Gifts to Agencies Should Be Cleared with an Ethics Adviser

With the frequent confusion of person and office, sometimes it's not that easy to tell the difference between a gift to a local government agency and a gift to its director. This confusion can open an agency director to accusations of ethical misconduct.

This is what has happened in Baltimore. According to an article in the Baltimore Sun, the city comptroller accepted the pro bono services of a firm whose most prominent member is the owner of the Baltimore Orioles baseball team, in other words, a major player in city politics. The legal services are for a suit against the mayor, alleging that a large telephone contract was not competitively bid.

The mayor came back with the allegation that the comptroller's acceptance of the gift of legal services is a violation of the ethics code. The comptroller insisted that the legal services were not for her benefit, but for the benefit of the city's residents. She also insisted that the Orioles owner does no business with the comptroller's office, and that she would withdraw from any matter involving him or his businesses or properties that came before the comptroller's office or the Board of Estimate, on which she also sits.

Ask!
The biggest problem with the handling of this situation has not apparently been mentioned by either side. Before seeking a gift from someone doing business with the city, especially in a complex and combative situation such as this, involving someone so prominent as the Orioles owner, an official should ask her city's government ethics adviser what to do. Baltimore is fortunate enough to have one, and he should be made use of. If she does not make use of him, an official only has herself to blame for accusations made against her.

This situation should be used not to fuel a battle between mayor and comptroller, but to show all officials and employees that the first rule of government ethics is, Ask!

The mayor is also wrong to accuse the comptroller of an ethics violation. Baltimore has an ethics program. The mayor should seek an advisory opinion or file a complaint, not act as if she is the one who determines when ethics violations occur. It's understandable that she's angry about the suit against her, but if she feels she's in the right, she should act responsibly by going through the proper channels in dealing with ethics issues.

Basically, everyone handled this situation irresponsibly. The comptroller should have sought advice from the city's ethics adviser, the mayor should have sought advice from the city's ethics adviser. And the comptroller's pro bono attorney should have kept his mouth shut on government ethics issues he doesn't understand (he wrongly stated that withdrawal from matters involving the law firm's principal is sufficient to deal with a possibly illegal gift; see below for more on this issue).

Gifts to Local Government Agencies
This situation is made especially complex because the comptroller did not accept a gift of legal services to represent the city's interests against, say, the state or a contractor that has failed to fulfill its obligations under a contract. In such a case, it would be much easier for her to treat the gift as one to the city rather than to herself. As it is, she accepted the gift to represent her agency against the mayor. The city's interest is not clear. Only the outcome of the suit will, presumably, determine whether her suit is in the city's interest rather than simply representing her beliefs or her attempt to stymie the mayor.

Considering all the circumstances, I would likely have advised the comptroller to look elsewhere for legal services. If possible, her office should pay for them. If she lacked the budget, she should have sought out services from a firm or nonprofit legal services organization that does not do business with the city.

The reason is that, even if a gift of legal services is clearly in the city's best interest, it is not the best thing for such a high-level official, especially a comptroller – who should be above reproach –  to accept such a gift from someone doing business with the city, especially someone so prominent. The appearance of impropriety in this situation is too damaging. See the section of my book Local Government Ethics Programs on gifts to local governments.

Withdrawal Is Not a Cure for an Illegal Gift
Both the comptroller's attorney and the director of the University of Baltimore's Hoffberger Center for Professional Ethics are quoted in the article as saying that withdrawal is a sufficient cure for an illegal gift. It is not. The proper cure for a gift is to return it or, in this case, pay for services rendered and stop accepting the services in the future. Yes, the comptroller should also withdraw from any matter involving the gift giver, but this is a secondary cure.

The attorney and the professor appear not to recognize the difference between a conflict that exists and a conflict that is created. Let's say the pro bono law firm employed the comptroller's spouse. Since a conflict exists, the comptroller would have to withdraw from any matter involving the law firm. The comptroller could violate the ethics code only by failing to withdraw.

But when an official accepts a gift from a law firm, she creates a conflict. The creation of the conflict is a violation. The same thing applies if the official's spouse were to accept a job from a law firm or other company doing business with the official's agency or, in the case of a high-level official such as the comptroller, with the city in any capacity. The conflict should not have been created in the first place.

Withdrawal is not sufficient to cure this violation, although withdrawal would be required. Failure to withdraw from a matter involving the law firm would be a secondary violation.

This is a difficult distinction to make. Even a professor of professional ethics (but not government ethics) did not understand it. That is why it is so important to seek advice from a trained government ethics professional, and to make such ethics advisers available.

Requirement of Approval
An alternative to seeking advice from an ethics officer or ethics commission administrator regarding gifts to a government agency is to require that officials seek approval, or a waiver, from the ethics officer or commission. In fact, Baltimore has just such a requirement (although it is limited to situations where the gift giver does business with the agency to which the gift is given, which may or may not be the case in the current situation). Here is the language from Baltimore's ethics code:

The prohibition [of soliciting gifts from those doing business with one's agency] does not apply to a solicitation if:
(l) it is for the benefit of an official governmental program or activity or a City-endorsed charitable function or activity; and
(2) it either:
(i) is expressly allowed by a rule or regulation of the Ethics Board; or
(ii) otherwise has been approved in advance by the Ethics Board, on the written request of the public servant and his or her agency.

It's a good idea to make an explicit requirement such as this, since at least so far no jurisdiction requires its officials to seek government ethics advice when they are faced with a conflict situation. This provision accomplishes the same result, at least with respect to what are presented as gifts to an agency.

The Baltimore provision, which is attached (see below), goes on to specify the standards the ethics board should use in deciding whether or not to approve, as well as giving a detailed description of what information must be included in a request for approval. Those who like their ethics codes short and simple will hate this provision. But this sort of detail, whether included in a law or in an ethics commission's rules and regulations, provides the necessary guidance to make the process work smoothly and fairly. The best way to structure this sort of approval process is to include it in an exception to gift rule, and provide a link to the relevant procedural rule, so that it won't make the code appear overwhelming to the great majority of officials and employees who will never employ this approval process.

Robert Wechsler
Director of Research-Retired, City Ethics

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