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Disclosure of Gifts -- Really Just from Companies?
Friday, April 17th, 2009
Robert Wechsler
Update below:
The controversy in Baltimore over the mayor's acceptance of gifts from a developer whose companies have received a great deal of funding from the city appears now to be focused on whether or not the mayor was required to disclose these gifts, since the developer did not personally do business with the city.
According to an article in today's Baltimore Sun, the city solicitor filed an affidavit last month saying that, in the reporter's words, "public officials do not need to disclose gifts from people who control business entities from behind the scenes."
Here is the language in the Baltimore ethics code:
The city solicitor's interpretation of this provision would effectively mean that only gifts made by companies must be disclosed, since rarely do individuals do more than minor business with a city. But the person who gave the mayor the gifts is, according to the article, connected to 27 companies used for a dozen development projects that received city support. "Real people control those artificial business entities," wrote the prosecutor. And these people give gifts that should be disclosed.
In addition, elsewhere in the disclosure provisions, references are to business entities doing business, not persons. A legalistic approach to this provision, like the city solicitor's, would have to recognize that this implies the meaning of "person" would not mean "business entity" or the more commonly-used term "business entity" would have been used.
In any event, the ethics code more clearly prohibits accepting such gifts (something the city solicitor ignored). Note the phrase "directly or indirectly" and how this provision goes beyond covering gifts from those doing business or being regulated, to covering gifts from those having a financial interest or engaging in a regulated activity.
This language should have been used in the disclosure provision, as well. This failure gave the mayor an opening to contend that she didn't need to disclose the gifts, but she knows very well that it doesn't make sense not to disclose a gift from someone with 27 companies doing business with the city.
It's sad that the city solicitor would join her in making this disingenuous legalistic argument. A defense lawyer, yes, but not a government lawyer who should be representing not the interests of the woman in the mayoral seat, but instead the office of the mayor and the public interest in good, reasonable ethics laws.
Update: On pages 13-16 of his Opposition to Motion to Dismiss, the MD prosecutor makes a good argument for inclusion of representatives of business entities when considering gifts to public officials.
Robert Wechsler
Director of Research-Retired, City Ethics
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The controversy in Baltimore over the mayor's acceptance of gifts from a developer whose companies have received a great deal of funding from the city appears now to be focused on whether or not the mayor was required to disclose these gifts, since the developer did not personally do business with the city.
According to an article in today's Baltimore Sun, the city solicitor filed an affidavit last month saying that, in the reporter's words, "public officials do not need to disclose gifts from people who control business entities from behind the scenes."
Here is the language in the Baltimore ethics code:
The [disclosure] statement must include
a schedule of each significant gift that was, at any time during the
reporting period:
(1) accepted by the public servant or by any other person at the direction of the public servant; and
(2) given by or on behalf of, directly or indirectly, any person that was:
(i) a lobbyist;
(ii) a person regulated by the City; or
(iii) a person doing business with the City.
(1) accepted by the public servant or by any other person at the direction of the public servant; and
(2) given by or on behalf of, directly or indirectly, any person that was:
(i) a lobbyist;
(ii) a person regulated by the City; or
(iii) a person doing business with the City.
The city solicitor's interpretation of this provision would effectively mean that only gifts made by companies must be disclosed, since rarely do individuals do more than minor business with a city. But the person who gave the mayor the gifts is, according to the article, connected to 27 companies used for a dozen development projects that received city support. "Real people control those artificial business entities," wrote the prosecutor. And these people give gifts that should be disclosed.
In addition, elsewhere in the disclosure provisions, references are to business entities doing business, not persons. A legalistic approach to this provision, like the city solicitor's, would have to recognize that this implies the meaning of "person" would not mean "business entity" or the more commonly-used term "business entity" would have been used.
In any event, the ethics code more clearly prohibits accepting such gifts (something the city solicitor ignored). Note the phrase "directly or indirectly" and how this provision goes beyond covering gifts from those doing business or being regulated, to covering gifts from those having a financial interest or engaging in a regulated activity.
§ 6-27. Acceptance prohibited.
Except as otherwise provided in this Part IV, a public servant may not
knowingly accept any gift, directly or indirectly, from any person that
the public servant knows or has reason to know:
(1) does or seeks to do business of any kind, regardless of amount:
(i) with the public servant’s agency; or
(ii) if the public servant is a member or employee of the City Council, with the City Council;
(2) engages in an activity that is regulated or controlled by the public servant’s agency;
(3) has a financial interest that might be substantially and materially affected, in a manner distinguishable from the public generally, by the performance or nonperformance of the public servant’s official duties;
(1) does or seeks to do business of any kind, regardless of amount:
(i) with the public servant’s agency; or
(ii) if the public servant is a member or employee of the City Council, with the City Council;
(2) engages in an activity that is regulated or controlled by the public servant’s agency;
(3) has a financial interest that might be substantially and materially affected, in a manner distinguishable from the public generally, by the performance or nonperformance of the public servant’s official duties;
This language should have been used in the disclosure provision, as well. This failure gave the mayor an opening to contend that she didn't need to disclose the gifts, but she knows very well that it doesn't make sense not to disclose a gift from someone with 27 companies doing business with the city.
It's sad that the city solicitor would join her in making this disingenuous legalistic argument. A defense lawyer, yes, but not a government lawyer who should be representing not the interests of the woman in the mayoral seat, but instead the office of the mayor and the public interest in good, reasonable ethics laws.
Update: On pages 13-16 of his Opposition to Motion to Dismiss, the MD prosecutor makes a good argument for inclusion of representatives of business entities when considering gifts to public officials.
Robert Wechsler
Director of Research-Retired, City Ethics
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