making local government more ethical
A recent action by the Securities and Exchange Commission (SEC) against the city of Harvey, IL, a poor city of 30,000 just south of Chicago, deals with a different sort of fiduciary duty than the usual government ethics case. In a complaint dated June 24, 2014 (attached; see below), the SEC alleges that the city's comptroller acted as financial adviser in three bond issues for a hotel development, diverted some of the funds to himself, and also diverted funds to the city's general fund. The comptroller is acting as financial adviser for a 2014 bond offering, which the SEC is trying to prevent through a court restraining order.

The action is based on the city's fiduciary duty to disclose to investors how bond proceeds will be used, as well as the risks associated with investing in the city's bonds (but the term "fiduciary duty" is not actually used in the complaint). This is part of the SEC's promised crackdown on disclosure failures related to municipal bonds. Alternatively, the complaint alleges fraud and the making of false and misleading statements.

A week ago, I wrote about a poorly written provision in Denver's ethics code, and the danger it poses not only to Denver, but also elsewhere, since local governments in Colorado and in other states are apt to look at the ethics code of such a large, well-respected city (although now that its highness has two meanings, who knows).

On a happier note, this post will look at an excellent decision by Denver's ethics board (attached; see below) relating to this very provision, as well as other, related provisions, and the situation that led to the editorial on which I based my post. The board dismissed the complaint because, even if all its facts were true, it determined that there would be no ethics violation.

What is special is that the board did not simply dismiss the complaint, as most do, either without another word or with a short look at the stated facts and the law. The board effectively acknowledged the limitations of the gift provision:  "[T]he Board’s decision should not be read to constitute an endorsement of the practice of accepting gifts by elected officials under circumstances akin to those at issue here."

It all started with a private meeting among three members of the Orlando-Orange County Expressway Authority board, according to an article last week in the Orlando Sentinel. The subject of the informal meeting was the ouster of the executive director, which took place at the next formal meeting.

But after an investigation into the private meeting, a grand jury indicted one of the three members for bribery and soliciting compensation for official behavior. Lesson:  open meeting act violations are sometimes related to government ethics and criminal misuse of office violations.

You're a government official who has had an ethics complaint filed against you. You want it go away. What do you do? According to an article in The Missoulian this weekend, there may be a new arrow in your quiver:  file a court suit demanding dismissal of the complaint on the grounds of a conspiracy to remove you from office and to act in a biased manner toward conservative officials.

Since the Montana case involves a court proceeding brought by the state Political Practices Commissioner, the respondent — the state senate majority leader — didn't have to file a suit. All he had to do was file a counterclaim.

Sometimes even a wrongheaded ethics complaint can do good, by showing how wrongheaded a town's government ethics program is.

According to an editorial in The Day this week, the head of a local political party, Independence for Montville, filed an ethics complaint alleging that a former council member who owns a hot dog stand pushed to have the town's street vendor law changed so that street vendors could be 500 feet rather than a mile (5280 feet) from a competing business. Unless there were a law prohibiting former council members from lobbying for their own interests, there would be no ethics violation.

The problem was that, in Montville (a town of 20,000 best known for hosting the Mohegan Sun casino), it is the town council that handles ethics complaints. As the editors recognize, "One party is going to be in charge, which means the public and those filing complaints are likely to look skeptically at the council's ethical rulings, suspecting favoritism, even if perhaps it is not there." Even if a local legislative body is nonpartisan, or evenly split, there is still the problem of members judging their colleagues regarding issues that affect them all, so that by letting off one colleague, they are creating (or seen to be creating) a precedent to let themselves off in the future.

There is nothing more natural and, in most circumstances, ethical than a mother doing her best to help her son when he is in trouble. And yet, in most jurisdictions, there are multiple government ethics laws that prohibit this very conduct when the mother is a government official. This is as good an example as there is of the fact that government ethics is not about ethical conduct in general, but rather about government fiduciaries dealing responsibly with their conflicts of interest.

According to an article in the Eagle Tribune last week, a hearing was held by the Massachusetts ethics commission regarding a complaint against a member of the Groveland, MA board of selectmen (its governing body). She was alleged to have used her position to try to help her son, a Groveland police officer who had been placed on administrative leave.

According to the EC's press release, this otherwise commendable conduct might have violated four different ethics provisions:

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