making local government more ethical
According to an Associated Press article this weekend, Jim Moran, a congressman from Virginia, was banned from entering Russia supposedly for a series of financial misdeeds. These supposed misdeeds, as delineated in Moran's Wikipedia page, include ethics and ethics-related criminal allegations that have been dismissed by the House Ethics Committee, the Virginia Attorney General, and the Federal Elections Commission. Allegations of insider trading based on a 2008 briefing by the Treasury Secretary and Federal Reserve chair do not appear to have been investigated. There is no reason to believe that there was any particular wrongdoing by any of these bodies or offices; in fact, at least one of the allegations would not be illegal but, if true, would instead be an example of common, institutional corruption.

This might be the first time an American politician has been sanctioned by a foreign country for ethics violations (with or without a hearing). However, it is believed that the real reason for the ban, besides simply a tit-for-tat response to an American entry ban on certain Russians, was Moran's sponsorship of an amendment prohibiting the U.S. purchase of helicopters from a Russian state arms dealer that is alleged to have supplied the Assad regime in Syria.

An excellent editorial yesterday by Dan Barton, editor of the Kingston (NY) Times, raises a few important issues relating to local government ethics proceedings.

According to Barton, Kingston's new ethics board dismissed a complaint from a city alderman that the mayor had violated the ethics code by hiring as an attorney for the city's local development corporation a lawyer with whom the mayor practiced as "of counsel."

The Speech or Debate Clause of the U.S. Constitution protects activities within the "legislative sphere" from being heard outside the legislature, and prevents the introduction of evidence of legislative activity in any such hearing. A recent brief from the U.S. House Ways and Means Committee in S.E.C. v. Ways and Means Committee argues (on pp. 30, 34-37) that communications between industry lobbyists and the staff director of the committee's subcommittee on health are privileged and may not be subpoenaed by the SEC in an investigation of alleged insider trading-related leaks.

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.

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