Lincoln, Nebraska Raises Interesting Questions Regarding City Contracts with City Officials

What’s been happening recently in Lincoln, Nebraska, concerning city officials having contracts with the city, provides food for thought on a few basic conflicts of interest issues.

One issue is whether city officials and employees should be allowed to have contracts with the city. Or are full and open bidding provisions enough? Or full disclosure?

Another issue is whether a city council is the right body to decide this question.

Yet another issue is the inclusiveness of conflicts language.

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Earlier this year, the city’s Charter Revision Committee proposed unanimously (14-0) that “no elected official or department director shall contract with the city, individually or through a business.”

According to an article in the Journal Star, the council voted on whether to put this proposal on the ballot. It split 3-3, by party, leaving the deciding vote to a council member who was on vacation. As always seems to happen in these cases, the council member had lost the last mayoral race partly because his landscaping company had some problems with its city contracts. Guess how he voted.

Whether he should even vote became an issue, considering his contracts with the city. But the state Accountability and Disclosure Commission decided that it was okay, because the law stated that an official action would have to result in a financial benefit to the official, and the vote was only about putting the issue on the ballot.

This is why conflict language should not be so narrow. Many votes or acts do not necessarily result in a financial benefit. That’s why the City Ethics Model Code Project uses this language: “in a manner which he or she knows, or has reason to believe, may result in a personal or financial benefit.” Without such inclusive language, officials will be able to vote to prevent themselves from having to give up their contracts or their position.

There was discussion about having the contracts ban be an ordinance rather than a charter amendment (and then there would be a clear conflict for this council member), but the ordinance still wouldn’t have passed.

Immediately after the vote, a petition drive began to put the proposal on the ballot. The council responded with an ordinance, but it wouldn’t ban contracts. It would require open bidding, disclosure, and a vote by the council (with the relevant council member recusing himself).

This is a common solution to this problem, but considering the Charter Revision Committee's strong position and the petition drive, contract conflicts have most likely been rampant in Lincoln. A common solution, especially without independent enforcement, might not be enough.

One indication of how concerned the council is about disclosure and ethics matters in general is the fact that an ethics code has been tabled since 2002. The leader of the petition movement is working on a new ethics code.

Another council member of the majority party who has a contract with the city said of the petition drive, “It’s a solution in search of a nonexistent problem.” Actually, it sounds to me as if the council member has no basic understanding of conflicts of interest, or he would have kept his mouth shut. And the council clearly thinks there’s a problem, or they wouldn’t have written an ordinance to solve it in a way short of banning.

The ordinance, which is scheduled to be discussed today, also includes a short standards of ethical conduct section, without any enforcement provisions.

A question that arises from this situation is, is there a conflict in having elected officials decide the ethics rules that will apply to them and to the people they work with and appoint? When a charter revision committee votes 14-0 for an ethics proposal, and the council votes 4-3 on party lines against, what message does that send to the public? When the council, which has refused to deal with ethics matters for six years, suddenly comes up with an ethics proposal when faced with a serious petition drive, what message does that send to the public?

It sends the message that elected officials are in it for themselves, that they care so much about the ability to have contracts with the city that they’re willing to actually require disclosure, open bidding, and recusal — essential ethics rules they’ve turned their backs on — in order to preserve this form of self-dealing.

Robert Wechsler
Director of Research-Retired, City Ethics