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The Positive Effects of Applicant Disclosure, and How to Enforce It
Tuesday, August 25th, 2009
Robert Wechsler
Applicant disclosure is an effective part of local government ethics
that is usually ignored. Usually it is officials who are required to
disclose potential conflicts of interest, either in the form of annual
disclosure statements, revised when circumstances change, or in the
form of announcements that they have a potential conflict and are
withdrawing from involvement in a matter.
The principal burden should be on officials, but placing an additional burden on applicants -- such as those seeking zoning changes and contracts -- does two things, in particular. One, it makes applicants think twice about their relationships with officials. If they are required to publicly disclose these relationships and, if they do not, risk losing their contracts or zoning approvals, they will be more likely not to tempt officials, but instead deal with them on an arm's-length basis.
Two, it places a check on officials' disclosures. If officials know their relationships will be disclosed, they will be more likely to disclose them themselves.
The principal value of applicant disclosure is to help prevent pay-to-play, where applicants feel required to give officials something in order to get something from the local government, whether a contract or a land use change. When applicants are required to disclose what they give, it's harder for officials to ask for, or expect, anything.
The occasion for this post was an article in the Sun-Sentinel yesterday, which noted that a restaurant that had been given a contract by the city of Deerfield Beach (FL) had not disclosed two sizeable campaign contributions to officials who had voted on the contract. The city's applicant disclosure requirement is new this year, but a disclosure affidavit and the complete ethics code were part of the restaurant bid package.
The affidavit requires three disclosures:
According to the article, the city attorney said that the city commission has three choices: "it could reject all the bids and begin again, give the contract to second choice David Weinstein, manager of Kelly's Ocean Grille, or let JB's remain the winner." Nothing is said about the mayor and commissioner who received contributions (and who happened to be the only two who made the winning bidder their first choice) recusing themselves from the votes on these three choices.
This is why it is better to have a contract or approval automatically voided if in violation of the ethics code. The commission or other body is free to reconsider the approval or contract, but those who have a potential conflict and did not declare it when the matter came before them the first time would be required to recuse themselves, even if, as here, the conflict involved perfectly legal campaign contributions.
The City Ethics Model Code applicant disclosure provision does not include disclosure of campaign contributions, but another provision does automatically void any contract that results in or from a violation of the code. Also, a third provision bars any contractor that knowingly violates the code from doing business with the local government for three years.
Other blog posts on applicant disclosure:
An L.A. case where applicant disclosure would have made a difference
Applicant disclosure and professional confidentiality
The principal burden should be on officials, but placing an additional burden on applicants -- such as those seeking zoning changes and contracts -- does two things, in particular. One, it makes applicants think twice about their relationships with officials. If they are required to publicly disclose these relationships and, if they do not, risk losing their contracts or zoning approvals, they will be more likely not to tempt officials, but instead deal with them on an arm's-length basis.
Two, it places a check on officials' disclosures. If officials know their relationships will be disclosed, they will be more likely to disclose them themselves.
The principal value of applicant disclosure is to help prevent pay-to-play, where applicants feel required to give officials something in order to get something from the local government, whether a contract or a land use change. When applicants are required to disclose what they give, it's harder for officials to ask for, or expect, anything.
The occasion for this post was an article in the Sun-Sentinel yesterday, which noted that a restaurant that had been given a contract by the city of Deerfield Beach (FL) had not disclosed two sizeable campaign contributions to officials who had voted on the contract. The city's applicant disclosure requirement is new this year, but a disclosure affidavit and the complete ethics code were part of the restaurant bid package.
The affidavit requires three disclosures:
- 1. All campaign contributions to
sitting city commissioners in the past four years, as well as the
contributions of all officers, directors, and shareholders of a corporation
if the application is a corporation, or partners if the applicant is a
partnership, or members, whether general or limited, if it is a limited
liability company.
2. All items that a regulated officer of the city is required to disclose concerning any conflict, whether actionable or non-actionable.
3. Any action that is a violation of the ethics code in reference to the application and done with the applicant and/or the applicant’s agents. Also what was done to rectify the violation (for example: if a gift was given, asking for return of the gift.)
According to the article, the city attorney said that the city commission has three choices: "it could reject all the bids and begin again, give the contract to second choice David Weinstein, manager of Kelly's Ocean Grille, or let JB's remain the winner." Nothing is said about the mayor and commissioner who received contributions (and who happened to be the only two who made the winning bidder their first choice) recusing themselves from the votes on these three choices.
This is why it is better to have a contract or approval automatically voided if in violation of the ethics code. The commission or other body is free to reconsider the approval or contract, but those who have a potential conflict and did not declare it when the matter came before them the first time would be required to recuse themselves, even if, as here, the conflict involved perfectly legal campaign contributions.
The City Ethics Model Code applicant disclosure provision does not include disclosure of campaign contributions, but another provision does automatically void any contract that results in or from a violation of the code. Also, a third provision bars any contractor that knowingly violates the code from doing business with the local government for three years.
Other blog posts on applicant disclosure:
An L.A. case where applicant disclosure would have made a difference
Applicant disclosure and professional confidentiality
Story Topics:
- Robert Wechsler's blog
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