agencies, left the human services board after he was reprimanded for participating with this conflict (another nonprofit official did the same). Just because one is not paid does not mean that a job does not provide important benefits, even indirect financial benefits.
Relationships between local government and nonprofits can also become an issue when the money goes in the other direction, that is, when the city gets money from the nonprofit. For example, in Pottawattamie County, Iowa in 2009, a county board member sat on the board of a foundation that gave grants to, among other institutions, the county and the county seat, Council Bluffs. Would it be sufficient to withdraw from participation when the foundation’s board dealt with a county grant request? Perhaps not. A Council Bluffs council member wondered how this foundation board member would deal with competitors of the county, such as the city. The assumption is that he would be seen as biased toward the county and, therefore, against other possible grantees.
Even where you receive no financial benefits, positions, even with nonprofits, give you obligations and loyalties. Wearing two hats puts in question any decision you make for one entity that affects the other entity, or its competitors.
Membership of a club, community organization, or house of worship can cause the appearance of a conflict, but does not generally require withdrawal, any more than does sharing with someone race, religion, gender, or age. However, there are situations where such an organization is seeking benefits from the government, and it may appear that an official is seeking to help his organization or even himself, due to lower membership or school fees (and the member may also feel uncomfortable having to possibly vote against his organization).
For example, in 2012 in Wallingford, Connecticut, a matter came before the council involving funding for the wall of a church parking lot that was also used by ordinary townspeople. Council members had various affiliations with the church.
It’s easy to deal with an individual in a paid position with the church. But what about an unpaid member of the board? Since a member of the church board would have likely made the decision to support the bill, this position would clearly be sufficient to require him to withdraw from the matter when it came before the council. But what about a member of the board of the church's school? This board may not have taken a position on the bill, but since the school is part of the church, its board members would be equally identified with the church's interests. Therefore, it would be best for a church school board member to withdraw.
Even church members are in a conflict situation. If the funding were approved, church members would not have to pay to fix the wall (a substantial amount of money was involved). Whether or not a particular family actually gives much money to the church is not really relevant. What is relevant is the perception that this is the family's house of worship, and that anyone is seen to favor her house of worship over the public interest in having a church wall fixed by the church. This is a difficult issue to deal with in an ethics code, but it is important to consider such conflict situations publicly and ask for advice that goes beyond the ethics code’s minimum guidelines to consider the appearance of impropriety.
Relationships more tenuous than membership, such as having gone to the school as a child, having a grandchild in the church school or even a child that attends classes there (as opposed to attending the school as a full-time student), or a spouse who once taught at the school, may create an appearance of a conflict, but would not, I think, require withdrawal. What is best in such a situation is seeking advice, so that it is an independent ethics adviser rather than the official herself who decides when a relationship is too tenuous to require withdrawal.
Sometimes an institution will be over-represented on a local government body. If there are substantial sums of government money or there is a serious dispute involved, the body can vote not on the project itself, but rather on turning the matter over to a consultant to determine whether the project is in the public interest. The body would still have the final vote, but at least the public would be assured that a neutral expert had studied the project and concluded that it was in the public interest.
4. Indefinite Benefits
Conflicts arising from indefinite benefits is probably the most difficult gray area in government ethics. It is because of the existence of indefinite conflicts that I often speak in general terms not merely of conflicts, but of “possible conflicts” as well as “conflict situations.” That is why the highly important word “may” precedes the verb “benefit” in the City Ethics Model Code’s basic conflict provision. This concept is well stated in the Tulsa ethics code (§603): “The possibility, not the actuality, of a conflict shall govern.” There need be no benefit to anyone; a reasonable possibility of a benefit is enough.
In practice, an official with an indefinite conflict may see a possible conflict situation — which might be beneficial or harmful to them, depending on what happens in the future — as something he or she does not have to deal with at the present time. There are more pressing things to worry about than a situation that might never be beneficial to him, or to anyone else.
But the public tends to see indefinite benefits as something the official is hoping or even expecting to get, and they want the official to deal responsibly with the situation or, in some cases, say clearly how he plans to deal with it. With conflict situations, you cannot wait until you see how things turn out. You have to deal responsibly with them when you realize they exist, and recognize that although the language refers to benefits, conflicts are often based on obligations and relationships, which are usually there from the beginning.
It is with respect to indefinite benefits that the language of “interests” can be useful. If you have an interest in a company, and the company is involved, it doesn’t matter how a decision will affect the company. You still must withdraw from any matter involving the company. But there are other situations that are not so clear.
One situation that can make a conflict indefinite is candidacy. For example, in 2010 a council candidate in Tampa was the executive director of a nonprofit organization that had a large contract with the city to build affordable apartments. As the candidate said, the situation was “a someday, might possibly happen, down the road. First the campaign has to go forward and the elections have to be completed. I have to be elected for this story to have any meaning.”
But her opponents argued that, if elected, she would have to choose between her position and her job. The executive director said that the state ethics commission had told her that all she'd have to do is recuse herself from any matter involving the contract. But Tampa has a stricter rule than the state, making a conflict-related violation grounds for recall.
The fact is that it doesn’t matter exactly what the law says. The conflict is still problematic. Not only would the candidate’s organization soon be renegotiating a contract with the city, and be seen to be helped by his inside influence, but the housing staff would have to oversee an organization led by a council member (if goals were not met, housing staff would have to ask the council member to return funds).
As “down the road” as the conflict is, the responsible thing for the candidate to do was to clearly explain how she would deal with it if she were elected. And despite what the state ethics commission said, withdrawal would not clearly be sufficient.
One typical indefinite benefit has already been mentioned: proximity to a development or project, including transportation projects. Any particular property, and its owners, may benefit from being near a new bus or subway stop, a parking garage, or a street improved with brick sidewalks and fancy streetlights. And the value of any particular property may be harmed by putting a garbage dump or chemical factory nearby, or by a commercial or housing project that brings lots of traffic into a quiet neighborhood.
Proximity is a difficult area because, despite the proximity to a project, there may be no benefit at all, or there could be benefits and harms, such as, for a business, more people drawn to the area, but also less parking and more competition for one’s customers. For a nearby home, a development is more likely to be harmful, but for the owner of nearby undeveloped commercial property, the value is likely to go up. If it’s not certain there will be any benefit or harm from the development, does that mean there is no conflict?
The answer is No, because what is important here is not the actual concrete benefit or harm, but rather how the official’s presumed expectation of benefit or harm is perceived by the public, based on the only concrete thing the public has to go on: the position the official takes on the project. If an official supports a development near her business, it is assumed that she expects to benefit from it. If she opposes the development, it is assumed that she expects it to harm her business. Since the official is presumed to know best (even if she turns out to be wrong), the assumption is that she is putting her interests ahead of the public interest. Neither her level of certainty nor the correctness (or even the actual existence) of her expectations are relevant.
The idea that there has to be a definite benefit in order to withdraw from a matter can cause serious appearances of impropriety. For example, in Cincinnati, there was a streetcar project that would likely help an official’s family firm if it went near the firm’s undeveloped property. The state ethics commission felt it had to decide that there would be a definite impact on the property in order to find an official in violation due to voting with a conflict. If a streetcar route is uncertain at the time of the vote, there is no direct, certain benefit. But there is a clear conflict based on the official’s (or, in this case, the official’s father’s) expectations and the appearance of the official’s participation from the public’s point of view.
A popular way to include proximity in an ethics code is to be mathematical and precise in drafting what is known as a “proximity rule,” that is, a rule that requires officials to withdraw from any matter dealing with property or improvements within a certain distance from property they own or rent (this can be extended to property their business or their immediate family owns or rents).
But how many feet or yards do you choose? California uses 500 feet, for example. Telluride, Colorado uses 150 feet, while Aspen, Colorado uses 300 feet. Any number that is chosen is basically random or, worse, intended to make officials withdraw in fewer situations, even where there is a clear appearance of impropriety. As it is, all of these figures happen to be low, as far as I’m concerned. The number a council picks should not itself make it look like the council is not serious about requiring withdrawal in situations where the public would consider the official to have an interest.
Should officials be required to go out and measure the distance between the edge of their property and the edge of the other property, or the new addition or out-building? And if the official’s house is nowhere near the relevant property edge, would that matter with respect to the measurement process? If just a number is selected, these questions still remain to be answered.
One problem with a rule such as this is that while providing relatively clear guidance, it ignores the spirit and purpose of the code. After all, everyone knows that people, especially business owners, have a special interest in nearby businesses or housing developments expanding, because it affects the value of their property or business. That is really what matters here. The number of feet is only one factor, and hardly the most important one, in determining whether an official needs to withdraw from the matter.
Therefore, proximity should be considered an issue to be raised and weighed rather than a number chosen without respect to the particular situation. Even though they supply clear guidance, numbers are too mechanical; they do not really have a place in an ethics code.
Probability of Benefit
The probability of benefit or harm is a relevant consideration. If the probability is slim, or if the say of the official’s agency or board in the matter is minor, then an indefinite benefit should be treated as a de minimis benefit.
But even where the probability is small, it is important to explain clearly, honestly, and publicly what the possible benefits or harms are, how likely they are to occur, and how much authority the official or her board has in the matter. It is also important to seek advice from an ethics commission or ethics officer, and to share that advice with the public. The more responsibility an official shows in dealing with a conflict, the less likely it is that the public will think the official is hiding something or presenting a false picture of the situation.
It is important to remember that any possibility requires disclosure and some kind of action. Rulings of New York City’s conflicts of interest board have found that there is a violation if an action have a more than a 0% chance of benefiting an official or associated person. If officials see that they have to deal responsibly with indefinite conflict situations, then they will seek advice and thereby save the government from bad press and scandals.
After all, nothing gains the public’s trust as much as officials who recognize that even the best, most honest explanations can sound like hogwash to a skeptical public. The more the public thinks there is a great deal to be gained or lost in a matter, the more skeptical it is likely to be about an official’s motives, and the more important it is for officials to withdraw even when it is not clear whether or not their relationship to a matter will benefit them, harm them, or have no effect whatsoever.
Benefit to an Employer
Another common kind of indefinite benefit has been referred to above: a benefit to one’s employer that will not lead to any immediate benefit to the official or to a member of the official’s family. Officials in this situation often say there is nothing in it for them, but the public sees it different. People know that if you bring business to an employer, that could mean a promotion or bonus down the road. In fact, the public will usually assume that there is an expectation of such a benefit. This is why it is unnecessary to draw even a dotted line between a benefit to an employer and a benefit to the official. It is enough that the benefit goes to the official’s employer.
Former Partners, Current Competitors, and Expertise
A more difficult form of indefinite conflict can be seen in a case from Carbondale, Colorado. A member of the town board had been a partner with people in a development project that went nowhere. Some of his former partners became involved with a new development that required approval from the town board.
If the new group of partners included only one person who had partnered with the town board member in the past, the relationship would be tenuous. But if the same group of partners is involved with this development, it is reasonable for the public to believe that, if the town board member were to help his former partners, they would be more likely to include him in the next development project, which might very well be in another town, where the official would have no conflict. Even more certain would be the town board member’s exclusion from further projects of this group if he were to oppose the current development.
No ethics code is going to cover such a situation. But there is still an appearance of impropriety, because people know how business works. You help your former partners, and you’re likely to get included in the next partnership. You stand in their way, and you’re out.
More common are situations where an official has an interest in a company that is in competition with a company that is seeking benefits from her agency. For example, the Los Angeles city controller pushed for the council to block a Home Depot project, even though she held a 50% share in a family building supply business nine miles away. It would be reasonable for the owner of such a business to be biased, and seen as biased, against a chainstore seeking to open another store in competition with her own. It would be best for her not to participate in any matter involving that store's area of business. There was talk about the fact that the store was nine miles away (a bit more than the common 500 feet). But with the involvement of a chain like this, that already had multiple stores in the area, it is hard for anyone with an independent store not being strong biased against the project.
Too often a relationship with a competitor is ignored. This is especially true in the real estate business. Someone who works for or represents a developer may not be involved in a project, but it's likely that one of her company's or client's competitors is involved. This is why someone involved with development has no place on a planning or zoning board.
This is less of a problem with contracts, at least if they are competitively bid. It doesn't matter if an official has a relationship with a competitor who chooses not to bid. One possibility, however, is that an official could use his influence to affect specifications in such a way as to exclude a contractor with a relationship to an official from the other party, simply out of spite. This is, however, a situation where the interest is personal, but solely in a political way. Because it is political, it is not a conflict in government ethics terms. In any event, it would be impossible to prohibit.
If a contract is not bid out, however, an official's special relationship with a competitor of the chosen contractor very well could give rise to a conflict situation. Relationships with competitors must be taken seriously.
Here is an example of a relationship with a competitor in the land use field. A developer sits on a zoning board, which is about to consider a new development. The zoning board member has nothing to do with the development and has never done business with the developer. But the developer of this new project is a competitor of the zoning board member’s business. Its owners may have bid against the zoning board member for other properties in other cities. They might be trying to get into a part of the business the zoning board member is in. In addition, the zoning board member has an interest in how the zoning board’s decisions will affect his future developments. The zoning board member may not have a relationship with the developer or any obligations toward it, but he has enough conflicting personal interests to require his withdrawal from this matter.
These conflicting interests also suggest that he may have to withdraw from many matters and, therefore, should consider resigning from the zoning board. It is best not to have anyone involved in a business on a board that regulates companies in that business, even if the person is willing to withdraw from any matter in which he is directly or indirectly involved.
But, say many officials, expertise is invaluable. It is important to have board members who know the business they’re regulating. This is an advantage provided by retired developers and by professionals who are exclusively involved in projects outside the city or county. But expertise usually is accompanied by conflicts, and often by so many conflicts that it is not practical to withdraw each time there is a conflict. Such an expert, if responsible in handling his conflicts, will be of little use to the board.
On the other hand, experts can be useful if they do not sit on the board, but rather provide testimony or advice to the board. As advocates and advisers, they have no say in how the board decides, and yet their expertise is put at the board’s disposal. In short, expertise and power need not go together. The real issue is not a choice between expertise and government ethics, but how best to employ available expertise so that there is not an appearance of impropriety.
It is important to acknowledge that many individuals use public service, especially as a volunteer on a board, as a way to make contacts and do favors that will pay off for their business. A lawyer or realtor wants to have it both ways. They want to use their expertise to serve their community and they want to increase their business at the same time. But to do so, they become involved in numerous conflict situations, because the expertise of an active businessperson comes with strings attached. It also creates an uncomfortable situation for fellow board members, who see these people not only as expert advisers, but as interested parties and colleagues of the people coming before them. It is better for everyone if experts are not colleagues of those they advise, but rather external advisers alone.
There is a responsible way for a professional, as opposed to a developer, to handle such situations in advance. A professional can act as if he had two clients, clearing every matter with both of them, and with the ethics commission or ethics officer, as well. The professional can let each client know that the government comes first, that he has to deal responsibly with any sort of conflict, even if it means not handling a particular deal. This will not lose him too many clients, because such a limitation is offset by his authority in the community, which comes, in part, from his government position. And, hopefully, for every client that would abandon him because of this limitation, other clients and potential clients would gain increased respect for him.
Solicitation of Employment
Soliciting a job offer is a form of indefinite benefit that can create a serious appearance of impropriety if it comes out. Who would trust an official to be unbiased toward an individual or entity for whom he would like to work, not to mention has solicited a job offer from? Sure, he may not get the job. But he will likely do what he feels is necessary to get the job offer, or not do what may jeopardize his being hired.
San Antonio feels soliciting a job offer is important enough include in the city’s basic conflict provision (§2-43(a)), ninth on a list that otherwise looks very much like the City Ethics Model Code’s basic conflict provision. San Antonio includes the official’s spouse, as well as direct and indirect solicitation (that mutual friend who will get the ball rolling) and any solicitation within the past twelve months.
The San Antonio language does not make it clear whether this is limited to soliciting job offers for oneself, or for anyone, including a family member, friend, or business associate. Since an employee is more likely to solicit a job for a son or daughter than for herself, such a solicitation should be clearly included as a conflict.
But is it enough to make the solicitation of employment a conflict requiring withdrawal? After all, by the time one solicits a job, or receives an offer, the damage might already be done. The reason that the official believes he might get a job, or the reason the job offer is made, might be that the official has already done a great deal to help the potential employer. The permit or contract might be pretty much in the bag and, therefore, withdrawal would only be for show, or would be too late altogether. In such a case, prohibiting solicitation of a job from any interested party would be more appropriate, as in the following language derived from a Stamford, Connecticut provision:
An official or employee may not solicit employment with any individual or entity that has, or has had, a substantial matter pending before his or her agency.
Valuing a Benefit
In some situations, it’s not at all clear whether an official will benefit. Take, for example, a council member who is reimbursed for the rent on a district office in a building he owns. It might appear that an official would not benefit as long as he is paying the going rate. But it is often hard to determine the going rate with enough precision to determine whether the official is benefiting or not. And it’s possible that the space would not have been rented at all if the official hadn’t rented it to himself. Since hard evidence can be hard to provide (and to be believed), it is best that an official consider that renting from himself will be seen by the public as inappropriate self-dealing, whatever the valuation.
Valuation is a problem difficult for even an ethics adviser to solve, other than by recommending that the official rent or buy from someone else. It is best not to be in a position where paying the going rate or the fair market value is one’s only defense, unless it is a common product with a relatively stable price. See the section of valuation of gifts and discounts.
5. Special Conflicts
The specifics of conflicts in a procurement program are different from those for a planning commission or a local legislative body. This is why Los Angeles has a unique system of conflicts of interest codes that take into account the differences in conflict situations among agencies, departments, and boards.
These conflict codes are limited to disclosure, which is inadequate. But they do provide a good idea of the different sorts of conflict situation to look out for. Therefore, they provide more concrete guidance as to what conflict situations may arise and, when they do, require the seeking of advice from the ethics commission's staff. These differences do not need to appear in the form of different codes. In fact, this causes lots of problems, including with the creation of precedents. But it would be useful for officials if some of these differences were set out in FAQs for each department and agency.
The Convention Center code, for example, requires the disclosure not only of relationships with companies that do business with the convention center, but with any company that “Manufactures, sells or leases any furniture, supplies, materials, machinery or equipment of the type utilized by the Los Angeles Convention Center” or any company that “Provides consulting and/or contractual services, including but not limited to the following: a. crowd handling or control, ticket taking or ticket selling; b. security; c. electrical and/or electronics installation, maintenance and repair....”
Convention centers are notorious for contract problems. Therefore, the L.A. convention center wants to make sure that its officials and higher-level employees disclose, and recognize as problematic, a relationship with any company that may seek business from the convention center. There is even a requirement that an official disclose a relationship with a company that “Is or within the past twelve months was a competitor [emphasis mine] of any person or business entity in any of the above.” It is unusual, but very mature, to recognize that being involved with the competitor of someone seeking or doing business with a government agency can itself cause problems, both in fact and in perception.
It is important to ensure that any process for dealing with specific sorts of conflict situation not be used to weaken government ethics rules. It should only be used to apply them in a way that provides more guidance, more understanding and, therefore, more responsible handling of conflict situations.
B. Preferential Treatment
Ridding government of preferential treatment (also referred to as “special consideration” or “favoritism”) is a central goal of government ethics. Nothing sours the public on the fairness of their local government more than feeling that some people are being given special consideration, privileges, exemptions, short cuts, and jobs that normal citizens do not have. And yet, despite being so basic, the preferential treatment provision is one of the most problematic ethics provisions. Here is a typical preferential treatment provision:
An official or employee may not, directly or indirectly, in a positive or negative sense, treat anyone, including himself and his family, preferentially, that is, other than in a manner generally accorded to city residents.
The problem with this sort of provision is that it is so open-ended. It is essentially an extension of the basic conflict provision ad infinitum. It takes a prohibition of the misuse of office to provide benefits to someone with whom an official has a special relationship, and extends this prohibition to cover benefits to anyone. This opens up several cans of worms.
Therefore, a preferential treatment provision belongs in the aspirational Declaration of Policy section of an ethics code, as it is in the City Ethics Model Code, rather than in the enforceable section. As an essential element of government ethics, preferential treatment should be considered by officials in determining how to deal with a situation and by ethics officers when giving ethics advice. But when it comes to enforcement, the provision’s coverage is too broad, the language provides insufficient guidance and, therefore, it can be used as a blunt weapon against an official or it can be a trap into which an official may unknowingly fall.
The fact is, however, that because the misuse of office to favor people is such a central government ethics issue, a preferential treatment provision does appear in one form or another in the enforceable section of many local ethics codes. Therefore, it must be reckoned with not just as a goal, but as an ethics provision.
The principal issue with respect to a preferential treatment provision is how much, and how, to extend the prohibition of benefiting family members and business associates so that it covers forms of preferential treatment that benefit others. If it is too open-ended, people will use it to attack almost any sort of behavior they don’t like. If it’s too narrow, it is no longer a preferential treatment provision, but rather one of the many enforcement provisions that are simply focused, narrow preferential treatment provisions, including misuse of government property, misuse of confidential information, and product and company endorsement provisions.
Sometimes the benefit deriving from preferential treatment is limited to financial benefits, as in this provision from the Massachusetts Conflict of Interest Law:
No current officer or employee of a state, county or municipal agency shall ... use or attempt to use such official position to secure for such officer, employee or others unwarranted privileges or exemptions which are of substantial value and which are not properly available to similarly situated individuals.
Adding more detail does not necessarily provide much more guidance. Here is the relevant International Municipal Lawyers Association Model Code provision:
No public servants shall use or attempt to use their official positions improperly to unreasonably request, grant, or obtain in any manner any unlawful or unwarranted privileges, advantages, benefits or exemptions for themselves, or others, and no public servants shall use, or attempt to use, their positions to avoid the consequences of illegal acts for any person....
One thing that distinguishes a preferential treatment provision from a basic conflict provision is that it covers more conflict situations that cannot be cured by withdrawing from a matter. In most cases, once a preferential treatment provision has been violated, it is too late to handle the conflict responsibly. At this point, the issue becomes handling the violation responsibly, that is, owning up to it, apologizing for it, and trying as best as possible to reverse the preferential treatment or make restitution for it.
Those who draft such a provision must not only recognize its importance, but also recognize the many ways in which it can be abused in order to hurt an official’s opponent. Abuse of a preferential treatment provision can cause unnecessary scandal and call into question the ethics code itself. Both of these results are damaging to the public’s trust in the government.
Therefore, when an ethics code includes a broad preferential treatment provision among its enforceable provisions, it is important that comments make it clear what areas it refers to and what areas it does not refer to. Written (and easily accessible) advisory opinions are especially important with respect to such a provision. And the advice should be gathered in a general advisory opinion that includes a variety of situations, including situations that have occurred elsewhere but provide useful guidance.
San Antonio has a valuable addendum to its preferential treatment provision: “A city official who represents to a person that he or she may provide an advantage to that person based on the official’s position on a board or commission violates this rule.” This could be called the Braggart Rule.
Many ethics, and even criminal, provisions can usefully be looked at as special versions of a preferential treatment provision. For example, patronage is preferential treatment toward those who help an official get elected. A gift is essentially an official allowing himself to be preferentially benefited due to the position he holds. Bribery differs from a gift because it involves two-way preferential treatment. One way is the same as a gift; the other way involves an official giving preferential treatment in return, by helping the gift giver get a contract or a permit.
Common forms of preferential treatment, such as ticket fixing by police officers, are often prohibited by personnel or other departmental regulations. But when ticket fixing is given to government officials and employees, it is more serious than the amount of the ticket may suggest. It suggests that favoritism is common in the government. In other words, the expectation and provision of special treatment is an indication of institutional corruption.
Also, when the charge is not just speeding or going through a light, but driving while intoxicated, leaving the scene of an accident, or other sorts of conduct that can seriously affect an official's personal reputation in the community, there is a benefit to the official’s reputation, which is worth far more than the price of a ticket. The value of reputation should not be ignored.
Here’s a thought experiment that shows how preferential treatment can be problematic even when it does not create a conflict situation. Let’s say a city decided that, to end police favoritism or the acceptance of bribes to rip up tickets, it would charge $1,000 to rip up a ticket. The city would benefit, but no police officer would personally benefit. However, this would still be unacceptable, because it would be seen as favoring the wealthy. Tickets and other legal sanctions should not be for sale, any more than places in a special public school.
Areas Excluded from Preferential Treatment
Three areas that should, by comments or advisory opinions, be excluded from coverage by a preferential treatment provision are management decisions, political matters, and constituent services.
Management decisions include decisions to go forward with a particular project as opposed to another project. These decisions clearly show the preference of one project over another, but such decisions must be made. What is important with respect to such decisions is that the projects be discussed openly, that citizen input be allowed, that the reasons for preferences be publicly stated, and that officials with conflicts withdraw from participation.
Similarly, politics involves preferring your party or faction members over others. Many appointments, such as legislative aides, are political appointments, and there is no problem giving them to people who helped in the official’s campaign. But civil service positions are a different story. With such positions there are requirements, including tests, that must be followed. It is with respect to these positions that people feel insiders should not be given special consideration. Exempting a person from having to take a test or changing job requirements to suit a particular individual involves a serious misuse of office. Creating special jobs or hiring paid advisers, special assistants, or consultants in order to provide jobs to campaign workers and contributors also creates an appearance of impropriety. As discussed in the following subsection, preferential treatment is especially problematic when it is done in a manner that is out of the ordinary or does not follow formal processes, which are set up to ensure fairness and competence.
Constituent services should also be excluded from the coverage of a preferential treatment provision. This sort of personal help, such as putting citizens in touch with the appropriate government employee, is fine, as long as it is offered to all constituents. El Paso’s preferential treatment provision expressly excludes constituent and other basic governmental services, using this language:
This provision does not preclude officers or employees from acting in any manner consistent with their official duties or from zealously providing public services to anyone who is entitled to them.
But it’s important to remember that a principal defense to accusations of preferential treatment is that the official was only doing “constituent services.” Looked at closer, the services both were going to someone with a special relationship to the official (sometimes a large campaign contributor) and were beyond the usual help with the provision of government services. Usually these so-called constituent services involve special deals, permits, contracts, licenses, and grants. These are not areas for constituent services. These services involve doing business with and regulation by the government.
It is worth considering whether constituent services should be the province of elected representatives. This is rarely questioned. However, local legislators are elected to determine policy, not to deal with nitty-gritty issues. This is what administrators are supposed to do. The provision of constituent services allows local legislators to justify preferential treatment by simply saying they were helping a constituent, even if they would most likely not have given so much attention to the needs of an ordinary citizen. Considering how important constituent services are to re-election, this area of government blurs the line between governance and election campaigns. Also, those who live in the districts of more senior legislators tend to get better service than those who live in the districts of junior legislators. This is unfairness in support of power and incumbency.
When you start thinking about constituent services, it seems more reasonable for them to be provided by an office under the city or county manager or chief administrator. This would lead not only to better service overall, but also fewer legislative aides who are effectively working for re-election campaigns and making government service appear something that those with money and connections can have to an extent others cannot.
Following Formal Processes
An important sign of preferential treatment is not going through the required formal process, whether it involves a contract, an approval, a license, or the hiring of personnel. If there is not a formal process at all, this is a sign that officials want to be able to do as they please, that is, help those they please.
Without formal processes, officials have discretion to do what they please. And money goes to those who have discretion. Loopholes in processes, especially those left intact after they have been pointed out, are another way officials leave open the possibility of helping others without doing anything illegal or having to throw their weight around. When there is no formal process, or it has big loopholes, an informal process operates instead.
Informal processes, or unwritten rules, usually exist to allow for preferential treatment. One example is the land use approval process that was employed in Gwinnett County, Georgia. The county had what a grand jury called a “custom of district courtesy.” This custom, more common in large cities (in Chicago it is known as “aldermanic privilege”), provided that no land acquisition matter would be put on the agenda for review by the county’s legislative body unless staff received the approval of the commissioner for the district in which the land was located.
This gave each commissioner the power to effectively extort money from developers (pay to play), who could not proceed with their projects without the district commissioner’s approval. This sort of informal, unethical process often leads beyond preferential treatment to criminal behavior.
Most important, what this sort of process does is make land deals and contracts not the county’s, but the district representative’s. In other words, it replaces the public interest with an official’s personal interest. The district representative comes to think of what happens in his district as somehow separate from the county, including its formal processes, and he tends to think of what happens in other districts as none of his business. Creating fiefdoms in this manner limits oversight and makes accountability narrowly applicable to the district. This is very damaging to our democratic political system.
There are other kinds of “courtesy,” which become norms in some departments or agencies. There is the “courtesy” that some police departments give, better known as “ticket fixing.” And there is the “courtesy” that some officials give to those who do business with the local government, in order to help them save money on taxes, even when the savings are not due them. For example, you can only get a forced-sale tax exemption if your property has been condemned, so some governments, when they purchase property, refer to the process as “friendly condemnation,” a way of saying it’s not really condemnation, while using this magic word so that the seller can take a tax exemption and refer to the document if the I.R.S. audits him. There is also what is referred to as a “courtesy letter,” a letter that uses certain language so that it can be used by someone doing a transaction with the government to lessen his taxes, even when the transaction alone would not allow the tax reduction. These courtesies are usually given as part of an ongoing exchange of favors that make government service of personal benefit to those involved.
Access to discretionary funds (such as council district funds), as well as the power of local legislators to personally promise funds or approve bids and sales of land, lead to a great deal of ethical misconduct. Individual officials should not have such discretion. It should be shared and, as far as possible, be in the hands of professional administrators, such as a procurement or grant office, or an independent committee, such as a bid committee, rather than elected officials.
When unwritten rules are the norm, even following the written rules can sometimes constitute preferential treatment. There are times when an investigation is going on, or a watchdog is watching, that it is not safe to go by the unwritten rules. If you are favored, those in charge let you know that you better follow the written rules for this transaction.
Letting you know there is trouble is normally an ethical act. And it does make people follow the rules. It is also perfectly legal. And yet it is deeply unethical, because it protects the unwritten rules from being discovered, and it prevents a lot of favored people, who usually do not follow the written rules, from getting caught. It’s effectively the call of the lookout man, letting everyone know the cops are coming and they better stash away the guns and the loot. That’s a good thing for the gang, and for anyone who might be hanging around with them, but its intent is to preserve the gang, not a way to move forward toward a healthy ethics environment. And it’s a way to provide security to those who support the personal system, which would not work if the people involved felt that the jig might be up any minute. If they know they’ll be given warning, then they can more comfortably go along with the unwritten rules and ignore the formal processes. They also know that they’ll be alerted when the coast is clear.
One way to deal with the unwritten rules regarding land use is to provide a clear guide to the formal land use process, including the names of all officials involved and their ethical obligations, to be placed on the ethics website. The laws are not enough; they can be found and understood only by lawyers. The process has to be explained so that citizens, civic organizations, the press, and officials and employees can fully know what the formal processes and rules are and, therefore, can ask the right questions and better tell when the rules are not being followed.
In a perfect world, the guide would also include the unwritten rules, even if they are no longer being followed. There is no reason to act as if they never existed. Even when an ethics environment has been improved, the unwritten rules live on in the memories of many people in the community. And they can easily become the norm again. They should live on in a guide, as the rules that are not to be followed, the rules the community has tried to put behind itself, so that they can be recognized if they return.
C. Withdrawal from Participation
The essential action in government ethics is withdrawal from participation in a matter when an official or employee has a possible conflict. Withdrawal from participation means that an official or employee who (1) has a conflict with respect to a matter before, or that will be coming before, her board or agency or, if a high-level official, before the government, and (2) has some ability to influence the matter, should publicly disclose the conflict and should not formally or informally, privately or publicly, communicate, act, or vote with respect to the matter. The official’s only communication regarding the matter should be disclosure of the conflict and, if there is a question about how to handle the conflict situation, a consultation with an official ethics adviser or a request for an advisory opinion from the ethics commission.
Sometimes, the board or commission on which an official sits will not want to delay consideration of a matter until ethics advice can be obtained. In such cases, they may either vote on the matter or let the board member decide for herself, for the purpose of that meeting alone. But when there is a question, the best decision is to withdraw. The worst thing is to talk about one’s personal integrity and ability to act without bias.
The reason withdrawal is the essential action in government ethics is that, in most instances, it is the most responsible way in which an official or employee can act so as not to use, or be seen as using, his position to benefit himself, a family member, business associate, or anyone else that others might consider to be receiving preferential treatment. That is, if an official or employee is in a position to benefit himself or those with whom he has a special relationship, he must withdraw fully and immediately, so that he does nothing to provide such benefits. If the official only partially withdraws or withdraws late in the process (for example, when the matter comes up for a vote), he may be unfairly benefiting himself or another even though he has withdrawn.
It is important that an official cannot simply decide for himself what withdrawal consists of or when it should begin and end, at least to the extent that this means less withdrawal rather than more. For example, in 2009 in Escondido, California, a council member who was married to a police officer decided that, although she would join in all debates on police matters, she would not vote on them, unless her vote was needed to break a 2-2 tie. That is, she would participate, but not vote, except when her vote would determine the decision. An official should never choose this sort of extremely limited withdrawal.
And yet many council members supported their colleague’s extremely idiosyncratic and self-serving personal interpretation of such an important rule. People are uncomfortable disagreeing with others’ personal feelings about something. But withdrawal rules are not about personal feelings. They are a means of putting the public interest ahead of personal interests and concerns. They are rules like any other, which are meant to be followed, not a suggestion that officials can deal with as they choose.
1. The Abstention-Only Approach
When an official is only required to abstain from voting on a matter where he has a conflict, as some ethics codes require, he is free to misuse his position to advocate for the action in public, enlist the help of other officials in private, provide advice, draft or edit relevant documents — that is, the motion, ordinance, report, contract specifications, permit, etc. — bargain with other board members to get their votes, and the like. This is hardly a responsible handling of the official’s conflict, nor does it do anything to increase the public’s trust, except to the extent all this activity occurs in secret, which itself undermines the public’s trust as well as the information it can use to effectively participate in the governance of its community.
Voting is the most public face of withdrawal, but it is not even necessarily the most important, because most of what occurs in government comes before a vote, and most government action does not involve a formal vote at all.
Nor is voting on, say, a contract or permit the only means by which an official can help to benefit someone with whom he has a special relationship. On most matters, elected officials don't just have one vote. There are motions, amendments, and committee votes, in addition to final votes. There also votes to trade, as well as other authority, such as the power to prevent matters from even being discussed that comes from chairing the council or a committee.
In fact, most appointed officials and employees have no votes at all. They research, draft, discuss, and act. Abstention is meaningless when it comes to them. It is amazing that anyone would think an abstention-only approach to withdrawal could be relevant to the great majority of officials and employees and, since they work for higher-level officials, to those who have authority over what they do.
The appearance of impropriety of a conflicted official trying to persuade his colleagues to vote for a contract or grant, while he himself would not be able to vote, is just as great or greater than if the official were to vote. Think how hypocritical an official appears when, after the official abstains from voting, the local newspaper discovers that he’s been using his influence to get everyone on board to vote for the action, thereby making his vote unnecessary. This kind of misconduct not only undermines the public’s trust in the local government, but also its trust in the effectiveness of the local government’s ethics program.
Some withdrawal provisions do not even require that abstention from voting be accompanied by disclosure of the underlying conflict. Abstention without disclosure keeps the conflict secret, as if it were something to be ashamed of. In fact, it is laudable when an official deals openly and responsibly with a conflict. If officials do this on a regular basis, it increases the public’s trust in government. It reassures them that officials are acting in the public interest rather than in their own interest.
It is important that a conflict is not kept secret because advice was sought from a government attorney, making it supposedly privileged and confidential. Because an official’s conflicts are public information (this is the policy behind annual disclosure), an official who seeks advice should be required to waive any privilege that might exist. Or the ethics code’s requirement of disclosure should be considered to override any privilege. The alternative is to turn government attorneys into black boxes, and requests for ethics advice into a way to undermine government transparency.
Even an official’s resignation should not change the requirement to disclose a conflict at the time she resigns, if the conflict is relevant to the resignation.
Here’s an exchange involving a government attorney who took an abstention-only view and a board member who took a full withdrawal approach. The situation that led to the exchange involved a property to be leased by an independent authority. The vice-president of the listing agent for the property was a board member of the authority and would, therefore, benefit financially from the transaction. The authority attorney defended the listing agent by saying that the agent “did not vote on anything dealing with the cargo building.” Another board member responded, “The voting isn't the issue. The issue is whether he took part in the negotiations and whether or not he disclosed that he was going to gain financially. ... If I'm a realtor, I'm on this board, and that lease is going to be part of the deal, I [would] recuse myself from anything. I wouldn't even be in the goddamn room when it was being talked about and that's what should have been done.”
Focusing on voting instead of withdrawal is naive, ignorant, or disingenuous. Too many people use abstention from voting as a smokescreen to hide the irresponsible handling of a conflict. An abstention-only approach has no place in a local government ethics code.
2. The Permitting Abstention Approach
Some local governments, and state laws that cover local officials, even compromise on the issue of requiring abstention from voting when an official has a conflict. They use the word “may,” allowing the official, or the body, to decide whether or not to abstain from voting.
An individual in the midst of a conflict situation is the worst-situated person to make such a decision. We all have blind spots that prevent us from seeing ourselves as the public sees us. That is why it is so important to get independent ethics advice. It is best for the community if the decision comes from an independent ethics adviser rather than from a conflicted official.
A good response to someone who prefers “may” to “shall” in front of the word “withdraw” or “recuse,” is that an ethics code normally prohibits the use of one’s office to benefit oneself and others. When a matter comes up that would provide an official with such a benefit, how can the official act consistently with this prohibition without withdrawing from the matter? There is usually no responsible alternative.
The principal argument for letting the official decide whether or not to abstain from voting is that an official who discloses a conflict and still votes risks being thrown out of office by the city or county’s voters. This assumes a lot. It assumes that the official or employee was not appointed or hired (even though far more public servants are appointed and hired than elected), that the official will be opposed in the next election by a legitimate candidate, that the failure to abstain was reported in local news media accurately and with sufficient explanation so that the situation can be clearly understood by the average voter, that most voters actually see or hear this coverage, directly or indirectly, and see it as anything more than common politics, that voters can correctly determine the truth, and that even those who know, understand, make a correct determination, and care about what happened remember it at election time, care enough so that it makes the difference in their support, believe the opponent has cleaner hands, and actually vote. And the fact is that heavily fined politicians as well as indicted, even convicted criminals are sometimes re-elected. Enforcement at the polls is simply not a good argument.
Another argument for voluntary abstention and withdrawal is that officials should be trusted to make such decisions themselves. After all, they were elected or appointed to make decisions for the community. Why should this decision be any different? One reason is that the official is in a conflicted situation relative to the community. It is not only difficult for such an official to make a decision; it is also damaging for the public to see a conflicted official choosing to benefit himself or others.
3. The Disclosure-Only Approach
Some local governments require from an official with a conflict nothing but disclosure. Sometimes the disclosure need not even be made public or the public disclosure is nothing more than “I have a conflict.” (See the section on transactional disclosure for more on what constitutes disclosure of a conflict.)
A disclosure-only policy is effectively no ethics policy at all. An ethics policy requires the responsible handling of conflicts so that officials are not seen to be misusing their office for personal purposes. Simply requiring disclosure of conflicts does nothing to change the impression that there is such misuse of office. What it says is that it’s fine to misuse a public office as long as you say that’s what you may be doing. It draws the legal line short of any sort of limitation, allowing officials to say that they are following the law and acting ethically, even if what they are failing to deal responsibly with their conflicts, and the public considers them to be misusing their office for the benefit of themselves or those with whom they have special relationships.
Disclosure is a good thing. It provides transparency. This is important when it comes to campaign contributions, relationships and assets included in an annual financial disclosure statement, lobbying, and the like, that is, with respect to conduct that is both legal and ethical. But when a matter arises with respect to which an official is conflicted, disclosure is not enough. It is like setting up a desk at a school entrance, asking students to take out their drugs and guns, and then letting them take them into school with them.
Disclosure-only provisions are compliance provisions. Government ethics is not a compliance program. It is a program based on training and advice, whose goal is to have officials act in such a way as to preserve the public’s trust in the government. Disclosure-only provisions relating to conflicts undermine the public trust and do not allow for enforcement of the irresponsible handling of conflict situations.
As Elisabeth Rosenthal wrote in a January 21, 2012 New York Times column, “disclosure requirements merely get information onto the table, but themselves demand no further action.” Disclosure-only requirements make disclosure not a step but “an end-point in the chain of responsibility, an act of compliance with the letter of the law....” By itself, disclosure leads citizens to suspect officials’ motives without providing a constructive way to restore trust.
In addition, the goals of disclosure are not clear. No guidance is provided. There is just a form that has to be filled out, not a responsible act.
Knowing they would have to let the public know they are acting in their personal interest would, one would think, deter officials from acting with a conflict. But when the law says disclosure is enough, the officials can defend their conduct by saying that they complied with the law. This leaves the public grumbling that these guys write the laws to help themselves. In other words, the public sees officials acting doubly in their personal interest, writing the laws and then following them in order to serve their personal interest. This is not a way to increase the public trust and, therefore, has no place in a local government ethics program.
4. The Prohibition of Abstention Approach
There are state and local governments that actually prohibit withdrawal from a vote, except in relatively extreme situations. Michigan is one of these states. Charter Township Act §42.7(6) requires charter township board members to vote, except on a vote to appoint oneself to a township office. Only a unanimous vote of the board can even allow a board member to abstain. That means that a board can never require a board member to abstain; it can only allow her to do so when that is what she wants.
Florida has §286.012, which prohibits any local government official present at a meeting from abstaining, unless there appears to be a possible conflict of interest, but only a conflict according to state law, not one according to a local law. This complicates conflict and withdrawal situations for local ethics commissions. The result is that some local ethics codes make room for §286.012, both by limiting abstention to state conflicts and by allowing officials with a conflict according to local law to vote.
For the most part, statutes such as this (from 1947) predate the modern era of government ethics. They place the duty to vote (and supposedly represent one’s constituents) ahead of the duty not to use your position to help your family and business associates (which is not representing one’s constituents). But some of these statutes are still on the books, and there are still many officials who hide behind the “duty to vote.” Some officials even argue that voting with a conflict is just the sort of difficult, unpopular decision legislators are sometimes required to make.
When this argument is made, the response should be that this is not the sort of decision that is contemplated when one speaks of difficult, unpopular decisions. Those decisions involve policy issues. This is a procedural, practical issue: dealing responsibly with one’s conflict situation.
Other arguments for requiring officials to vote include:
(1) Abstention disenfranchises constituents. However, a representative seen to be voting for her personal interest is also effectively disenfranchising her constituents, who voted for someone to represent the public interest, not their personal interest.
(2) Abstention is considered a negative vote in some jurisdictions. Therefore, requiring an official with a conflict to abstain does not merely remove one vote; it helps defeat a motion. A simple solution to this problem is to change the rule so that an abstention is not a negative vote.
(3) Separation of powers and legislative immunity arguments (see the section on these complex topics); and
(4) A First Amendment free speech argument. In June 2011, the U.S. Supreme Court, in Nevada Commission on Ethics v. Carrigan, put to rest an argument that local legislators have a First Amendment free speech right to vote, despite a conflict. The Court made it clear that local legislators also do not have a free speech right to speak about a matter in the legislature when they have a conflict. But the Court said nothing about rights that might affect the other aspects of withdrawal from participation.
A serious problem with statutes and ordinances that require voting is that they focus solely on voting, providing no guidance with respect to the rest of an official’s handling of a conflict. Does an official withdraw from the matter and then vote? Or does the duty to vote include the duty to advocate for a matter even though you have a special relationship with someone involved in the matter? These statutes show no sign of there having been a balancing of the obligation to constituents to vote against the obligation to constituents not to vote, or be seen as voting, for one’s personal interests over the public interest.
In New York City, members of the council are permitted to vote with a conflict, but they cannot otherwise participate in the matter and they must disclose their conflict both on the record and to the conflicts of interest board. This is the most responsible way to deal with a situation where voting is required. But it is best not to require voting at all.
5. How to Withdraw from Participation
Withdrawal from participation is commonly referred to as “recusal,” a term originally applied to judges (a less-used term, “disqualification,” is also primarily a judicial term). I choose not to use the term “recusal,” because it is not familiar to non-lawyers (it does not even appear in my edition of Webster’s dictionary or in my word processing software’s spell-check), and it is commonly used strictly with respect to voting (even though in the judicial context it means full withdrawal, because for judges there is no other choice). Therefore, using the term “recusal” makes it appear that all an official has to do is abstain from voting and she has responsibly handled her conflict. Since citizens, including the news media, do not understood the term, they accept whatever definition the city or county attorney gives to it.
It is important that the concept of “participation” is included, to prevent the common misunderstanding that voting is all that matters.
How and When to Withdraw
If a conflicted official sits on a board or commission, including a legislative body, the official should, when the matter where he has a conflict comes up for discussion, disclose the conflict on the record and leave the table, or even the room, while the matter is being discussed or voted on. If the matter comes up in an executive session, the official should leave the room. If it is the only item on an executive session agenda, the official should not attend.
It is a best practice for a board chair, when a new matter comes before a board, to ask if anyone may have a conflict, that is, if anyone has a special relationship with anyone involved in the matter. This makes disclosing and handling a conflict a regular part of the board’s dealing with a matter. It makes the responsible handling of a conflict a ritual little different from seconding a motion. It also makes it an official expectation that each board member will deal responsibly with her conflicts, and makes discussion of conflict situations a common and, therefore, comfortable occurrence. This both removes the emotional, defensive aspect of conflicts, and educates officials so that they better understand, and can better anticipate, conflict situations and how best to deal with them responsibly.
If a member discloses a relationship he has, or someone else states the belief that a board member has a relationship, the member may (1) choose to withdraw; (2) ask for permission to table the matter so that she can ask the ethics officer for advice; or (3) if the matter is urgent, ask that the matter of withdrawal be discussed and determined by the board.
Following this procedure does not mean that withdrawal need begin only at the moment the matter formally comes before the board, or that the conflict should not be disclosed earlier. As soon as the official becomes aware that a matter might be coming before her board, she should not participate in any discussion about it, ask that she not be copied on memos about it, and let the chair know that she will not participate in the matter in any way. In case anyone asks when the official decided to withdraw, it would be best to put this disclosure to the chair in writing. When the matter comes up before the board, the chair can then read or summarize the letter, and make the letter part of the minutes.
If the official or employee works in a government agency or department, he should similarly disclose the matter to his supervisor, have nothing to do with the matter, and certainly not discuss it with a subordinate or other colleague to whom the matter has been assigned. Any practical guidance the official gives, when this is necessary to hand the matter over to another official, should be given in front of at least one uninvolved individual, in order to prevent there being any attempt to persuade or coerce the official who will be handling the matter. This does not mean that an official will consciously try to push his interest, but rather recognizes that people unconsciously do this, and that this can best be prevented through oversight that makes an official more self-conscious of what he is doing and what he is not permitted to do.
The disclosure and withdrawal should occur as soon as the official knows about a matter and that he has a special relationship with someone who may be involved in the matter or that he is otherwise conflicted. For example, if a procurement manager knows that his brother might be interested in bidding on a contract, the manager should have nothing to do with preparing the contract for bidding. He should not wait for the brother to decide about making a bid, or to actually make a bid. If the brother decides not to bid, the procurement manager can then get involved in the matter. Withdrawal from participation is not permanent.
One thing most ethics codes ignore is how to disclose a conflict. I like the way the Anchorage ethics codes puts it: “in narrative form.” In other words, the official must effectively tell a story about his relationship to people who may be involved in the matter, any interest he or these people may have in the matter, and any benefits or harms that may arise out of the matter and affect he or these people.
And the official should answer questions people may have about the conflict situation, to the extent they are relevant. For example, if the official says that his brother is a co-owner of a company, it does not matter what the percentage is or how much it may be worth. It is the interest and the co-owner’s relationship with the official that matter.
What Is a Matter?
Everything that comes up before a board or agency is not a “matter” that requires withdrawal. A matter is only something on which the board or agency will possibly act. For example, if a board decides to discuss a member’s conflict, this is not a matter it will likely act on. It is simply discussing the matter to help the member make the decision correctly (a decision that may, of course, be to seek ethics advice). It would be absurd to ask the member with the potential conflict to withdraw from the discussion about his conflict. It is important to get his input with respect to the facts and to his views of the situation. But if the board does decide that it will make the decision (or if the ethics code gives the board this responsibility), the conflicted official should stop participating, except to answer questions the board directs to her.
A matter does not require withdrawal if the official has no decision-making authority. For example, a clerk may stamp a document given to her by a relative, and a public works employee may fix a street in front of his house if directed to by a supervisor. A secretary may take the minutes of a meeting that involves a family member, but someone from the board or agency should review the minutes to make sure her bias is nowhere in evidence.
It is also important to determine exactly what the matter is. For example, there was a case in New London, Connecticut where in a council executive session regarding a department head’s personnel issues, the department head wanted a council member to withdraw because the council member intended to criticize the department head’s actions with regard to her. But the council member would not benefit in any way from the department head’s personnel situation, which is clearly what the matter involved (this is why it was conducted in an executive session). The fact that the council member was critical (or might be critical) of the department head’s actions toward her was not the matter under discussion in the executive session, and it did not create a special relationship that would prevent the council member’s participation.
Some officials think that it is only important to withdraw from controversial matters that are of special interest to the public. But one never knows which matter is going to become controversial, and it is more likely to become controversial if someone discovers that an official did not handle a conflict situation responsibly. Officials should act as if full attention will be brought to any decision they make. In any event, it is best to make a habit of dealing responsibly with conflict situations, so that it is the default response in the most important situations, where the pressures are greatest to act irresponsibly.
What Aspects of a Matter to Withdraw From
There is sometimes an important and difficult issue regarding which matters to withdraw from when an official has a conflict situation. For example, take a situation in Billings, Montana. The mayor’s wife created bike trails for a city-county agency. Should the mayor have withdrawn from any matter involving bike trails, or only from matters involving funding of his wife’s salary?
Council members disagreed among themselves. One council member felt that the mayor was hurting his own cause by participating and voting on bike trail-related matters. A second felt that the mayor’s participation made it awkward for the council, while a third felt the mayor was making it awkward for his wife. A fourth felt it was no big deal, and a fifth just wanted to put the issue to rest.
A good argument could be made that, especially since there was already a law requiring developers to put aside land for bike trails, the wife was not about to lose her job due to lack of need for her work, no matter what the mayor did. This argument would lead to the conclusion that the mayor should only withdraw from a matter involving his wife’s salary or a change in the bike trail law.
And yet no one clearly favored the mayor’s participation in matters involving bike trails, for a variety of reasons, all of them practical, none of them legal.
The lawyers, however, did not agree. One attorney for the mayor said there would be no conflict unless the mayor or his wife were to benefit personally. Two other attorneys went so far as to declare the conflict policy unconstitutional, because it deprived the mayor of the duty to vote on matters that did not affect him or his wife (adding that she could be deprived of a property right). Presumably, they would say that only a matter involving the wife’s salary should require the mayor’s withdrawal.
In addition, the city’s board of ethics said, in a nonbinding advisory opinion, that there was no legal reason for the mayor to withdraw, although one member said she would in a similar situation. The board's only requirement was that the mayor withdraw if his wife were to testify. It did not require withdrawal even if the wife’s salary became an issue.
The responses to this situation show very clearly how useless legal arguments can be for someone trying to deal responsibly with a conflict. You can talk about legal requirements and constitutionality all you want, but when it comes down to it, what matters is how the situation looks to the public, and how the situation affects the participants, the matter, and the city government.
Two citizens commenting on an article about this situation felt that it did not pass the “smell test.” One citizen wrote, “I am puzzled why the Mayor would jeopardize ‘public perception’ in order to vote on trails. There must be some sort of pay off for him to do so or he wouldn't continue to push to vote on something so controversial. Is he that unprofessional to choose voting over ‘public confidence?’”
The council members and citizens made good arguments for the mayor’s withdrawal even from matters where there was not a direct benefit to his wife, but where it looked like he might favor trail-building because this was what his wife worked with.
But not all the citizens agreed. Others thought the whole exercise was just nitpicking, that there are many more pressing issues. This is a common response, since few people understand the importance of procedural issues and focus exclusively on substantive issues.
And other citizens thought all this conflict talk “hamstringed” the mayor, that the mayor should have more freedom and power than he has, not less. This preference for strong mayors is common, partly because our popular culture focuses exclusively on strong political figures (mirroring our tendency to see political leaders as father figures).
It is important for officials to learn to recognize and anticipate the various responses to conflicts, because it not only allows them to deal with them responsibly, but also to explain why it is important to take particular action, even when it is not legally required. The worst thing is to only consider the legal arguments. The best thing is to focus on the most important aspects of a conflict situation, such as, in this case, the husband-wife relationship, the public nature of a mayor’s decisions, and the importance of the official’s participation to the administration the project (what would really be lost if the mayor said nothing about bike trail matters and abstained when they came up for a vote?).
Participation is not limited to meetings or communications with officials, employees, and individuals involved in the matter. Participation includes any formal or informal communication with anyone, anywhere, at any time, where there is any question that such participation might (if known) be seen as an attempt to influence anyone at any level of government, individuals and entities involved in the matter, or citizens. This means that an official who withdraws should not write a letter to the editor about the matter, or talk about the matter before a local civic group or political party members. Other than (1) completely private conversations with individuals with no direct or indirect relationship with a matter or its players, such as a conversation with one’s spouse, (2) a conversation with an ethics officer or other adviser regarding how to deal with the conflict situation, or (3) conversations where the official is providing factual or procedural information that cannot be obtained from others (and in these situations, someone else should be present), an official should stay clear of the matter or topic altogether.
It is important to remember that a public official’s personal opinions cannot be separated from his official opinion. A public official cannot simply take off his official hat and say he is speaking only as a private citizen (this happens far too often). An official who is dealing responsibly with a conflict by withdrawing from participation in a matter has no free speech right to do otherwise. If the official would prefer to persuade others regarding a matter where he has a personal or financial interest, he is free to resign and say anything he wants (at least if he isn’t paid for it; see the section on post-employment provisions). This removes the conflict, and could even be considered simply another form of withdrawal from participation as an official.
Who Must Withdraw
Not everyone who has a conflict must withdraw from a matter. The City Ethics Model Code conflict provision says that an official or employee “may not use his or her official position or office, or take or fail to take any action, or influence others to take or fail to take any action.” This means that an employee who is not using his position, who cannot take action, and cannot influence others to take action does not have a conflict that requires withdrawal.
Many employees are not in a position to act or influence. They are charged with filling out forms, typing and sending letters, accepting and filing documents and other administrative, non-discretionary work. A form might be for a relative, a letter to an organization on whose board he sits, or a document from his law firm, but he can fill out the form, type the letter, and accept the document despite the conflict.
In addition, an official whose apparent conflict is based on a situation where the official is acting solely as an official does not need to withdraw. For example, in 2012 there was a controversy when it turned out that a district attorney who was a member of the state ethics commission was a member of an organization that lobbied legislators and, therefore, was under the ethics commission’s jurisdiction. What at first blush appears to be a serious conflict turned out not to be serious at all, because the district attorney was a member of the organization only in his capacity as a district attorney. It is only when a situation involves an official as an individual apart from his office that there is a conflict requiring withdrawal.
“The Vote Doesn’t Matter”
When a conflicted official does not abstain from voting, the official will often say that since she voted with the large majority on her board (or was a lone dissenter), her vote didn’t make a difference, so it’s no problem that she didn’t withdraw. This argument often works, because many people care more about how something turns out than about how it is done. The ends rather than the means. The idea is that if the official with a conflict didn’t make a difference, she did nothing wrong, even if she didn’t follow the withdrawal rule in the code of ethics.
There is a problem here beyond the importance of means and following the law. The official might have used her influence (or be seen to have used her influence) to create the large majority on the board, instead of staying out of the matter altogether. Not only are some board members more influential than others, especially when they know a lot about a matter (which is generally true when one has a conflict), but a lot of horse-trading goes on, especially on legislative bodies. An official with a conflict should not be helping her sister’s organization get a grant in return for her help in getting another council member’s pet project off the ground.
In other words, a lot goes on behind the scenes (including multiple votes at multiple levels on multiple occasions) that is more important than the final vote (and often than any vote). It is this behind-the-scenes activity that the citizen doesn’t know about (although he may have his suspicions), at least until the scandal hits the front page a year later. By following the withdrawal rule even when there is likely to be a unanimous vote, an official makes sure that she does not influence (and is not seen as influencing) the vote in any manner. Looked at from another point of view, it is pointless not to withdraw when one knows one’s vote will be meaningless.
In any event, when the decision to withdraw arises, there is no way of knowing how the vote will come out, or even whether there will be a vote. By the time a matter does come to a vote, unanimous or very close, most of the damage will have been done. Even if the law requires only abstention, it is best to follow the law whether or not your vote will make a difference.
Ongoing or Recurring Conflicts
It often happens that someone with special expertise is appointed to a board or hired for a position where conflicts arise with regularity, because that expertise means that the individual has relationships with many of the individuals and entities that will come before his board or agency, due to his current or recent employment or other activities, or the employment or activities of someone with whom the individual has a special relationship. It is best that such individuals do not accept such positions, but when they do, the responsible way to deal with the situation of ongoing conflicts is to either resign from the position or, if possible, cease the outside employment or activity that creates the conflict (this applies to a spouse if it is the spouse’s position that creates the ongoing conflict).
I say “if possible,” because for many people in such situations, there are relationships, and the apparent obligations that go with them, that no ceasing of employment or activity will change. Therefore, in many cases, the only responsible way to deal with ongoing conflicts is to resign.
For example, if a zoning board member’s husband is a big developer in town, every time that developer, or even a competitor, comes before the zoning board, the board member would have a conflict. A zoning board member cannot keep withdrawing. In such a situation, the official should resign from her position. The same problem arises if the member or her husband is a realtor or land use attorney in town.
Here is the City Ethics Model Code provision on ongoing conflicts:
An official or employee whose outside employment or other outside activity or relationship can reasonably be expected to require more than sporadic withdrawal must resign or cease such outside employment or activity. If the ongoing conflict involves a relationship, the official or employee must resign. An official or employee should not begin employment or an activity or relationship that can reasonably be expected to require more than sporadic withdrawal. If a prospective official or employee is in such a situation, he or she should not accept the position.
How often is “more than sporadic” depends on the situation. For example, a zoning board member may have conflicts relating to only two cases in a year, but if they involve the building of a fence and a garage by neighbors, it doesn’t matter. If those two cases involve major developments and take a great deal of the board’s time, with many hearings and votes that the member with a conflict will not be able to participate in, it matters a lot and something needs to be done.
Consider the case of a Las Vegas council member who was president of a construction union. In 2007, the Nevada Commission on Ethics allowed the council member to keep his union position, and yet recommended that he drop it because he “would have to abstain so often that his constituents would be deprived of their voices.” One of the commission members told the council member, “I’ll guarantee you, you’ll be back here in front of us, whether you like it or not.” And the commission chair said that the council member would be “walking a field of land mines” and that, “if he were to find himself before the body again, the ethics commission would not look kindly on him.”
Needless to say, the council member retained both his positions and, two years later, someone filed an ethics complaint against him. And needless to say, the council member got a green light from the city attorney rather than going back to the state commission for advice he didn’t want to hear. And needless to say, the council member came before the commission again.
Los Angeles has language that puts the onus regarding frequent conflicts (based on ownership rather than employment) on high-level officials that hire or appoint, and indirectly recommends that officials in such a position divest the assets that led to the conflict situation:
§49.58.8. Every City agency shall make every effort to avoid hiring or appointing City officials who hold, and are unwilling or unable to sell, assets that would present significant and continuing conflicts of interest.
This is a useful approach, but deals only with a limited number of ongoing conflict situations.
Indianapolis uses not the language of frequency but rather the language of importance:
An official, appointee, or employee shall not knowingly ... accept other employment involving compensation of substantial value if the responsibilities of that employment ... require the individual’s recusal from matters so central or critical to the performance of the individual's official duties that the individual's ability to perform those duties would be substantially impaired...
Problems with this approach include (1) the requirement of substantial compensation, and (2) the limitation to the official’s employment, that is, failing to include immediate family members or business associates.
Ongoing conflicts should not be taken lightly. If an official has one, he should ask the proper authority for ethics advice each time he would prefer not to withdraw from a matter related to his industry, because each situation may have a different best way of handling the conflict. But if the advice is to withdraw, again and again, the ongoing conflict needs to be dealt with in a more comprehensive manner, such as resignation.
The best time to deal with ongoing conflicts, if they are foreseeable, is before a position is accepted or before someone runs for a particular office. This is one reason why it is important to provide ethics training to candidates and new officials and employees, and to require them to file a disclosure form as soon as possible. It’s also important that a candidate make it clear during her campaign how she is dealing or will deal responsibly with her ongoing conflict.
The Rule of Necessity
There are times when multiple board or commission members have a conflict, or when there is a bare quorum and only one member has a conflict. The result of withdrawal would be loss of a quorum and an inability to consider the matter.
Multiple conflicts occur especially in a company town, that is, a city or county that has one major, dominating institution, for example, a company or university, for which a large percentage of the town’s citizens work.
When a quorum is lost due to conflicted members, the Rule of Necessity comes into play. The Rule of Necessity is originally a common-law judicial doctrine that deals with the problem of a biased judge in a court of last resort where there is no possibility of selecting another judge. Here’s the way the Rule of Necessity appears in the City Ethics Model Code:
If withdrawal would leave a board with less than a quorum capable of acting, members must disclose their conflicts on the public record, but they may then vote. If an official or employee is the only person authorized by law to act, the official or employee must disclose the nature and circumstances of the conflict to the Ethics Commission and ask for a waiver or advisory opinion.
The Rule of Necessity rarely appears in ethics codes. However, even when it is not there, it is a common rule that people can turn to.
There is a variation on the Rule of Necessity, which applies, for example, in California, where only the number of conflicted members necessary to create a quorum are allowed to participate. The selection of those who may participate is made by a random drawing. In Loma Linda, California, for example, where in 2009 four of five council members worked for Loma Linda University, the four conflicted members would choose straws, and then the two that won, plus the one without a conflict, would discuss and vote on the matter. This makes the conflict public on a regular basis, and gives citizens the choice of having regularly conflicted officials or not.
An interesting supplement to this rule in California is that any member who must withdraw due to a gift cannot be allowed to participate. This is intended to prevent a party to a matter from giving gifts to all members so that those members who have an existing relationship with the party may be allowed to participate (see the CA Attorney General’s Office 2010 treatise on conflicts of interest, p. 22). It’s important for ethics advisers to know about this, because you never know who else will come up with this clever scheme.
When considering employing the Rule of Necessity, it is important to recognize that it is unfair and potentially damaging, because it allows officials to act or be seen to act in their personal interest. Therefore, it is important to seek other ways of dealing with a matter before invoking this rule.
One way to prevent the need for employing this rule is to have one or two alternates on important boards and commissions, especially in company towns. This includes ethics commissions. Alternates make quorums easier to obtain, whether or not there is a conflicted member. They also make it easier for members with conflicts to withdraw without being concerned that their withdrawal will make it hard for the board to act. And there is the bonus of having a way for members to gain experience, and not having to vote before they have a basic understanding of the board’s responsibilities and subject area.
Another way to deal with this problem, especially in company towns, is to have a backup plan, for example, another body or individual that can make a decision in the event there are multiple conflicts.
A third solution provides that a court, body, or individual be charged with appointing one or more temporary board members to act in the particular matter. It would be best if this possibility were to appear in the board’s bylaws, but even if the situation were not anticipated, a board could turn to a court or the council for such a solution.
These solutions are based on ideas in a law review article by Arnold Rochvarg, “Is the Rule of Necessity Really Necessary in State Administrative Law: The Central Panel Solution” (Journal of the National Association of Administrative Law Judges, Vol. 19, No. 35 (1999)).
In any event, even when it is necessary for officials to vote, this does not mean that it is necessary for them to participate in the matter in other ways, as long as they remain at the table to preserve a quorum. The Rule of Necessity applies only to the voting aspect of withdrawal.
When Withdrawal Is Wrong
There are times when the most responsible way to handle a conflict is to participate. This is the case when, by not voting, a conflicted official on a board would prevent a decision or action that would have harmed him had he participated and acted in the public interest.
An example of this occurred in Stamford, Connecticut in 2011, when a member of the finance board, who had refused to withdraw when it suited him, chose to withdraw when the issue involved approving the city’s ethics board request for funding sufficient to hire counsel for an ethics proceeding where the finance board member was the respondent. Without counsel, it would be difficult for the ethics board to hold a hearing where someone would argue that the respondent violated an ethics provision.
This was a case where the official had an obligation to vote against his interests or honestly show his constituents, by voting against the counsel, that he wanted to prevent the ethics process against him from moving forward. To do this by appearing to be handling his conflict responsibly was clever, but irrresponsible.
When Withdrawal Is Insufficient
There are many situations where withdrawal is not a sufficiently responsible way to deal with a conflict. Of course, this is generally the case when a conflict is created by events, for example, by the offer of a gift. The responsible way to handle this is to refuse the gift, not to accept the gift and withdraw.
Withdrawal is insufficient when an administrative official is responsible for the matter, such as hiring or entering into a contract. For example, if a procurement official is charged with selecting who will get a contract, and one of the bidders is his brother, she cannot withdraw and hand the matter over to a subordinate. The reason is that this puts the subordinate in a differently, but equally conflicted situation. The subordinate has a personal interest in not having his boss be angry with him. It is unfair, and harmful to the public interest, to put a subordinate in this position. In addition, the public will not believe that the subordinate is not doing the supervisor’s bidding, so to speak. Therefore, the responsible way to deal with the situation is either to have the brother drop out of the bidding or have an individual or body that does not report to the procurement official make the decision (if this is practicable).
Another situation where withdrawal was insufficient involved the mayor of Denton, Texas (pop. 113,000) in 2008. The mayor’s two-partner law firm had done collections for the city before he was elected, and the contract came up before the council during his first term. He withdrew from the matter, but his firm was given the contract. Not only does it look wrong to give a mayor a city contract, but a mayor should not be collecting city taxes, and the council should not be put in the position of managing the behavior of the mayor as a lawyer representing the city. One of the council members who voted against the mayor getting the contract said, “This is about something that’s higher than a legal standard. It’s about the integrity of the chair and the office of mayor in our city.”
Another situation involved a council member in Allen County, Indiana, whose car was stopped by a sheriff’s department officer. After a call to the sheriff, the council member was allowed to leave without taking a drunk-driving test. The council member said he would withdraw from matters involving the sheriff’s department, but this would not be sufficient. The problem was not a conflict based on the council member’s relationship with the sheriff, but on the preferential treatment given to the council member due to his office.
Every decision to withdraw should be examined to see if it is just a matter of trying to make things look right, or whether it is really the most responsible way to deal with the conflict situation. As with everything in government ethics, withdrawal is not a mechanical decision. When there is a question, it is important to ask for advice from an ethics officer who has seen and dealt with other situations such as this, and who knows the reasons why withdrawal may be insufficient and what the alternatives to withdrawal are.
Resignation and Sale
Sometimes officials will choose to deal with a conflict not by withdrawing or doing something else as an official, but rather by getting rid of the other hat. This includes such things as selling stock or resigning from a position or a job.
In most cases, this will remove the conflict and allow the official to participate in the matter. But in many cases, this will not. For example, selling stock in a public company will remove the conflict if that company is before one’s board. But if it’s a private company and the official has a substantial ownership percentage, the relationship with one’s co-owners is still there, even if the ownership interest has just been sold. And the stock can easily be repurchased in a way that is very different from repurchasing public stock. Anyone can purchase public stock at the listed price. But not anyone can purchase an ownership interest in a private company, at any price. A former business owner can easily become an owner of the business again.
Consider this situation from Saybrook, Illinois. In 2008, two members of both a sportsman's club board and the village board of trustees resigned their sportsman's club membership so they would have no conflict participating in a motion for the village to annex the club. The two members reserved their right to rejoin the club after the annexation issue was dealt with.
When, as here, there is no apparent financial interest, but a strong interest nevertheless in an organization, strong enough to participate on its board, then resigning would not be enough to negate the conflict. It would certainly do nothing about an appearance of conflict, and there is no indication that one's loyalties and feelings of obligation would not still be divided. If the club membership were sufficient to create a conflict (and this is not certain), resignation followed by becoming a member again would not remove the conflict. In fact, it would make the officials look like they were trying to fool the public via a meaningless resignation.
Resignation and sale are often the most responsible way to deal with a conflict. But they are not magic incantations. Certainly, if a conflict will clearly lead to more than the very occasional problem down the road, it is right to resign or sell or whatever it takes to get rid of the conflict. But there are relationships and obligations you can’t get rid of, at least not without an appreciable amount of time passing.
6. A Summary Case Study
Here’s an historical case study, from Long Branch, New Jersey (pop. 30,000), whose facts present a range of special and not so special relationships that might or might not be the basis of a conflict sufficient to require withdrawal from participation. The names, which are made up, are included to make it easier to keep the characters straight.
The situation involves the reappointment of a volunteer sewerage authority commission member, George. George was a founder and is a director of a local bank. He is also a large contributor to the campaign of Mayor Enrique. Reappointment is made by the council, which includes the mayor.
One of the five council members, Joan, is the bank's chief financial officer and also a fellow bank director of George’s. Another council member, Tom, works part-time as a messenger for the bank, and a third, Francine, owns a few shares of stock in the bank.
The city attorney, Defacto, who advises the council, is also a fellow director of the bank and a major stockholder. The city attorney told the council that none of its members had a conflict sufficient to require their withdrawal from discussing and voting on George’s reappointment. There is no local government ethics program.
Which of these officials should or should not withdraw from consideration of George’s reappointment, and why? Think about this on your own before reading what I have to say about the possible conflicts involved.
Although Joan would likely not financially benefit in any way from George’s reappointment, as an officer and director of the bank she is a close business associate of George’s, would appear to be biased and, therefore, should not participate in any way.
Francine, as a small shareholder in the bank, need not withdraw, because she neither could financially benefit from George’s reappointment nor does she have a special relationship with him. But she should disclose her stock ownership, even if not required by law, and explain (or, better, have someone else explain) why this does not create a special relationship or possible financial benefit worthy of her withdrawal.
Tom, the part-time messenger for the bank, raises a more difficult question. He gets paid by the bank, but it's part-time work and he would not likely have any contact with a member of the bank's board of directors, not to mention a special relationship. But there is an issue of financial benefit that would, at least from the public’s point of view, create the appearance of a conflict. It would appear that Tom may feel obliged to vote for, or be afraid to vote against, a board member of his employer. In fact, he is in a lose-lose situation: if he votes for George, he'll be seen as having felt obliged; if he votes against George, he could jeopardize his job. If I were him, I would withdraw, not because of any ethics provision, but because he is conflicted, and would be perceived to be conflicted, in a personal way that an ethics provision could not describe.
Mayor Enrique’s only relationship with George is as the beneficiary of large campaign contributions. Some local governments formally consider this a conflict (in fact, this is the case for state officials in the mayor’s state). Legally, the mayor would not have to withdraw. But whether or not contributions legally create a conflict, they certainly create an appearance of impropriety. Citizens hate cronyism, in this case giving government positions to major contributors. It makes local government look like a club of connected, wealthy people, with others left out in the cold. A mayor who recognizes this, and withdraws when major contributors come before the council (and, in other situations, does not nominate people who have given him or her large campaign contributions), will not only be acting responsibly, but also be very popular with citizens (although not, perhaps, as popular with certain campaign contributors). More important, doing this sends the message to the entire government that other considerations, such as merit and diversity, trump connections and, to those who want to sit on a board or commission, it sends the message that making large campaign contributions is not necessary. In fact, the opposite is true.
The city attorney, Defacto, as a close business associate of George’s, should have withdrawn from the matter from the beginning. But since he already participated, and gave poor advice, which was in the interest of George, withdrawal is not a sufficiently responsible way of dealing with his conflict or his conduct. Without an ethics commission, the council should hold a hearing regarding the city attorney’s conduct, and censure him. When a government attorney not only ignores his own conflict, but provides ethics advice that is both wrong and in the interest of a close business associate, an example needs to be set. It has to be made clear that government ethics, more than any area of city activity, should be free of conflicts.
And, I think, the council should determine that the city attorney has so tainted George’s reappointment that the council should not even consider it. In fact, the best thing for George to do is take his name out of contention.
You can see from this case study that all possible situations and relationships cannot be anticipated by an ethics code, or even by a huge book such as this one. This is why it is so important to have an experienced, independent ethics officer to provide advice.
IV. Other Conflict Provisions
Reciprocity is an important part of every culture. It is something that everyone expects from their relationships with others. It is what makes our relationships seem fair.
One of the principal elements of reciprocity is mutual gift-giving. It is part of our day-to-day personal, business, and professional relationships to give each other gifts. We take each other out to lunch or a ballgame, invite each other over for dinner or a party, help out each other’s kids when we can. We give holiday gifts to those who do things for us, including our customers and our clients. Lawyers invite clients to their country clubs, and businesses send customers on vacations, or give them free rides in their jets. Gifts are a way of cementing relationships and making people who matter to us (personally or financially, or both) feel special. They express our gratitude.
In their book Out of Character (Crown Archetype, 2011), David DeSteno and Piercarlo Valdesolo discuss experiments that have shown that not only are people who feel grateful to someone more likely to help that person, but people who are grateful for something someone has just done for them are also more likely to help a stranger. No one has a good enough character to fend off gratitude. And why would anyone want to? It's one of the things that keeps families and communities together. But gratitude has its place.
A gift also makes the recipient feel good. When we receive a gift, our brain secretes oxytocin, the neurotransmitter that prepares women for motherhood. Oxytocin makes us less selfish, but only with respect to our group, which includes those who give us gifts. It makes us trust them more.
Local government officials don’t have customers or clients that need to be won and kept by the giving of gifts, nor are they customers or clients of anyone. They have citizens and constituents for whom they work, but they are not supposed to be obliged to one citizen or constituent more than to another.
Therefore, the very sorts of relationships that are important to business and professional life are what, in government, give rise to conflict situations. Therefore, the gifts that help cement these relationships are, for the most part, prohibited. They are prohibited because they make these business and professional relationships conflicted even without a specific matter coming before the official at the time of the gift, and because the public sees officials who accept gifts as “so many pigs feeding at the trough,” not something that furthers their trust in those who govern their communities.
Here’s another way of looking at gifts. When someone does business with, seeks approval or a grant from, or is regulated by government, they are not doing business with, seeking approval or a grant from, or regulated by officials. When someone lobbies an official, they are trying to convince the government, not the official. Officials are merely part of the government, individuals sitting in government positions at the moment. They are doing, or supposed to be doing, nothing but their government work, and to be paid nothing but what the budget says they are paid. In other words, officials do not personally act and should not personally benefit from what they are required to do as part of their public role. They should not be given special treatment, that is, no tickets, invitations to play golf or go on a vacation, or the like, because they should do nothing special for anyone. They should not be involved in reciprocity or feel gratitude to anyone in their role as an official.
But officials are human, and they are used to functioning in a reciprocal, gift-giving social world. They also like to treated specially. They like to be given tickets, flights in corporate jets, dinners at fancy restaurants. They often feel they deserve such perks because they take lower salaries in government than they could get in the private sector (although this often isn’t true). This is why officials waste a lot of energy seeking exceptions to gift provisions, so that they continue to get gifts. Exceptions and loopholes are a big problem in ethics codes’ gift provisions.
Unlike bribery, which refers to gifts given in return for a promise of official action or inaction, that is, where there is a direct relationship between one gift and another, in a relationship of ongoing reciprocity, there is no such direct relationship between gift and official action. The other thing that distinguishes bribery from gift-giving is that it is extremely difficult to prove bribery.
What matters to government ethics is that gifts from those seeking special benefits from a local government give the impression of bribery, even when bribery cannot be proven. And the appearance that government officials are taking bribes is very damaging to the public's trust in government.
It is unfortunate that limiting or prohibiting gifts makes some who seek influence or pay to play look for alternate legal means to make or receive large gifts, for example, bundled campaign contributions or gifts to favorite charities. But these can be dealt with, too.
It is important to recognize that gifts create conflict situations by creating both a relationship between gift giver and recipient and the appearance of a relationship, with the commensurate obligations. But unlike with a pre-existing conflict, which can be handled responsibly by withdrawing from matters involving those with whom one has a conflicted relationship, the way to deal responsibly with a gift is to reject or return it. The way to deal responsibly with a gift is to prevent the relationship from coming into being. If there is already a relationship, a gift only strengthens the official’s obligations to the gift giver and makes it difficult for the public to believe the official is not somehow favoring the gift giver.
Once a gift has been accepted, however, not only does the gift have to be returned or paid for. The recipient must also withdraw from matters that involve the gift giver.
Officials often reject limits or bans on gifts by insisting that they can’t be bought. When they do, tell them that’s not the point of a gift ban. A good way to see how meaningless it is to say, “I can’t be bought,” is to ask the person saying it to name the people in the room who also can’t be bought. If she says, “No one on this council can be bought,” respond, “How do you know? Are you willing to put your position on the line, to resign if anyone on the council is found to have done something for someone who gave him something of value?” If an official can only assure citizens that she herself cannot be bought, it is meaningless. “I can’t be bought” is nothing but words that few people believe. That’s why we need gift bans. We need to assure the community that its government is not for sale.
1. Gift Bans
The easiest way to prevent loopholes in gift provisions is to dispense with exceptions altogether, at least with respect to those doing or seeking business with the local government, those regulated by or seeking benefits, licenses, or approvals from the local government, their principals and officers (and their immediate family members), affiliated firms, and those who represent them (commonly referred to as “restricted sources” or “interested parties”). Here is the principal part of the City Ethics Model Code gift provision:
An official or employee, his or her spouse or domestic partner, child or step-child, parent, or member of his or her household, may not solicit nor accept anything of value from any person or entity that the official or employee knows, or has reason to believe, has received or sought a financial benefit, directly or through a relationship with another person or entity, from the city within the previous three years, or intends to seek a financial benefit in the future. If in doubt, the official or employee should refrain from soliciting or refuse a gift, and should first inquire into the person or entity's relationship with the city.
The provision includes an official’s immediate family members, because it is very easy to give an official a gift indirectly by giving the gift to a family member.
The provision includes not only accepting a gift, but also soliciting a gift. This protects people and businesses from the pressure of officials who demand gifts in return for contracts, approvals, and the like.
The provision applies to those who are seeking, have recently received, or intend to seek a financial benefit from the local government, which includes not only contracts, but also grants, approvals, licenses, and permits that add value to property or that allow work that could not otherwise be done.
Due to the phrase “directly or through a relationship with another person or entity,” the provision also applies to gifts from those who have a special relationship with a restricted source, for example, a close relative, business associate, or association in which the restricted source is a member, such as a chamber of commerce, state or national association. Otherwise, the owner of a restricted source may provide a gift through another company that he owns, as was done to the then mayor of New Orleans. If only direct gifts are prohibited, there is a huge loophole that allows gifts to be made in all sorts of ways. When a complaint was filed regarding the gift to the mayor, all he and his colleagues learned is that this was an effective way to get away with ethical misconduct. This is true of most exceptions as well as of gift rules that are limited to direct gifts.
The gift provision does not allow an official to say he didn’t know who actually made the gift. This is necessary, because no one can know what an official actually knows. The gift ban applies even if the official merely had reason to believe, and it expressly requires officials to inquire before accepting a gift if they are not sure. This is important because the public is doubly disgusted when an official says he didn’t know the person who paid for his family’s vacation in the Caribbean was seeking business with the local government. The public reasonably believes that no one offers such a gift unless they want something in return.
Some jurisdictions define “gift” to include job offers; others prohibit job offers from restricted sources in a separate provision. Job offers should be treated separately from outside employment that an official had before taking office. Such employment need not, in most cases, be given up; however, it should require withdrawal from any matter involving the employer or its clients.
Some gift bans use not the language of benefits sought by those making the gifts, but rather the fact that they are subject to the government. I think it’s best to be consistent as possible in the use of “benefits” language, but adding “subject to” language can make it more clear who are the targets of the ban, which is helpful to both officials and to restricted sources. Here is the Texas gift ban, which applies to local officials (the section continues with other gift bans involving officials involved in litigation, procurement, and judicial matters; these gift bans use the language of “interest”).
Texas Penal Code §36.08(a). A public servant in an agency performing regulatory functions or conducting inspections or investigations commits an offense if he solicits, accepts, or agrees to accept any benefit from a person the public servant knows to be subject to regulation, inspection, or investigation by the public servant or his agency.
An important advantage of a gift ban is that it is straightforward and relatively easy to comply with. It lessens the confusion regarding the valuation of gifts and it means that city officials do not have to keep a tally of each gift they get from each individual or entity, so that they can make sure no one entity (including its employees) gives them more than the dollar limit specified in the gift provision.
For the purpose of gift provisions, as well as to help deal with conflicts in general, it is very useful for a local government to create and regularly update a list of restricted sources (including their owners and officers) and make the list easily available online, both for officials and for the public to consult. A list like this can make life much easier for local government officials, and prevent officials from insisting they didn’t know or have reason to know that someone who gave them a gift was or worked for a restricted source.
Of course, the fact that someone who is not a close friend, family member, or business associate is offering a gift should instantly give an official reason to believe they want something from the government and, therefore, that they are a restricted source.
This points to a principal purpose behind gift provisions: they prohibit bribery without having to make the difficult proof that there was a quid pro quo, for example, that the gift was given to ensure a specific vote. Like the average person, a gift provision assumes there is something wrong when a gift is given to a government official by someone who has something to gain from the official’s action or inaction (past, present, or future). And like the average person, a gift provision is mature enough to recognize that mutual obligations do not take the form of quid pro quos. People give and take in many ways, at various times, without the need to say that this makes you obligated to do that. Bribery provisions cover only a tiny part of gift transactions in a country, such as the U.S., where bribery is not the norm. As the federal Office of Governmental Ethics said in a 2012 report on exceptions to the federal gift provision:
[I]t is increasingly recognized that the more realistic problem is not the brazen quid pro quo, but rather the cultivation of familiarity and access that a lobbyist may use in the future to obtain a more sympathetic hearing for clients.
A gift provision also dispenses with the need for evidence of a quid pro quo, which is required in a bribery case and is hard to obtain without a sting operation.
And yet many local government ethics codes prohibit only gifts where there is a clear quid pro quo. Sometimes these bribery prohibitions are included in addition to gift bans. This is not only unnecessary, but confusing. Bribery prohibitions belong only in criminal codes.
Some local governments prohibit both sides of a gift transaction (as soon as a gift is accepted, even if it has not actually been given, it becomes a transaction). Even though it is the official who has special obligations to the community, it is good to let people know that they are not supposed to put officials in the position of having to refuse gifts. Including both sides of a gift transaction also gives restricted sources protection from pay to play: to an official who asks for something in order to get their support for a contract, permit, license, or grant, one can simply say, “I’m prohibited by law from making a gift.” Here is how the Miami-Dade County gift provision begins:
No person shall offer or give to any public official or employee, directly or indirectly, and no public official or employee shall solicit or accept . . .
It is often overlooked that elected officials often try in many ways to influence appointed officials and employees in order to obtain preferential treatment to them and to their family members, business associates, and political supporters. For this reason, Miami-Dade County also prohibits gifts from officials to employees:
No county public official shall offer or give anything of value to a member or employee of a county department or entity, while that member or employee is associated with the county department or entity, and no member or employee of a department shall solicit or accept from any such person anything of value from a county official or employee.
Total Gift Bans
A total gift ban prohibits gifts from anyone, not only restricted sources. Many ethics codes have a total gift ban. This means that those who drafted the code did not understand that it is only gifts from restricted sources (directly or indirectly) that matter, that gifts are restricted because they create and deepen (and appear to create and deepen) relationships and obligations between government officials and those who seek benefits from the official's agency or, with respect to high-level officials, the government. If someone making a gift has nothing to gain from the government, then the obligation that is created or deepened is purely personal, and there is only one reason to restrict it: it may be an indirect gift from a restricted source.
A total gift ban is almost always accompanied by numerous exceptions. These exceptions open up many loopholes, undermining the ban and leading to many scandals. The possibility of indirect gifts, if that is what the total gift ban is seeking to prevent, can be better dealt with by a requirement that officials inquire about the original source of questionable gifts, that is, any substantial gift that is not from someone who would normally give them a substantial gift (and how many people is that?!). If the official is not certain that the gift is not from a restricted source, she should refuse the gift. If she accepts the gift and it is an indirect gift from a restricted source, then she is responsible for accepting it.
Total gift bans are problematic not only because they are overly restrictive, but also because, due to their many exceptions, they are not restrictive enough. In addition, these exceptions can have unintended consequences, and they can require numerous waivers to be given. For example, a total gift ban in Alaska has a compassionate gift exception, but this only applies to gifts up to the gift limit of $250. A few years ago, a state representative needed a kidney transplant. But the law wouldn’t let him have one. That’s ridiculous not because gifts to officials shouldn’t be banned, but because they should only be banned from people and entities that have something to gain by making a gift. It’s highly unlikely that a lobbyist was offering his kidney to the legislator.
Chicago’s total gift ban has lots of exceptions, including gifts from a “personal friend” (an undefinable term) and gifts “related to official city business,” whatever that means. The vagueness of language in gift ban exceptions can make it difficult to enforce against any gifts.
Some popular exceptions can create very ugly situations. For example, because exceptions for public service awards are usually unlimited, a big contractor or developer could make an annual gift of a car to an official for being Ethical Official of the Year, and it's perfectly legal. It is far easier simply to prevent any gifts from contractors and developers seeking benefits from the government, whatever the so-called purpose.
In any event, total gift bans only prevent certain kinds of indirect gifts. Ethics laws cannot place a total gift ban on gifts to immediate family members, and yet they are a great way to make a gift to an official's household or someone very important to the official. A gift provision based on restricted sources can prohibit gifts from restricted sources to an official's family, business, and even a pet charity. A total ban cannot.
Also, officials see total gift bans as intrusive into their personal life, and their fight against gift bans can turn fuel their opposition to an ethics program in general.
In addition, total gift bans are hard to remove because it can be argued that they're the “toughest.” But the “toughest” doesn't always mean the best or most responsible.
A total gift ban sometimes forces an ethics commission, seeking to be fair, to squeeze a situation into an exception that wasn’t meant to apply to it. For instance, in Colorado in 2013, a draft advisory opinion would have allowed gifts to a legal defense fund to be permitted under the “special occasion” exception, which reads, "The prohibitions in ... this section do not apply if the gift or thing of value is: ... (g) Given by an individual who is a relative or personal friend of the recipient on a special occasion.” This exception was intended for birthdays and anniversaries, not legal defense funds. The ethics commission had to make additional rules to prevent restricted sources, even though the law did not allow for this.
Gift Provisions That Seek to Prevent Influence
A popular way to complicate a gift provision is to have it be effectively a bribery lite provision. Here is a New York State Municipal Law provision (§805-a(1)):
No municipal officer or employee shall ... directly or indirectly, solicit any gift, or accept or receive any gift having a value of seventy-five dollars or more ... under circumstances in which it could reasonably be inferred that the gift was intended to influence him, or could reasonably be expected to influence him, in the performance of his official duties or was intended as a reward for any official action on his part.
Instead of specifying which people officials should not be accepting gifts from, this sort of provision specifies the circumstances in which officials should not be accepting gifts. Such circumstances are those “in which it could be reasonably inferred” that influence was intended or that the gift “was intended as a reward,” and those in which a gift “could reasonably be expected to influence” the official. This adds two unusual elements to ordinary ethics provisions: the elements of intent (to influence or reward) and expectation (that a particular gift would influence a particular official).
The result is both complex and vague, providing little guidance to officials or to ethics officers and commissions, and also providing many ways to argue that the provision does not apply to a wide variety of situations. Intent is an internal state that is not only very difficult to prove (or to “infer”), but even difficult for an individual to know about himself or be honest with himself about (“the official is someone I like, and it’s his birthday, after all”). And how is an official to know what could be reasonably inferred, or what could be reasonably expected? How can a provision like this be fairly enforced?
Consider this example. In 2010, the mayor of Tulsa accepted free legal services from a city contractor. The Tulsa ethics provision requires an official to determine what might be reasonably perceived, rather than simply prohibiting him from accepting a gift from a city contractor. Since the mayor perceived the matter as a public service, he had no reason to consider that it would be perceived any different by others. Had the provision simply said the mayor could not accept any gift from a contractor, he would have had no reason to accept the gift.
Note the difference between the use in the New York provision of “could reasonably be inferred” and the use of “has reason to believe” in the City Ethics Model Code provision. In the model provision, the reason to believe involves a fact: the giver’s business relationship with the local government. In the New York provision, the reason to infer involves intent and expectation, which are neither facts nor within the official’s ability to know, only to guess.
In other words, you can ask someone who offers you a gift what his relationship with the local government is. If you ask him his intent or expectation, he’s certainly not going to confess that he was trying to influence or reward you. He’s going to say he’s helping out the city by subsidizing your trip to a conference or getting you to a meeting more quickly on his corporate jet. He’ll say he’s helping you draft an ordinance, and why not work on it at Chez Cher, so he can get his city work done during work hours?
The New York gift provision is really an aspirational provision, telling officials they should not take gifts that might look bad. This is exactly the advice an ethics officer would give. But this language does not work as an enforceable ethics provision. That might be why this sort of language is popular.
When the Alabama legislature passed an ethics reform act in 2011 that added a provision saying that officials could not “solicit or receive anything for the purpose of influencing official action,” even this was too much for many state senators. The Senate tried to add the word “corruptly” to the provision, so that it would read “for the purpose of corruptly influencing official action.” It’s hard to enforce the current law; it would be next to impossible to enforce the amended law. In addition, it would send the message that it’s okay to take gifts from lobbyists and others seeking to honestly influence officials by giving them gifts.
There is a second important problem with trying to limit only gifts intended to influence. Such a provision ignores the other principal problem with gifts to officials: pay to play. Often a lobbyist or, say, a developer does not make a gift in order to influence an official. Often the gift is given because it is required by the official, expressly or tacitly, before the official will consider the lobbyist or developer’s requests. Such a gift is effectively extorted from the giver, not given to influence. By focusing on influence, this sort of provision makes an exception for pay to play. It legalizes pay-to-play gift giving.
Here’s how pay-to-play gifts work, from testimony given in a bribery trial involving a $25,000 contribution to a charity, requested by a Miami-Dade County commissioner:
Prosecutor: “The fact that you had a matter pending in front of the commission at that particular moment, was that raised at all by the person you talked to in the commissioner's office?”
“Not at all, no.”
“But yet, I could assume it would be fair to say that it must have been on your mind, because you turned around and called [your partner] . . . It was actually his project.”
“I'm ashamed to tell you that, yes. I'm ashamed to tell you . . . it was not one of my finer moments, Mr. Scruggs.”
The developer went on to say that he made the donation to the charity affiliated with the commissioner because it appeared to be a good cause, and because he was loathe to turn down the request. “I didn't see a reason to poke her in the eye and tell her no.” At least from the developer’s point of view, there was no intent to influence. There was only an intent not to be on the wrong side of an official. That is worth a lot of money.
The language of “influence” means that someone doing business with government is not required to say No to a pay-to-play request. Like a New York Yankees spokesperson said in 2010 regarding tickets given to the governor, “The burden has to be with the public official. We can't be the ethics police.” New York state law prohibits giving gifts, but only gifts “intended to influence.” This means that when an official asks, a contractor has no legal reason to say No.
And then there is the matter of intent. Intent is not what matters in government ethics. And intent is very difficult to prove. What matters in government ethics is appearance, and there is no difference, from the public’s point of view, between gifts intended to influence and gifts that have been extorted. They may feel very different to the official and the restricted source, but this difference doesn’t matter in government ethics. Government ethics accepts the fact that neither the public nor the ethics commission can reasonably tell the difference between an intent to influence and an intent to go along with an official’s demands. Both kinds of gifts need to be prohibited. A gift from a restricted source is a gift from a restricted source, whatever the intent or expectation.
Two Special Kinds of Gift
There are two kinds of gift that are ignored by most ethics codes, but are worth acknowledging as special problems. One is a gift given anonymously. When a gift is given anonymously, an official is put in an especially uncomfortable position. The gift cannot be returned. An official who hands the gift on to the local government has to insist that he has no idea where it came from, making it look as if he were trying to hide the giver’s identity, when in fact he is dealing responsibly with the situation (which is not quite a conflict situation, because it’s not clear (1) who the conflict would be with or (2) that the giver has anything to gain).
More often, however, the official has a good idea who sent it (or finds out indirectly), but since he doesn’t know that a restricted source sent it, he may in fact accept it. If discovered, he can insist he didn’t know where it came from and, therefore, that the gift could not have influenced him in any way. In other words, an anonymous gift can be a way of allowing an official to accept a gift, at least legally, if not ethically. But the public won’t believe that the official doesn’t know where the gift came from. They know that it is unlikely anyone would give an official a gift unless he had reason to believe the official would know who it came from.
The only local government I know of that prohibits anonymous gifts is Chicago (§2-156-040(a)).
Chicago also expressly prohibits the other problematic kind of gift, the cash gift (§2-156-040(c)). As discussed below, the fact that most gratuities are paid in cash makes it difficult to control them. Cash gifts do not leave any paper trail. It is, therefore, difficult to enforce a prohibition on cash gifts, but it is worth letting officials know they are problematic, at least when there is a minimum gift amount (as there is in Chicago).
2. Gift Amount
There is a mistaken idea that a local government official’s “price” is somehow relevant to a gift provision. Politicians constantly insist that you can’t buy them for the price of a lunch or a ticket to a basketball game. The fact is that people are more inclined to support someone who takes them out for a drink, not to mention lunch or a basketball game. It isn’t a matter of buying; it’s a matter of our deep-seated feeling of give and take. Just sitting through lunches together creates a special sort of camaraderie.
Gifts are not about amounts. If you take someone fishing, you don’t expect him to take you fishing in return, or spend on you the cost of the gas to drive to the lake. The fishing trip is part of a series of exchanges that are part of what relationships are all about.
When an official says she can’t be bought by the cost of a dinner, ask her for a full accounting of her relationship with the person who paid for it, every meeting, phone call, help with legislation. Or ask her how much her spouse paid her to get married. Or her pet to be cared for. We can be “bought” in any number of ways.
When people talk about the amount of a gift, mention how valuable a stock tip can be, or a recommendation of a child to a school or company, even if they cost nothing at all.
Gifts are not about money, they are about relationships. Not surprisingly, government ethics is also about relationships. Government officials are human, and the exchanges common to a good relationship are very important to them, just as they are to the rest of us. The growing recognition that relationships are what matters is behind the fact that more and more local governments are requiring that their officials keep a public record of all their meetings with lobbyists and other restricted sources. Gifts are just one piece of the puzzle, but a piece of the puzzle for which there are receipts, that is, clear evidence.
Gifts also involve preferential treatment. Ordinary citizens don’t have lunch with their representatives. And if they did, they wouldn’t expect to pay for their representative’s lunch. Why is it different for lobbyists and other restricted sources? What reason do they have to act different, or be treated different, from ordinary citizens? Yes, they have reason to meet with officials, to inform and persuade them about matters important to them, but why can’t they do it in the same government office where ordinary citizens meet with officials?
Former Georgia state representative Roger Hines recognized all this in a 2012 op-ed column about the state’s $100 limit on gifts from lobbyists: “I didn’t like the feeling I had after accepting the tickets. Not everything that’s legal is right or wise to do. Every citizen in Georgia has the right to go to the Capitol and influence legislation, but most don’t have the time or money to do so. ... The gift-giving is corrupting, and the writer of this sentence, and every reader of it, is corruptible.”
And why can’t the government pay for its officials’ business lunches and dinners, not to mention their tickets, when the official is doing government business or fulfilling a ceremonial function? It’s more than worth the money when you consider how much it benefits the public trust.
Despite the fact that the amount of a gift has little relevance to a gift-giving relationship, many ethics codes allow gifts up to a set limit. There are two parts to any gift limit amount: the amount per gift and the aggregate amount per year. Many gift provisions only include the amount per gift, which is usually $50 to $100. Anything less than this amount is considered to be of insufficient (de minimis) value to make a difference. But if it doesn’t make a difference, why is it being offered to or requested by the official? If it’s such a small amount, why can’t the government foot the bill?
The reason for an aggregate gift limit is that per gift limits allow for frequent lunches and dinners, or even tabs at local restaurants, which can add up to hundreds or even thousands of dollars a year. In a city without an aggregate gift limit, an official could conceivably go to any restaurant in town whenever he wanted and never pay for a meal. He could simply choose which tab to charge it to. And what lobbyist, contractor, or developer could turn down a request to set up a tab if a tab were perfectly legal?
There is a third aspect to gift amounts that comes up again and again: the value of a gift. What is the value of a seat in a luxury box at a sports event, a seat that you cannot buy and that is accompanied by a buffet dinner and drinks, cover from sun and rain, closed circuit television, and perhaps attractive young individuals to socialize with? What is the value of a seat on a corporate jet, or a good ticket to the Super Bowl, which is worth far more than its face-value price? These are thorny questions that lead to poorly written or very complex code provisions, endless disagreements, ethics complaints, and bad press for local governments. Banning gifts from restricted sources means that no one has to worry about determining such values, and all that controversy is prevented.
If a local government is going to allow gifts, it should provide detailed information on how to value at least the most common gifts that raise questions, such as a skybox ticket, a ticket to a charitable event, and a flight on a private plane. Arkansas’ ethics code does this, complete with examples.
Some gifts have no monetary value, or at least no ascertainable amount, yet are very valuable. Take a recommendation or job offer. “Keep doing what you’re doing, Joe, and I’ll give your son a good sales position.” That may be music to an official’s ears, but what is the dollar value, especially when the pay is on commission? Gifts from people seeking benefits from government are gifts, whatever their certain monetary amount. (See the section on gifts with no financial value, below.)
Sometimes it’s not even clear whether something is a gift or not. For example, to determine whether a loan to an official is a gift or not, it has to be determined whether the loan was made at the market rate. This can be difficult to determine. For example, there are different market rates for different individuals and companies. Therefore, it is better that officials not accept loans from restricted sources at all. Some local ethics codes do prohibit such loans, or limit them to a low amount, for example, in San Diego $500 if there is a formal loan document, $250 if not.
There is a similar problem with rent. If an official rents from a restricted source, it is often difficult to determine whether the rent is at or below market rate. Only the difference between the rent and the market rate would constitute a gift, legally speaking. But the real gift may have been making the space available at all when space was scarce in the area. The gift may, in other words, have been preferential treatment rather than dollars. Again, it’s better that an official not rent from a restricted source and, if the official is already renting from a restricted source, it is appropriate, although rarely required, for the official to withdraw from any matters involving the landlord, in whatever capacity the landlord is acting.
In fact, this problem arises with respect to almost any transaction between an official and a restricted source, short of a regular retail purchase at a store. It’s always hard to know whether a discount has been given or preferential treatment has been shown, whether in the purchase of property or in the provision of professional services.
It’s important to remember that a gift is a transaction, although only one piece of it. If officials should not be transacting business with restricted sources, they should not be accepting gifts from them, either. And if they are accepting gifts (and this is allowed), this creates a conflict, requiring the official to withdraw from any matter involving the restricted source. But that would put an end to the gifts, at least to the gifts prohibited by law.
Giving an official a discount can look worse than giving her a gift, because it shows favoritism to officials over other customers or clients. Using one’s office to get a discount does not go over well with the public. When it came out that U.S. Senator Christopher Dodd had been put on a bank’s list of special customers, who were treated specially with respect to loans, the public was angry, and Dodd decided not to run for office again.
Second, a discount is a hidden way of giving a gift. It looks designed to get around gift provisions. The one thing worse than an official accepting a gift from a restricted source is an official accepting a sneaky gift from a restricted source.
One way to deal with this problem is to require an official who wants to purchase anything from a restricted source, other than a product with a set, non-negotiated price, to declare the purchase as if it were a gift. Then the restricted source should be required to prove to the ethics commission that no discount was given. The restricted source can better handle this burden, since it has better access to the necessary information. At the end of this process, there will either be no more appearance of impropriety, or the official will not make the purchase, or take the apartment or loan.
Sometimes the discount is 100%, and what is given is not a product or labor that creates a product, like a house addition. What is given is services, legal, accounting, palm-reading, whatever, at no cost. Since there’s no sign of the services, no invoice, no fixed-up bathroom, these gifts are difficult to see. Accepting a gift such as this should be seriously penalized, and full restitution should be made.
Gifts with No Financial Value
Gifts are almost always defined as being transactions that provide a financial benefit. But some of the best things in life are not only free, but cost nothing and provide no financial benefit. For example, a developer intercedes to help a zoning board member’s child or sibling get into a good university. It costs the developer nothing and provides no financial benefit to the child or the official (in fact, it might cost the official a lot of money). But it is a gift that creates a strong feeling of obligation, not to mention, if it becomes public and the official supports the developer’s project, a strong appearance of impropriety.
As with any ethics provision, a gift provision is only a minimum requirement. If it is limited to gifts with a financial value, that does not meant that gifts with no financial value do not create an appearance of impropriety. It just means it is difficult to anticipate and describe the situations where this would occur.
In fact, helping to get an official’s child into a school is more problematic than giving her money or offering her work, because she cannot refuse or return the gift. Once the deed is done – even if the child decides to go to another university – it's an unreturnable gift that creates a special relationship. There cannot even be restitution later on.
If someone helps get an official’s child into a school, the official needs to recognize that this creates a special relationship and, therefore, tell that someone (and the public) that she will have to withdraw from any matters involving him, his business partners, or his clients. If someone offers his help, the official needs to tell him that this would require her withdrawal.
We are told by our parents, “It’s the thought that counts.” When it comes to gifts to public officials, our parents were right. What doesn’t count is the motive behind the gift. It might have been done out of friendship, love, or pity, but it is the fact that it was done that creates a conflict situation.
3. Acceptance and Rejection of a Gift
Accepting a gift is very different from acting in order to obtain a benefit. A gift, unless it is bribe, does not require any action by an official other than acceptance. Acting in order to obtain a benefit may require months or even years of action to get, say, a development approved or a bid accepted.
While it is impossible to describe the great variety of conduct that constitutes action to obtain a benefit, it is relatively easy to describe acceptance of a gift. One can also describe what it means to reject a gift. This is helpful information, and it can be further clarified and applied to examples in the form of advisory opinions. However, few ethics codes include such a description. Fortunately, for those looking for such language, San Diego has a detailed description of acceptance of a gift, which it calls, confusingly, a “benefit” (§27.3522). The version below uses the word “gift.”
(a) A gift is “accepted” when the recipient knows that he or she has either actual possession of the gift or takes any action exercising direction or control over the gift.
(b) In the case of a rebate or discount, a gift is “accepted” when the recipient knows that the rebate or discount is not made in the regular course of business to members of the public.
(c) Discarding a gift does not negate receipt or acceptance of the gift, except when the gift is a pass or ticket and subject to the exception set forth in section 27.3525(m).
(d) Turning a gift over to another person does not negate receipt or acceptance of the gift.
(e) A payment made to, or on behalf of, an elected City Official or a candidate for an elective office of the City for his or her food constitutes the acceptance of a gift.
I would add to (a) that acceptance must include not only knowledge regarding the gift, but also knowledge regarding who the giver is. This is especially important if the gift is made indirectly, through a representative or go-between who is not a restricted source. But it also needs to be said that, if it’s not clear who the giver is, an official must ask.
I would change (b) to include not only knowledge of a discount, but a reasonable belief that there is one, and then the failure to ask whether there is one, and get an answer in writing. If a restricted source offers an official a loan, for example, the official has an obligation to make sure that there is no discount or any special terms. U.S. Senator Christopher Dodd’s long political career ended due to his failure to ask.
More thought goes into accepting a gift than returning a gift. The Minneapolis Ethical Practices Board includes on its website a simple form cover letter for returning a gift. The letter explains exactly why the gift must be returned. Every ethics commission should have such a letter on its website.
What to Do with an Illegal Gift
What should an official do when she receives a gift in violation of the ethics code? This too is rarely specified in an ethics code, even in San Diego’s. When possible, the gift should be immediately returned with a cover letter stating that it was made in violation of the gift provision. It is not sufficient to make a payment of the difference between the value of the gift and the gift limit (for example, if the gift is a $100 ticket and the gift limit is $50, it does not make the gift legal to send the giver a check for $50).
When the gift is not returnable – either because, for example, it will quickly spoil, it is not material (e.g., a discount or a job offer), it has already been consumed (before realizing it was illegal; remember, gifts to family members are included, and they have not had ethics training), or it cannot be undone (e.g., extra work done on one’s house beyond what was contracted for) – there should still be an immediate response, refusing an immaterial gift or pointing out that the gift is not worth returning or has been consumed, but still pointing out that the gift was illegal.
If a gift has been used or consumed before the official learns who it came from, the official should immediately notify the ethics commission of the gift and settle the matter without the need for an investigation or proceeding. Disclosure of receipt (and return or refusal) of the gift should also be given to one’s supervisor or chair. In fact, public notice should be given of any offer of an illegal gift. This is a way for an ethics commission to see what is happening, to see which restricted sources are tempting officials, and to give officials warning. Such information may form the basis for a broader investigation or a public hearing on gift-related issues.
There are some local governments that insist on having illegal gifts given to the city. Of course, this is not always possible, for the same reasons that many gifts are not returnable. Oddly, Chicago requires that illegal gifts be turned over to the Comptroller, “to be added to the inventory of City property.” But this raises another issue, which is discussed below in the section on gifts to local governments.
4. Gift Exceptions
The City Ethics Model Code recommends five exceptions to the gift ban. The first exception is for gifts from immediate family members who happen also to be restricted sources. The second is for gifts up to an aggregate value of $50 during any twelve-month period, but this is here only because it is common, not because it is recommended (a general de minimis rule will prevent enforcement against small gifts; see the section on de minimis benefits). The third exception is for gifts to the local government that are transferred to the local government (that is, gifts accepted by an official only in his official capacity, not for his use). However, see the section on gifts to local governments, which discusses problems with this exception.
The fourth exception is for gifts up to $50 for solemnizing a marriage ceremony, which applies primarily to mayors and justices of the peace. This depends on the custom in a particular local government. And the fifth exception is for public awards from charitable organizations, up to a value of $100 (again because it is so common; but there is a question whether a charitable organization that, say, has a social service contract with a city should be giving awards to city officials at all, even if the award is just a piece of paper).
The City Ethics Model Code does something very different from other ethics codes: it places these exceptions not in the gift provision, but in an all-purpose exclusions section (§102). Doing this means that when an official consults the gift provision, she sees a gift ban rather than a long list of exceptions. In many gift provisions, the ban is followed by so many exceptions that there doesn’t seem to be a ban at all.
Once you start thinking of reasonable exceptions to a gift ban, it becomes very difficult (1) to decide where to draw the line and (2) to use language that will prevent what was intended to be a narrow exception from being turned into something you can drive a truck through. The following subsections take a critical look at common gift exceptions.
a. Gifts from Lobbyists. You would think that, of all people, lobbyists would be the least likely group to be given an exception to a gift ban. As an Alabama lobbyist once pointed out, “lobbyists don't give anything to public officials but for the purpose of influencing official action.”
New York City has one of the best ethics codes in the country, and yet there are 14 exceptions to the lobbyist gift provision, ranging from gifts of no substantial value, which could be covered by a general de minimis rule (see City Ethics Model Code §213.1), to “invitation to attendance at professional or educational programs as a guest of the sponsoring organization” and “travel-related expenses from a private entity which is offered or given as a gift to the City rather than to the public servant.”
When one imagines the situation where an organization invites an official to participate at a conference, and pays her way because her expertise is valuable, one imagines a professional organization making the invitation for nothing but the most upstanding of reasons.
But try imagining it differently. The organization is seeking to stop an ordinance from being passed, and its lobbyist wants to use the conference as an opportunity to get into the council president’s good graces. Imagine the headlines when the trip comes out: “Lobbyist Fighting Ordinance Hosts Council President at Swank Oceanfront Hotel.” Why should a gift provision allow this?
Of course, the fact that the organization lobbies the local government may not mean that anything nefarious is going on. But if the lobbyist or organization pays for the trip, it will look that way. If it’s important to the city for the council president to attend, then the council budget should pay the conference fee and all the related expenses, including hotel and transportation. If the lobbyist is holding a private party during the conference, the council president does not need to attend. How could that possibly help the city?
One sees how hard it is to defend gifts from lobbyists by listening to what lobbyists say when people question such gift-giving. Instead of maturely commenting on the issue of special relationships and how they give rise to appearances of impropriety, they tend to present the government ethics viewpoint as a cartoonish picture of shark lobbyists preying on weak, corrupt officials. After drawing this horrific picture of themselves, they call it “insulting” as they hadn’t drawn the picture themselves. This is what I call the Jaws version of the Straw Man Fallacy.
b. Educational Function. It is important to consider what an exception means in practice, well beyond what it appears on its face to mean. Sometimes a single term can make all the difference between a reasonable exception and a major loophole. One example is the phrase “educational function” in the 2010 Alabama gift provision amendments, as follows:
[A] public official and a public employee may accept any of the following: ...
(4) Waiver, payment of, or reimbursement for actual and necessary transportation and lodging expenses, registration fees, and similar fees in connection with the public official's or public employee's attendance at any of the following functions if no reimbursement is made by the public official's or public employee's agency:
a. An educational function. ...
In order to make a large gift to an official, all a restricted source needs to do is make the gift a vacation somehow tied to a conference, seminar, or anything else that can be considered to have an “educational function.” Ditto for an official who wants to get a restricted source to pay up, and keep the whole thing legal. Considering the educational functions that go on every day at or near the world’s fanciest resorts, it does not require a lot of maneuvering to get around the Alabama gift ban, which applies to local officials.
Some jurisdictions do not allow a gift that is tied to an educational function, unless the official is speaking or participating on a panel. This sounds much more responsible, until you learn how easy it is for a company or lobbyist to arrange for officials to speak or participate on a panel. What happens is that companies send officials a list of panels to choose from. They don't have to indicate any special knowledge or experience, they don't have to be asked, as is common at conferences, they just sign up.
This is what investment firms did for members of the Baltimore Employees' Retirement System board. Instead of thinking that it is a good thing for officials to sit on panels and make speeches, it is better to think whether it is a good thing to allow restricted sources to be paying for this. Here’s what one member of the Baltimore board said, “The sponsors of the conferences pay for part of the expenses because they want access to the trustees; that’s why they pay — they want business.”
Why should those doing business with government pay for officials’ training or for officials to train others? If officials are not receiving sufficient training, why don't they ask the government to provide more training? If restricted sources care so much about helping the government with training, why don't they give the government a gift to pay for training (with the government free to make decisions about training) instead of using educational functions as opportunities to develop personal relations with officials? In other words, why must supposedly helpful gifts have the quid pro quo of personal relations?
c. Widely Attended Events. Take another exception in the 2010 Alabama law, for “widely attended events,” that is, dinners and receptions at which more than a hundred people “with a diversity of views or interests” are expected. That sounds like everything is above board until you realize that these diverse people only need to be invited; they don't have to actually come. So a gun manufacturer could invite dozens of liberals who wouldn't dream of showing up, and thereby wine and dine the fifty people they really wanted to invite in the first place. Or a contractor can invite dozens of officials, most of whom don’t even deal with contracts, so they won’t bother attending. Remember that, in local government, most companies and their lobbyists aren’t trying to preach to those who oppose their goals; they’re trying to get projects approved, contract specifications geared toward them, and particular changes made to laws by those who generally support their views, say, on development.
d. Sports Events. And then there is attendance at sports events. It is a common exception to allow officials to attend events if their attendance “serves a public purpose” or has “a ceremonial function.” There are occasions when the mayor is required to throw out the first pitch, celebrate the retirement of the football coach, etc. But these occasions are rare enough, and limited to a small number of officials, that they could be dealt with through an annual or semi-annual waiver request to the ethics commission. There is no need for an exception.
Sometimes, a gift provision exception refers not to the official’s function, but to the occasion or the event, for example, whether it is a “ceremonial occasion” (Los Angeles), “in the interest of the city” (New York City), or “related to official City business” (Chicago). This is more problematic, because although the occasion may be ceremonial or in the city’s interest (as determined by department heads or the deputy mayor in NYC), a particular official may have no real public function there. In most cases, these terms are not defined. Officials tend to see whatever they do as official and in the city’s interest.
Sometimes just the ticket is allowed to be accepted, sometimes transportation, food, and drinks, as well. Sometimes there is a separate gift limit. Sometimes the ticket may be accepted as long as the official declares it as income (but who is going to check? tax returns are not public documents).
Attendance at sports events, paid by a restricted source (and sports teams are major restricted sources), is sure to appear on the front page. If it’s the mayor throwing out the first pitch of the season, okay, but beyond that, no one wants to see city officials getting lots of luxury box and courtside seats to games, even if there is an arguably public or ceremonial purpose. The only other truly acceptable purpose is wooing businesses to move their offices or factories to the city or county. But then the local government, as the host, is the one who pays. (See the subsection below on luxury boxes.)
It is best for the city to pay for attendance of its officials at occasions of value to the city. Public disclosure is valuable when the city pays, because it's good to make sure that officials do not too often take advantage of the city buying them entertainment.
Even if it is legitimate for an official to appear ceremonially at a sporting event, there is a question of what should happen after the ceremony is over (or before it starts if the ceremony occurs after the game). If attendance is not limited to the ceremonial act, perhaps attendance should not be an exception in that instance, or at least the official should have to report it. Staying for a meal or the game, at the expense of a restricted source, is truly acceptance of a gift, and such a gift should be prohibited. The official or the government should pay for it.
e. Hosting. A serious exception in the Texas Local Government Code §176.003(a-1) permits, without even a disclosure requirement, gifts to officials and their family members for “food, lodging, transportation, or entertainment accepted as a guest.” As long as the host is there, a gift is acceptable. What makes this exception so odd is that it would be better that the restricted source not be sharing the official's meal, flight, or entertainment. It is such long meetings, for the purpose of influencing decisions, that create the sort of relationships that lead to conflict problems. These are the most important gifts to prohibit.
Better that a hosting exception be limited to nominal gifts made at the offices of a restricted source, for example, refreshments, the validation of a parking ticket, or the use of electricity to recharge a cellphone. Better yet, the restricted source should visit the official, rather than the other way around.
f. Timing. Some gift provisions prohibit gifts only during certain periods, for example, during a contract award period, or when someone is seeking or doing business with the government. And it is the norm for gift bans to end when an official leaves office, although one form of gift, a job with a restricted source, is sometimes prohibited in a post-employment provision.
What these time restrictions do is allow officials to be rewarded after the fact, that is, after the contract runs out, or the development has been approved, or the official has left office, retired, or moved on to another job.
Preventing this would require not only removing time restrictions, but also adding gifts to the post-employment provisions and creating a pre- and post-doing business period that would apply to restricted sources giving gifts. Such a period, say two years, would be added to the gift provision so that a gift could not be given a year before or after a restricted source began to seek government business or approval, and then two years after the business was done or the final approval was given.
g. Campaign Contributions. The most common gift exception of all is also the most abused: campaign contributions. In ethics codes, campaign contributions are usually sacrosanct, because campaign contributions are dealt with in campaign finance laws, usually at the state level, and because they are part of the political world and protected by the First Amendment. Those are a lot of good reasons for a campaign contribution exception to a gift ban.
But large campaign contributions from restricted sources, including their lobbyists, executives, and employees, are seen by the public as gifts and often become big news stories. The fact that they’re perfectly legal doesn’t make them look any less corrupt.
What most officials say when they make a decision that benefits a large campaign contributor is, “I can’t be bought.”
It is not honest or reasonable to say that one doesn't have a price, since different sums of money are constantly being accepted from people who benefit from officials' decisions. It isn't about having a price. It's about representing constituents at the same time one is running for office and one is being lobbied by those seeking special benefits from one’s government. One involves influence and the other involves money. If those trying to influence are those giving money, then it means nothing to say, “I can't be bought.” From the public's point of the view, officials can be bought. From a practical point of view, each sort of act and each sort of vote has, at least potentially, a price.
And from the official's point of view, politics is a matter of give and take. It's complex and ongoing. Give and take is not made up of single transactions where something is bought for a specified amount of money.
What an official should say who has made a decision that benefits someone who gave a substantial amount of money to that official (or gives such money afterwards), even legally, should instead say to the public, “Unfortunately, since I'm not independently wealthy, I have to take campaign contributions in order to represent you. If I refuse to take contributions from those seeking benefits from the government, I will not have enough money to run. Unless I withdraw from too many important matters, I will be making and influencing decisions that will benefit some of these contributors. Making these decisions will look bad. I would like to do it differently, but until enough officials vote for public financing, and agree to openly criticize anyone who pays for independent ads favoring them or attacking their opponents, I have to look like I can be bought, or the reason I won't be able to be bought is that I will not be in office. Where, by the way, I think I do a damn good job representing you.”
Some campaign finance laws make it illegal for contractors or lobbyists to make contributions to candidates, but such provisions do not cover many restricted sources. Campaign finance laws tend to ban or limit contributions from contractors because contractors have a special ongoing relationship with the government, one that others, including developers, lobbyists, grantees, and those seeking (but not currently holding) contracts do not have.
But there is another approach. I call it the Westminster Approach, after the town of Westminster, Colorado, where it was first instituted (see my blog post on its approach). The Westminster Approach uses a gift provision to turn a campaign contribution into a conflict of interest. Very clever, although still far from foolproof.
The Westminster Approach makes an interesting assumption. If a contribution was not intended to influence the candidate, then the contributor won't mind that the candidate cannot participate or vote on any matter dealing with the contributor's interests. At the same time, the candidate will not be placed in the position of appearing to favor someone who gave him a sizeable contribution or — and this is certainly possible if the candidate is truly independent — having to vote against a strong supporter. It's a win-win situation for everyone, so long as there was no intent to influence.
The way the Westminster Approach deals concretely with this assumption is to say that any contribution over a certain amount (the amount is $100 in Westminster) creates “a conflict of interest with regard to that Councillor's vote on any issue or matter coming before the Council involving a benefit to the contributing person, organization, or agent, unless such interests are merely incidental to an issue or question involving the common public good.” Not elegant language, but it will do.
What’s especially nice about this rule is that it places no restriction whatsoever on a person’s campaign giving. It only restricts the candidate who receives the gift, assuming the candidate wins, of course. And this is not a restriction on the official’s right to vote but, like any conflict of interest, it is instead a protection of constituents against the official’s voting to benefit someone who has benefited the official.
What’s wrong with this approach? For one thing, it does nothing to prevent a contribution given the day after a vote, nor for that matter does it affect an official’s participation in a matter up to the receipt of the contribution, even if a contribution is promised before the vote. The first problem can be fixed by adding a prohibition of contributions for a period of time after the decision has been made. The second problem can be partially fixed by including promised or pledged contributions.
The Westminster provision also does nothing about contributions from individuals who do not directly benefit from a vote, for example, from employees, spouses, and potential subcontractors. That is, like most conflict provisions, it does not provide for situations where a gift would create an indirect or indefinite conflict. But such a provision could deal expressly at least with indirect conflicts by adding the word “indirectly.”
The biggest weakness of the Westminster Approach is that council members who expect to run again are very unlikely to vote for it. But New Jersey, which in 2012 was named by the Center for Public Integrity as having the best procedures in place for a transparent government meant to prevent corruption, has a similar rule for state officials, §19:61-7.4(c), which requires withdrawal through to the end of the official’s term in office.
The City Ethics Model Code takes a Westiminster Approach to campaign contributions, but includes it in the basic conflict provision (§100.1(a)(5)).
While running for president in 2012, Mitt Romney essentially agreed with the application of the Westminster Approach by local governments. He said, “the person sitting across the table from [a teachers union] should not have received the largest campaign contribution from the teachers union themselves ... [It's] an extraordinary conflict of interest.”
Along with public campaign financing, which prohibits large contributions from anyone, another approach to dealing with the fact that large campaign contributions from restricted sources can cause a serious appearance of impropriety is to require any elected official to publicly disclose the recent receipt of a large contribution before voting on a matter involving the contributor. This approach was raised in Corpus Christi, Texas in 2009. Council members complained that “complying with the rule would make meetings long and they would be likely to forget who had given them $1,000.”
This is effectively an admission that council members receive so many large contributions from restricted sources that disclosing them would take a significant amount of time and that they either could not recall such large contributions or a list of them would be a burden to carry with them, even on their cellphones. When the mayor suggested that the city do this work for council members, the council still unanimously opposed the idea.
When restricted sources are allowed to make campaign contributions, there is a more limited approach, which is used, for example, in New York City. The mayor and council submit to the city’s Conflicts of Interest Board a list of officials who are barred from soliciting political contributions because of their role in policy matters. This list makes it clear to policy aides that they cannot be seen soliciting contributions from individuals and entities that are lobbying them. It makes what is often a gray area black-and-white, and keeps them out of trouble.
There is one kind of campaign contribution that is usually ignored by ethics programs: contributions to campaigns for national positions in local government associations. These campaigns can be expensive, and it is common for officials to turn to restricted sources for quick and easy cash. For example, when a member of the Mariposa County, Arizona board of supervisors campaigned for officer positions in the National Association of Counties, he was given one $25,000 contribution, and fifteen others between $3,000 to $24,999. After this supervisor’s campaign, the association limited campaign travel expenses to $25,000 to prevent such huge gifts. All national associations need to make rules restricting both expenditures and contributions from restricted sources. In addition, gift provisions should not exclude these gifts. They should be prohibited, at least above a certain small amount.
h. Legal Defense Funds. Another exception sometimes found in a gift provision is for legal defense funds. This exception allows officials accused of ethics or criminal violations to raise large sums of money from restricted sources. For example, a Los Angeles mayor once used a legal defense fund to pay off a $50,000 city ethics fine for improper fund-raising by raising funds from contractors and from officials the mayor had himself appointed. This sends the message that it is proper to do something improper in order to pay off a fine for doing something improper. This is not the sort of message an ethics program wants to give, or that the public wants to hear.
In many jurisdictions, restricted sources are not only permitted to make contributions to a legal defense fund, even if it was dealings with these same restricted sources that gave rise to the ethics complaint. The restricted sources are also allowed to raise money from others for the legal defense fund, giving rise to even more obligations from the official.
Conflicts relating to legal defense funds can get really ugly. For example, the chair of the Detroit ethics board accepted a seat on the mayor’s legal defense fund committee, despite the fact that complaints against the mayor had been filed with the ethics board. Of course, when this became controversial, he quickly had to resign, but much of the damage had already been done.
In addition, a legal defense fund is allowed to file suits itself. This means that a legal defense fund can be employed as a way to file SLAPP suits, that is, suits intended to intimidate others, including whistleblowers and political opponents (see the section below on SLAPP suits). If gifts to legal defense funds are excepted from a gift provision, those doing business with a local government can be involved in trying to silence officials and citizens who are speaking out against them and their allies in government.
Legal defense funds are also inherently unfair and effectively a misuse of office for personal gain. Most elected officials, not to mention unelected officials and employees, lack the network of contacts and supporters necessary to have a legal defense fund. Only the most powerful, or those under the wings of the most powerful, can use a legal defense fund to pay for their defense, fines, and litigation. Without their high office and the favors they had given or promised, no one other than close friends and family members would contribute to a legal defense fund.
Some local governments place limits on contributions to legal defense funds. For example, the limit in Los Angeles is $1,000. If legal defense funds are to be allowed, an even lower limit is recommended, so that it will not appear to the public that the contribution gives rise to a serious obligation to the contributor (legal defense funds can also be used for pay to play if large contributions are allowed). Restricted sources should either be prohibited from making contributions, or limited to a very low figure, as in a gift provision, no more than $100.
If legal defense funds are allowed, there should also be rules separating them as much as possible from the official and the government. For example, a ruling in New York State in 2009 made the following requirements for legal defense funds:
To not be considered an illegal gift, the defense dollars must go into a trust solely for the purpose of defraying pending legal expenses. The money must be managed by a custodian who cannot be a legislative employee, and who must maintain records and pay bills by check. Checks must be signed by the fund manager and countersigned by another non-legislative employee. The defendant cannot have any say over the account or ability to draw from it, and cannot be told who is contributing.
But it cannot be expected that the official will actually not know who is making the contributions. The spokesperson for the defendant in question acknowledged “that he didn't think it was a secret who the contributors to the fund are.”
It is important that anyone who founds or sits on the board of a legal defense fund not be in a position such that the public would see this participation as a payback for favors given them by the official involved, or as a possible in-kind gift for benefits down the road. In other words, a founder or board member of a legal defense fund should not be in a position to benefit from anything the official or government could do for her.
A legal defense fund sends some very bad messages. One, it says that high-level politicians don't have to pay for their defense or for their ethics fines. They effectively have a Get Out of Jail Free card. Contrast this with what a Los Angeles council president did in 2011: pay his ethics fine himself. He said, “While I paid the full cost of the awards show tickets, I messed up when it came to the dinners afterward. That's my mistake, and I'm personally paying for the cost of these three dinners now to clear it up.”
Second, a legal defense fund says that large gifts from restricted sources are okay in some circumstances. Third, it tells lesser officials that, when it comes to ethics enforcement, they are indeed lesser, because they don't have enough power to raise money to defend against ethics complaints or pay ethics fines.
And fourth, it tells other high-level elected officials that the only sanction they will receive for an ethics violation is some bad publicity. And even the publicity may not be as bad as it would otherwise be, because with extra resources they are more likely to ensure themselves a dismissal or a settlement that will make their misconduct look better than it was.
It is difficult to get a local legislative body to prohibit legal defense funds related to ethics proceedings, because its members are among the few who might be able to make use of a legal defense fund. If elected officials start legal defense funds when confronted with ethics and criminal proceedings, thereby effectively limiting the ethics commission’s enforcement power against them to bad publicity, the ethics commission should work to get good government and other local organizations to band together and make a big stink about legal defense funds. And they should try to bring more transparency to the ethics enforcement process so that there is bad publicity at each step in the process.
5. Indirect Gifts
Indirect gifts are gifts that can get around even a gift ban (as well as gift disclosure) provision that has very few exceptions. There are two sorts of indirect gift, (1) gifts made via an intermediary (an individual or entity, including a company employee or affiliate), and (2) gifts made to an individual or entity that has a special relationship to an official.
It is important to recognize that an owner or officer of a restricted source is a restricted source himself, and can no more make a gift than the company itself. One need not personally seek benefits from a government to be a restricted source.
Gifts made via intermediaries can be dealt with using language like that in the City Ethics Model Code: just the words “directly or indirectly” will do. But this language is rarely found in ethics codes. And using others to get around what cannot be done directly is the most popular way of eluding ethics rules. An important reason is that lawyers are trained to find ways of doing indirectly what cannot be done directly. If lawyers would simply say to their clients, or to themselves when they are officials, that such cleverness has no place in a government ethics context, indirect gifts and the like would be far less of a problem. But legal ethics rules rarely say anything about this sort of inappropriate cleverness, and few lawyers treat clients who are public officials different than clients who are not.
A related problem arises when lobbyist and campaign finance law gift provisions treat lobbyist and client separately, allowing twice the ordinary gift limit and twice the ordinary campaign contribution limit, instead of recognizing lobbyist gifts and contributions as being client gifts and contributions made through an intermediary.
Gifts to those close to the official include gifts to immediate family members, to related businesses and business associates, and to favorite charities. The most common form of gift to family members is work rather than things: legal or other professional work, properties to represent, or a job. The problem is proving that these are gifts rather than simply the ordinary course of business.
It is no coincidence that so many spouses of elected officials are realtors. This should always be suspect, and such spouse-realtors should be asked to disclose all of their clients and to not represent restricted sources. But the problem of laundering gifts through professionals and family businesses goes well beyond realtors.
It is common to include gifts to immediate family members in a gift ban. This prevents ugly situations such as the one in Viriginia in 2013, when a pharmaceutical company seeking state approval of a dietary supplement spent $15,000 on the wedding of the governor’s daughter, and he defended it by insisting that none of the money went to him. Not a single person in Virginia could possibly have believed that the gift was not made for the benefit of the governor. Gifts to children, even children who have left the household, need to be included in a gift ban.
When a scandal occurs, the failure to prohibit indirect gifts comes to look like the huge loophole it is.
Gifts to officials’ businesses, business associates, favorite charities, and other family members are, however, too rarely seen as effectively gifts to the official. The issue becomes whether the official benefited from the gift, and this is difficult to prove. But this sort of indirect gift raises a lot of appearance of impropriety issues in local governments across the country.
San Antonio has valuable language in its gift provision that ties the official to the acceptance by others of gifts, “A city official or employee shall take reasonable steps to persuade: (1) a parent, spouse, child, or other relative within the second degree of consanguinity or affinity, or (2) an outside business associate not to solicit, accept, or agree to accept any gift or benefit...” (§2-45(d)). Although not sufficient, this is a useful addition to prohibiting these gifts. It focuses each official’s attention on the need to be assertive in getting those close to her to understand their role in a government ethics program.
The typical sort of gift to an official’s business is given in such a way that it is not clearly a gift. For example, a restricted source hires the official’s law firm to do work that is unrelated to a matter before the official. Just a coincidence? Or the restricted source gives a subcontract to a company the official works for, in a project out of town. Just a coincidence?
In such instances, the official receives no direct benefit, unless she’s on commission or, if a professional, can use the work to get a larger partner percentage (information that is usually not accessible). But if it comes out, it appears to the public that the unrelated work might have been offered to the official as a form of influence, or because it was demanded as pay to play. It’s always beneficial for an employee to bring business to her company. The benefit might show up later as a raise, bonus, promotion, or larger partnership percentage. The gift is effectively indefinite as well as indirect, but a gift nonetheless, and one that can seriously undermine public trust.
It’s important to look at gifts not just from the point of view of who benefits, or even from the public’s point of view. Try putting yourself in the shoes of the restricted source. A bill that would give you a lot more bus bench advertising business is up for consideration before the council. You want a strong advocate on the council for the bill, there's an architect on the council, and you need to hire an architect for a project you are working on that has nothing to do with bus bench advertising. So you hire the council member’s firm rather than another firm. You give up nothing, and the council member gets extra work. You know that it’s a gift, but legally it’s not a gift because presumably the architect is being paid the going rate. And the design job is so unrelated to bus bench advertising, no one is likely to notice. So there won’t be any problem, at least giftwise (hiring the firm could require the council member to withdraw from the matter, but only if the city has an unusually good conflict provision).
Clever minds can turn indirect gifts into win-win-win situations. One of the most clever was put together by the Connecticut House speaker a few years ago. After he became House speaker, he was given a job fund-raising for a national charity. The organization agreed to pay him $67,500 if he raised $200,000 in a year. It didn’t take him long to raise that money, since all he had to do was contact a few restricted sources, who were delighted to give money to the new speaker’s favorite charity. What was so clever is that the speaker was not paid on commission, but was only paid if he reached the agreed amount, making his pay effectively a 33% commission, but legally a salary. The charity got a quick $133,000, the restricted sources gave the speaker far more than they could otherwise legally give him, and the speaker was $67,5000 richer for very little work. Only the citizens of Connecticut were losers in this deal.
Another clever scheme was concocted by a member of Congress. He founded two hunting clubs that included primarily lobbyists and executives of companies that had business before the committee he chaired. Via his second club, he paid more than $1 million for a 1,500-acre ranch. Members paid for the mortgage via membership dues. The congressman never benefited directly. But he did get the benefit of two hunting clubs and their facilities, as well the companionship of those who looked to him for benefits. The House ethics committee approved of both clubs, of course, but a local ethics commission need not approve such a scheme, even if the local ethics code does not clearly prohibit it. The reason is that the clubs were just conduits for gifts to the congressman. An ethics commission should look through such conduits and focus on actual benefits and relationships.
Because it is hard to anticipate all clever schemes and thereby prevent all sorts of indirect gifts, ethics training and the use of ethics advice are necessary to prevent serious appearances of impropriety that are not actually ethics violations. If officials know they are supposed to ask before they play these games, they will have no defense when they don’t. If they fail to get their schemes approved, they cannot argue that they thought their schemes were perfectly legal.
Gifts to Officials’ Pet Charities
Far more common than the Connecticut example, where the official was paid by the charitable organization, is the situation where an elected official has, or has even set up, a favorite charity or charity event that allows him to effectively accept, and often require, large gifts from restricted sources. This is a clever way to get around gift rules and to ensure that those seeking special benefits from the local government must pay in order to play. The mayoral golf tournament has become the icon for this sort of indirect gift.
It is good for an official’s reputation to be identified with a charity. It’s a good use of one’s time, better in some ways than campaigning. To those seeking something from the local government, such a charity is a beacon, attracting support from anyone who wants the official to approve his contract, project, grant, license, or land use request.
It is also hard for anyone to criticize such contributions. The official does not benefit financially (although there are many cases where he or, more often, his family members do). The charity does good things for the community (although this too can sometimes be more appearance than reality). Only a heartless good government extremist would criticize such a situation.
But to those who understand government ethics, there is a lot to criticize. Officials who associate themselves with charitable organizations violate two essential ethics provisions: misuse of office and preferential treatment. It is a misuse of office for an individual in that office to use it to favor a charity she personally favors. And it is preferential treatment for an official to support one charity over other charities.
Here is what a 2010 Florida grand jury report said about the practice of gifts to official charities by winning contractors:
We received testimony about how procurement contracts could be awarded to a bidder who may then contribute to an elected official’s charity of choice. We heard this is in fact common and that it has been upheld in litigation. A contractor or vendor who has been awarded a contract may be prohibited from donating directly to an official’s campaign; so in order to circumvent this, a donation is made to the public official’s charity. ... Since it is unlikely that there was ever anything stated between the contractor and the public official, proving any unlawful quid pro quo would be difficult. Rather, the problem is that there is an appearance of impropriety and this appearance needs to be addressed.
This is true not only of contractors, but also of other restricted sources.
In addition, charitable organizations are not purely good things. First of all, most of them are very opaque. Neither their list of contributors nor their expenditures are public information. And even when a charity is relatively transparent, a charitable contributor can choose to remain anonymous or at least keep the amount of the contribution secret; a campaign contributor cannot. And it is hard to expect charities to disclose donors who ask to be anonymous, because this would seriously affect their ability to get donations. This makes charities the perfect black box for gifts to government officials.
Take this example from Rialto, California. The son of a member of Congress sat on the Rialto council. He was CEO of a foundation that bore his father’s name. It had a good cause: to give away scholarships. But in 2008, it gave only $36,000 in scholarships while paying the council member $51,800 (according to IRS documents; the son said he was receiving only half that amount, which would still be a lot relative to the foundation’s expenditures). In 2008, the foundation also gave $20,000 in fire equipment to the council member’s city, reportedly paid for from a contribution by another nonprofit, which was funded primarily by sub-prime mortgage lenders and was the sponsor of an initiative to promote Latino homeownership. This initiative was, in turn, the creation of the Congressional Hispanic Caucus Institute. The council member’s father chaired the Congressional Hispanic Caucus.
The nonprofit had also benefited from the council member’s father cosponsoring a bill that would allow the nonprofit’s seller-financed downpayment assistance program to become legal after it had been prohibited. And the foundation raised money from a biofuel company that wanted to build a new plant in Rialto. The council member voted to endorse federal assistance for the project.
Once an official has set up a nonprofit to benefit get around gift restrictions and benefit his family, it is a short step to use it for all sorts of purposes and in ways that involve other kinds of misuse of office and create further conflict situations.
Not all nonprofits that high-level officials get involved with are charities in the usual sense. Some are professional and business associations, think tanks, and the like. When a local politician embraces one of these, it sends the message to restricted sources that their gifts to the association or institute is effectively a gift to the politician.
For example, in 2010 the mayor of Madison, Wisconsin accepted an invitation to co-chair a committee to raise funds for a national conference of urban designers and developers to be held in Madison. One job for the mayor was to raise funds from companies and individuals, including restricted sources.
One can talk on and on about whether the funds raised by the mayor would influence him, would constitute pay to play, or would create an appearance of impropriety. But the fact is that this is no role for a mayor to play. A mayor speaks to welcome people to a conference; he doesn’t raise funds for it, because he’s too busy raising and managing the city’s funds. If the city is full of companies and individuals who do business with the city and want the conference to be held in their city, a conference that will benefit them and their investments, why shouldn't they sit on the committee and do the fundraising themselves? Even symbolically, there is no place for a mayor on the letterhead of any organization other than the city, if for no other reason than it shows favoritism based on the officeholder’s personal or professional preferences.
There are not many laws focused on charitable fundraising. However, there are some that limit at least lobbyist participation in charities that involve officials, even if they are fairly weak. For example, Maryland has a law that prohibits lobbyist involvement “in any charitable fundraising activity at the request of an official or employee.” The problem with this language is the “request” part. Officials don’t have to make such a request; lobbyists and other restricted sources will offer to help out all on their own.
One unforeseen result of the word “request” in the Maryland law was that a tradition of organizing a series of sketches performed by legislators, for which lobbyists would buy lots of tickets, was turned over to a panel of former legislators, some of whom happened to be lobbyists. This was not an improvement.
One of these lobbyists (also vice chair of the scholarship fund that received proceeds from the event) collected ticket money for the event, but insisted that he did not break the law because (1) he did not actually sell any tickets and (2) no elected official asked him to raise funds. No one had to ask him anything. After all, he sat on the organizing committee and the scholarship board of a legislative charity. But what is a lobbyist doing there?
The legislative ethics committee counsel said that “Lobbyists selling tickets to legislators is not the same as legislators selling tickets to lobbyists.” To which one might respond, When it comes to the perception that legislators are in bed with lobbyists, does it really matter which side of the bed they sleep on? Either way, it’s all about personal reciprocity. It's a matter of lobbyists doing things for legislators, helping their charity, running their show, putting legislators further in their debt.
As so often is the case, lawyers focus on the technicalities of sleeping positions, while government ethics professionals focus on how to keep them out of bed altogether. Better that they sit together at a table and talk.
Another approach is to place the prohibition on elected officials, as in this provision from Fort Lauderdale: “No member of the city commission shall knowingly solicit or accept any donation for any third party from any person or entity that is doing business with the city.” But this still allows restricted sources to make donations to favorite charities, as long as they are not solicited by or given directly to an official.
The best way to prevent such situations is via a provision prohibiting high-level officials from any high-level involvement with a nonprofit, directly or indirectly, including through their immediate family and business associates. This sounds mean-spirited. But think about it for a few minutes and you realize that, when an official publicly supports one charity over other charities, this is an instance of preferential treatment. Is it any different from the mayor being a spokesperson for one business rather than for all the businesses in one’s community, a situation that is sometimes expressly prohibited in ethics codes?
An individual has the right to prefer one community charity to another, and to establish relationships through fundraising. A government official has the obligation not to show special preference to charities and not to establish relationships with restricted sources, especially through money changing hands.
A compromise approach would be to require that any official who wants to be involved in any way with a nonprofit get the ethics commission's approval, promise to quickly refuse or return donations by a restricted source, and make monthly reports of all donations and expenditures, swearing each month, under penalty of repaying treble damages without a hearing, that no donation was accepted from and no expenditure went to any entity, or any person who works for a firm, seeking a special benefit from the local government, or that any such donation has been returned.
Any of these approaches might put a stop to mayoral charities altogether, and thereby protect both mayors and the public from the scandals they seem inevitably to lead to.
Breaking ties with particular charities while in office is an excellent example of the sort of sacrifice that officials need to make when they become public servants. It might help them and make them feel good to be identified with a charity, even if they have no thought in the world of using it as a vehicle for pay to play. But even without any corrupt intent at all, it is still preferential treatment.
Lower-level officials and employees should be free to participate in charities, but if there is any question, they should seek advice or a waiver before joining a board or doing more than limited fundraising.
Many elected officials insist that they are important to charitable fundraising in the community. And it’s true that they could lend their name and time to any charity that asked, so that there is no preferential treatment (although I’ve never actually heard of this being done). But is this really the role of a government official, especially considering that some government services are contracted out to nonprofits, so that many are themselves restricted sources?
The most unethical aspect of the misuse of charities is effectively making nonprofits’ employees and board members co-conspirators in a pay-to-play scheme. Officials have an obligation not to make use of well-meaning people like this, who have their own obligations and conflicts.
For more on this topic, see the section on charities in the final chapter.
Most government ethics issues do not affect the average local government employee. When one does not have much decision-making authority (technically speaking, when one’s “functions are only ministerial”), any conflict an employee may have usually does not become operative. That is, an ordinary employee rarely has to withdraw from a matter.
Gifts from restricted sources are also unlikely, since there’s not much the ordinary employee can do to help them. But gratuities can be a big issue.
There is disagreement whether gratuities belong in a government ethics code. Most gratuities are given not to influence employees in order to get preferential treatment, but rather to reward them for doing their job. The public trust is usually not undermined if parents give small gifts to teachers or sanitation workers. Nor is there an issue of personal versus public interest. Therefore, the usual ethics issues are not present in the case of most gratuities.
But there are important issues involved. The question is whether they should be treated as ethics issues or as human resources issues, that is, whether prohibitions and limitations belong in an ethics code or in an employee code of conduct or personnel or departmental rule.
The most important issue is that, when gratuities are allowed, citizens sometimes feel compelled to give them. This is not a good thing. It is enough for citizens to pay their taxes. They should not feel obliged to give more than this, or feel bad that they cannot. And they should not have to wonder how much to give or what can be given. For example, they should not have to fear that their failure to give their child’s teachers gifts will result in less attention being given to their child.
A related issue is that, when gratuities are allowed, employees could use their position to put pressure on citizens to give gratuities, either by saying something or leaving an envelope. Even if no threat is made, there is an implied threat that services may not be given, or may be given more slowly or with less attention, if no payment is made. This turns gratuities into required bribes. Such bribes are part of everyday life in many countries around the world, but not in the U.S., where they are criminal violations.
Another issue is the difficulty of knowing the difference between an innocent reward and a payment for preferential treatment, that is, services beyond what is required, for example, removing leaves along with garbage. One likely difference would be that the payment for preferential treatment would be larger than the ordinary gratuity, but if gratuities are acceptable and in cash, it would be hard to know the amount.
Which leads to another serious problem with gratuities: since they are almost always in the form of cash or goods, this is a very difficult area to regulate. It is probably easier to enforce it from the other side, especially with respect to public works. That is, it is easier to enforce ethics rules on the use of public machinery and vehicles, on moonlighting, and on what may be done during work hours. Doing this prevents employees providing certain kinds of preferential treatment, such as doing work for citizens outside of work hours or lending them equipment, in return for money. But it is far more difficult to prevent preferential treatment toward students, in recreation, and the like.
Finally, there is a difference between an environment where tipping is prohibited and where tipping is common. Tipping creates a different relationship between citizen and government. Even when it is not corrupt, it can be uncomfortable for many people. This is a good reason to have a clear rule that is well publicized and enforced.
If gratuities are allowed, it is important to set limitations on amount and type (for example, no liquor), to let citizens know about these limitations, and to make them consistent for all government employees, so that citizens can remember the rules. And beyond prohibitions, there can be positive guidelines to citizens and public servants alike with respect to appropriate gifts, such as a class gift for teachers and team gifts for coaches, rather than individual gifts. It should not be assumed that parents will know what is appropriate. It is easier for parents and others to make gifts together when they know there is a formal process to follow and guidance in following it.
Although I don’t think an ethics commission should enforce gratuity rules, if the ethics commission receives numerous complaints from citizens, it might be valuable to hold a public hearing to consider the issue and alternatives for dealing with the problem.
7. Disclosure of Gifts
Many gift provisions merely require the disclosure of gifts, at least of gifts over a certain amount, or of certain kinds of gifts, such as travel. The idea is that no official will accept a gift if disclosing it might hurt her reputation.
One argument against this is that disclosing gifts online actually increases the amount of public distrust. They see concretely that their officials are accepting substantial gifts from restricted sources and, without any other information, it looks like a lot of bribery is going on. This does not further any government ethics goal.
To the extent this information is not put online, but has to be viewed individually during the work day, it does not create an effective deterrent to accepting gifts. Of course, there are good government groups, newspaper reporters, and bloggers who can do the work for the public, but it’s amazing how rarely such databases lead to articles and posts when there is no particular scandal involved.
The organization most likely to make public inappropriate gifts is the other major political party or, sometimes, another faction in the same party. It is in their interest, more than anyone else’s, to embarrass elected officials. Therefore, a disclosure-only approach effectively politicize ethics enforcement, which is not a very good way of gaining the public’s trust. It just looks like more partisan rancor, and people don’t know what or whom to believe. The result is less rather than more trust in the government.
Another problem with the disclosure-only approach is that it assumes that, if an official does take inappropriate gifts, he will be punished at the ballot box (known as “vertical accountability”). But this assumes that most people are paying attention to what is written about the gifts, that they will remember at election time, and that a gift or two, as opposed to the official’s abilities and policies and those of other candidates, will be the determining factor in their voting decisions. These are a lot of assumptions on which to base an approach.
The ballot-box argument also provides only one sanction, and it is an extreme one: removal. There are no fines and no restitution. Those who make the gifts are not sanctioned at all.
The ballot-box argument also assumes, in a district election, that a council member’s constituents are the only ones who have an interest in protecting the integrity of public offices. This is not true. Every citizen of a city or county has an interest in having the officials who run their community act in the public interest. And the conduct of one council or board member reflects on the rest of the council and board, affecting the public’s trust in the entire government. As for appointed officials and employees, that is, the great majority of those under an ethics code’s jurisdiction, they are not even elected, so the gift receivers among them cannot be tossed out by voters.
The fact is that, in jurisdictions with disclosure-only rules, large gifts are made and the officials who receive them are usually re-elected.
One alternative in discussing which kind of gift approach to take – disclosure or other means of enforcement – is to look at them in terms of who enforces the rules: the public, political parties, or an ethics commission. It would seem more fair and more effective to have a rule enforced in a set manner according to formal rules by independent professionals than to have a rule enforced haphazardly by untrained, partisan individuals. Having an ethics commission enforce ethics laws is known as “horizontal accountability.” It is every bit as important as vertical accountability.
Where there is gift disclosure, it is important to make sure that the restricted sources that are required to disclose are not only entities doing and seeking business with the local government, but also the principals and officers of the entities, and their immediate family members. Where this is not made explicit, language can be interpreted to limit gift disclosure to gifts from companies, as was done in Baltimore in 2009. There, the city solicitor filed an affidavit saying that city officials did not need to disclose gifts from people who control business entities that are regulated by or do business with the city. That essentially means that disclosure is not required at all.
8. Gifts to Local Governments
Gifts to local governments are, in general, not controversial. In fact, some ethics codes include a requirement that officials turn gifts over to the local government. It is common for local companies to make gifts to schools, especially for particular projects or programs. It is good advertising, similar to making contributions to local charities. And it appears to be a way for businesses, especially those who gain from their relationship with the city or county, to show their gratitude and their loyalty to the community. Executives say that their companies feel it’s right to make donations to communities where they operate, but where such companies operate, they are in a position to benefit from or be harmed by government action.
It would actually be better, in a government ethics sense, if companies were to make gifts to communities where they did not operate and had no plans to operate. These gifts would be accompanied by no appearance of impropriety. But that is not going to happen.
The reason that gifts to local governments is a problem is that officials are loyal to their governments and communities, and feel that someone who makes a gift to the community is owed something in return. Not something specific necessarily, such as support for a permit to allow a factory to expand. But it is certainly hard to oppose the request of a company that gives a fieldhouse to a school.
Officials are also loyal to their parties, and the party in power, and its leaders, usually receive credit for large gifts to the community.
When government contractors and local developers seeking government approval make such gifts, it can be seen by the public as an attempt to buy influence, even if no official directly or indirectly benefits from the gifts. Take an example from Richland Hills, Texas. An energy company negotiating a lease to drill on city property wanted to give the city $200,000 to rebuild a community center. Some council members said they would not accept the gift until the lease had been finalized. But the damage had been done; the offer was on the table before the negotiations were over and therefore would be seen as affecting the negotiations even if the gift was not formally accepted until afterward.