Law vs. Function, and Oversight
An interesting issue has arisen in Louisiana. It involves an
important distinction in government ethics, between law and
function.<br>
<br>
According to <a href="http://theadvocate.com/home/3663529-125/ethics-board-bese-member-may&qu…; target="”_blank”">an
AP article this weekend</a>, the Louisiana Board of Ethics found
that a state board of education member may keep both this position
and her job as executive director of the New Orleans branch of Teach
for America, even though Teach for America has a sizeable contract
with the state board of ed and the law is that a board member cannot
be an officer of an entity that has a contract with the board.<br>
<br>
<b>The Law and the Facts</b><br>
The law is that a board member's employment is prohibited if certain
elements are true. The element relevant to this situation is that
the official “must be neither an officer, director, trustee nor
partner in this non-governmental employer.”<br>
<br>
There are two important facts to consider:<br>
(1) The member is not executive director of the contractor, but only
of its New Orleans branch. However, it is this branch that will be
supplying the teachers under the contract.<br>
<br>
(2) The contract was already in place when the executive director
was elected to the board, so there was no conflict involved.
However, there will be a conflict when the contract comes up for
renewal.<br>
<br>
<b>The Legal Interpretations</b><br>
The board of ed felt that its member must choose between the board
and her employer, resigning from one or the other (but then it
correctly sought an advisory opinion from the ethics board; self-regulation is not the responsible way to handle an ethics matter). The
ethics board staff felt that the executive director's position with
Teach for America fit the employment element and, therefore, that
she needed to choose.<br>
<br>
But the ethics board unanimously rejected the staff's advice,
arguing that the executive director headed an office, not the
organization, and therefore the employment element did not apply to
her.<br>
<br>
The executive director's lawyer went even further. He called her
position an "honorific that nonprofits hand out." That is, she was
not really an officer, just a low-level head of an office.<br>
<br>
<b>Law vs. Function</b><br>
It is arguable, as the ethics
board found, that the executive director is not an officer of the
organization entering into the contract with the state. However,
this is a purely legal argument. The ethics of the situation goes
beyond interpretation of legal language.<br>
<br>
The fact is that the executive director is an officer of the office
that is fulfilling the terms of the contract. Functionally, she is
the most important person in the organization relative to the
contract. Functionally, she is more important than the
national organization's board and executive director put together.<br>
<br>
The best way to look at the situation is not in terms of the
contract, which already exists in any event, but in terms of what
would happen if a problem with fulfilling the contract was to arise.
The board of ed would not talk to the head office. It would talk to
the local office, which is where the problems would likely occur. In
other words, the board (or its staff) would talk to its own board
member.<br>
<br>
All the legal interpretations in the world cannot change this fact.
That is why, as in so many conflict situations, an ethics adviser
has to go beyond mere legal interpretation.<br>
<br>
<b>Oversight</b><br>
Contracts are generally bid competitively. But oversight of a
contract is not. Therefore, conflicts raise a lesser problem with
respect to a competitive bid than they do with respect to oversight.<br>
<br>
A board should not have to oversee its members' personal (as opposed
to official) work. This puts board members in an uncomfortable
position, and it can undermine the public's trust in the board when
the board makes a decision that appears to be going easy on its
member. It's a lose-lose proposition.<br>
<br>
This is why many ethics codes, like Louisiana's, recognize that
withdrawal is not enough in such a situation. A board member should
not be doing business with her board, not only because it might
favor its member when it comes time to choose a bidder or negotiate
terms. It's also about oversight.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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