A Critique of a New Industry-Local Government Ethics Code in New York

Back in May, I wrote about the conflict of interest problems in upstate New York local governments due to the development of wind farms in the area. This week, New York's Attorney General, Andrew Cuomo, issued a Wind Industry Ethics Code to deal with these problems. Hats off to Cuomo for the idea, although not for the execution.

Here are some of the provisions of the new code, from an AG office press release. The complete ethics code can be found here:

• Bans wind companies from hiring municipal employees or their relatives, giving gifts of more than $10 during a one-year period, or providing any other form of compensation that is contingent on any action before a municipal agency
• Prevents wind companies from soliciting, using, or knowingly receiving confidential information acquired by a municipal officer in the course of his or her officials duties
• Requires wind companies to establish and maintain a public Web site to disclose the names of all municipal officers or their relatives who have a financial stake in wind farm development
• Requires wind companies to submit in writing to the municipal clerk for public inspection and to publish in the local newspaper the nature and scope of the municipal officer’s financial interest
• Mandates that all wind easements and leases be in writing and filed with the County Clerk
• Dictates that within thirty days of signing the Wind Industry Ethics Code, companies must conduct a seminar for employees about identifying and preventing conflicts of interest when working with municipal employees
  

The code will be enforced by a task force that includes two local district attorneys, one of them from the county discussed in my blog entry (do district attorneys belong on ethics commissions?). A first violation is punishable by a fine of up to $50,000; subsequent violations draw fines of up to $100,000

This ethics code focuses on disclosure and recusal. And its principal recusal provision is poorly written and inadequate:

General Standard: The Wind Company shall not directly or indirectly offer to, or confer on, a Municipal Officer, his or her Relative, or any third party on behalf of such Municipal Officer any benefit under circumstances in which it could reasonably be inferred the benefit would induce such Municipal Officer to commit an official act or to refrain from performing an official duty in connection with Wind Farm Development, unless such Municipal Officer recuses him or herself from any official duties in connection with Wind Farm Development.

How can a wind company refrain from doing something based on whether the official later recuses him or herself (and what if the benefit has already been given, as has happened throughout the area)? This is an impossible standard, and would not hold up in a suit. It should be rewritten. And when it's rewritten, it should be considered whether there are certain positions that should not be given any benefit by a wind company no matter what.

On the other hand, the provision requiring that an official have recused himself or herself in order to be hired by a wind company works, although it could be made more clear the extent of the recusal required -- once is enough, or must the official have withdrawn from day one?

Here's a worthless provision, which provides none of the promised restrictions in its title:

Restrictions on Easements/Leases with Municipal Officers: The Wind Company shall not enter into any agreement with any Municipal Officer that requires the Municipal Officer to support or cooperate with Wind Farm Development in any manner that relates to the Municipal Officer’s official duties.

Who in his or her right mind would enter into an agreement requiring an official to support a development? Just having the easement or investment is enough to put an official's personal interests in conflict with his or her obligations of impartiality and concern for the public interest. This provision should be rewritten or cut.

The confidentiality provision is oddly one-sided, because this is an ethics code only for wind companies, not for the other side of the equation. This creates problems not too much unlike most local government ethics codes, which let contractors off without any obligations. If wind companies have to agree to abide by this ethics code, why can't towns and counties do the same thing, and take on some obligations themselves?

Confidential Information: The Wind Company shall not solicit, use, or knowingly receive confidential information acquired by a Municipal Officer in the course of his or her official duties.

This ethics code does have one valuable and unusual provision:

Restrictions on Legal Representation: The Wind Company shall not agree to pay legal fees for any Municipal Officer or Municipality in connection with any investigation by any law enforcement agency.

At first blush, one would think that this was dealt with in the gifts provision, but the payment of legal fees could be included in an agreement. Good thinking!

I hope that the AG's office will take a second look at this ethics code, in light of my criticisms and those of others. The ethics code was a great idea, but it would be nice to have a great ethics code, as well.

Robert Wechsler
Director of Research-Retired, City Ethics

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