making local government more ethical
The arrest of New York state senate majority leader Sheldon Silver points to an ongoing institutional problem that is not limited to New York state:  the law firm as the perfect place to launder money. The reason for this is that lawyer-client confidentiality, at least as it is often practiced, allows a law firm, and the public office holders who are part of or do work for it, to keep its clients, its services, its receipts, and its payments secret.

According to the complaint, dated January 21, Silver has been accused of using his position to give himself millions of dollars in kickbacks and bribes, most of which went through two law firms with which he is affiliated. What were called "attorney referral fees" came from clients with substantial business before the state and, according to the complaint, "not as a result of legitimate outside income Silver earned as a private lawyer." Even legitimate and semi-legitimate outside income earned from those seeking special benefits from the government can be problematic.

The principal value of lobbying, according to both lobbyists and government officials, is the expert information lobbyists provide. The view is often stated that, with the resources they have, government officials could not effectively do their job without the expertise they obtain from lobbyists.

The public, however, has no idea how this information is used. When it turns out that a lobbyist effectively wrote a bill, argument, letter, or speech that an official presents as his own work, no matter how useful this service may be, it appears that the official is representing the lobbyist's client rather than the public.

An article in today's New York Times quotes former Oregon attorney general David B. Frohnmayer on the topic, specifically with respect to a letter written by a energy industry lobbyist for a state attorney general to send to the federal Environmental Protection Agency:
“When you use a public office, pretty shamelessly, to vouch for a private party with substantial financial interest without the disclosure of the true authorship, that is a dangerous practice. The puppeteer behind the stage is pulling strings, and [the public] can’t see. I don’t like that. And when it is exposed, it makes [the public] feel used.”
Gretchen Morgenson's investigative piece in yesterday's New York Times is extremely disturbing. According to her research, local and state government pension funds have taken huge risks, and then allowed them to be hidden from the public, by signing agreements with private equity firms that make their terms confidential, including (1) their high fees and questionable clawback provisions, (2) their provisions for investors to be charged for litigation losses or settlements by the equity firm, and sometimes (3) provisions allowing equity firm general partners to not have a fiduciary duty to the pension funds.

Chicago's Legislative IG
The battle continues in Chicago over government ethics authority and funding. According to the cover letter to the legislative inspector general's semi-annual report dated August 22, 2014 (attached; see below), the IG's office has expended its 2014 budget and the city council is not willing to provide it with more funds. The council has also transferred campaign finance authority from the IG's office back to the ethics board, over the opposition of both the IG and the ethics board itself, which also lacks the resources to deal with the huge demands of campaign finance oversight, and believes that it is better to separate investigation from enforcement.

As the IG states in the letter, "Since the campaign finance reporting mechanism in itself is essentially based on an honor system which requires self-reporting, it is imperative that there are proactive reviews taking place on a consistent basis to ensure compliance." According to the IG, last year the ethics board was changed from an investigative body to an an adjudicative body, with the IG offices (there is also an executive IG) to take over its investigative responsibilities.

The IG powerfully describes the council's attitude toward ethics enforcement (council members are called "aldermen"):
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:

An interesting debate about lobbying and advisory groups can be found on the Austin Bulldog website. Late last week, the Bulldog published an article about an ethics complaint filed by the president of the Austin Neighborhoods Council (ANC) against an appointed member of the Land Development Code Advisory Group (CAG). The complaint alleges that the CAG member is an unregistered lobbyist for a real estate consulting company, and that the resolution establishing CAG says that lobbyists or employees of lobbyists, registered or not, may not be members. The CAG member insists she has never lobbied, nor has her consulting firm.

There are two important issues here:  the definition of lobbyist and the membership of advisory groups. I have dealt with the latter issue in three blog posts:  a Fort Worth situation, "Making Use of Expertise," and "Alternatives to Allowing Conflicted Individuals to Sit on Advisory Boards." So I won't go into this issue here, except to say that there is no reason in the world to limit the prohibition on membership to lobbyists without limiting it equally to anyone directly or indirectly seeking special benefits from the government. There has to be a balancing of expertise with conflict of interest, and conflicts of interest are not limited to lobbyists.