Guaranteeing an Ethics Commission's Budget

Anonymous

Fri, 06/10/2011 - 05:13

Conflicts

The dream of every ethics commission is to have a guaranteed budget.
But it is not really a dream for two reasons. One, there are ethics
commissions with guaranteed budgets. And two, it is a reasonable policy
that can be countered only by a local legislative body's need for
control. This blog post will look at the arguments for and against a
guaranteed budget, as well as several examples of and approaches to
guaranteeing budgets for ethics commissions and similar independent
bodies and agencies.

The Arguments For and Against 
Why is something so uncommon such a reasonable policy? Here's the
argument made by the New York City Conflicts of Interest Board (COIB)
in <a href="http://www.nyc.gov/html/conflicts/downloads/pdf2/charter_revision/revis…; target="”_blank”">a
June 2009 proposal</a>:<ul>

[T]he COIB has no natural constituency and no source of revenue.
Furthermore, it regulates the very people who set its budget. Indeed,
invariably the Board has before it matters involving high-level
officials at the same time those officials are passing on the Board's
budget, an unseemly situation. Lack of a source of assured funding also
significantly undercuts the perception of the Board‟s independence.</ul>

Or as <a href="http://thetownadvocate.com/Documents/Ethics%20Press%20Release%2011.8.20…; target="”_blank”">a
citizens group in Newburgh, NY argued</a> in August 2010, the proposed
ethics commission might be "investigating the very
people whom they would ask for funding." 
 
This issue is being argued this month in Cuyahoga County, OH
(Cleveland), with respect to the newly appointed inspector general.
According to two Cleveland Plain Dealer articles last week (<a href="http://www.cleveland.com/cuyahoga-county/index.ssf/2011/05/cuyahoga_cou…; target="”_blank”">1</a>
<a href="http://blog.cleveland.com/metro/2011/06/cuyahoga_council_dems_protest.h…; target="”_blank”">2</a>),
the county executive and the council ethics committee chair want to
give the IG's office a guaranteed budget floor, with a fixed
formula, either a dollar amount or a percentage of the general fund.
Most of the county council members "protested having their hands tied
on funding, and brushed aside the argument that the inspector general
needs budget independence to be impartial. They said [the IG] should go
through the budget process like other county department heads." 
 
One council member proposed a compromise: a guarantee for most of
the budget, which could be either a dollar amount or a percentage of
the general fund, with the IG required to go before the council for
some portion of the budget. 
 
Having your hands tied on funding is hardly an argument; it's a
feeling, a fear of loss of control. And the issue is not primarily about the IG's impartiality. It
is about the appearance of impropriety of a council holding a watchdog's purse strings. And it is about the conflict that exists
when an IG has to weigh his handling of a matter involving a council
member, or a council staff member, against the preservation of his job, his subordinates' jobs, and the
overall effectiveness of the IG's office. More concretely, if the IG has
five investigations going on, does he devote sufficient resources to
the one involving a council member, knowing that this might undermine
the other investigations as well as future investigations? 
 
How do you deal responsibly with this situation? You can't withdraw,
you can't disclose. You need to come up with a creative solution. And
that solution is a guaranteed budget. It solves the problem, with the
bonus of increasing public trust in the IG program. 
 
Examples of Guaranteed Budgets 
The same holds true for ethics commissions. And there are actually
councils and legislatures that have given them guaranteed budgets. 
 
New Orleans has an IG office that, in conjunction with its Ethics
Review Board, is assured of an amount not less than .75% of the General
Fund operating
budget, and its budget cannot be vetoed by the mayor (§9-401 of
the <a href="http://www.cityofno.com/Portals/Intelliport/Resources/HomeRuleCharterCN…; target="”_blank”">Home
Rule Charter</a>). 
 
Philadelphia has the following charter provision (<a href="http://www.amlegal.com/nxt/gateway.dll/Pennsylvania/philadelphia_pa/phi…; target="”_blank”">§2-300(4)(e)</a>):<ul>

For the first two fiscal years immediately following the
effective date of this subsection, at least $1,000,000; and for all
subsequent fiscal years, an amount adequate to enable the Board to
perform the functions assigned to it by this charter, shall be
appropriated for the work of the Board of Ethics. Should the Council
fail to make an adequate appropriation to the Board of Ethics, the
Board may petition any court of Common Pleas of Philadelphia County for
a mandamus to the Council to perform its duty under this section.</ul>

This provision effectively creates a budget floor for the ethics board,
and even though it doesn't expressly guarantee the equivalent amount
each year, it provides sufficient evidence of what the board needs to operate for a court to
order the council to give the board an equivalent amount. 
 
An ordinance in San Diego guarantees its ethics commission a minimum
staff of three named positions and a
"reasonable budget" (<a href="http://www.sandiego.gov/city-clerk/officialdocs/legisdocs/muni.shtml&qu…; target="”_blank”">San
Diego
Municipal Code</a> Section 26.0411). The EC now has five staff members. 
 
The <a href="http://www.amlegal.com/library/ca/losangeles.shtml" target="”_blank”">Los
Angeles
City Charter</a> requires an automatic annual
appropriation of $2 million into a public financing trust fund, which
is administered by the city's ethics commission. 
 
NYC's COIB is seeking the same sort of guaranteed budget as the city's
Independent Budget Office already has. The IBO's budget must be at
least 10% of the budget of the Office of
Management and Budget (<a href="http://www.nyc.gov/html/charter/downloads/pdf/citycharter2009.pdf" target="”_blank”">Charter</a>
§ 259(b)). 
 
Just last month, the <a href="http://www.lobbycomply.com/wordpress/?p=3784" target="”_blank”">Alabama
legislature approved</a> a semi-guaranteed EC budget of .01% of the
state’s general fund budget. It
can only be modified by a 2/3 vote of the Alabama House and
Senate. 
 
California's Fair Political Practices Commission, its ethics commission
(which has jurisdiction over local governments), has had a guaranteed
budget since 1976, when it was appropriated $1 million and was guaranteed at least
the same amount, adjusted for inflation. (<a href="http://www.nolo.com/law/CA-GOV83122.19761075.html" target="”_blank”">Ca. Gov’t.
Code Section 83122</a>) 
 
<a href="http://community.allenalley.com/community/budget1113/admin/ethics" target="”_blank”">Oregon's
ethics commission</a>, which also has jurisdiction over local
governments,
has an unusual new setup. Starting with the last fiscal year, the EC
assesses agencies, based
on full-time equivalent staffing, as well as municipalities. I'm sure
that EC isn't very popular. 
 
</big></big>Michigan's Civil Service Commission is guaranteed by <a href="http://www.legislature.mi.gov/documents/publications/Constitution.pdf&q…; target="”_blank”">the
state constitution</a> "a sum not less than one percent of the
aggregate payroll of the classified service for the preceding fiscal
year." 
 
So, it's clear that many jurisdictions both see and respect the
connection between an independent body's independence and a budget that
cannot be used as a lever or threat by those over which the independent
body provides oversight. And government ethics professionals
consistently recommend guaranteed EC budgets. I'm sure there are more
examples that I haven't found. I'd be much obliged to hear about any
you know of, so that this list can be as complete as possible. 
 
The Responsibilities of a Guaranteed Budget 
Should the independent body, ethics commission or whatever, do
something in return for getting a guaranteed budget? NYC's COIB believes so. It recommends the
following:<ul>

A guaranteed budget, however,
imposes a heavy burden upon the Board to use its funds prudently. For
that reason, the proposal would also require the Board to provide a
public, detailed list of its expenditures. Just as public financial
disclosure works to discourage conflicts of interest by individual
public servants, such a detailed public disclosure of COIB expenses
would discourage inappropriate expenditures.</ul>

The COIB's proposal of a guaranteed budget of .07% of the city's net
total expense budget, with a detailed expenditure disclosure
requirement, is a very mature proposal, which should set an example for
other ethics commissions. However, in smaller cities (which means every
other city), the percentage will have to be higher. New Orleans' .75%
appears to be a reasonable number for smaller cities. 
 
Alternative Approaches to Guaranteeing a Budget 
Alternatives include (1) the California approach of a set minimum
amount, which increases with inflation; (2) the Oregon approach of
assessing agencies and municipalities, which would work with counties
whose cities were participating (e.g., Palm Beach County, FL) and with
independent agencies and authorities that were participating in a city
or county ethics program; (3) the San Diego approach of
guaranteeing a minimum staff amount; and (4) the Philadelphia approach, which starts with a budget number and then
allows the EC to appeal to a court if it does not feel it is being
given a budget adequate for it to perform its functions (this puts a lot of
burden on the EC, but at least gives it leverage with the council it
would not otherwise have). 
 
Handling Increased Responsibilities 
It is important to recognize that sometimes ECs are given increased
responsibilities. For example, they are charged with campaign finance,
or with training all government employees, or with overseeing
additional agencies and authorities, or in the case of counties, towns
within the county. Increased responsibilities should be accompanied by
an increase in the percentage or minimum amount. It would be best if
this possibility was anticipated by including a mechanism in the
guarantee for increasing the EC's percentage or minimum budget. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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