making local government more ethical
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).

There are three interesting issues in this one minor matter, involving a Louisiana sheriff's purchase of a house at a foreclosure sale handled by the sheriff's office.

The Application of Ethics Laws to Foreclosure Purchases
The first issue involves the transaction itself, the particular law in Louisiana, and how more common conflict laws may be interpreted in such a situation.

Louisiana has an unusual law that deals with this sort of transaction:
§1113. Prohibited contractual arrangements
A.(1) No public servant ... or member of such a public servant's immediate family, or legal entity in which he has a controlling interest shall bid on or enter into any contract, subcontract, or other transaction that is under the supervision or jurisdiction of the agency of such public servant.
One of the especially good aspects of this language is that it is not limited to situations where an official was personally involved in a transaction. The rule acknowledges that, to the public, it doesn't matter if the sheriff's deputy had handled the auction. What matters is that it was the sheriff's office. Similarly, a deputy should not be allowed to purchase property at an auction run by the sheriff or by another deputy.

Ethics reform can take the oddest forms, especially when those doing it put on blinders and consider nothing but the situation before them, thereby failing to consider best practices or, in fact, the practices of any other jurisdiction.

This is the kind of ethics reform that recently happened in Park Ridge, IL, a suburb of Chicago with 37,000 inhabitants. According to an article in the Chicago Tribune, someone filing an ethics complaint must henceforth cite a law that the respondent has violated. This is a good change. In the past, apparently, one need only say that certain conduct created an appearance of impropriety.

However, the other part of the ethics reform took the enforcement program from bad to worse. Simply focusing ethics reform on enforcement — rather than training, advice, and disclosure — is a problem. But giving high-level officials more involvement in enforcement is seriously problematic.

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