An Interesting Agency Independence from Ethics Enforcement Issue in Broward County

I've written about the issue of <a href="http://www.cityethics.org/content/independence-ethics-administration-sh…; target="”_blank”">ethics
commission jurisdiction over independent agencies</a> and
authorities, which arose in recent years in such places as
Jacksonville, Louisville, and Palm Beach and Broward counties in
Florida. The issue has arisen again in Broward County, in a
different and interesting context.<br>
<br>
According to <a href="http://www.browardbulldog.org/2012/07/broward-ig-agents-quiz-former-hal…; target="”_blank”">a
Broward <i>Bulldog</i> article this week</a>, both the Hallandale Beach
city attorney and the Hallandale Beach Community Redevelopment
Agency (CRA) attorney have taken the position that "the CRA is 'a
separate legal entity' and not subject to the authority of the
[county Inspector General] under county and state laws." They have
taken this position because the IG is investigating the city and the
CRA with respect to allegations of self-dealing and financial
mismanagement.<br>
<br>

The CRA is not your typical independent agency. One, its board
members are the city commissioners. Two, although the CRA was
created in 1996, it was not made an independent agency until March
2012, the month, coincidentally, that independent auditors said that
the city failed to provide them with $20 million in vendor contracts
for review, limiting the scope of their audit report, according to <a href="http://www.browardbulldog.org/2012/06/hallandale-refuses-full-cooperati…; target="”_blank”">a
<i>Bulldog</i> article from June</a>. Three, all 59 properties purchased
with CRA funds are in the city's name, not the CRA's.<br>
<br>
So, this is the least independent an agency could possibly be. If
this agency was determined to be outside the IG's jurisdiction (and,
equally, the ethics commission's), any agency would be. And yet all
attorneys involved or asked about the issue insist that the IG's
jurisdiction will have to be decided by the courts, which would make
a purely legal determination of the issue. I disagree.<br>
<br>
<b>The Hats Are the Same</b><br>
Let's start with a statement of the CRA attorney: "[T]he individual
Hallandale Beach CRA board members and the city commissioners are
each one and the same person. However, in these separate capacities
they wear separate hats and are guided by separate legal
requirements."<br>
<br>
This simply is not true. Commissioners on the CRA are acting solely
as city commissioners. They were not elected or appointed to the
CRA. They appointed themselves and they themselves declared the CRA
an independent agency. Such an appointment and declaration does not
in any way change their role, their obligations, or their legal or
representative status. They continue to sit on the CRA solely as
commissioners, and are guided by the very same legal and ethical
requirements they have always been guided by. And they are subject
to the same authorities.<br>
<br>
When a commissioner sits on a regional authority, she sits on it
solely as a commissioner. She does not don another hat. Why should
it be any different on a city authority, especially one she herself
created?<br>
<br>
<b>Not All Legal Fictions Are the Same</b><br>
The CRA is a legal fiction, but not a legal
fiction like a corporation. It lacks a corporation's legitimacy. The corporation was created as a legal
fiction to deal with such issues as individual liability. There is no
issue of liability with respect to the fiction known as the CRA. In
fact, no individuals, as such, are involved. Elected officials do
not sit on an agency board as individuals with potential personal
liability. They sit on an agency board as representatives of the
community, they have special obligations to the public that
individuals who incorporate never had, and they are individually protected by the legislative immunty defense, at least to the extent they do not violate ethics provisions. There is no distinction with respect to obligations (that is, no ethics distinction)
between the members of a city commission and a redevelopment agency.<br>
<br>
Legal fictions are not all alike. This legal fiction appears to have
been created solely to prevent county and state investigation of possible individual misconduct. Even
if there were other reasons, the commissioners' obligations remain
the same, and no declaration they make should in any way protect
them from being subject to IG or ethics investigation in their role as government officials.<br>
<br>
<b>This Is Not Really a Legal Issue</b><br>
Until March, the CRA was inarguably subject to the IG's authority.
All of the transactions being investigated occurred before March.
The commissioners, who are being investigated, knew this when they
chose to make the CRA independent. Therefore, they acted in their
self-interest to protect themselves from a public investigation.
Even after having done this, they had, and still have, the choice to
make the CRA, or themselves individually, subject to the IG with
respect to the CRA. In fact, some present and former commissioners
have done just that. Nothing any lawyer could say can change this.<br>
<br>
In other words, a commissioner's obligations trump the law, however
it is interpreted. If an official feels he should be subject to
public investigation, he can choose to be, as can the entire CRA or
board of commissioners. In the alternative, one or more can ask for
an independent legal and/or ethical opinion on the matter. They do
not have to depend on attorneys who are under their control and,
therefore, placed in a conflicted position if they believe the CRA
should be subject to the IG's jurisdiction, but know that they are
being asked to say otherwise (and that this can be done if the
ethics of the situation is totally ignored).<br>
<br>
The city and CRA attorneys should not have been put in this
position, but when they were, they could have suggested an
independent legal and/or ethical opinion. They did not have to tell
the commissioners what some of them apparently wanted to hear.<br>
<br>
I said that they could have sought a legal and/or ethical opinion,
but I don't really feel that a legal opinion is appropriate, because I don't see this as a legal issue at
all. The only reason anyone is calling it a legal issue is that the
commissioners, after there were allegations of self-dealing and an
audit showed irregularities, chose to act in a way that protected
themselves from investigation. This conduct, although a change in
legal status, was an act of self-protection at the public's expense.
In other words, ethical misconduct. The change of legal status
should not, therefore, be used as a legal excuse not to recognize
this as an ethical issue, to remove the conduct from ethics
investigation, and to change the commissioners' ethical obligations
to their community.<br>
<br>
<b>Legal and Ethics Independence</b><br>
Even if the legal status had been changed ten years ago, and only
two of the five commissioners sat on the CRA board with three
other individuals, I believe that the agency should still be subject to the IG's
jurisdiction. Independence should be recognized only when city
funds, land, facilities, and personnel are not used by the agency.
Legal independence is irrelevant to ethics independence.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
203-859-1959