making local government more ethical
The last time I discussed contingency fee arrangements in local government contracting was 2007 (the focus then was on attorneys). A front-page story in today's New York Times shows clearly that I have not been giving this topic the attention it deserves.

Allegations have been made by the U.S. Attorney for the Southern District of New York (disclosure: I worked for this office as a law school intern back in 1977-78) that a New York City department and an IT contractor were engaged in defrauding Medicaid over a five-year period, at a cost of tens of millions of dollars. With respect to government ethics, the central paragraph of the article is as follows:
Does the "broken windows" theory, as first stated in a 1982 Atlantic essay by George L. Kelling and James Q. Wilson, apply to government ethics? The theory says that, if small things like broken windows are ignored, people will think that no one cares and, therefore, they will break more windows and move on to more serious misconduct. It's about setting norms and sending signals.

Forget the misuse of this theory in policing, where individuals are arrested for small offenses, sending them into the criminal justice system when they should not be. The focus of the theory was on fixing windows, showing that people do care, and sending the message that good conduct is the community norm.

Isn't this what a good local government ethics program is supposed to do:  try to prevent and fix the small instances of ethical misconduct through training, advice, and disclosure, so that the big ones don't happen? A good ethics officer should dispose of reports and complaints of minor misconduct and misconduct that isn't covered by the ethics code by talking with the official and trying to get her to understand why what she is alleged to have done (whether or not she actually did it, whether or not there is an enforceable rule involved) might be harmful to the government organization and the community if it were to become (or remain) common.

The former chair of the Venice in Peril Fund wrote a disturbing piece for the September 25 issue of the New York Review of Books about corruption in Venice. This corruption derived largely from a major project:  the building of flood protection barriers, known as MOSE. Although this project was larger than those in most cities, the misuse of funds, the failure to competitively bid, the false invoicing, the nepotism and the cronyism are no different. Similarly, the need for independent oversight is the same whether the project involves the building of a new school, a convention center, a transportation system, or a city dump.

Members of the Consorvio, the contractor, have been charged with (and some have confessed to) buying the support of "anyone they thought would further their cause." The founder of the Consorvio, who resigned a year ago after investigators found that he had made illegal payments, has said "that it was he who was behind the system of buying support and influence and granting contracts without an open bidding process."

Chicago's Legislative IG
The battle continues in Chicago over government ethics authority and funding. According to the cover letter to the legislative inspector general's semi-annual report dated August 22, 2014 (attached; see below), the IG's office has expended its 2014 budget and the city council is not willing to provide it with more funds. The council has also transferred campaign finance authority from the IG's office back to the ethics board, over the opposition of both the IG and the ethics board itself, which also lacks the resources to deal with the huge demands of campaign finance oversight, and believes that it is better to separate investigation from enforcement.

As the IG states in the letter, "Since the campaign finance reporting mechanism in itself is essentially based on an honor system which requires self-reporting, it is imperative that there are proactive reviews taking place on a consistent basis to ensure compliance." According to the IG, last year the ethics board was changed from an investigative body to an an adjudicative body, with the IG offices (there is also an executive IG) to take over its investigative responsibilities.

The IG powerfully describes the council's attitude toward ethics enforcement (council members are called "aldermen"):
There are several problems with the settlement the Massachusetts AG reached last week with a lobbying firm that the AG alleged had entered into an illegal contingency fee agreement with a hospital. According to the AG's press release, the lobbying firm would be paid a percentage of funds paid to the hospital pursuant to legislation the lobbyist would try to help get passed.

The Prosecutor
The biggest problem is the office that prosecuted the case. Because the state ethics commission is not given authority to pursue allegations under the lobbying code, such allegations become political footballs and undermine trust that they are being fairly pursued. In this case, the politics involves an elected official (the AG) who is running for governor and has received campaign contributions from members of the lobbying firm, including one $500 contribution weeks before the settlement was reached, according to a Boston Herald article this week.

An interesting debate about lobbying and advisory groups can be found on the Austin Bulldog website. Late last week, the Bulldog published an article about an ethics complaint filed by the president of the Austin Neighborhoods Council (ANC) against an appointed member of the Land Development Code Advisory Group (CAG). The complaint alleges that the CAG member is an unregistered lobbyist for a real estate consulting company, and that the resolution establishing CAG says that lobbyists or employees of lobbyists, registered or not, may not be members. The CAG member insists she has never lobbied, nor has her consulting firm.

There are two important issues here:  the definition of lobbyist and the membership of advisory groups. I have dealt with the latter issue in three blog posts:  a Fort Worth situation, "Making Use of Expertise," and "Alternatives to Allowing Conflicted Individuals to Sit on Advisory Boards." So I won't go into this issue here, except to say that there is no reason in the world to limit the prohibition on membership to lobbyists without limiting it equally to anyone directly or indirectly seeking special benefits from the government. There has to be a balancing of expertise with conflict of interest, and conflicts of interest are not limited to lobbyists.

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