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Maricopa County 3 - Disclosing Properties Owned by a Corporation
Tuesday, September 29th, 2009
Robert Wechsler
A central dispute in the first group of charges brought against
Maricopa County Supervisor Don Stapley involved whether he was required
to disclose properties held by a company he owned, as long as he listed
the company among his assets. Stapley felt this was not required.
It is important to list an official's real-estate holdings in town, so that when issues arise affecting those holdings, the public can know whether he should have recused himself. In other words, such annual disclosure is a check on the official's otherwise self-regulated disclosure of a conflict (and recusal) when it becomes an issue.
A corporation, partnership, or other sort of entity should not stand between an official and the public's ability to check the official's conflict disclosure. Disclosure rules need to be carefully written so that they clearly require disclosure of the property holdings of each entity owned in whole or in part by an official or an official's spouse (as well as entities for which either of them works). If the rules aren't clear, they will be ignored by anyone seeking to hide his or her interests.
Arizona's financial disclosure provision §38-542(A)(5) does require disclosure of real property owned by a "controlled or dependent business," but there is an exception: "If the controlled or dependent business is in the business of dealing in real property interests or improvements, disclosure need not include individual parcels or transactions as long as the aggregate value of all parcels of such property is reported." This is an exception you can drive a truck through.
Yes, a big real estate business would require constant updating of financial disclosure forms. But a big real estate business could easily set up a simple computer program that would automatically update its holdings, say, every month or every quarter. A small real estate business isn't going to do that many deals, at least where it owns the property.
If an official is turning over so many properties in town that reporting the transactions is too great a burden, then it is likely that, if that official's authority has anything to do with property in town, there are too many conflicts for that person to hold that position.
Robert Wechsler
Director of Research-Retired, City Ethics
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It is important to list an official's real-estate holdings in town, so that when issues arise affecting those holdings, the public can know whether he should have recused himself. In other words, such annual disclosure is a check on the official's otherwise self-regulated disclosure of a conflict (and recusal) when it becomes an issue.
A corporation, partnership, or other sort of entity should not stand between an official and the public's ability to check the official's conflict disclosure. Disclosure rules need to be carefully written so that they clearly require disclosure of the property holdings of each entity owned in whole or in part by an official or an official's spouse (as well as entities for which either of them works). If the rules aren't clear, they will be ignored by anyone seeking to hide his or her interests.
Arizona's financial disclosure provision §38-542(A)(5) does require disclosure of real property owned by a "controlled or dependent business," but there is an exception: "If the controlled or dependent business is in the business of dealing in real property interests or improvements, disclosure need not include individual parcels or transactions as long as the aggregate value of all parcels of such property is reported." This is an exception you can drive a truck through.
Yes, a big real estate business would require constant updating of financial disclosure forms. But a big real estate business could easily set up a simple computer program that would automatically update its holdings, say, every month or every quarter. A small real estate business isn't going to do that many deals, at least where it owns the property.
If an official is turning over so many properties in town that reporting the transactions is too great a burden, then it is likely that, if that official's authority has anything to do with property in town, there are too many conflicts for that person to hold that position.
Robert Wechsler
Director of Research-Retired, City Ethics
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