We Do Not Live by Financial Interests Alone

The tendency of local government ethics codes to limit conflicts to financial interests is one of my pet peeves. A current matter in Tacoma shows the downside of this limited definition of interests that can conflict.

According to a recent article in the News-Tribune, a council member worked on the final conceptual drawings submitted to the city in a bid to renovate the city's baseball stadium. Knowing just this, anyone would say he should have recused himself from involvement in the matter.

But there's more. One, he was not paid for his work. And two, he was not yet a member of the council when he worked on the drawings. However, he was a finalist for appointment to the council, so he knew there was a good chance he would be voting on it.

The council member did not disclose his involvement, and he both publicly criticized a competing bid and discussed the matter in private with his fellow council members.

Just before the council vote on the bids, the city manager and city attorney learned of the council member's involvement, and only then was it disclosed. However, the council member voted.

The city attorney said that because the council member did not have a financial tie to the project, nothing legally required him to recuse himself from the vote. Here is Tacoma's relevant ethics code provision (also check out the similar state provision, which applies to municipal officers; note that the state only uses the term "beneficial interest," which many people find confusing; Tacoma uses both terms, most likely an oversight):

1.46.030(B). Beneficial Interests in Contracts Prohibited.
No City official shall participate in his or her capacity as a City official in the making of a contract in which he or she has a financial interest, direct or indirect .... Except, that this prohibition shall not apply where the City official has only a remote interest in the contract, and where the fact and extent of such interest is disclosed ... prior to formation of the contract....

It's not clear whether the council member had a "remote interest" in the contract (which could be a de minimis interest or could be an overly indirect interest), but he certainly had no direct financial interest. However, did he have an indirect financial interest? That is, why did he offer his services for nothing? Was he helping a friend? A family member? A business associate? Was there anything in it for him other than the joy of sharing his expertise?

Let's assume that what he did does not qualify as an indirect interest. That means that, according to the ethics code, someone who actually helped put together a bid can advocate for the bid from within the council, and vote on it, as well. In other words, a strong appearance of impropriety is meaningless unless that bogeyman, the financial interest, is present. People's interest is only in their pocketbook. That's a very crude view of life, and it does not coincide with what the public considers improper.

The drafters of the ethics code (it was passed in 2006) did try to deal with appearances of impropriety. Here's the provision, which comes right before the general conflict provision above.

1.46.030(A). General Prohibition Against Conflicts of Interest.
In order to avoid becoming involved or implicated in a conflict of interest or impropriety, or an appearance of conflict of interest or impropriety, no current City official should be involved in any activity that might be seen as conflicting with the conduct of official City business or as adverse to the interests of the City. Even the appearance of the following prohibited conduct alone may be sufficient to constitute a violation of this Code of Ethics.

According to this odd language, any old appearance of impropriety, no matter how strong, is insufficient. There has to be the appearance of prohibited conduct, that is, a financial interest still has to be involved. If the city's ethics board, through the independent investigator it has decided to hire, fails to find evidence of such a financial interest, direct or indirect, all the appearances in the world won't be enough for the board to find an ethics violation.

Non-financial interests can cause just as much of a trust problem as financial interests. In fact, the muddiness of many indirect financial interests makes them more difficult to investigate, report on, and provide advice about (for example, had the council member sought an advisory opinion, the ethics board would have had to ask all sorts of questions about the council member's relationship with the firm he did his work for, as well as his relationships with individuals involved in that firm).

For these reasons, local government officials should be told up front that non-financial interests require recusal, as well. Only then will a city's goal of preventing appearances of impropriety be possible to attain, at least with respect to basic conflicts.

In the City Ethics Model Code, not only are personal, non-financial interests included, but the basic conflict provision focuses not on interests, but rather on action taken by the official. In addition, the provision is not limited to contracts, which although applicable to the Tacoma matter, does not cover a wide range of government action.

I hope that the Tacoma council will use this opportunity to take a close second look at its relatively new ethics code, because the council member's problem is a drafting problem as much as it is an ethics problem.

Robert Wechsler
Director of Research-Retired, City Ethics

---