The Fiduciary Duty of an Appointing Official

According to an article in yesterday's New York Times, the New York Governor’s Task Force on Public Authorities Reform has filed its report (not yet available online) on the implementation of the Public Authorities Reform Act of 2009, whose provisions are summarized in a separate document.

The task force was created in December 2009 to assess the effectiveness of the Act and and come up with ways to improve the accountability of state and local public authorities.

One of the report's most important findings, according to the article, is "that politicians were inserting themselves in the business of authorities, which are supposed to be independent bodies, by sometimes pressuring their appointees to vote in certain ways."

The article notes that New York City's mayor, in particular, "has often seemed to expect that his appointees carry out his policies, particularly those he has named to the board of the Metropolitan Transportation Authority [MTA]."

The article quotes a state assemblyman, Richard Brodsky, who pushed for the authorities reform act, as saying, “The law has always required board members to do what’s right for the public, not what’s right for the elected officials.” In other words, how appointing officials and their appointees act after the appointment is a government ethics issue.

One aspect of this issue is similar to officials coercing subordinates to support their campaigns or do personal work for them. But the most important issue is the fiduciary duty of appointing officials. As the assemblyman said, “Think if it was a judge. Should the governor be able to call a judge on the Court of Appeals [NY State's highest court] and tell them how to decide a case? The same should be true of the MTA. These are independent agencies with an independent mission.”

According to the article, "the report proposes that the law be amended to make explicit that politicians who appoint board members have a fiduciary duty that precludes them from improperly influencing their appointees. And it proposes giving state regulators enforcement powers over politicians who appoint board members, including referring violations to the attorney general or a local district attorney."

This is an important issue that ethics programs generally do not deal with. It has especially been a problem in New York, but it happens all over and at every level of government. It is very difficult to enforce, but it is important to stress the fact that an appointing official has a fiduciary duty to let go, to not only let her appointees act independently, but to let them feel as if they are not beholden.

This is a perfect example of ethical leadership. An ethical leader will expressly tell everyone she appoints that the appointment is about the person, not the appointing official's or the party's policies.

Robert Wechsler
Director of Research-Retired, City Ethics

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