Folio Article: Miller's Crossing

When Mayor John Peyton decided to hire Carla Miller as Jacksonville’s Ethics Officer in 2007, the city was in crisis. A grand jury was investigating violations of state open-meeting laws by nearly every member of the former City Council. The FBI had begun sniffing around JaxPort, probing dubious contracts and allegations of influence peddling. The city had spent $36.5 million to develop the old Shipyards site, with nothing to show for it. It had spent another $26.8 million on the courthouse with similar results.

BY SUSAN COOPER EASTMAN

February 3, 2009
This cover story is reproduced with permission from Folioweekly magazine
See: www.folioweekly.com

CARLA MILLER was appointed to reform Jacksonville’s ethics. The fact that she’s being squeezed out suggests she may be doing her job too well.

When Mayor John Peyton decided to hire Carla Miller as Jacksonville’s Ethics Officer in 2007, the city was in crisis. A grand jury was investigating violations of state open-meeting laws by nearly every member of the former City Council. The FBI had begun sniffing around JaxPort, probing dubious contracts and allegations of influence peddling. The city had spent $36.5 million to develop the old Shipyards site, with nothing to show for it. It had spent another $26.8 million on the courthouse with similar results.

The mayor himself was embroiled in scandal. City Hall cynics who believed local government operates on a system of patronage and paybacks got their proof when it came to light that two close friends of Peyton’s had been awarded lucrative city contracts without submitting proper bids. Peyton’s former chief of staff and close friend Scott Teagle had gotten more than $500,000 in contracts, even though his company wasn’t qualified to compete for the work. Another Peyton friend received a $64,100 no-bid consulting job, for little more than helping city employees organize their desks.

The wave of ethical violations and bad decisions threatened to swamp the Peyton Administration. Public outcry was fierce. State Attorney Harry Shorstein was openly critical. The mayor responded. In an open letter to the public in August 2007, Peyton aplogized for the lapses that led to the hiring of his friends, calling it a "failure" that eroded public trust. To restore the public’s faith, Peyton proposed hiring an Ethics Officer, establishing a hotline for the reporting of ethics violations and appointing a veteran of the Council Auditor’s Office as Inspector General to help investigate complaints.

One measure of how seriously Peyton regarded the dustup was his choice of Carla Miller for the job of Ethics Officer. A former federal prosecutor who’d helped take down a corrupt state senator in Jacksonville in the 1980s, Miller had served as chair of the city’s Ethics Commission, authored much of city’s Ethics Code, and was an internationally recognized expert on ethics, serving as president of a nonprofit organization devoted to helping local governments reform corrupt systems. She was so dedicated to making Jacksonville’s Ethics Code work that after it was adopted in 1999, she served as the city’s voluntary Ethics Officer for eight years.

Peyton considered Miller an essential part of the ethics overhaul and assigned her a broad slate of responsibilities. In addition to duties outlined in the Ethics Code — teaching ethics law to elected officials and city employees, monitoring compliance with gift reporting and lobbyist registration, and instituting the hotline — Peyton specifically charged Miller with bringing greater transparency and accountability to the procurement process, the business of bids and contracts that proved such an embarrassment to his administration.

But despite the sweeping reform Peyton proposed, the structure of the position constrained inquiry. Simply put, Miller is in the unenviable position of reporting to the very people who oversee the bureaucracy she’s tasked with watchdogging: She answers to both the mayor and the City Council president.

The ethics hotline has a similar problem. Although Miller is responsible for handling preliminary inquiries, ethics complaints that merit investigation are referred to either the administration’s Inspector General or the City Council Auditor. Those probes typically examine whether an action followed city protocol or if any laws have been broken, but they rarely examine whether city laws or procedures themselves need to be modified. Broader issues of how contracts are awarded or whether the purchasing code is transparent aren’t addressed unless they’re specifically taken up by Miller or the Ethics Commission.

Miller’s biggest obstacle, though, is internal resistance. Her reform efforts have raised the hackles of influential lobbyists and infuriated some City Councilmembers. The blowback has been fierce, both through official channels and in the media. Several councilmembers, most notably Stephen Joost and Jay Jabour, openly balked at granting Miller a part-time wage of $85 an hour — a starting salary in legal circles — even though she agreed to forego salary increases, health insurance and pension benefits. She’s been treated with open hostility by lobbyists, who accuse her of overreaching, and by some officials, who think her investigations have embarrassed the city.

A little more than a year into the job, Miller believes she’s accomplished much. She trained more than 1,000 city employees. She established a protocol for the ethics hotline. She strengthened lobbyist disclosure requirements and made a wide range of ethics reports available on the Ethics Office website.

Miller’s not at all certain she’ll still have a job a year from now. Even if she does, she fears the position of Ethics Officer will be so reduced it may not be worth having. Plenty of City Hall observers agree. Unless and until the city creates a truly independent Ethics Office, insiders say, the future of the position will always be in peril.

“She is really in an impossible situation,” says Ethics Commissioner Pat Sher. “How can she relate to the public as their advocate at the same time she … reports to the mayor and the [council president]?”

Former State Attorney Harry Shorstein agrees. “The need for an ethics commission and ethics officer is greater today than ever in Jacksonville history,” he says. “[But] the effectiveness of the Ethics Commission and the Ethics Officer will always depend on their independence and insulation from political influence.”

Carla Miller was born in 1951 in Philadelphia. A private-school student throughout her childhood, Miller grew up sheltered and somewhat idealistic. She attended Florida State University in the 1960s, and told The Florida Times-Union in a 2007 interview that as a young woman, she’d worn “dresses, complete with pantyhose and white gloves, to football games.”

In 1979, she earned her law degree from the University of Florida, then went to work for the U.S. Attorney’s Office for the Middle District of Florida. Her interest in ethics grew out of her years as a federal prosecutor. She was involved in 15 white-collar criminal cases right out of college and wondered whether the culture surrounding elected officials encouraged corruption or could help prevent it.

Miller became familiar with the underbelly of Northeast Florida politics during a major investigation into corruption in Jacksonville City Hall. She helped convict former state Sen. Dan Scarborough, of Jacksonville, along with a state lobbyist and local lawyer, for conspiring to obtain an illegal liquor license for a local bar. Since 1983, Miller has been in private practice, a partner in the personal injury law firm of Miller and Skinner, P.A. She also founded the consulting agency City Ethics, through which she helps municipalities around the world establish ethics programs. After Mayor John Delaney ran on a platform of ethical reform, Miller volunteered to help fashion the city’s Ethics Code, then volunteered to be the Ethics Officer.

Miller took Peyton’s offer of a job aware of the funding, staffing and independence limitations — she was a part-time employee with no full-time support staff — but eager to make it work.

“Here was the dilemma: Do I take a part-time position and really try to make it work with the limited resources because I care enough about it?” she asks. “Or do I say, ‘With the limited resources you’ve given me, I can’t really take this on.’ Maybe I just had to do it that way for a year in order to understand what really needed to be done.”

What needs to be done, Miller believes, is to establish a truly independent ethics function, with the hotline and either the Inspector General or another investigative unit attached to an independent ethics commission. The structure would be similar to those found in Miami, Atlanta and Philadelphia, cities where ethics commissions have the authority to investigate violations and mete out punishment. They can subpoena witnesses, levy fines, and have large budgets. And they aren’t shy about going after elected officials.

The Miami-Dade Commission on Ethics and Public Trust has an annual budget of $2 million, five board members, an executive director and six investigators. In 2007, the commission investigated Mayor Manny Diaz and a former Miami Commissioner, and found both had violated city ethics laws when they formed a real estate company with the city manager and purchased land near a major capital improvement project. The commissioner (no longer in office) paid a $750 fine; Diaz was fined $250 and given a formal letter of reprimand from the commission.

The Atlanta Board of Ethics has a smaller budget — about $350,000 — but no less power. Just last month, two Atlanta City Councilmembers agreed to pay nearly $27,000 in fines and penalties related to the misuse of their city council expense accounts, after the citizenappointed ethics board found they’d spent the money inappropriately.

In Jacksonville, by comparison, the total annual budget for the Ethics Office is about $90,000 — including Miller’s $75,000 salary. The Ethics Commission has no power to subpoena witness and although it can issue reprimands, it cannot levy fines. In most cases, local ethics probes take a backseat to formal investigations where there is a possibility of criminal wrongdoing. For instance, a grand jury investigated the 2001 Shipyards deal, in which the Delaney administration crafted a flawed contract that allowed developers with almost no large-scale project experience to receive $36.5 million in city money. The money was ostensibly for public improvements, but the contract placed few restrictions on when or how that money would be spent. (Some of it went to buy football tickets to woo potential investors.) The public improvements — like the rest of the Shipyards project — were never completed. The city was left with nothing but piles of dirt.

A grand jury investigation found fault with city attorneys, and a lot of wasted money, but no evidence of a crime. Aside from a scathing report, there was no punishment for those involved. But just because no criminal violations were found doesn’t mean that there weren’t ethical ones — violations an empowered Ethics Commission might have pursued and punished.

The grand jury also pointed out that in 2003, the former director of the Jacksonville Economic Development Commission, Mike Weinstein, accepted a $25,000 consulting fee from the Shipyards group to help the company market its property during the Super Bowl. Weinstein, who was later named Super Bowl Host Committee Chair, had been in charge at JEDC when the lucrative Shipyards deal went through. The grand jury report in 2005 concluded Weinstein had violated city rules that prohibit a former city official from acting as a representative for a party on any matter in which the city or the official had a direct or substantial interest. The grand jury merely noted the violation, however, and the state attorney didn’t prosecute it. (The Ethics Code was expanded in 2007 to include restrictions on post-city employment.) Weinstein, far from being punished, has prospered. In November, he was elected state representative.

Perhaps the best case for more stringent ethics oversight is the January 2008 grand jury report into violations of the Sunshine and open-meetings laws on the part of City Councilmembers. Although the grand jury didn’t find criminal violations, it did find myriad non-criminal violations. But Shorstein declined to prosecute, noting that punishment for any non-criminal violations — a maximum fine of $500 — would be miniscule relative to the time and money it would take to prosecute them.

Shorstein’s decision may have been fiscally prudent, but the message it sent to lawmakers was troubling. Basically, it affirmed their ability to violate the law with impunity. The council attempted to salve community outrage by passing the Jacksonville Sunshine Law Compliance Act, but the law did little more than reiterate what state laws already stated. And it’s no easier to make lawmakers comply with the local law than it was with the state law. There’s simply no enforcement function.

Newly elected City Councilmember John Crescimbeni believes that the city’s ethics office is the appropriate watchdog in that situation, but is skeptical the office can assume that role while it’s under the thumb of the mayor and the council. He plans to introduce legislation calling for a truly independent Ethics Office and Ethics Commission. “I want our city to operate responsibly and ethically. I think they need to be an autonomous organization that reports to nobody but the citizens.”

In November, Carla Miller attended the Transparency International anti-corruption conference in Athens, Greece — an event that drew ethics advocates from around the world. Some of the people who took part have been threatened or tortured for their efforts to bring transparency to politics; some of their colleagues have been killed. Miller calls the conference “inspiring,” but also helpful in keeping her own challenges in perspective.

It’s perspective she’ll need this year. Even as some ethics advocates call for strengthening her role, administrative zeal for the Ethics Office seems to be waning. Some observers expect the city to chip away at Miller’s authority and corral her influence. Already she’s been chastised for raising questions about the procurement process. There’s also talk of shifting the hotline from the Ethics Office and the Ethics Commission to the Office of Inspector General, a move that would allow the administration to exercise more control and might diminish tipsters’ confidence that their information will be protected from disclosure. If the hotline is taken from the Ethics Office, it would leave the Ethics Office to handle little more than employee training and gift reporting. Miller would be cut out of the investigative process entirely.

Miller may also face a funding struggle in next round of recession-era budget hearings. City Councilmember Clay Yarborough predicts she will have to fight for even the limited money her office receives. Persuading the council to fund an independent Ethics Office and Ethics Commission, he says, is a long shot.

Commissioner Sher is more optimistic. She believes public support for an independent board is stronger than elected officials realize. “I think the general public is solidly behind us,” she says. “I think they’d rather we spend money on ethics than on a cruise terminal.”

Part of that support, of course, depends on the public perception that ethics watchdogs get results. One of Miller’s biggest successes in that area was the registration of lobbyists. Soon after Peyton hired her, she reviewed the entire ethics code with an eye toward compliance issues, like gift reporting, secondary employment and lobbyist registration. She found compliance with lobbyist registration laws particularly lax. Although the Ethics Code required lobbyists to register with the city and identify their clients and issues, most provided only rote disclosure, listing only “various issues and clients” on the form. Miller found the rule unacceptably vague and clearly designed to benefit lobbyists.

At Miller’s request, the council approved a more detailed lobbyist registration form, one that required client names and professions, the issue for which they would be lobbying and whether the lobbyist had a financial interest in the outcome of the legislation.

The law took effect Jan. 1, 2008, and over the following few months, 50 lobbyists sent updated information, although not all provided specific information on the issues upon which they were hired to lobby. Nine didn’t comply. In April, Miller sent out letters to the nine, informing them that if they didn’t comply, their names would be stricken from the list of legally registered lobbyists. She noted it was a Class A offense to lobby without proper registration, punishable by a $25 fine or 10 days in jail. She also notified the State Attorney’s Office that some lobbyists weren’t in compliance.

That letter — and the implicit threat — didn’t sit well with omnipresent land-use lobbyist Paul Harden, one of the nine who didn’t comply. On April 7, Harden sent a letter to Miller noting he’d been registering the same way — “various issues and clients” — for some 23 years, and he didn’t believe he was compelled to change. He asserted that Miller had no authority to strike his name from the list of registered lobbyists.

Miller checked her position with the city’s General Counsel’s Office to make sure she was acting within her authority, and the Ethics Commission backed her, asking Harden to appear before them to discuss his intransigence. In the end, he agreed to register, although like most lobbyists, he still lists only general land use and zoning as his issues, and not the specific bill or property he’s working on.

Miller concedes compliance with lobbyist registration rules is still incomplete, but even the partial victory cost her plenty. She was warned of retribution, she says, and was told she would be undermined for challenging Harden. She was even told rumors could be circulated about her, true or not. Miller says she wasn’t fazed by the threats, just disappointed. “What were they going to say?” she laughs. “That I’m a Weight Watcher’s dropout?”

Miller also encountered resistance when she began raising questions about a new contract for Trail Ridge Landfill on the Westside. The Peyton Administration wants to waive the city’s purchasing code in order to give Waste Management a no-bid, 40- year, $750 million contract to manage the landfill. The deal’s critics note that it’s the single-largest contract in city history, one that deserves the scrutiny of a competitive bid process. Miller was also concerned that the bill seemed purposely vague, not saying how much the contract would cost the city or how long it would last. (Coincidentally, the bill was being pushed through council by land-use attorney Harden, who threatened to sue the city “until the cows come home” if the deal wasn’t signed.)

Miller’s concerns went beyond the specific contract. She believes that any time the bidding process is set aside, the reason — and the amount of money involved — should be abundantly clear to the public. She began asking questions about how often the purchasing code was waived and for what reasons. But as she ventured deeper into procurement matters, Miller says she was told in no uncertain terms to back off and stick to her area: the Ethics Code. The Ethics Commission got a similar response from the Chief Deputy of the General Counsel’s Office Cindy Laquidara when it began asking about the contract at a Sept. 30 meeting. Laquidara warned that the commission was overstepping its responsibilities and meddling in City Council business.

In an interview with Folio Weekly, Laquidara clarified her statement, saying that while questioning the procurement code might be fertile ground for the Ethics Office and the Ethics Commission, they must first be educated about how the code functions. “Then you actually might be able to bring some value to it,” Laquidara says. “When one stands up and says, ‘This particular bill is not transparent,’ and you don’t know what laws apply to it, it’s not very helpful.” She adds, “Throwing grenades is real easy.”

Miller says she wasn’t grenade-throwing and notes that the mayor signed an executive order calling for the Ethics Officer “to integrate ethics into procurement policies.”

“What does that mean?” she asks. “It means asking questions about the procurement process.” She adds with barely discernable sarcasm, “If you’re waiving the procurement process for what is close to $750 million, that may be something that would catch your attention.”

Miller concedes it would be easier — and safer — to stick to boilerplate ethics. But as a former prosecutor, she says that when she senses her questions make people skittish, she tends to want to know more.

“You can pick safe issues or you can pick ones where people are skittish. Safe issues would be: Let’s discuss whether or not employees can get fruit baskets, and should fruit baskets have chocolate in them, because that might bring it up over the $100 limit. Or do you say: The procurement code is really interesting, and how does that work and is it a fair and transparent system in plain English for the citizens of Jacksonville to understand?”

For Miller, the answer is a no-brainer. She’s fully aware that making people uncomfortable makes her job less secure. She doesn’t think she’ll be fired — something she and others say would be politically untenable. But she does think that a minority inside City Hall feels threatened. Miller doesn’t care. “I don’t want to look back and say, ‘Well, did I waste my time here for the past 10 years? Did it really just add up to making people think they had an effective ethics program, or was it really an effective program? Did it provide more transparency? Did it save taxpayers’ money? Or did it just have ‘ethics’ written on a door and some brochures to hand out and make people worried about taking gift baskets?’”

She doesn’t answer her own question, but her meaning is transparent.