A test of Various quotation options...

Anonymous

Tue, 12/21/2010 - 15:51

<a href="http://www.cityethics.org/content/image-consultants-role-local-governme…; target="”_blank”">My
last blog post</a> involved the <a href="http://www.bcerssite.org/index.html" target="”_blank”">Baltimore Employees'
Retirement System</a> board calling in an image consultant to help
protect it from an investigation by <a href="http://www.baltimorecity.gov/Government/BoardsandCommissions/EthicsBoar…; target="”_blank”">the
city's ethics board</a>. This blog post will look at why there is an
investigation (again, I could not find any minutes posted, so I am
dependent on the research done by <a href="http://investigativevoice.com" target="”_blank”">the Investigative Voice</a>).

An Exception That Undermines the Rule 
According to a series of Investigative Voice posts, emails show
that extensive travel by Baltimore pension board members (all but one)
and staff is partially subsidized by financial firms seeking contracts with the
pension board. Gifts from companies doing business with one's agency are
prohibited by the <a href="http://www.baltimorecity.gov/LinkClick.aspx?fileticket=dnUl23Yo-fQ%3d&t…; target="”_blank”">Baltimore
ethics code</a> (§6-27), but there are, of course, exceptions,
including a big one relevant to acceptance of travel costs:
<pre>

§ 6-28. Qualified exemptions. 
...the prohibitions in § 6-27 ... do not apply to the unsolicited
receipt of ... 
(3) in return for a speaking engagement or participation on a panel at
a meeting, reasonable expenses for food, travel, lodging, and scheduled
entertainment of the public servant, but only if: 
(i) the expenses are associated with the meeting; and 
(ii) to the extent the expenses are anticipated to exceed $500, the
public servant has notified the Ethics Board before attending the
meeting</pre>

There is another provision that provides a limit on this and the other
exemptions, which should make any official think twice about using the
exemption at all:
<pre>
§ 6-29. Exemption limitations. 
The exemptions specified in § 6-28 {“Qualified exemptions”} of
this subtitle do not apply to any gift if: 
(1) the gift would tend to impair the recipient’s impartiality and
independent judgment; or 
(2) for a gift of significant value: 
(i) the gift would give the appearance of impairing the recipient’s
impartiality and independent judgment; or 
(ii) the recipient believes or has reason to believe that the gift is
designed to impair his or her impartiality and independent judgment.
</pre>

Accepting travel, lodging, and food from someone doing or seeking to do
business with the pension board clearly gives the appearance of
impairing the board members' independent judgment. What other reason
could it have? Do investment firms, out of charitable impulse, really
choose to subsidize pension board members' and their staff's education? 
 
Those who drafted this exception seem to feel that this charitable impulse actually exists. They
appear to have assumed that the board member's expertise as a speaker is worth
someone's while to fly them to Florida or California or
Monaco. I don't think this impulse exists, nor that the exception should
exist. Effectively, the exception makes the rule meaningless, at least
in this context. 
 
According to <a href="http://www.investigativevoice.com/index.php?option=com_content&view=art…; target="”_blank”">an
Investigative Voice post</a>, investment firms have anticipated
this sort of exception by providing an opportunity to pension board
members to select a discussion panel to serve on. They don't have to
indicate any special knowledge or experience, they don't have to be
asked, as is common at conferences, they just sign up and, voila!, they
have met the principal criterion of the exception. 
 
A History of Travel Problems 
The pension board's travel is not a new issue. Back in 2006, this issue arose
when a board member filed a financial disclosure statement
reflecting the board's travel practices, according to <a href="http://www.calvertinstitute.org/main/pub_detail.php?pub_id=198" target="”_blank”">a
Calvert Institute for Policy Research article</a> published this
September, entitled "Hit and Run Politics:
Baltimore City and Maryland State Pensions: A Short History." 
 
The pension board authorized $10,000 for a study of the travel practices of
other large-city pension boards (to show it's hardly alone?) and to
recommend new travel policies. Then it rejected a motion to reduce the
travel limit per member from $10,000 a year to $7,500 a year. However,
it did limit each member to one international trip and placed a limit
of three trustees per conference. 
 
A Dissident Pension Board Member's View 
The disclosing pension board member is still on the board. He is quoted by
Investigative Voice as saying, “The sponsors of the conferences pay for
part of the expenses because they want access to the trustees; that’s
why they pay — they want business. But it’s a violation of city ethics
to accept gifts from people who are doing or want to do business with
the city, and not declare them. I used to travel myself, but when the
rules changed, I stopped.” 
 
What makes this especially odd is that <a href="http://www.bcerssite.org/ERSboardandadmin.html" target="”_blank”">the board</a> is
chaired by the city comptroller who, one would think, would be concerned
about ethics issues. The board also contains a labor leader, the city's
labor commissioner, an investment firm executive, an attorney, a city
employee, and a retired pension administrator who is the board's ethics
dissident. 
 
Dealing Responsibly with the Problem and the Investigations 
There's nothing wrong with a reasonable amount of travel for educational and networking
purposes, especially by staff members. But at least as long as there
are any exceptions to the gift provision, great care needs to be taken
in publicly disclosing the source of all spending (city, personal,
investment firm) as well as all discounts (including free registration)
and other gifts taken by board members and staff. 
 
It appears that this information is not being made available to
Investigative Voice nor, presumably, to the public. This lack of
transparency makes it appear that the pension board is doing something
it shouldn't be doing. 
 
Therefore, it has only itself to blame for any investigation that is done into its
practices, either by the ethics board or by investigative reporters.
Instead of hiring an image consultant, it should immediately make all
of its travel records for the last ten years or so public, and reach a
settlement with the ethics board as quickly, and publicly, as possible.
As respondent, it should insist on a public ethics proceeding. 
 
If staff or board members have been misrepresenting the source of their
travel expense payments, they should be removed. 
 
Consideration should also be given to staggering the terms of pension
board members. All but one of their terms end in December 2011. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
---

Search

A test of Various quotation options...

Share This Page