The Pretzel Logic Required by Limiting Conflicts to Financial Interests. And the Ultimate Defense.

Anonymous

Sat, 07/31/2010 - 02:50

City Related

Update: August 2, 2010 (see below) 
 
I've long said that conflicts of interest should not be limited to
financial interests or, in other terms, situations where a possible
financial benefit or loss is involved (see, for example,<a href="http://www.cityethics.org/content/conflicts-interest-go-beyond-financia…; target="”_blank”">
this 2009 blog post</a>). My position is confirmed by the twisted yet
necessary logic in <a href="http://media.baycitizen.org/uploaded/documents/2010/7/fppc-letter/Foust…; target="”_blank”">a
July
28 decision of the California Fair Political Practices Commission</a>
(FPCC), the state ethics body, with jurisdiction over state and local
officials. And then the whole thing is undermined by wrongly allowing the use of a city attorney's advice as a defense.

A Redwood City council member is the acting president and CEO of the <a href="http://samceda.org/" target="”_blank”">San Mateo County Economic Development
Association</a> (SAMCEDA), which lobbies for area companies on issues
such as development projects. She was also named by SAMCEDA as<a href="http://www.co.sanmateo.ca.us/portal/site/bos/menuitem.ed7ea6e3285fc7cf7…; target="”_blank”">
its member on the county's 2010 charter review committee.</a> 
 
The council member voted on a big development project endorsed by
SAMCEDA and for which it has lobbied aggressively. 
 
Involvement vs. Employment with an Issues Organization 
It's okay for an elected official to be a
member, even a leader, of an organization that, for example, supports
or criticizes development in the city or county. The official's
involvement with the organization, and the organization's positions,
are most likely an important reason the official was elected. No one
would want pro- and anti-development advocates left out of local
government development decisions, as long as they are not taking the
positions to benefit themselves. It's a matter of ideology, not
interest. 
 
This council member is a paid employee of a pro-development
organization. Whether or not the organization itself benefits
financially or not from decisions before the council is, I think,
irrelevant to whether she recuses herself on matters in which the
organization has been involved. In fact, if the organization is
involved in a number of matters before the council, or in a few matters that
repeatedly come before the council, such an employee should not sit on
the council at all, because she is depriving her constituents of a
representative who lacks an interest in the matter. 
 
How Limiting Conflicts to Financial Interests Undermines an Ethics
Program 
Unfortunately, in California, as in so many jurisdictions, the employer as well as the employee must benefit financially for there to be a conflict of interest. So
here's what the FPCC was forced to reason in order to find a conflict
in this matter:<ul>
Your actions violated the Act because it was reasonably forseeable that
your vote to hire an environmental firm to review the Saltworks
project, a vote that moved the project along on its path toward
potential approval, could affect SAMCEDA, an organization so interested
in the Saltworks project it held a vote to endorse the project and has
sent its employees as advocates on the Saltworks project to the Redwood
City council's meetings. Further, the developers involved in the
Saltworks project are dues-paying members to SAMCEDA. It is reasonably
forseeable that other developers, encouraged that projects endorsed by
SAMCEDA are successfully moving forward, will join SAMCEDA as
dues-paying members. The reasonable forseeability of so much as a
penny's worth of increased dues revenue to SAMCEDA because of the
advancement of the Saltworks project should have disqualified you from
your decision regarding the environmental review.</ul>
This kind of reasoning undermines the credibility of an ethics program.
It almost makes me sympathize with an organization that not only
lobbies its own CEO, but also hires a council member as its VP and
nominates her for its position on the county's charter review
committee. Why? Because the CEO had no reason to believe that her
employer would benefit financially from her support of the Saltworks
project. But she did have every reason to believe that she was, at
least in part, hired to support SAMCEDA's goals on the council and the charter review committee, and that this is how
her participation would be seen by the public — effectively as ongoing
bribery. 
 
Here's what a lawyer who represents officials before the FPCC said
about the decision, according to <a href="http://www.baycitizen.org/development/story/conflict-interest-saltworks…; target="”_blank”">an
article
in the Bay Citizen</a>:<ul>
That's stretching the concept of reasonable foreseeability. What is she
up there thinking, that "I should approve this project so I can get
more members so I can get a raise?"</ul>
As for the other side of the development issue, the director of an
anti-development organization is quoted by <a href="http://www.thepelicaneye.com/2010/02/charter-review-committee-member-ro…; target="”_blank”">The
Pelican
Eye</a> as saying that it is the council member's job "to
advance SAMCEDA's interests." That describes the conflict perfectly.
It's damaging to the state ethics program that the FPCC wasn't allowed
to describe it that way. 
 
City Attorney Advice 
To further undermine the credibility of the ethics program, the very
next sentence of the FPCC's decision is as follows:<ul>
Because, however, you consulted with the interim Redwood City attorney
on this matter and were advised you did not have a conflict of
interest, we have decided to close this case.</ul>
As I wrote in <a href="http://www.cityethics.org/node/227" target="”_blank”">a blog post</a>,
the
California supreme court determined back in 2007 that a council
member charged with a conflict of interest could not use the defense
that she had acted upon the advice of the city attorney. The reasoning
was, "An official cannot escape liability for conflict of interest
violations by claiming to have been misinformed by an employee serving
at her pleasure." As in the 2007 case, the Redwood City attorney is
appointed by the council. 
 
The city attorney's advice was not a defense, and the FPCC should have
let both this council member, and all council members, know this
by proceeding with this ethics matter. 
 
The two city attorneys who advised the council member that she had no
conflict were, for their part, sticking too close to the law and
ignoring the appearance of impropriety arising from a council member
advancing her employer's interests. Too often, local government
attorneys are too legalistic, too partisan, too personally loyal, or
simply too ignorant about government ethics to be able to give neutral,
competent advice. That's what ethics officers and ethics commission
staff are for. 
 
In addition, local government attorneys know that nothing will happen
to them if they tell an official there is no conflict. They know that
they are part of the ultimate Catch 22 in government ethics: tell
the official it's okay, the official does it, and enforcement is
impossible. There might as well be no official ethics advice and no enforcement. Even disclosure is often undermined by local government attorney advice. 
 
Officials must be encouraged not to turn to local government attorneys
for ethics advice. They need to know that, if they choose a local government attorney over an ethics officer or ethics commission, the
advice will not be a defense, for all the reasons given above. Otherwise, it is the ultimate defense. 
 
Update: August 2, 2010 
I was informed today by the FPPC's executive director that the city attorney advice was not treated as a defense, but rather as a mitigating circumstance. In California, there are <a href="http://www.fppc.ca.gov/index.php?id=539" target="”_blank”">two kinds of letter</a> that constitute enforcement short of a commission hearing and possible fine: the advisory letter, where there is insufficient evidence of a violation, but where "the subject of a complaint should be made aware of potential future responsibilities"; and the warning letter, as in this matter, where there is sufficient evidence of a violation, but where "it is not in the best interest of the People of California to issue a fine." The majority of complaints investigated by commission staff end in a warning letter. 
 
I agree that, in this case, especially considering the necessarily pretzel logic of the decision, it was better not to waste (for the commission and the council member) the time and money involved in a full-scale hearing. I just wish that the city attorney advice was not presented as the sole reason for not going forward with the case, and I also wish that it was made clear that this was not a defense, but rather a mitigating factor. 
 
In fact, I don't think government attorney advice should ever be the sole mitigating factor, because it sends the message that even if there may still be enforcement by the FPPC, there will not be a public hearing, nor will there be a fine. Even though there is a finding of a violation, the official can say she was depending on counsel, and it is hard to fault her for that, unless you know the law in California. 
 
By the way, it's worth knowing that you can subscribe to FPPC meeting agendas, monthly press releases, and various other notices. <a href="http://www.fppc.ca.gov/index.php?id=408" target="”_blank”">Go here to sign up.</a> 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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The Pretzel Logic Required by Limiting Conflicts to Financial Interests. And the Ultimate Defense.

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