Safra Working Papers

Back in January, I wrote a blog entry focusing on the lack of transparency in the credit rating business so central to the subprime mortgage mess that has brought the world economy to its knees. Transparency, it has become clear, is all important.

Last month, I wrote about the conflict of interest that led credit agencies to ignore the risk inherent in mortgage-backed securities. A front-page article in today's New York Times shows how a different sort of conflict of interest at Citigroup allowed the risks involved in these securities to be ignored. No crimes, no politics, just plain old conflict of interest. With an extremely big price tag for our society.

How can I donate?

Currently, we accept donations in U.S. dollars. You can donate using Paypal or using direct deposit. Please see our donation form.

Double-dipping occurs when someone holds two government jobs, usually at two different levels of government. This is not legal in many states, and for a good reason. It sets up many possible conflicts of interest, not the least of which is that when you're doing one job, you're not doing the other. It sometimes means actually dealing with yourself, wearing both your hats at once. It leads to a lot of pork-barrel spending, as local officials use their state power and local connections to direct state grant money.

A new way to obtain ethics reform is making some headway in New York State. A number of former bigwigs, including former governor Mario Cuomo, and former NYC mayors Ed Koch and Rudy Giuliani, have created an organization called New York Uprising and a three-part pledge, one of which calls for a new state ethics commission and financial disclosure requirements (the other two involve redistricting and budget-making).

Vernon, CA, the subject of several blog posts here (click here for the latest), has been the object of criminal investigations, but now local officials are starting to get creative in response to the most creatively imagined city in the U.S.

Solution 1: Constitutional Amendment

Check out this excellent look at Vincent J. Fumo, a Pennsylvania state senator who "made no distinction between the personal and the political." Of special interest is his intimidating treatment of his staff.

My earlier blog entry on Fumo.

Update: December 1, 2010 (see below)

Last week, the Texas Attorney General issued a legal opinion on the role of the county attorney in representing and advising the El Paso County ethics commission, which was established in 2009.

Financial disclosure scares citizens away from sitting on local boards and commissions. This is the “fact” stated every time any level of financial disclosure is discussed. In my state, Connecticut, all the financial disclosure that was required in a recent bill was the name of one’s employer, and yet the Connecticut Conference of Municipalities opposed it with the same old canard. “Canard” is French for “duck” or, more appropriately in this case, “Duck!” which is effectively what municipal officials are saying when they oppose financial disclosure.

How to use the Federal Sentencing Guidelines (FSG) to establish or strengthen ethics programs

Purposes of the FSG:

a) Prevent and detect criminal conduct and b) Promote an ethical culture

Update: November 16, 2009 (see below)

On Sunday, the Lexington Herald-Leader took an unflattering look at Kentucky's legislative ethics commission. As in New York State, a central problem appears to be the commission's lack of independence.

How much jurisdiction need a government ethics program have over procurement matters when there is a procurement program dealing with them? This question, common to all cities and counties, is being asked in Honolulu, with respect to the Honolulu Authority for Rapid Transportation (HART), which will be soon awarding about a billion dollars in contracts.

I'm currently reading a classic political science book about urban politics, Who Governs? by Robert Dahl. Who governs? is a question that is not asked often enough in local government ethics. It is not enough for an ethics program to have jurisdiction over officials and employees. It needs to have jurisdiction over those who actually govern the community, no matter what their position.

Here's a mind-twister of a situation, from St. Marys City (GA; pop 17,000). According to an article on jacksonville.com, four members of the city council wrote the state attorney general asking for a ruling on whether a fifth council member violated state law by refusing to disqualify himself from voting on the proposed relocation of the St. Marys Airport (he owns a business there).

The perceived independence of an ethics commission is extremely important. This perceived independence has become an issue in Frankfort (KY), according to an article in Tuesday's State-Journal.

Note: When I originally wrote this blog post, I erroneously assumed that the ethics commission member whose conflict situation I discuss was the only one selected by the assembly speaker. I since learned that three of the members were selected by the assembly speaker. I would argue, therefore, that these three members are in the same situation (except for the personal opinion expressed about someone who would presumably be involved in the matter). With a fourteen-member commission, the withdrawal of three members from a matter would not hamper consideration of it.

According to an iLind.net blog post this week, the chair of the Honolulu Ethics Commission resigned on April 22. Although his letter of resignation provides no cause for the resignation, the chair apparently said that he had been asked to assist a mayoral candidate's campaign and did not want to violate the ethics code.

Is it too much to ask that an ethics commission member lead the way, set an example, with respect to the single most important aspect of a government ethics program:  ethics advice?

Should ethics commission members follow ethics laws to the letter, and no further, or should they provide leadership and a role model by going beyond legalism and instead acting ethically? State EC members in New York and Georgia are telling the world by their actions and their words that only the letter of the law matters in government ethics.

This blog post was partially rewritten on March 24, 2011 after communication with the EC's executive director.