You are here
Issues Arising from an Iowa Complaint Dismissal
Wednesday, August 29th, 2012
A number of important issues arise from a case before the Iowa Ethics and Campaign
Disclosure Board (ECDB) last week. The issues include: (1) how
to treat an inadequate complaint; (2) how to treat a complainant in
a proceeding, and (3) what to do when an ethics code and rules may
be inadequate to a situation where there is a strong appearance of
impropriety.
The case involves a member of the state Board of Regents, which oversees Iowa's state universities. A man with a special relationship to one of the universities, including the funding of a chair in his area of business, was appointed to the board in February 2011, and took office in May 2011. Before and after these dates, he was involved in a major business deal involving the rental of land for agricultural purposes in Tanzania by a company for which he was CEO, with the university involved in an advisory capacity and via an outreach training and health program.
Formal disclosure of the conflict came six weeks after his term began, after a newspaper wrote an article about the Tanzania operation. And after this, the board member did not participate in a negotiation. However, in his financial disclosure statement, he listed himself as "farming-self-employed," even though he held multiple positions with companies, at least one of which was doing business with the university. The statement was amended after a complaint was filed by Iowa Citizens for Community Improvement (CCI), an organization focused on what it considers to be corporate misconduct.
An Inadequate Complaint
After an hour of deliberation, the ECDB unanimously dismissed CCI's complaint. According to a column in the Des Moines Register on Saturday, the ECDB chair "made little secret of his disdain for [the complaint], saying it reflected 'a profound misunderstanding of Iowa law' and admonishing the group for not citing the right code chapter."
An ethics board should not expect complainants to be accomplished lawyers. They are only supposed to be citizens, and their mistakes, even their utter incompetence, should not be used as a weapon against them in a public meeting.
In fact, an ethics board has an obligation to improve a complaint if it states facts that might constitute an ethics violation. The board should correct legal mistakes and communicate with the complainant regarding additional facts or clarification of statements made in the complaint.
It is true that many complaints concern matters that are not within the jurisdiction of an ethics board. These complaints may be immediately dismissed. But when a complaint concerns ethics matters, the inadequacy of the complainant to get the law right is irrelevant. Once a complaint is filed, it is the ethics board's, not the complainant's. The ethics board, like a prosecutor, has an obligation to do the best it can with what information it was given. The rules allow the ECDB to change a complaint or initiate its own investigation.
As I point out below, the real problem here was not the complaint's inadequacy so much as the ethics code's inadequacy. It would have been far better for the ECDB chair to have pointed out the failings of the law rather than the failings of the complainant.
How to Treat a Complainant
A complainant usually plays a minor role in an ethics proceeding. But when a complaint is dismissed with a criticism of the complainant, the complainant has a right to respond.
In the Register column, entitled, "Ethics Board Shouldn't Shush the Public," the columnist wrote that a CCI member asked to speak in response to the chair's dismissal statement. The chair "angrily silenced her, setting up a confrontation. She continued to speak, and he tried to drown her out, pounding the table and declaring the session closed so that the room was swiftly cleared."
The columnist nicely suggests that the chair could have told her speaking after a dismissal is not allowed. But under the circumstances, it should have been allowed. Not only did the CCI have a right to respond to unnecessary criticism directed at it, and to mention publicly that it had amended the complaint, but shushing it was wrong for three other reasons.
One, it is important for an ethics board to do nothing that would intimidate or otherwise make it less likely that people who know of an ethics violation will file a complaint. The relationship between ethics board and complainant should never be adversarial, at least not due to the board.
Two, shushing the CCI makes this ethics board chair look discriminatory. As the columnist wrote, "Would another complainant, say a newspaper publisher or a foundation CEO, have been treated that way?" The answer is clearly, No. A board charged with overseeing preferential treatment should go out of its way to treat everyone the same, even when the complainant is far more vocal and even uncivil than the norm. In this case, shushing the CCI member gives the organization ammunition to accuse the board of siding with corporate and high-level political interests (the governor selected the regents board member). A board that wants to be respected needs to be respectful to those who come before it, no matter whether they've been disrespectful of the board or have taken up too much of the board staff's time.
Three, an ethics board should never be seen to be closing down public input. It can limit the amount of time someone has, but it is important to get the public involved and make it feel welcome and safe at ethics board meetings. This is especially true of complainants and potential complainants, such as good government groups. In fact, this same argument can used to limit a demonstration, so that others can be heard and their matters dealt with.
It appears that the CCI's style is public confrontation and demonstration. This is not something that ethics boards commonly have to deal with. But the best way to deal with it is not to stifle it, but to limit it. If a board wants to limit speech, it should have rules on paper and they should be applied as consistently as possible
Another good way to deal with a confrontational individual or group is to show empathy with them. In this case, they were trying every way to publicize and stop a project they objected to. To them, every government body appeared to be colluding to protect corporate interests. It might have gone a long way to cooling off the CCI's passions if the chair would have said that the board felt the ethics provisions involved here were inadequate, and that it would make recommendations for improving them, so that the next time such complex conflict situations were brought before them, they would have the authority to investigate and deal with them. This might even make the group an ally of the ethics board, rather than an opponent.
The board should work on changes to its procedural regulations that would provide better guidance to this and future chairs with respect to the rights of complainants and others to speak at ethics board meetings. See below for more suggestions of what to do.
An Inadequate Ethics Code?
According to an Iowa Politics blog post last week, on the Register website, "ethics board members and staff said they plan to propose changes to filing rules to ensure more detailed financial disclosures." This is a sign that the board realizes that this situation showed some weaknesses in its ethics program.
But this is not the most important weakness. The financial disclosure statement defines "Sources of Income," stating, "In the categories available in the drop-down list, select each source from which you received more than $1000 in gross annual income during the previous calendar year." And it asks for all occupation/positions along with each position's business/employer. Leaving off CEO positions is clearly not an adequate filing.
False vs. Insufficient Information
A bigger weakness is the law and its interpretation and application by the ECDB. Section 7.5 penalizes an official for failure to file on time and for including "false or fraudulent information" in a disclosure form. But there is no express penalty for failure to include requested information. Is insufficient information "false"? The ethics board implied in its dismissal order (attached; see below) that it is not. I think this was a missed opportunity to interpret "false" as including the failure to provide vital information.
The law's omission of insufficient financial statements is a serious weakness. But an ethics board can deal with this weakness in two ways: by interpreting the law to include insufficiency and by recommending that the law be changed to expressly deal with insufficiencies.
The Amendment of Financial Statements
Another problem with the ECDB's approach is that, although there is nothing in the law that provides for dismissal upon amendment of a financial statement, it considered the amended statement to be adequate to cure a possible violation (even though it found no possible violation). And the amendment was filed only days before the complaint was considered.
It is a good policy to encourage and reward the amendment of disclosure statements. But when a complaint is filed before an amendment is made, the amendment should not affect whether or not there is a violation. It may be taken into consideration in determining a penalty, and it may be part of a settlement. But it is not sufficient to affect whether a complaint is dismissed or a violation found.
The ECDB also said that the regents board member's business interests were well known, even though this is also not mentioned in the law and, therefore, should be considered as no more than a mitigating circumstance in considering a penalty.
Weakness in the Conflict Provision
The most important weakness shown by this situation is the ethics code's conflict provision. There are two problems here.
The ECDB's dismissal order states that "the complaint does not allege [that the regents board member] took any official action or performed any official duty that would detrimentally affect or create a benefit" for his business." This is the basis for dismissal of the complaint with respect to the board member's possible conflict.
The ethics code language (Section 68B.2A) refers to "official action or performing any official duty that would detrimentally affect or create a benefit for the outside employment or activity." This means that an official who is wearing two hats is free to do anything he wants as a business person dealing with those under his jurisdiction, including lobbying officials and doing business with those under his jurisdiction, as long as he does not act with respect to his interests in that particular matter.
However, an individual on an oversight board has authority far beyond the particular matter that can be used to provide himself with preferential treatment (and create an appearance of impropriety). Also, if problems arise due to the matter, the board member's colleagues are the ones who will have to deal with this. This is unfair to them and will, if they appear easy on their colleague, look unfair to the public.
In addition, a conflict situation does not arise when government action leads to a benefit to an official's business. Benefits may not come for some time, they may never come at all, or they may come indirectly. A conflict situation exists whenever an official seeks a benefit for himself or for a person with whom he has a special relationship, not when the benefit occurs.
It is often not enough for an official in such a position to withdraw from one side of the matter. He should not be doing business with those over whom he wields power. The ECDB should use this occasion to recommend that the law be changed so that it can prevent these situations from arising.
Conflicts are not bad in and of themselves. What is important is that they be handled responsibly. But there are conflict situations that cannot be cured by withdrawal. For these, stronger rules must be written and/or the ethics board must be given more authority to deal with such situations.
What to Do
I think this case should be reopened, and it should be used by the ethics board to take a long hard look both at the ethic law and at its procedures and its role in the complaint process. The ethics board should apologize to the CCI for how it treated its representative. It appears that the representative might have herself acted inappropriately by creating a demonstration during an ethics board meeting. But it could have been dealt with better, and the rules could have been made clear from the start, with an emphasis on the need to deal with other matters at the meeting.
The ethics board should, as part of the proceeding, before it determines whether to investigate or not, clarify for itself and for state officials and the public:
1. The role of a complainant and the role of the ethics board in handling an inadequate complaint.
2. What the law and rules say about the amendment of a financial statement after a complaint has been filed regarding false statements made in that statement, and what is the most appropriate way to deal with such an amendment. Ditto for information that is publicly available but was not included in the financial statement.
3. Whether it believes that the failure to include vital facts in a statement could possibly constitute the inclusion of "false or fraudulent information," considering that the information about the regent board member's occupation omitted his position most relevant to a university over which he provides oversight.
4. How it will go about trying to make the state's conflict provision more complete and more clear.
Robert Wechsler
Director of Research-Retired, City Ethics
---
The case involves a member of the state Board of Regents, which oversees Iowa's state universities. A man with a special relationship to one of the universities, including the funding of a chair in his area of business, was appointed to the board in February 2011, and took office in May 2011. Before and after these dates, he was involved in a major business deal involving the rental of land for agricultural purposes in Tanzania by a company for which he was CEO, with the university involved in an advisory capacity and via an outreach training and health program.
Formal disclosure of the conflict came six weeks after his term began, after a newspaper wrote an article about the Tanzania operation. And after this, the board member did not participate in a negotiation. However, in his financial disclosure statement, he listed himself as "farming-self-employed," even though he held multiple positions with companies, at least one of which was doing business with the university. The statement was amended after a complaint was filed by Iowa Citizens for Community Improvement (CCI), an organization focused on what it considers to be corporate misconduct.
An Inadequate Complaint
After an hour of deliberation, the ECDB unanimously dismissed CCI's complaint. According to a column in the Des Moines Register on Saturday, the ECDB chair "made little secret of his disdain for [the complaint], saying it reflected 'a profound misunderstanding of Iowa law' and admonishing the group for not citing the right code chapter."
An ethics board should not expect complainants to be accomplished lawyers. They are only supposed to be citizens, and their mistakes, even their utter incompetence, should not be used as a weapon against them in a public meeting.
In fact, an ethics board has an obligation to improve a complaint if it states facts that might constitute an ethics violation. The board should correct legal mistakes and communicate with the complainant regarding additional facts or clarification of statements made in the complaint.
It is true that many complaints concern matters that are not within the jurisdiction of an ethics board. These complaints may be immediately dismissed. But when a complaint concerns ethics matters, the inadequacy of the complainant to get the law right is irrelevant. Once a complaint is filed, it is the ethics board's, not the complainant's. The ethics board, like a prosecutor, has an obligation to do the best it can with what information it was given. The rules allow the ECDB to change a complaint or initiate its own investigation.
As I point out below, the real problem here was not the complaint's inadequacy so much as the ethics code's inadequacy. It would have been far better for the ECDB chair to have pointed out the failings of the law rather than the failings of the complainant.
How to Treat a Complainant
A complainant usually plays a minor role in an ethics proceeding. But when a complaint is dismissed with a criticism of the complainant, the complainant has a right to respond.
In the Register column, entitled, "Ethics Board Shouldn't Shush the Public," the columnist wrote that a CCI member asked to speak in response to the chair's dismissal statement. The chair "angrily silenced her, setting up a confrontation. She continued to speak, and he tried to drown her out, pounding the table and declaring the session closed so that the room was swiftly cleared."
The columnist nicely suggests that the chair could have told her speaking after a dismissal is not allowed. But under the circumstances, it should have been allowed. Not only did the CCI have a right to respond to unnecessary criticism directed at it, and to mention publicly that it had amended the complaint, but shushing it was wrong for three other reasons.
One, it is important for an ethics board to do nothing that would intimidate or otherwise make it less likely that people who know of an ethics violation will file a complaint. The relationship between ethics board and complainant should never be adversarial, at least not due to the board.
Two, shushing the CCI makes this ethics board chair look discriminatory. As the columnist wrote, "Would another complainant, say a newspaper publisher or a foundation CEO, have been treated that way?" The answer is clearly, No. A board charged with overseeing preferential treatment should go out of its way to treat everyone the same, even when the complainant is far more vocal and even uncivil than the norm. In this case, shushing the CCI member gives the organization ammunition to accuse the board of siding with corporate and high-level political interests (the governor selected the regents board member). A board that wants to be respected needs to be respectful to those who come before it, no matter whether they've been disrespectful of the board or have taken up too much of the board staff's time.
Three, an ethics board should never be seen to be closing down public input. It can limit the amount of time someone has, but it is important to get the public involved and make it feel welcome and safe at ethics board meetings. This is especially true of complainants and potential complainants, such as good government groups. In fact, this same argument can used to limit a demonstration, so that others can be heard and their matters dealt with.
It appears that the CCI's style is public confrontation and demonstration. This is not something that ethics boards commonly have to deal with. But the best way to deal with it is not to stifle it, but to limit it. If a board wants to limit speech, it should have rules on paper and they should be applied as consistently as possible
Another good way to deal with a confrontational individual or group is to show empathy with them. In this case, they were trying every way to publicize and stop a project they objected to. To them, every government body appeared to be colluding to protect corporate interests. It might have gone a long way to cooling off the CCI's passions if the chair would have said that the board felt the ethics provisions involved here were inadequate, and that it would make recommendations for improving them, so that the next time such complex conflict situations were brought before them, they would have the authority to investigate and deal with them. This might even make the group an ally of the ethics board, rather than an opponent.
The board should work on changes to its procedural regulations that would provide better guidance to this and future chairs with respect to the rights of complainants and others to speak at ethics board meetings. See below for more suggestions of what to do.
An Inadequate Ethics Code?
According to an Iowa Politics blog post last week, on the Register website, "ethics board members and staff said they plan to propose changes to filing rules to ensure more detailed financial disclosures." This is a sign that the board realizes that this situation showed some weaknesses in its ethics program.
But this is not the most important weakness. The financial disclosure statement defines "Sources of Income," stating, "In the categories available in the drop-down list, select each source from which you received more than $1000 in gross annual income during the previous calendar year." And it asks for all occupation/positions along with each position's business/employer. Leaving off CEO positions is clearly not an adequate filing.
False vs. Insufficient Information
A bigger weakness is the law and its interpretation and application by the ECDB. Section 7.5 penalizes an official for failure to file on time and for including "false or fraudulent information" in a disclosure form. But there is no express penalty for failure to include requested information. Is insufficient information "false"? The ethics board implied in its dismissal order (attached; see below) that it is not. I think this was a missed opportunity to interpret "false" as including the failure to provide vital information.
The law's omission of insufficient financial statements is a serious weakness. But an ethics board can deal with this weakness in two ways: by interpreting the law to include insufficiency and by recommending that the law be changed to expressly deal with insufficiencies.
The Amendment of Financial Statements
Another problem with the ECDB's approach is that, although there is nothing in the law that provides for dismissal upon amendment of a financial statement, it considered the amended statement to be adequate to cure a possible violation (even though it found no possible violation). And the amendment was filed only days before the complaint was considered.
It is a good policy to encourage and reward the amendment of disclosure statements. But when a complaint is filed before an amendment is made, the amendment should not affect whether or not there is a violation. It may be taken into consideration in determining a penalty, and it may be part of a settlement. But it is not sufficient to affect whether a complaint is dismissed or a violation found.
The ECDB also said that the regents board member's business interests were well known, even though this is also not mentioned in the law and, therefore, should be considered as no more than a mitigating circumstance in considering a penalty.
Weakness in the Conflict Provision
The most important weakness shown by this situation is the ethics code's conflict provision. There are two problems here.
The ECDB's dismissal order states that "the complaint does not allege [that the regents board member] took any official action or performed any official duty that would detrimentally affect or create a benefit" for his business." This is the basis for dismissal of the complaint with respect to the board member's possible conflict.
The ethics code language (Section 68B.2A) refers to "official action or performing any official duty that would detrimentally affect or create a benefit for the outside employment or activity." This means that an official who is wearing two hats is free to do anything he wants as a business person dealing with those under his jurisdiction, including lobbying officials and doing business with those under his jurisdiction, as long as he does not act with respect to his interests in that particular matter.
However, an individual on an oversight board has authority far beyond the particular matter that can be used to provide himself with preferential treatment (and create an appearance of impropriety). Also, if problems arise due to the matter, the board member's colleagues are the ones who will have to deal with this. This is unfair to them and will, if they appear easy on their colleague, look unfair to the public.
In addition, a conflict situation does not arise when government action leads to a benefit to an official's business. Benefits may not come for some time, they may never come at all, or they may come indirectly. A conflict situation exists whenever an official seeks a benefit for himself or for a person with whom he has a special relationship, not when the benefit occurs.
It is often not enough for an official in such a position to withdraw from one side of the matter. He should not be doing business with those over whom he wields power. The ECDB should use this occasion to recommend that the law be changed so that it can prevent these situations from arising.
Conflicts are not bad in and of themselves. What is important is that they be handled responsibly. But there are conflict situations that cannot be cured by withdrawal. For these, stronger rules must be written and/or the ethics board must be given more authority to deal with such situations.
What to Do
I think this case should be reopened, and it should be used by the ethics board to take a long hard look both at the ethic law and at its procedures and its role in the complaint process. The ethics board should apologize to the CCI for how it treated its representative. It appears that the representative might have herself acted inappropriately by creating a demonstration during an ethics board meeting. But it could have been dealt with better, and the rules could have been made clear from the start, with an emphasis on the need to deal with other matters at the meeting.
The ethics board should, as part of the proceeding, before it determines whether to investigate or not, clarify for itself and for state officials and the public:
1. The role of a complainant and the role of the ethics board in handling an inadequate complaint.
2. What the law and rules say about the amendment of a financial statement after a complaint has been filed regarding false statements made in that statement, and what is the most appropriate way to deal with such an amendment. Ditto for information that is publicly available but was not included in the financial statement.
3. Whether it believes that the failure to include vital facts in a statement could possibly constitute the inclusion of "false or fraudulent information," considering that the information about the regent board member's occupation omitted his position most relevant to a university over which he provides oversight.
4. How it will go about trying to make the state's conflict provision more complete and more clear.
Robert Wechsler
Director of Research-Retired, City Ethics
---
Story Topics:
| Attachment | Size |
|---|---|
 Iowa dismissal order 082312.pdf | 0 bytes |
- Robert Wechsler's blog
- Log in or register to post comments
