Soliciting Funds for a Conference and an Arts Center

There are some interesting ethics issues being raised in Madison, Wisconsin.

The mayor of Madison was asked to co-chair a committee that will be raising funds to sponsor a national conference of urban designers and developers to be held in Madison. One job for the mayor would be to send out fundraising letters and follow up with phone calls to companies and individuals, including some that do business with the city.

The mayor responsibly asked for an advisory opinion before accepting the co-chairmanship. A draft advisory opinion has been made available by the Capital Times, a local newspaper. One of the two questions, phrased by the city attorney (who is the ethics board staff), is as follows:

Would the solicitation of funds by the Mayor violate sec. 3.35(5)(a)2 [of the ethics code] in that the solicitation, even with no benefit to the Mayor or his immediate family, would be expected to influence the Mayor’s action or be considered a reward for action?

This is a new spin on the old situation of a mayor's favorite charity, which is used as a way for contractors and developers to give more to an official than campaign finance laws allow. Although the language of gift provisions is all about influencing officials, soliciting for nonprofits is more commonly a way for officials to get companies to pay in order to play.

Influence and Pay-to-Play
The advisory opinion takes an odd approach. It starts out by looking at how such solicitations of gifts could violate the code:

Although the Board could not directly determine that such solicitation and acceptance might influence the Mayor’s vote or official actions, the Board does find that soliciting and accepting those contributions for a third party would influence the Mayor’s judgment. It is only natural that the Mayor would be more considerate and open-minded to those who helped bring this important conference to the City.

What would it matter if an official's judgment were affected by a gift to his committee, if it did not affect his vote or official actions? This is a meaningless distinction, as far as I can tell. Yet, on the basis of this distinction, the ethics board found that fundraising for the committee would violate the ethics code.

What's worse, the board determined that there is no "issue with the Mayor being listed as co-chair of the host committee for the CNU convention. Letterhead with the Mayor listed as co-chair of the host committee could be sent by others to solicit funds, so long as the Mayor was not listed as a member of the fundraising committee, the Mayor was not doing the actual solicitation, and the Mayor did not make phone calls to make solicitations."

If the mayor would be more considerate to companies who help bring a conference to the city, what would it matter if it was the mayor himself who asked the companies directly for the gifts? Even if he had nothing whatsoever to do with the committee or even the conference itself, he would be just as happy that the gifts were made and, therefore, just as considerate and open-minded toward the givers.

Reasonable to Whom?
The reason for this lack of reason here is that the ethics board is very limited in its approach to government ethics. It starts out saying that it can't determine if the gifts would influence the mayor's actions, but this is only one issue. The other issues are (1) whether it would appear to the public that the gifts might influence the mayor and (2) whether the fundraising might be a way for the mayor to get companies and individuals to pay to play.

The problem with (1) is that the code speaks in terms of what can "reasonably be expected to influence ... or could reasonably be considered a reward." This invites the board to do the reasoning. But it's not about the board; it's about the public. And the public doesn't have to determine the odds of whether a mayor will be influenced. They see money going one way, and decisions coming right back to those who gave (or not to those who didn't give).

I'm not saying that the public's view should determine whether conduct is in violation of an ethics code. I'm saying (1) that a "reasonable expectation" standard, if used, should be looked at in terms of public trust, which is what matters here; and (2) that "reasonable expectation" standards are wrong in this context, because a gift from any company or individual doing business with the city to an organization in which the official plays an important role is going to be seen as a gift to the official. And when it comes to the reason for the gift, when gifts come from those doing business with the city, people who have a lot to gain by making top officials happy, people will think the worst.

Solving This Problem
It's hard to craft a gift provision that will include this sort of situation. But the ethics board is making an advisory opinion and, therefore, it does not have to stick to the law alone. It can say that this is a gray area, but that there would be a serious appearance of impropriety and recommend that the mayor not sit on the committee or be involved in any way in fundraising for the committee.

If the city is full of companies and individuals who do business with the city and want the conference to be held in their city, a conference that will benefit them and their investments, why shouldn't they sit on the committee and do the fundraising themselves? The mayor can speak to open the conference, but there is no reason why a mayor or council member should be a member of a committee that is raising large sums of money for any cause. A mayor is supposed to focus on raising tax dollars and grants for the city, and that should be enough to keep him busy.

The ethics board goes on to say in its advisory opinion, "The Board believes that a carefully crafted and limited exception to the Ethics Code, allowing such solicitations in limited circumstances and with disclosure of the contributors, is an issue that merits further consideration." This would set a horrible precedent for cutting out exceptions every time a gray area comes before them. If you did it for the mayor soliciting for a conference, why not for a council member soliciting for a charity or an administrator running for head of a professional organization?

Ethics Board Recommendations to the Council
It turns out that the ethics board did make such a recommendation to the council, and it was on the agenda for the October 19 meeting, according to a Forward Lookout blog post. Also of interest are the ethics board's two other recommendations:

50. Legislative File No. 19335 Creating Section 33.01(9)(f) of the Madison General Ordinances to require all sub-units to include an agenda item at each meeting for ethics disclosures and recusals. (Report of Ethics Board – Ald. Thuy Pham-Remmele, D. 20)

51. Legislative File No. 19916 Creating Section 3.35(6)(i) of the Madison General Ordinances to establish conditions and procedures for a third party to pay for incumbent’s permitted expenses. (Report of Ethics Board – Ald. Thuy Pham-Remmele, D. 20)

The first recommendation is excellent. It's important to formalize disclosure, and this seems like a good way to do it. The second recommendation is more questionable. Why should third parties be paying for an official's expenses? I'd have to see the conditions and procedures, but I don't see why this should be allowed in anything buy extraordinary situations. In such cases, a waiver could be sought from the ethics board.

By the way, it's worth taking a look at a five-page letter to the ethics board from the former Madison council member who wrote the above blog post. The letter, from April 2010, contains a number of suggestions for better handling of ethics matters in Madison.

Soliciting might be okay, as long as those solicited don't do business with the city or lobby for those who do. But let's all be big boys and girls, and recognize that the first people tipped to give are those who do business with the city and those who lobby for them. If you can't see that, you're too naive to be involved in government ethics.

Involvement with the Solicitation of Money for an Arts Center
This issue can take many forms. A complaint has been filed against the mayor, partially based on the advisory opinion, regarding his involvement in raising funds to support a city arts center that has been in trouble. The mayor supports city takeover of the arts center, which would apparently require a private nonprofit to do fundraising for it. By supporting this solution, he is setting up a situation whereby companies and individuals doing business with the city would be effectively acting to make the mayor's plan work.

Even if the mayor were not active in soliciting funds for the arts center, his vocal support of this solution could make it appear that donations to the art center would be donations to him. But this is one step beyond the conference situation. The arts center has been around for years, and people (including the mayor) have been giving it large donations for years. It is in no way identified with the mayor, and presumably the mayor would not be involved in fundraising.

It is valuable to discuss the issue, because there will be accusations such as this that the mayor is using the arts center for pay-to-play purposes. Unfortunately, since a complaint has been filed, the ethics board will be more justifiably limited in how it approaches the matter. However, since nothing has actually occurred, the ethics board could ask that the complainant rephrase the matter as a request for an advisory opinion. Otherwise, the board should probably dismiss the complaint and suggest to the mayor that he request another advisory opinion himself.

Robert Wechsler
Director of Research-Retired, City Ethics

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