The Revolving Door and the Appearance of Impropriety

It was exciting to see someone who made her reputation as a government ethics advocate named to the Republican ticket. But it was very troubling to read how she handled a recent revolving door matter.

Also, what she did and said made me realize there is a hole in the City Ethics Model Code Project's provisions on the revolving door. The provision deals with what officials do after their public service, but not what public servants might have done before they came on board.

The general rule applies to only one year after termination of government employment. However, "With respect to particular matters on which the official or employee personally worked while in city service or employment, this bar is permanent." But what is the appropriate term when someone who has lobbied for a company becomes a government official specifically to advise on a matter involving that company, especially when a large (in this case $500 million) subsidy is involved?

According to an article in today's New York Times, Alaska Governor Sarah Palin hired as her chief adviser on a natural gas pipeline (being supplied by TransCanada) someone who had lobbied for TransCanada's pipeline subsidiary five years earlier and then two years later negotiated with the firm as a government employee. She said, when asked if there was a conflict of interest, "Going on five years later, no."

Here's how the Anchorage Daily News article (where that quote originally appeared) described the situation in December 2007:

More recently, in 2005, TransCanada negotiated a "conceptual" deal with Alaska on tax and other terms for a pipeline. But this effort, as well as a competing proposal from Conoco, BP and Exxon Mobil, died under Palin's predecessor, former Gov. Frank Murkowski.

Now, TransCanada is bidding once again.

The company has worked behind the scenes to bolster its position in Alaska.

One of its lobbyists, lawyer Tom Roberts of Washington, D.C., was chief counsel and legislative director for Murkowski from 1985 to 1990 when Murkowski was a senator.

For the 2005 deal, TransCanada negotiated with Marty Rutherford, a deputy natural resources commissioner under Murkowski. Two years earlier, Rutherford had worked as a Juneau lobbyist for TransCanada's pipeline subsidiary, Foothills, and made $40,200.

Today Rutherford heads Palin's gas pipeline team.

This is one of those situations where, if the governor had come out against a subsidy or awarded the contract to another company, no one would have thought anything was wrong.  However, she did come out in favor of a huge, controversial subsidy to TransCanada, with the advice of someone who had lobbied for the company. If he ever lobbied for the company's pipeline contract, is five years enough to prevent an appearance of impropriety, of undue corporate influence, and the feeling among citizens that the decision was made before the governor considered it thoroughly?

The reason for limiting the revolving-door provision to one year is that it places a serious burden on government officials and employees if their job possibilities are too restricted, and therefore it becomes difficult to hire qualified people in government.  But does this argument apply the other way around? Would it place a serious burden on individuals to prevent them from being involved in making decisions with respect to companies they have worked for or represented in the recent past or, even moreso, matters in which they were themselves involved? And if so, how recent must the involvement have been?

Restrictions on former government officials are intended to prevent them from misuing their office by making decisions intended to lead companies to employ them. That is why many jurisdictions, and the City Ethics Model Code, makes this restriction permanent with respect to particular matters on which a public servant works.

Restrictions on hiring people who have worked for such companies are intended to prevent them from making biased decisions that seem to be favoring their former employers. It is unlikely that a government official would make a decision that would lead a company to employ her years later.  However, it is likely that the public would see a decision as biased if the decisionmaker worked for that company as recently as five years earlier. The first is essentially about misuse of office and bribery, the second is essentially about the appearance of impropriety in the form of undue influence and bias.

It's difficult to set a time period for what appears to be improper. In terms of a law, I would probably make the period short of five years, except for specific matters the potential official has been involved in, where I would make it, too, permanent.

But no matter what the law says, when hiring someone in a highly visible and controversial situation where a large contract or subsidy is involved, I would steer clear of someone who had worked for any interested company, and certainly as recently as five years ago. And I would not hire anyone who had ever dealt with the particular matter.

It deeply troubles me that someone who made her reputation as a whistleblower and good government zealot would not realize that government ethics is not simply what the law says, and that the perception of impropriety is extremely important. If someone with her views and moral courage is not willing, when in power, to steer clear of hiring someone who has popped in and out of the revolving door with respect to the particular pipeline (or to admit that this is problematic), then how can any public official be expected to take these extralegal ethical issues into account?

Robert Wechsler
Director of Research-Retired, City Ethics

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