making local government more ethical
Call for a State Municipal Lobbying Code
It may be a big holiday week and the end of the year, but there has still been some news on the government ethics front. The Boston Globe has called for the state to institute disclosure requirements for local lobbying. According to the editorial, the only rule now is to file a letter with the Boston city clerk when lobbying the Boston city council. One letter about whom is represented and what the nature of the business is. You can lobby the Boston mayor and any board or agency without notice, not to mention the other cities and counties in the state. That doesn't cut it, at least according to the Globe editorial board.

There is a lot of disagreement over whether contingency fee arrangements between client and lobbyist should be permitted. Many cities, counties, and states prohibit arrangements where lobbyists are paid only if they succeed. The principal reason is that this arrangement encourages ethical misconduct. It encourages lobbyists to do everything they can to win, which may be good in a private adversary suit, but is not appropriate in a public context, where winning involves changes in public policy or obtaining public contracts, grants, or permits.

Historically, courts have seen contingency fee arrangements relating to government action as leading to corruption and harmful to the public's trust in its government. But lawyers have argued that it works well for them, and allows more people to hire lobbyists (although there is no evidence that this actually occurs).

An investigative piece in the New York Times last week shows what can happen when lawyers being paid via contingency fee arrangements lobby state attorneys general. What the lawyers are lobbying for is to have AGs bring suits that will help their clients, and them, win their cases. These lawyers are acting as procurement lobbyists, for themselves and their clients.

There is a front-page article in the New York Times today about the recent increase in lobbying and entertaining state attorneys general (AGs), as well as in campaign contributions from businesses who have a financial interest in decisions that these AGs make, especially with respect to suits they file on behalf of consumers.

Since many state lobbying laws only requiring disclosure of lobbying directed to legislators, much of this lobbying is done in secret and the campaign contributions are permitted. Many contributions are made through partisan AG associations, which were formed in 2000 and 2002, and are funded by big companies that stand to benefit from AG decisions.

In addition, revolving door laws sometimes do not apply to AGs — or former AGs insist they are acting as lawyers and are, therefore, excepted from revolving door laws that apply only to lobbyists — enabling them to immediately do work for companies that are seeking special benefits from the office they just left, as well as their former "clients" in government agencies and the legislature.

The question is, are city and county attorneys being lobbied in the same way by interested parties? These attorneys — most of whom are not elected, but rather are appointed by mayors, councils, and/or managers — not only are responsible for government litigation, but are also highly influential with respect to legislation (which they usually draft) and every other local government matter, upon which they offer their legal and often policy opinions. Especially when there is no strong mayor, the city or county attorney is often the single most influential individual, even if she never gets to vote on legislation.

The logic of a California appellate decision on Monday, in the case of St. Croix v. Superior Court (A140308, July 28, 2014) (attached; see below), doesn't seem right to me. It skips steps. St. Croix is the executive director of the San Francisco Ethics Commission, and this matter involves a public records request for documents relating to the commission’s regulations governing ethics complaints. Here's how the court's logic goes:

According to an article in the San Francisco Chronicle last week, Oakland's council approved an amendment to the city charter, to go before voters in November, that would increase the authority of the city's ethics commission and provide it with the funds it needs to do its job. Congratulations to the council for what is, in some ways, an excellent reform package.

This ethics reform process began with a June 2013 civil grand jury report, which called for giving the city's ethics commission more authority to enforce ethics laws, and more resources with which to do it. Then, in May 2014, a working group of individuals mostly from good government-oriented civic organizations filed a report that made numerous ethics reform recommendations (see my blog post on it). The council quickly got to work on a charter amendment that contains some of the working group's recommendations.

One of the great things about discussions of the conflicts of interest of people in the securities world is that "fiduciary duty" is considered the basis for the rules that govern their relationship with government officials and others. In discussions of the conflicts of interest of those whom they deal with in municipal governments and those who provide other sorts of advice or products to municipal governments, "fiduciary duty" often goes unmentioned.

I say this as an introduction to a discussion of the Municipal Securities Rulemaking Board's (MSRB) draft Rule G-42, entitled "Duties of Non-Solicitor Municipal Advisors" (the MSRB's text webinar on the draft rule is attached; see below). "Municipal advisors" are the people who advise municipalities with respect to their issuance of bonds and related transactions (the definition is complex and outside the bounds of this post).

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