making local government more ethical
This is the second of four blog posts on Florida Senate Bill 606 (attached; see below), one of the worst ethics reform bills I have ever read (click here to read the first post, which focused on a provision that provides an additional penalty on complainants in order to reduce the number of ethics complaints).

Gift Reporting vs. Gift Banning
The central provision of the bill would end gift reporting for state and local officials. I too am opposed to gift reporting. Government officials should not be accepting gifts from restricted sources, at least beyond a very low limit, such as $50 a year, to cover basic refreshments. To have them report gifts sends the message that they're okay, and that the only issue is how much one's constituents will notice or care enough to vote gift receivers out of office.

The problem with gift reporting in Florida is that no distinction is made between gifts from restricted sources and gifts from others (except for relatives). Every birthday present from a friend has to be reported. This is ridiculous.

The problem with simply getting rid of gift reporting is that, when one does, gifts from restricted sources remain legal and, to make it even worse, there is no transparency.

A recent Miami Herald article describes a case that embodies a number of important government ethics issues, including the conflict issues that involve local schools of higher education, gifts to officials' relatives and the officials' knowledge of them, an ethics program's jurisdiction over these relatives, and whether government attorneys should provide ethics advice about past conduct.

The article reports on the ways in which a fast-expanding for-profit medical college has apparently been involved with elected officials and their families. The article says that the college's founder has made over $170,000 in campaign contributions, it has hired a member of the state legislature as an attorney, and it has provided free tuition to that legislator's sister-in-law.

That same legislator sponsored legislation that loosened the accreditation requirements for physical therapy assistant programs which, among other things, allowed the college to rapidly expand its program to five different campuses. The legislation was tacked on to an unrelated piece of legislation just before it was voted on, and "could ultimately boost Dade Medical’s revenues by millions of dollars."

It was pointed out to me by Justin Levitt, a professor at Loyola Law School Los Angeles, that back in 2000 John Copeland Nagle, a professor at Notre Dame Law School, wrote a law review article suggesting what I call the Westminster Approach to campaign contributions from those seeking benefits from the recipient official's government. The article, which focuses on Congress, is entitled "The Recusal Alternative to Campaign Finance Legislation" (37 Harv. J. on Legis. 69 (2000)).

The Westminster Approach, named after a 1996 ethics law in Westminster, CO, requires an official who has received a gift, including a campaign contribution, above a certain dollar amount to withdraw from participation in a matter involving the contributor. This means that there is no contribution limit, but if a contributor goes beyond the gift limit, the recipient official is not in a position to help the contributor. Therefore, there is nothing to be gained (1) by making large contributions in the hope that they will benefit the contributor, or (2) by requiring the payment of large contributions in order to play.

Updated: November 20, 2013 (see below)

The gift regulation proposed by Philadelphia's ethics board last week (attached; see below) provides a great opportunity to consider many issues involving gift bans and exceptions.

It's a great thing that the ethics board has chosen to provide guidance with respect to the city's gift ban, which is not itself very clear. However, I don't think it did a very good job. I'm a big fan of Philadelphia's ethics program, but this gift regulation is dreadful. Fortunately, it's just a proposal. There will be a hearing on November 20, hopefully followed by a rethink of the regulation.

There is usually another side of the coin, and that other side is often ignored in drafting a government ethics code. The other side of the nepotism coin came up recently in an ethics proceeding in Stamford, CT.

According to an article this week in the Stamford Advocate, a former finance board member filed an ethics complaint against a former colleague, who still sits on the finance board, for intervening to help a cousin, and member of her household (which in Stamford is considered "immediate family"), who is a city employee.

One piece of evidence provided by the complainant is that the respondent e-mailed the mayor after learning that the complainant, then a finance board member, was seeking to reorganize the department where the respondent's cousin worked, which might have meant the cousin losing her job. The e-mail included the following:
"It was like dandelions. You just accept them. They were there, something you've seen all your life."

Dandelions are a perfect metaphor for institutional corruption. In this case, the dandelions were extra payments (beyond those due to retirees) made by Detroit's two pension funds, to active employees (54%), retirees (14%), and the city itself (32%), the latter to lower annual contributions to the funds, according to a front-page article in today's New York Times. The extra payments totaled almost $2 billion over 23 years. The quote is from Detroit's former independent auditor general, Joseph Harris.

Why would pension boards hand out payments to active employees? May it have had something to do with the fact that the boards were controlled by government employee unions? Back in 2008, I wrote a blog post which dealt with this issue. The post talks about whose property a pension fund is:  that of the employees who will be paid from it or of the citizens whose money is being spent? In good times and when pension board trustees are acting responsibly, the citizens have little to lose. But in bad times and when pension board trustees are acting irresponsibly, not only is the citizens' money wasted, but they may find themselves paying extra money of their own.

randomness