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The Need for Ethics Oversight of COGs
Monday, July 2nd, 2012
Robert Wechsler
They have various names, such as councils of governments (COGs),
joint powers authorities (JPAs), and regional councils or commissions, but whatever names they have, these
local government associations are often left outside of both
local and state government ethics programs. And yet, as the term
"joint powers authorities" implies, they do wield power and do spend
or affect the spending of money, often huge amounts of money in transportation, water, and other construction projects.
According to an article in the Los Angeles Times this weekend, the executive director of a California COG was charged last week with four felonies relating to his use of his office to obtain grants for a consulting firm he owns. His consulting firm has a managing contract with the COG, but in addition it has obtained grants through the use of his position. The COG coordinates efforts among 31 cities, 3 water districts and county supervisors in the Los Angeles area.
Fortunately, the state has a law that (1) prohibits public officials from having a financial interest in a contract they make in their official capacity, and (2) apparently considers COG executive directors to be public officials. I wonder whether they would be considered public officials in most states, even though they manage an association of local governments and have a great deal of influence on the spending of public funds.
How could so many public officials allow this to happen? Their first mistake was to allow management of the COG to be handled not by an individual with employees under the COG board's direct oversight, but rather by an individual for whom the employees work independently. This setup gives the power to the boss rather than the board, and it removes the employees from the usual relations with the COG. It may be less expensive, but the risk of abuse is too great to merit the savings. Without oversight, such setups often lead to fiefdoms that act in the boss's interest rather than in the public interest.
Fortunately, there was some oversight, although it was indirect, coming from the source of one of the grants that was given to the consulting firm. According to the article, the California Department of Transportation audited the COG twice, finding mismanagement in its handling of grants, as well as an inadequate procurement process. In fact, the department penalized the COG by having it return $89,262 of a $250,000 grant. One of the audits, in September 2011, found that the agreement between the COG and the consulting firm created a conflict of interest.
It took almost a year before that finding led to any action. Even the one board member who apparently spoke out, and voted against the COG budget, did not act until March of this year.
Fortunately, a citizen took the initiative. But he found the COG uncooperative. His public records requests were refused by the COG, which led to a complaint and a $50,000 settlement with the COG's board (this also was apparently intended to settle charges of undermining public participation). Secrecy and attempts to undermine public participation are hallmarks of a fiefdom (for more on fiefdoms, see the section of my book Local Government Ethics Programs on the topic). But this was not a separate agency, as most fiefdoms are. This was an association of governments, all represented by people subject to, and supposedly trained in, government ethics laws.
It has not been confirmed by the district attorney's Public Integrity Division that brought the charges, but it appears that it was a complaint by the same citizen that led it to investigate the matter. Possibly, the transportation department's audit also contributed to the district attorney's decision.
It appears that the executive director needs to be seriously penalized and his contract with the COG voided. But what about the members of the COG board over the last few years? If they knew that grants were going to the executive director's firm, and approved this or said nothing about the problem, should they not pay the same penalties as the executive director?
What happened with the San Gabriel Valley COG should be used as a teaching opportunity. The board members and staff of every local government association in California should be required to study the situation, and rules should be drafted to prevent such fiefdoms from occurring. These rules should include the prohibition of management contracts, independent financial and conflict oversight by an state agency, and a clear statement that all COG board members and staff are fully subject to state ethics and transparency laws.
Robert Wechsler
Director of Research-Retired, City Ethics
203-859-1959
According to an article in the Los Angeles Times this weekend, the executive director of a California COG was charged last week with four felonies relating to his use of his office to obtain grants for a consulting firm he owns. His consulting firm has a managing contract with the COG, but in addition it has obtained grants through the use of his position. The COG coordinates efforts among 31 cities, 3 water districts and county supervisors in the Los Angeles area.
Fortunately, the state has a law that (1) prohibits public officials from having a financial interest in a contract they make in their official capacity, and (2) apparently considers COG executive directors to be public officials. I wonder whether they would be considered public officials in most states, even though they manage an association of local governments and have a great deal of influence on the spending of public funds.
How could so many public officials allow this to happen? Their first mistake was to allow management of the COG to be handled not by an individual with employees under the COG board's direct oversight, but rather by an individual for whom the employees work independently. This setup gives the power to the boss rather than the board, and it removes the employees from the usual relations with the COG. It may be less expensive, but the risk of abuse is too great to merit the savings. Without oversight, such setups often lead to fiefdoms that act in the boss's interest rather than in the public interest.
Fortunately, there was some oversight, although it was indirect, coming from the source of one of the grants that was given to the consulting firm. According to the article, the California Department of Transportation audited the COG twice, finding mismanagement in its handling of grants, as well as an inadequate procurement process. In fact, the department penalized the COG by having it return $89,262 of a $250,000 grant. One of the audits, in September 2011, found that the agreement between the COG and the consulting firm created a conflict of interest.
It took almost a year before that finding led to any action. Even the one board member who apparently spoke out, and voted against the COG budget, did not act until March of this year.
Fortunately, a citizen took the initiative. But he found the COG uncooperative. His public records requests were refused by the COG, which led to a complaint and a $50,000 settlement with the COG's board (this also was apparently intended to settle charges of undermining public participation). Secrecy and attempts to undermine public participation are hallmarks of a fiefdom (for more on fiefdoms, see the section of my book Local Government Ethics Programs on the topic). But this was not a separate agency, as most fiefdoms are. This was an association of governments, all represented by people subject to, and supposedly trained in, government ethics laws.
It has not been confirmed by the district attorney's Public Integrity Division that brought the charges, but it appears that it was a complaint by the same citizen that led it to investigate the matter. Possibly, the transportation department's audit also contributed to the district attorney's decision.
It appears that the executive director needs to be seriously penalized and his contract with the COG voided. But what about the members of the COG board over the last few years? If they knew that grants were going to the executive director's firm, and approved this or said nothing about the problem, should they not pay the same penalties as the executive director?
What happened with the San Gabriel Valley COG should be used as a teaching opportunity. The board members and staff of every local government association in California should be required to study the situation, and rules should be drafted to prevent such fiefdoms from occurring. These rules should include the prohibition of management contracts, independent financial and conflict oversight by an state agency, and a clear statement that all COG board members and staff are fully subject to state ethics and transparency laws.
Robert Wechsler
Director of Research-Retired, City Ethics
203-859-1959
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