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Post-Employment Government Contracts
Monday, September 16th, 2013
Robert Wechsler
The first blog post on the West Palm Beach Community Redevelopment Agency (CRA) matter looked at it
from the point of view of the timing of withdrawal from
participation. This post will look at it from the point of view of
post-employment issues. A third post will look at this matter in
the context of multiple CRA problems in Florida.
The West Palm Beach matter raises the question whether or not the CRA director, who has recently resigned, should be able to bid on a contract to run the CRA, considering that she had pushed the idea of privatizing the CRA, even though she had not participated directly in designing the privatization process.
The typical post-employment, or revolving door, provision prohibits — for a period of a year or two after leaving government service — a former official from getting a job with or representing an individual or company that may have benefited from a matter in which the official participated or is regulated by the official's agency. Participation includes both decision making and influence, and includes matters in areas over which the official had official responsibility, even if the official did not directly participate.
In other words, the focus in a typical post-employment provision is the prevention of the use of one's office to help both oneself and those seeking special benefits from the government. The goal is to prevent preferential treatment while in office, in order to ensure a job with a contractor, developer, or grantee, as well as to prevent benefits after leaving office, by using one's special knowledge and contacts with colleagues and subordinates to get preferential treatment for one's employer.
What is usually ignored is the possibility that an official will not have need of an employer, that is, the situation where the official may directly benefit or be the principal, rather than the employee, of a company seeking a specific benefit from her former agency. This is the situation in the current West Palm Beach CRA matter.
Some post-employment provisions do prohibit doing business with one's government. For example, San Antonio and Dallas have provisions that prohibit former officials from selling anything to their government or entering into a no-bid contract with their government for one year after termination (it's six months in Nashville). As in so many cases, there is the assumption that bidding out a contract will make all the difference. But in this kind of situation, if those who write the specifications and determine the winning bidder are colleagues or subordinates of the winning bidder, it won't look like a fair bid and, therefore, the public will think it is no better than a no-bid contract.
Seattle acknowledges this and prohibits bidding on any contract an official was involved with, for one year after termination. Here is the provision:
Such a provision is not an essential part of an ethics code, but it does recognize the important fact that competitive bidding is not sufficient to ensure the public's trust in every instance. The bid of a recent government official who was involved, directly or indirectly, with the procurement process is certainly an instance where bidding does not appear to the public to ensure fairness or to ensure that the official was not acting in her personal interest when she pushed for contracting out the authority's operations, knowing that she would like bid for the contract.
Dallas takes a different, broader approach to this sort of situation. In ethics code §12A-4(b)(2), it prohibits an official or employee from acquiring "an interest in any matter affected by an official action of the city for a period of one year after the date of the official action," whether or not the official participated in the action. It’s not clear what “an interest in a matter” means, but it presumably includes an interest in a company, property, or contract involved in the matter.
Robert Wechsler
Director of Research-Retired, City Ethics
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The West Palm Beach matter raises the question whether or not the CRA director, who has recently resigned, should be able to bid on a contract to run the CRA, considering that she had pushed the idea of privatizing the CRA, even though she had not participated directly in designing the privatization process.
The typical post-employment, or revolving door, provision prohibits — for a period of a year or two after leaving government service — a former official from getting a job with or representing an individual or company that may have benefited from a matter in which the official participated or is regulated by the official's agency. Participation includes both decision making and influence, and includes matters in areas over which the official had official responsibility, even if the official did not directly participate.
In other words, the focus in a typical post-employment provision is the prevention of the use of one's office to help both oneself and those seeking special benefits from the government. The goal is to prevent preferential treatment while in office, in order to ensure a job with a contractor, developer, or grantee, as well as to prevent benefits after leaving office, by using one's special knowledge and contacts with colleagues and subordinates to get preferential treatment for one's employer.
What is usually ignored is the possibility that an official will not have need of an employer, that is, the situation where the official may directly benefit or be the principal, rather than the employee, of a company seeking a specific benefit from her former agency. This is the situation in the current West Palm Beach CRA matter.
Some post-employment provisions do prohibit doing business with one's government. For example, San Antonio and Dallas have provisions that prohibit former officials from selling anything to their government or entering into a no-bid contract with their government for one year after termination (it's six months in Nashville). As in so many cases, there is the assumption that bidding out a contract will make all the difference. But in this kind of situation, if those who write the specifications and determine the winning bidder are colleagues or subordinates of the winning bidder, it won't look like a fair bid and, therefore, the public will think it is no better than a no-bid contract.
Seattle acknowledges this and prohibits bidding on any contract an official was involved with, for one year after termination. Here is the provision:
§4.16.075D. A former Covered Individual may not, during the period of one year after leaving City office or employment, participate as a competitor in any competitive selection process for a City contract in which he or she assisted the City in determining the project or work to be done or the process to be used in selecting a contractor.The head of the West Palm Beach CRA "assisted the City" in going forward with the privatization project. The use of the word "assisted" is good, because it presumably includes influence as well as decision making. However, I would prefer to see the term "directly or indirectly" as well as the word "influence," so that it is more clear that high-level officials cannot bid for contracts because they did not make decisions, even when they affected them.
Such a provision is not an essential part of an ethics code, but it does recognize the important fact that competitive bidding is not sufficient to ensure the public's trust in every instance. The bid of a recent government official who was involved, directly or indirectly, with the procurement process is certainly an instance where bidding does not appear to the public to ensure fairness or to ensure that the official was not acting in her personal interest when she pushed for contracting out the authority's operations, knowing that she would like bid for the contract.
Dallas takes a different, broader approach to this sort of situation. In ethics code §12A-4(b)(2), it prohibits an official or employee from acquiring "an interest in any matter affected by an official action of the city for a period of one year after the date of the official action," whether or not the official participated in the action. It’s not clear what “an interest in a matter” means, but it presumably includes an interest in a company, property, or contract involved in the matter.
Robert Wechsler
Director of Research-Retired, City Ethics
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