A Minneapolis Study of Conflicts on Development-Related Boards

Anonymous

Fri, 01/25/2013 - 10:31

City Related

<a href="http://www.minnpost.com/two-cities/2013/01/minneapolis-considers-confli…; target="”_blank”">An
article on the MinnPost site this week</a> brought to my attention
a report done by the Minneapolis Ethical Practices Board (EPB) on
conflicts of interest involving development-related boards (planning, zoning, preservation) in Minneapolis and
in other cities (a copy of the report is attached; see below). The
report provides some valuable information.

The Origin of the Study 
According to the report, the EPB became aware of comments from
citizens and members at development-related board and commission
meetings about members' personal involvement in matters coming
before them. In addition, an ethics complaint alleged a violation
based on a planning commissioner's professional appearance before
the commission after the commissioner had withdrawn from
participation due to a conflict of interest. 
 
The city's ethics officer, who is an assistant city attorney, spoke with the mayor about these issues on the EPB's behalf. The mayor and
the EPB jointly directed the ethics officer to conduct a survey of
best practices "in an effort to identify proposed changes to the
Ethics Code and/or the Development Boards' by-laws and operating
procedures to reduce the number of situations in which the actions
of members with potential conflicts of interest give rise to
appearances of impropriety." 
 
This is exactly the sort of study ethics commissions should be
doing. Such studies would be most useful, however, if they were made
available online or, at least, sent to City Ethics to be made easily
available to other cities and counties around the country. There is no reason for other local governments to do the same work themselves. 
 
Results of the Study 
The centerpiece of the report is on page 7: a table showing
three relevant conflict of interest rules from 13 selected cities in
the midwest, west, and south. Almost all the cities (1) require full
withdrawal from matters when a development board member has a
conflict; (2) prohibit a member from addressing the board on behalf of
anyone but himself; and (3) require that a member who withdraws should
leave the room while the matter is being considered. 
 
What I found even more interesting were the rules of three
professional organizations. The American Planning Association's
Professional Institute and the American Institute of Certified
Planners have combined on a set of rules that require "planning process
participants" to:<blockquote>

Make public disclosure of all "personal interests" they may have
regarding any decision to be made in the planning process in which
they serve, or are requested to serve, as advisor or decision maker. 
 
Define "personal interest" broadly to include any actual or
potential benefits or advantages that they, a spouse, family member
or person living in their household might directly or indirectly
obtain from a planning decision. 
 
Abstain completely from direct or indirect participation as an
advisor or decision maker in any matter in which they have a
personal interest, and leave any chamber in which such matter is
under deliberation, unless their personal interest has been made a
matter of public record; their employer, if any, has given approval;
and the public official, public agency or court with jurisdiction to
rule on ethics matters has expressly authorized their participation.</blockquote>

What is happily surprising about these rules is (1) they apply to planning
professionals acting as advisors; (2) they define withdrawal in
terms of participation, not voting, and include both direct and
indirect participation; and (3) they define "personal interest" more
broadly than most local government ethics codes, at least with
respect to the potential nature of benefits and indirect benefits
from a planning decision. What they do not include are situations
where a planning decision may benefit a board member's business
associates. 
 
The National Alliance of Preservation Commissions code of ethics
states:<blockquote>

Commissioners and Staff should disclose all personal or financial
advantages that might accrue to them, their business interests or
family members either directly or indirectly from a recommendation
or decision. 
 
Commissioners and Staff who have an actual or apparent
conflict of interest in a matter coming before them should recuse
themselves entirely from deliberations and decisions. 
 
Commissioners and Staff are obligated to utilize their knowledge and
experience to make decisions and therefore should abstain from
participating and voting only in cases of a bona fide conflict of
interest.</blockquote>

These rules do not expressly include preservation professionals
acting as advisors, but they do cover possible benefit to
"business interests." 
 
Considering that development is such an important area for
government ethics, it is heartening to know that planning and
preservation professionals have conflict rules that are better than
most local governments have. I assume these rules are not enforced,
and it is unlikely that there is much ethics training or advice
available. But looked at critically, because neither group of rules is perfect, these rules should provide guidance for local
governments looking for good and fair conflict rules. 
 
Conclusions of the Report 
I agree with the report's conclusion that Minneapolis should
prohibit development-related board members from appearing before
their board when they have a conflict. But I don't think this prohibition should be so limited. I think such board members (and their staff) should
not be permitted to represent anyone before their board, or any
development-related city board, at all. One must not only deal responsibly
with a conflict by withdrawing from a matter, but one should also
not create a conflict by appearing before one's board for any reason
but representing oneself. And even this should happen extremely
rarely. If one has more than a very occasional matter before one's
board or other development-related boards, one should not sit on
that board. 
 
Although I found the study very valuable, I had trouble
with the focus of its conclusions. Specifically, I was troubled by the fact that
the report ignored the stated purpose of the study "to reduce the number of
situations in which the actions of members with potential conflicts
of interest give rise to appearances of impropriety." 
 
The report
looks at only one issue that might prevent such conflicts:
term limits. It finds that term limits do not reduce the number of
conflicts, because conflicts occur early in a member's term just as
much as they do later in a member's term. 
 
There is another problem that leads some development-related members to have too many
conflicts. Especially in a city the size of Minneapolis, these board members should not have more than a very occasional conflict, or it looks to the public like they are regulating their own industry in the name of public regulation. 
 
The study shows the frequency of withdrawals on three development-related boards in Minneapolis. One planning commission member had to withdraw 36
times in three years (2010-2012). The numbers for three other
members over this period were 12, 9, and 9. The numbers for the
other two development-related boards were lower, but of course
we don't know how many times members with possible conflicts failed
to withdraw. Perhaps the planning commission has a better ethics
environment, which encourages withdrawal. 
 
What is most important in the report, regarding the frequency of
withdrawals, is its acknowledgment that "membership [in the planning
commission] has included various planning professionals from the
community." As for members of the Heritage Preservation Commission, by law they
are supposed to include:<blockquote>

If available, at least 2 registered architects; 
If available, at least 1 licensed real estate agent or appraiser; 
If available, at least 1 resident or owner of a landmark or property
in a historic district; 
If available, at least 1 member of the Hennepin County Historical
Society.</blockquote>

In other words, those who are likely to have conflicts are not only
allowed to sit on the commission, but are given special preference. 
 
If Minneapolis, or any city or county, wants to reduce the number of
conflicts, and the appearance to the public that development issues
are decided by unelected development professionals regulating themselves, it should reduce
the number of development professionals on its development-related
commissions. Because their expertise if valuable, these
professionals should be encouraged to provide advice and testimony to
these boards. But they should not be making decisions that affect
themselves, their clients and business associates, or their
competitors. 
 
For more on the issue of expertise, see <a href="http://www.cityethics.org/content/making-use-expertise" target="”_blank”">my 2011 blog post on making use of expertise</a>. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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A Minneapolis Study of Conflicts on Development-Related Boards

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