Issues Arising from an Iowa Complaint Dismissal

Anonymous

Wed, 08/29/2012 - 05:30

Complaints/ Investigations/Hearings

A number of important issues arise from a case before the <a href="http://www.iowa.gov/ethics/" target="”_blank”">Iowa Ethics and Campaign
Disclosure Board</a> (ECDB) last week. The issues include: (1) how
to treat an inadequate complaint; (2) how to treat a complainant in
a proceeding, and (3) what to do when an ethics code and rules may
be inadequate to a situation where there is a strong appearance of
impropriety.

The case involves a member of the state Board of Regents, which
oversees Iowa's state universities. A man with a special
relationship to one of the universities, including the funding of a
chair in his area of business, was appointed to the board in
February 2011, and took office in May 2011. Before and after these
dates, he was involved in a major business deal involving the rental
of land for agricultural purposes in Tanzania by a company for which
he was CEO, with the university involved in an advisory capacity and
via an outreach training and health program. 
 
Formal disclosure of the conflict came six weeks after his term
began, after a newspaper wrote an article about the Tanzania operation.
And after this, the board member did not participate in a
negotiation. However, in his financial disclosure statement, he
listed himself as "farming-self-employed," even though he held
multiple positions with companies, at least one of which was doing
business with the university. The statement was amended after a
complaint was filed by <a href="http://iowacci.org/who-we-are/">Iowa

Citizens for Community Improvement</a> (CCI), an organization
focused on what it considers to be corporate misconduct. 
 
An Inadequate Complaint 
After an hour of deliberation, the ECDB unanimously dismissed CCI's
complaint. According to <a href="http://www.desmoinesregister.com/article/20120826/BASU/308260037/-1/NEW…; target="”_blank”">a
column in the Des Moines Register on Saturday</a>, the ECDB chair
"made little secret of his disdain for [the complaint], saying it
reflected 'a profound misunderstanding of Iowa law' and admonishing
the group for not citing the right code chapter." 
 
An ethics board should not expect complainants to be accomplished
lawyers. They are only supposed to be citizens, and their mistakes,
even their utter incompetence, should not be used as a weapon
against them in a public meeting. 
 
In fact, an ethics board has an obligation to improve a complaint if
it states facts that might constitute an ethics violation. The board
should correct legal mistakes and communicate with the complainant
regarding additional facts or clarification of statements made in
the complaint. 
 
It is true that many complaints concern matters that are not within
the jurisdiction of an ethics board. These complaints may be
immediately dismissed. But when a complaint concerns ethics matters,
the inadequacy of the complainant to get the law right is
irrelevant. Once a complaint is filed, it is the ethics board's, not
the complainant's. The ethics board, like a prosecutor, has an
obligation to do the best it can with what information it was given.
The rules allow the ECDB to change a complaint or initiate its own
investigation. 
 
As I point out below, the real problem here was not the complaint's
inadequacy so much as the ethics code's inadequacy. It would have
been far better for the ECDB chair to have pointed out the failings
of the law rather than the failings of the complainant. 
 
How to Treat a Complainant 
A complainant usually plays a minor role in an ethics proceeding.
But when a complaint is dismissed with a criticism of the
complainant, the complainant has a right to respond. 
 
In the Register column, entitled, "Ethics Board Shouldn't Shush the
Public," the columnist wrote that a CCI member asked to speak in
response to the chair's dismissal statement. The chair "angrily
silenced her, setting up a confrontation. She continued to speak,
and he tried to drown her out, pounding the table and declaring the
session closed so that the room was swiftly cleared." 
 
The columnist nicely suggests that the chair could have told her
speaking after a dismissal is not allowed. But under the
circumstances, it should have been allowed. Not only did the CCI
have a right to respond to unnecessary criticism directed at it, and
to mention publicly that it had amended the complaint, but shushing
it was wrong for three other reasons. 
 
One, it is important for an ethics board to do nothing that would
intimidate or otherwise make it less likely that people who know of
an ethics violation will file a complaint. The relationship between
ethics board and complainant should never be adversarial, at least
not due to the board. 
 
Two, shushing the CCI makes this ethics board chair look
discriminatory. As the columnist wrote, "Would another complainant,
say a newspaper publisher or a foundation CEO, have been treated
that way?" The answer is clearly, No. A board charged with
overseeing preferential treatment should go out of its way to treat
everyone the same, even when the complainant is far more vocal and
even uncivil than the norm. In this case, shushing the CCI member
gives the organization ammunition to accuse the board of siding with
corporate and high-level political interests (the governor selected
the regents board member). A board that wants to be respected needs
to be respectful to those who come before it, no matter whether
they've been disrespectful of the board or have taken up too much of
the board staff's time. 
 
Three, an ethics board should never be seen to be closing down
public input. It can limit the amount of time someone has, but it is
important to get the public involved and make it feel welcome and
safe at ethics board meetings. This is especially true of
complainants and potential complainants, such as good government
groups. In fact, this same argument can used to limit a demonstration, so that others can be heard and their matters dealt with. 
 
It appears that the CCI's style is public confrontation and
demonstration. This is not something that ethics boards commonly
have to deal with. But the best way to deal with it is not to stifle
it, but to limit it. If a board wants to limit speech, it should have
rules on paper and they should be applied as consistently
as possible 
 
Another good way to deal with a confrontational individual or group
is to show empathy with them. In this case, they were trying every
way to publicize and stop a project they objected to. To them, every
government body appeared to be colluding to protect corporate
interests. It might have gone a long way to cooling off the CCI's
passions if the chair would have said that the board felt the ethics
provisions involved here were inadequate, and that it would make
recommendations for improving them, so that the next time such
complex conflict situations were brought before them, they would
have the authority to investigate and deal with them. This might
even make the group an ally of the ethics board, rather than an
opponent. 
 
The board should work on changes to its procedural regulations that
would provide better guidance to this and future chairs with respect
to the rights of complainants and others to speak at ethics board
meetings. See below for more suggestions of what to do. 
 
An Inadequate Ethics Code? 
According to <a href="http://blogs.desmoinesregister.com/dmr/index.php/2012/08/23/board-raste…; target="”_blank”">an

Iowa Politics blog post last week</a>, on the Register website,
"ethics board members and staff said they plan to propose changes to
filing rules to ensure more detailed financial disclosures." This is
a sign that the board realizes that this situation showed some
weaknesses in its ethics program. 
 
But this is not the most important weakness. <a href="https://webapp.iecdb.iowa.gov/PFD/Disclosure.aspx" target="”_blank”">The
financial disclosure statement</a> defines "Sources of Income,"
stating, "In the categories available in the drop-down list, select
each source from which you received more than $1000 in gross annual
income during the previous calendar year." And it asks for all
occupation/positions along with each position's business/employer.
Leaving off CEO positions is clearly not an adequate filing. 
 
False vs. Insufficient Information 
A bigger weakness is the law and its interpretation and application
by the ECDB. Section 7.5 penalizes an official for failure to file
on time and for including "false or fraudulent information" in a
disclosure form. But there is no express penalty for failure to
include requested information. Is insufficient information "false"?
The ethics board implied in its dismissal order (attached; see
below) that it is not. I think this was a missed opportunity to
interpret "false" as including the failure to provide vital information. 
 
The law's omission of insufficient financial statements is a serious
weakness. But an ethics board can deal with this weakness in two
ways: by interpreting the law to include insufficiency and by
recommending that the law be changed to expressly deal with
insufficiencies. 
 
The Amendment of Financial Statements 
Another problem with the ECDB's approach is that, although there is
nothing in the law that provides for dismissal upon amendment of a
financial statement, it considered the amended statement to be
adequate to cure a possible violation (even though it found no
possible violation). And the amendment was filed only days before
the complaint was considered. 
 
It is a good policy to encourage and reward the amendment of
disclosure statements. But when a complaint is filed before an
amendment is made, the amendment should not affect whether or not
there is a violation. It may be taken into consideration in
determining a penalty, and it may be part of a settlement. But it is
not sufficient to affect whether a complaint is dismissed or a
violation found. 
 
The ECDB also said that the regents board member's business
interests were well known, even though this is also not mentioned in
the law and, therefore, should be considered as no more than a
mitigating circumstance in considering a penalty. 
 
Weakness in the Conflict Provision 
The most important weakness shown by this situation is the ethics
code's conflict provision. There are two problems here. 
 
The
ECDB's dismissal order states that "the complaint does not allege
[that the regents board member] took any official action or
performed any official duty that would detrimentally affect or
create a benefit" for his business." This is the basis for dismissal
of the complaint with respect to the board member's possible
conflict. 
 
The ethics code language (Section 68B.2A) refers to "official action
or performing any official duty that would detrimentally affect or
create a benefit for the outside employment or activity." This means
that an official who is wearing two hats is free to do anything he
wants as a business person dealing with those under his
jurisdiction, including lobbying officials and doing business with
those under his jurisdiction, as long as he does not act with
respect to his interests in that particular matter. 
 
However, an individual on an oversight board has authority far
beyond the particular matter that can be used to provide himself with preferential
treatment (and create an appearance of impropriety). Also, if problems arise due to the matter, the board
member's colleagues are the ones who will have to deal with this.
This is unfair to them and will, if they appear easy on their
colleague, look unfair to the public. 
 
In addition, a conflict situation does not arise when government action leads to a benefit to an official's business. Benefits may not come for some time, they may never come at all, or they may come indirectly. A conflict situation exists whenever an official seeks a benefit for himself or for a person with whom he has a special relationship, not when the benefit occurs. 
 
It is often not enough for an official in such a position to withdraw from
one side of the matter. He should not be doing business with those
over whom he wields power. The ECDB should use this occasion to
recommend that the law be changed so that it can prevent these
situations from arising. 
 
Conflicts are not bad in and of themselves. What is important is
that they be handled responsibly. But there are conflict situations
that cannot be cured by withdrawal. For these, stronger rules must
be written and/or the ethics board must be given more authority to
deal with such situations. 
 
What to Do 
I think this case should be reopened, and it should be used by the
ethics board to take a long hard look both at the ethic law and at
its procedures and its role in the complaint process. The ethics
board should apologize to the CCI for how it treated its
representative. It appears that the representative might have
herself acted inappropriately by creating a demonstration during an
ethics board meeting. But it could have been dealt with better, and
the rules could have been made clear from the start, with an
emphasis on the need to deal with other matters at the meeting. 
 
The ethics board should, as part of the proceeding, before it
determines whether to investigate or not, clarify for itself and for
state officials and the public: 
 
1. The role of a complainant and the role of the ethics board in
handling an inadequate complaint. 
2. What the law and rules say about the amendment of a financial
statement after a complaint has been filed regarding false
statements made in that statement, and what is the most appropriate
way to deal with such an amendment. Ditto for information that is
publicly available but was not included in the financial statement. 
3. Whether it believes that the failure to include vital facts in a
statement could possibly constitute the inclusion of "false or
fraudulent information," considering that the information about the
regent board member's occupation omitted his position most relevant
to a university over which he provides oversight. 
4. How it will go about trying to make the state's conflict
provision more complete and more clear. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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Issues Arising from an Iowa Complaint Dismissal

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