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A Conflict Miscellany
Thursday, March 21st, 2013
Robert Wechsler
Police Officer Side Businesses and Revenue Distinctions
There's an interesting article in yesterday's New Pittsburgh Courier about Pittsburgh police officer side businesses and the sorts of problem they create. One of the problems derives from a false distinction between different sorts of revenue.
One problem is that the police chief has engaged in a side business with officers. Even if this business does not place any of the officers in a conflict situation, it is inappropriate for a police chief to go into business with subordinates. One reason is the chief's power over subordinates, which makes it impossible for subordinates to say No. Another reason is that it is a form of preferential treatment that is out of place in a department, causing serious morale and management issues.
A second problem is that some of the businesses do work for the police department. For example, an officer-owned gym gives self-defense training to officers; a catering business caters police events; and a company helped coordinate a helicopter lift for the police department.
A police spokesperson said that some contracts "would be subject to a bid process in assurance that there is an approved contract with the City. However, other events that would utilize non-tax dollars would not be held to those restrictions.”
What allows officer-owned businesses to do work for the police deparment is the phrase "non-tax dollars." A police department's non-tax dollars come from such things as selling cars and other assets that are not picked up, usually because they're hot. A police department has its own revenue stream and, apparently, that revenue stream is considered not to be subject to procurement or conflict rules.
This distinction means nothing to the public. Those dollars may not be from taxes, but they do come from the community. And dollars are fungible. Who is to say which dollars are being given to fellow police officers rather than to the businesses of others in the community? Dollars are dollars.
This distinction exists solely to allow ethical misconduct. The distinction should be removed, and all monies treated exactly the same.
State Legislator Participation with Conflicts
The Center for Public Integrity has put out a must-read article on state legislators who consistently participate in matters that benefit their businesses and businesses for which they lobby. Check it out.
Pensions and Conflicts
According to an article last week in the Kansas City Business Journal, the chair of a city hospital board of trustees testified in a judicial hearing that the city's mayor had a conflict of interest with respect to selling the hospital because he has a police pension, and the city would use proceeds from the sale of the hospital to cover its pension obligations. Two council members also have police or fire pensions. In many jurisdictions, mayor and council members may get a pension even if they had never worked for the city as employees.
This does appear like a conflict, because a limited number of people have such pensions. Therefore, they are special personal benefits. What is not limited is the situations that may arise where the city raises revenue that might be used to shore up the city's pension obligations. Right now, with so many cities in deep pension trouble, anything a city government does can be seen as helping the shore up its pension obligations. Therefore, if having a pension was considered a conflict, no one with a pension now or in the future could be in a position to make decisions for the city. This is, of course, ridiculous. Therefore, the argument for a conflict fails.
Robert Wechsler
Director of Research-Retired, City Ethics
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There's an interesting article in yesterday's New Pittsburgh Courier about Pittsburgh police officer side businesses and the sorts of problem they create. One of the problems derives from a false distinction between different sorts of revenue.
One problem is that the police chief has engaged in a side business with officers. Even if this business does not place any of the officers in a conflict situation, it is inappropriate for a police chief to go into business with subordinates. One reason is the chief's power over subordinates, which makes it impossible for subordinates to say No. Another reason is that it is a form of preferential treatment that is out of place in a department, causing serious morale and management issues.
A second problem is that some of the businesses do work for the police department. For example, an officer-owned gym gives self-defense training to officers; a catering business caters police events; and a company helped coordinate a helicopter lift for the police department.
A police spokesperson said that some contracts "would be subject to a bid process in assurance that there is an approved contract with the City. However, other events that would utilize non-tax dollars would not be held to those restrictions.”
What allows officer-owned businesses to do work for the police deparment is the phrase "non-tax dollars." A police department's non-tax dollars come from such things as selling cars and other assets that are not picked up, usually because they're hot. A police department has its own revenue stream and, apparently, that revenue stream is considered not to be subject to procurement or conflict rules.
This distinction means nothing to the public. Those dollars may not be from taxes, but they do come from the community. And dollars are fungible. Who is to say which dollars are being given to fellow police officers rather than to the businesses of others in the community? Dollars are dollars.
This distinction exists solely to allow ethical misconduct. The distinction should be removed, and all monies treated exactly the same.
State Legislator Participation with Conflicts
The Center for Public Integrity has put out a must-read article on state legislators who consistently participate in matters that benefit their businesses and businesses for which they lobby. Check it out.
Pensions and Conflicts
According to an article last week in the Kansas City Business Journal, the chair of a city hospital board of trustees testified in a judicial hearing that the city's mayor had a conflict of interest with respect to selling the hospital because he has a police pension, and the city would use proceeds from the sale of the hospital to cover its pension obligations. Two council members also have police or fire pensions. In many jurisdictions, mayor and council members may get a pension even if they had never worked for the city as employees.
This does appear like a conflict, because a limited number of people have such pensions. Therefore, they are special personal benefits. What is not limited is the situations that may arise where the city raises revenue that might be used to shore up the city's pension obligations. Right now, with so many cities in deep pension trouble, anything a city government does can be seen as helping the shore up its pension obligations. Therefore, if having a pension was considered a conflict, no one with a pension now or in the future could be in a position to make decisions for the city. This is, of course, ridiculous. Therefore, the argument for a conflict fails.
Robert Wechsler
Director of Research-Retired, City Ethics
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