Holding Local Government Associations Accountable
Unions are paid for by union members, business associations are paid
for by businesses, but local government associations are paid for by
taxpayers, not by local governments. And yet while unions represent
members, and business associations represent businesses, local government
associations represent local governments. This setup is asking for trouble.<br>
<br>
In past blog posts, I've touched on the representation side of the
equation, for example, local government associations <a href="http://www.cityethics.org/content/conflicts-local-government-associatio…
government ethics laws</a> and <a href="http://www.cityethics.org/content/mandatory-local-government-ethics-tra…
ethics training</a>. In <a href="http://www.cityethics.org/content/maricopa-county-1-local-government-as…
third blog post</a>, as well as the first one in the previous sentence,
I also looked at the way politicians can use local government
associations to get around gift limits.<br>
<br>
But another sort problem came out last year via state auditor reports on the <a href="http://www.kaco.org/Home.htm">Kentucky Association of Counties</a>
(KACo) and the <a href="http://www.klc.org/">Kentucky League of Cities</a>
(KLC). According to the <a href="http://www.auditor.ky.gov/Public/Audit_Reports/Archive/2009KACoexaminat…
release</a> on <a href="http://www.auditor.ky.gov/Public/Audit_Reports/Archive/2009KACoexaminat…
KACo report</a>, the state auditor "found a 'self-serving' culture that
resulted in more than $3 million in excessive or questionable spending
over a three-year period," including "$334,300 to pay board members for
meetings, $278,154 for legal defense for convicted officials, $247,944
for a sports advertising contract, $83,000 for donations and
sponsorships, and $12,600 for use of two condominiums."<br>
<br>
In addition, there was a lack of board oversight, which included "weak
internal controls, minimal conflicts of interest and ethics policies,
and no whistleblower policy."<br>
<br>
The <a href="http://www.auditor.ky.gov/Public/Audit_Reports/Archive/2009KYLeagueofCi…
report on KLC</a> found a similar situation, as described in its <a href="http://www.auditor.ky.gov/Public/Audit_Reports/Archive/2009KYLeagueofCi…
release</a>: "a 'staff-driven' organization with weak board oversight
and inadequate policies governing ethical conduct, compensation,
spending, conflicts of interest and procurement.This lack of oversight
resulted in executive staff receiving unprecedented salaries and
exorbitant retirement bonuses that cost more than $500,000; spending
more than $350,000 in excessive or questionable spending; and
developing numerous conflicts of interest – including inappropriate
relationships with KLC vendors.
Many of the exam’s major findings occurred with little or no board
knowledge or understanding."<br>
<br>
Here's a selection from the long list of KLC staff conflicts of
interest:<br>
<ul>
$1.4 million for legal services with a law firm where the spouse of
KLC’s executive director is a partner.<br>
$28,600 at a restaurant owned, in part, by the spouse of the executive
director.<br>
Several family members of the chief insurance services officer either
currently work or previously worked for vendors of KLC.<br>
Housing and other expenses were paid annually for the chief insurance
services officer, the administrator of product development, the general
counsel, and their spouses at a vendor president’s home on a Caribbean
island.<br>
Reimbursement was made to KLC by a vendor for a cover charge for
admission to a strip club in Las Vegas for three KLC staff members.<br>
</ul>
Remember that the same people who run our local governments run these
local government associations. All the money that goes into these
associations is taxpayer money, for which they are responsible. And
yet, at least in Kentucky, these government officials, who know full
well about accountability and conflicts of interest, did almost nothing
to hold staff accountable or to disclose or limit their conflicts of interest.<br>
<br>
According to <a href="http://nky.cincinnati.com/article/AB/20100207/NEWS0103/2080322/Ky.-Leag…
nky.com article</a> last month, bills have been filed in the state
legislature to impose more oversight of the groups and require greater
transparency. It's sad when local government officials can't get their
own house in order.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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