Local Government Consultants and Conflicts - New York Lawyers and Their Pensions
According to a <a href="http://www.nytimes.com/2008/06/23/nyregion/23empire.html" target="”_blank”">New
York <span>Times</span> article</a> last
week, hundreds of lawyers in New York State who have done consulting
work for local school districts allowed themselves to be listed as
part-time employees and allowed themselves to be enrolled in the school
districts' pension systems. According to <a href="http://www.law.com/jsp/article.jsp?id=1202421244475" target="”_blank”">an article
in the New York <span>Law Journal</span></a>,
Attorney General Andrew Cuomo said that the pension deals were also
used by special districts, towns, and villages. Not only lawyers were
involved in this, but "predominately lawyers."<br>
<br>
Allowing yourself to be placed on a payroll and/or given a pension when
you have not been an employee is fraudulent. It is illegal, and who
would know this more than lawyers with municipal practices?<br>
<br>
It is also unethical, a form of using one's position to obtain special
consideration. However, in this case, it was done not by government
officials, but by government consultants.<br>
<br>
<a href="http://www.cityethics.org/node/466">Click here to read the rest of this blog entry.</a>
<br>
<br>
Government consultants are
often left out of ethics codes, but even the City Ethics Model Code,
which has a separate <a href="http://www.cityethics.org/mc/full#TOC48" target="”_blank”">provision
for consultants</a>, does not include them under the special
consideration and other conflicts provisions. I will need to rethink
this omission.<br>
<br>
Lawyers are often used extensively by local governments. Town and city
attorneys are often not employees, but are independent lawyers paid by
the hour. Should they not have to follow the same ethics rules as
officials and employees? Should they not have the same
responsibilities? Since they represent many others, they will likely
have many more conflicts to disclose and to deal with responsibly. This
is true of other sorts of consultants, as well.<br>
<br>
The first lawyers caught in the act have said that the law is not
clear. The managing partner of one firm is quoted in the New York <span>Law Journal</span> as saying, "The rules
and regulations covering the area of employment in this area are at
best confusing and not universally applied. Our hope is that the review
by the attorney general and comptroller will result in clarity for the
future to guide our clients and all municipal entities."<br>
<br>
The president of another firm said, "We believe there was nothing
improper with our lawyers being placed on the payrolls."<br>
<br>
The Attorney General thinks otherwise. He said that lawyers can
legitimately be employees of local government units, but he said the
rules are clear when people qualify as bona-fide employees and when
they are independent contractors. "You're an employee," Cuomo said.
"You have an office, a desk, a telephone. You go there. ... This is not
a discrete area of the law. This is a very well-known issue. ... It's
well litigated."<br>
<br>
Cuomo says that what's come out so far is the tip of the iceberg. "In
many ways, this situation is the public integrity version of death by a
thousand cuts. Ten thousand governments. Little scams. Chronic
widespread corruption and fraud. And in the end, the taxpayers bleed
millions of dollars." At least one lawyer and one firm have settled. It
will be interesting to see what happens, and how honorably New York
lawyers deal with this matter.<br>
<br>
One last thought. There's a curious question in this sort of case: if
you're
fraudulently on the payroll or
slated for a pension, do ethics codes apply to you as an employee, even
when you never were one? Here's the argument: As an employee, at
least
in name, you used your position to give yourself a pension you didn't
deserve because you weren't an employee. Try to get your mind around
that one!<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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