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HomeMy WebLinkAboutAgenda Report - December 16, 2014 B-01 SMEthics and Public Service Laws and Principles Or • Don't let this happen to you .. . Session Objectives 1. To familiarize you with laws that govern your service and when to ask questions 2. To encourage you to think beyond legal restrictions and provide tools for doing so 3. Help you comply with AB 1234 requirements Quotes • Nearly all men (and women) can stand adversity, but if you want to test a man's character, give him power. — Abraham Lincoln Quotes (cont.) • The means are the end in a democracy and good ends cannot come from questionable means. - Martin Luther King, Jr. Quotes (cont.) • If you are not on the line when you trip, you will not fall over it. - unknown Public Service Ethics is Different is Laws play a bigger role is Perception as important as reality Gut is not a reliable guide Key Concept: Actions & Decision- making must be in the public's interest What Is "Ethics" Anyway.? Ethics versus Ethics Laws • Law = Minimum standards • What we must do • Ethics is what we ought to do —Above and beyond law's minimum requirements What We Ought to Do =Values ✓ Trustworthiness ✓ Loyalty ✓ Responsibility ✓Respect ✓Fairness ✓Compassion Thinking Beyond Ethics Laws • Law tends to be starting point for most ethical analyses in public service • Floor for ethical conduct—not the ceiling Where do you want to set your sights as a public servant? • Just because it's legal, doesn't mean it is ethical (or public will perceive it to be so) Public Service Ethics—not always mandated by law • Remember that your role is first and foremost to serve the community. • Be truthful with your fellow elected officials, the public and others -even when it involves speaking hard or unwelcome truths. • Avoid any actions that would cause the public to question whether your decisions are based on personal interests instead of the public's interests. Its not always the law --continued • Make decisions based on the merits of the issues. • Honor the law's and the public's expectation that agency policies will be applied consistently. • Support the public's right to know and promote meaningful public involvement. • Support merit -based processes for the award of public employment and public contracts. • Be impartial and do not favor those who either have helped you or are in a position to help you. • Promote equality and treat all people equitably. Its not always the law --continued Treat fellow officials, staff and the public with courtesy, even when you disagree with them. Focus on the merits in discussions, not personality traits or other issues that might distract you from focusing on what is best for the community. Search for value from diverse opinions and build consensus. Follow through on commitments, keep others informed, and make timely responses. Be approachable and open-minded. Listen carefully and ask questions that add value to discussions. Involve all appropriate stakeholders in meetings affecting agency. Understanding Ethics Laws • What They Cover • When You Need to Ask Questions Resources for Further Reference Why Should You Take the Time? • Loss of freedom --6 months to 20 years • Fines (up to $250,000) + restitution +forfeiture • Attorneys fees ($3K to $1 M+) — Own and others' • Personal costs 0 O Four Groups of State Ethics Laws 1. Personal financial gain 2. Personal advantages and perks 3. Governmental transparency 4. 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INSTITUTE Fox _ LOCAL GOVERNMENT Group 1: Personal Financial Gain Issues • Principle: Public servants should not benefit financially from their positions Examples of Laws • Bribery and related crimes • Financial interest disqualification requirements — self-dealing • Revolving door restrictions on employment Bribery • Rule: Public officials may not solicit, receive or agree to receive a benefit in exchange for their official actions — "this for that" • Penalties: Loss of office, prison time, fines, restitution, attorneys fees and public embarrassment Ray Nagin, once New Orleans' Mayor, now Federal Inmate No. 32751-034 "What Ray Nagin did was sell his office, over and over and over again." Assistant US Attorney Matt Coman 10 -year Conviction for Bribery &Fraud i Case Study: City of Ringa Linga Linga Ding Dong Ding named by The Ronnettes Salary Trading: City Manager allegedly bribed the City Council to raise his salary in exchange for coneting the City to a Charter City where Council Salaries are not limited by the Gov Code. Employee Loans: Several management team employees with post employment loans in excess of $100,000.00 Similar Crimes • Receiving rewards for appointing someone to public office • Embezzlement—converting public funds or property to your own Ex -Lynwood councilmembers get prison in misuse of city funds Louis Byrd, 80, is given five years and Fernando Pedroza, 47, is given four years for illegally boosting salaries. Double Claiming Expenses "Its not the amount of money. It's the audacity of the conduct." said Denutv D_A_ Stenhen Tavlor rte' tinel TUESDAY, December 9, 2008 www.lodinews.com 2 Sectlons, 48. Pages 504: S.E,RNA'RES1..GNSy DEAL Enters no contest plea to charge of 'double-dipping on travel expenses Marla Elena - By Maggie Creamer - "Ethics is important and so is fiscal re. � Hansen said. Serna of. t.= .NEWS 3ENi1NEL5IAFi WRti=R - sponsibility." - - "The tragedy is- she: has done a lot of right, enters. a _ Serna has served on the board for 18 good- for the community, and this is Stockton, Maria Elena Serna of Lodi abruptly years and is in her fifth term. In recent probably what she will be remembered courtroom on resigned from the Delta College board years, she worked to get satellite cam- for," he said. Monday with Monday and minutes Later pleaded no pus in the Lodi and Galt area. - The charge of false claims: fur. pay - her attorney, - contest to a criminal charge of "double She had retired from Sear Creek ment filed ,Friday was originally a Al Ellis. Serna dipping'.' on travel reimbursements. High School in the Lodi Unified Sutioul felony but was reduced to a rriisde= resigned fromSerna received three years probation District, where she taught. history.- - meanor at Serna's arraignment lion, the Delta "i:., for collecting money from both Delta The daughter of farmworkers, Serna day, San Joaquin Deputy. District Attor_ College beard and the Community College League of has been a strong advocate for Hispanic ney Stephen Taylor said . - ;• California for trips she took from 2005 students and minority communities. Instead o£ proceeding'wttti a trial; and pleaded ;o. until this year. She has also been a candidate .for the Serna, E7, decided to eYiter,a Idea at the Flo contest to - �?;- There were about -live trips, with one Lodi City Council. arraignment, Taylor said. '- - "double costing ds little as $100 and another Her plea bargain and resignation Stockton Court -Judge Richard Guil-- .dlppiug"on tie. costing $500, said Delta College Super- stunned many in the Lodi community; Toni sentenced Serua after striking a trate! intendant and President Raul Ro- Lodi Mayor Larry Hansen worked tical with Scrna's lawyer, -Al. Ellis. The expenses. driguez. In total,- she pocketed about withSerna on trying to get a Delta Col- Lodi News-Sentiinel tried to contact - $1,700, hesaid. lege satenite camp" in Lodi. Serna several times Monday afternoon; - - "some people might see it as a small. She has always worked so hard for but did not hear back.. - - mAnP,ONrJM­ECA SUN POST matter, but we don't," Rodriguez said. young people in, the, community, Please See Serna, Pagel' , I Sacramento Official Sentenced in Credit Card Case Former Aide to Mayor Kevin Johnson sentenced to 9 -months in county jail and ordered to pay $19,000 in restitution to the City of Sacramento for misuse of city -issued credit card and theft of public funds between 2008 and 2012. • 2 - trips to Disneyland • Meals at various restaurants • Downloaded 1000 songs Its Not Always About Money Campaign Ethics "1:vant: ajlie for'n' -. �tiam�f � v�ola�an: tf iso# hd`anrute; .W-8. ofF�,m :sino re spolagless" ►arc oe►sni � � :� :' :.mv takr r PAN OP em apoles: f-ai yr g canldates_ ROWANste git.Oalfing for furtbar `dio IS )rdicuitatilt' u g ; to t ± a � :per » flelsne.� read lrom;a;.Ixe -ed statement 'flys hoard m; a }t' bite':&: tc6& house om '11W,Want to eq�vlagiae fay elan • -' 7`u � tiew::�att. ? ;a poi a� a doh. Distriet 'board. wee' • ' `If offinded ariypAte Y ►uant�4 �irt�laait still.�¢enta t¢ .: offer nab sire." wear .there should } add.. : Alm Sauey �i-oW1actioiie�a�ns�A�t :. that•t�m serxkan E t4.. 80,gaeeiffigd.HV@10Yees3:g %adws and: other diatri� Sad ]eIsnei mads a Iaia� t ' �Uct. �2 putidicly eudas�ing •eis�ha�pyv�t�ori�ala,� :. • =wee ae�aol't�oard sandid�, a , tuns.. , ,. . Disqualification Based on Financial Interests Rule: You may not participate in a decision if financial interests are affected by a decision Effect can be positive or negative Education Office Earns a Big Fat "F" Michael Fitzgerald, Record Columnist March 13, 2014 Regional Director of SJ County Migrant Education Program directed an estimated $144,000 in catering and janitorial expenses toward vendors she owned, or that were owned by her then husband. "I wasn't out to make millions." Disqualification versus Abstention is Abstention => voluntary — Beyond the legal minimum requirements Disqualification => Legally required —Does not imply wrongdoing — Unless you don't disqualify What Kinds of Interests? Sources of income of $500 or more —Your own income —Promised income —Partner's/child's income —Loans/guarantors What Kinds of Interests? Real property interests of $2000 or more — Direct or indirect — Partner/child's property — Tenant interest (except month to month) — 500 foot rule Penalties • Invalidate decision • Misdemeanor (could result in loss of office) • Fines ($5,000 to $10,000 per violation) • Attorneys fees (yours and others) • Embarrassment (personal/political) If You Are Disqualified 1. Don't discuss or influence (staff or colleagues) 2. Identify nature of conflict at meeting 3. (Elected Officials) Leave room (unless matter on consent) Limited exceptions: — Owned property — Owned/controlled business Warning! Special Rules for Contracts • Interests in contracts are forbidden • Disqualification may not be enough — Direct or indirect interest — Limited exceptions • May have to refund money paid • Felony: $1,000 fine, imprisonment, and loss of office Case Study: The Travel Store • Elected school board member owned travel agency — Twice failed to disclose interest on SEI • Voted on 15 decisions to approve payment to her travel agency ($28,481 total) • Possible fine under PRA: $76,000 (ultimate fine: $29,000) Case Study Financial Interests Board Member Bill is married to H.R. Consultant Joan. County is in the process of entering into a contract for H.R. consulting services. Joan wants to bid for the contract work. Bill and Joan have had a prenuptial agreement in place during their I I years of marriage. As a result, they have no community property. Does Bill have a financial interest in this contract? Case Study on Financial Interests YES Conflicts of Interest When Leaving Office — Govt. Code § 87407 • Before leaving office: — Public official may not make, participate in making or influence government decisions; — directly relating to any persons with whom public official is negotiating or has any arrangement concerning prospective employment Conflicts of Interest When Leaving Office — Govt. Code § 87407 • For one year after leaving office: — An elected official/city manager/chief administrative officer, or general manager; — May not be compensated as an agent/attorney/representative of another person; — To appear before or communicate with their former agency for the purpose of influencing — Regarding an administrative action or a legislative action (permits, licenses, grants, or contracts proceeding sale or purchase of goods or property, adoption of rules, ect.) Future Employment Issues • Revolving door prohibition — Elected Officials and top managers — Cannot represent people for pay for a year after leaving their agency • No participation in decisions involving future employers Ex -Stockton CFO Settles Case, Pays Fine • The Record, August 13, 2013 — Accused of influence peddling, former Chief Financial Officer settles by paying $8,000 in fines. — Accused of negotiating a $ 1. 1 million contract with a software firm on behalf of the City of Stockton while pursuing a job at the same company. EdBest Practices • Avoid temptation to look at public service as an opportunity for financial gain • Look at every decision and ask yourself whether it involves some kind of financial interest for you Group 2: Perks • Principles: Democratic equality and servicin _ the public's interest — Public servants should not receive special benefits by virtue of their positions For More Information on ##NNLRSTANDINO THE WASICR OF PUBLIC SERVICE ETHICS LAWS Perk Issues www.ca-i lq.org/Perks Two Kinds of Perk Rules 1. Perks that others offer you Compensation or gifts 2. Perks that you give yourself/use- of-public- resources issues Personal or political Gifts Don't Always Have Bows • Meals, food and drink (including receptions) • Entertainment (concerts & sporting events) • Certain kinds of travel and lodging Villaraigosa Ethics Fine: Record $42,000 Punishment Recommended After Mayor Accepts Free Tickets November 20, 2014 New charge filed against former Utah AG John Swallow Felony charge for allegedly taking a Nevada houseboat trip paid for by a campaign contributor brings the number of felony charges to 14. Does the Gift Limit Apply to You? • Elected state or local officers or candidates; • City Managers, City Attorneys, Public Officials who manage public investments (Govt. Code § 87200); • "Designated employees" who are identified by an agency's Conflict of Interest Code Gifts — Case Study • Beth, a city manager, gets married. Beth registered for a chandelier that cost $3,000. Harold, a local resident, purchases the chandelier for Beth as a wedding gift. Beth donates the chandelier within 30 days to a local, non-profit battered women's shelter. Does Beth have to disclose the chandelier because she donated it to a nonprofit entity? Gifts — Case Study No Gifts — Case Study • The Mayor has been invited to make a presentation at the League of Mayors statewide conference. The Mayor's lodging, food, and transportation costs total $4,000 and are paid in full by the League. He arrives the day before the conference, delivers his talk the next day, and leaves the day after the talk. Has the Mayor violated the gift limits because his expenses are covered for two days he is not presenting? Gifts — Case Study NO - If costs are reasonably related to governmental purpose, and the lodging and subsistence limited to the day before, day of and the day after the presentation. Perks Others Offer • Report $50 and up (over a year) • Limit ($440 per year) • Exceptions for some kinds of travel, informational materials • May also be a disqualifying interest (over $440 in prior 12 months) Penalties • Penalties: Up to $5,000 per violation • Own attorneys fees ($3,000-$30,000) • Others' attorneys fees (for private actions to enforce law) Other Perks Others Offer • No free or discounted travel from transportation from transportation carriers — Result — Immediate forfeiture of office • No honoraria (fees) for speaking or writing Use of Public Resources Issues • Personal use of public resources (including staff time and agency equipment) prohibited • Political use of public resources also prohibited Misuse of Public Funds • Bella, a physician for a Hospital District, went to Sri Lanka to provide emergency medical care for victims of the tsunami. The Hospital District reimbursed Bella's travel expenses to Sri Lanka. Is this a misuse of public funds by the Hospital District? Misuse of Public Funds True, False or Maybe Maybe — If the governing body decides there is a public purpose. Attorney General Opinion OS -309 Use of Public Resources Money or anything paid for with public money: • Staff time • Office space • Equipment • Supplies Example: Expense Reimbursement • Familiarize yourself with your agency's policies/limits What kinds of expenses What rates for food, lodging and transportation The importance of documentation • Note: Spouse/partner expenses not reimbursable Consequences of Violations • Civil penalties: $1,000/day fine + 3X value of resource used • Criminal penalties: 2-4 year prison term +disqualification from office 0 Can also have income tax implication Case Study: Sacramento Suburban Water District • Staff and directors misusing public resources • Investigative report by Sacramento Bee Use of agency credit card for personal purposes Misreporting of income Double-dipping on expense reimbursements • Legislative response: AB 1234 Political Use of Public Resources • By individuals or agency itself (support of ballot measures) • Mass mailing restrictions restrict incumbents' advantage • Gifts of public funds Example: First Five Commission • Agency resources used to produce pro - preschool ads • Legal? Maybe 9 Ethical? Director resigned Common Law Bias Prohibitions • Common law bias based on personal interest: public officials cannot use their position for personal gain • Common law bias or prejudice based on unofficial source: decision at a hearing should be based on the record • Common law prohibition on prejudging: public official should not be committed to an outcome before the hearing. Opinions are OK, but should not approach a hearing with a closed mind Special Rule No free transportation from transportation carriers Penalty: Loss of office EdBest Practice Avoid perks and the temptation to rationalize about them -Legally risky -Public relations headache Group 3: Transparency Laws Principles: • It's the public's business • Public trusts a process it can see Transparency Rules Conduct business in open and publicized meetings Allow public to participate in meetings 0 Allow public inspection of records Conducting Business at Open Meetings • A majority may not consult outside an agency -convened meeting • Key concept: what constitutes a meeting — Example: Serial communications • Exceptions for certain kinds of events — As long as a majority does not consult among themselves Brown Act — Case Study • Police Chief creates a policy which provides that police will not respond to home alarms unless verified by a third party. City Manager meets separately, individually and privately with members of the City Council to provide information regarding the policy but does not communicate or share comments or position of any member. The City Manager obtains the support of a majority of the members. Has the manager violated the Act? Brown Act — Case Study NO, But the legislature passed §54952.2 to clarify that just because a " collective concurrence" is not reached does not mean that the meetings do not violate the Brown Act Consequences of Violations • Nullification of decision • Criminal sanctions for intentional violations (up to 6 months in jail/$1000 fine) • Intense adverse media attention Public Records • Agendas and meeting materials • Other writings prepared, owned, used or retained by agency (including electronic) • Penalties: Adverse media attention +costs and fees if litigated Financial Interest Disclosure • Transparency includes obligation for high level public servants to disclose financial interests — Assuming office — Annually while in office — Upon leaving office Economic Interest Disclosure - Government Code §87200 • Covered officials: planning commissioners, county supervisors district attorneys/ county counsels county chief administrative officers/ treasurers city council members/ mayors, — city managers/ attorneys/ treasurers — public officials who manage public investments — candidates for any of these offices at any election — other officials designated by local agency conflict of interest codes Economic Interest Disclosure - Government Code §87200 • Filed upon taking office/ leaving office/ annual basis • Form 700 requires disclosure of personal financial interests • Alerts public officials to actual and potential conflicts to help avoid conflicts • Informs the public about potential conflicts Charitable Fundraising • Rule applies to elected officials • Disclose $5,000 or more from single source • Charitable, legislative or governmental purpose 0 0 EdBest Practices Assume all information is public or will become public Don't discuss agency business with quorum of fellow decision -makers outside of meetings 0 Group 4: Fair Process Laws • Principle: As adecision-maker, the public expects you to be impartial and avoid favoritism Fair Process Laws • Due process requirements and rules against bias — Expression of views prior to hearing — Personal, non-financial interests • Incompatible office prohibitions Fair Process Laws, continued • Competitive bidding requirements — State law defines — Also local requirements — Principles: • Everyone has a right to compete for agency's business • That competition produces the best price for taxpayers • Example: Council member steered contracts to sister's firm and apparently received kickbacks Fair Process Laws, continued • Disqualification requirements if decision involves family members • Nepotism • Campaign contribution restrictions (appointed bodies) • Demands for contributions in exchange for favorable action = federal fraud and extortion • Soliciting campaign contributions from fellow officials and employees prohibited EdBest Practices • Think fairness and merit -based decision-making in your decisions • Keep politics separate from relationships with agency staff Beyond the Law: Public Service Ethics Principles Ethics =Values • Six universal ethical values: — Trustworthiness — Loyalty — Responsibility • Community interest — Respect — Fairness — Compassion Source: Institute for Global Ethics Applying Values to Public Service Trustworthiness: is I am truthful with my fellow officials, the public and others. Analyzing Ethical Dilemmas Two kinds of dilemmas: • Two competing "right values" • Doing the right thing costs more than one wants to pay —the personal cost Example • Campaign contributor wants you to do something You are not convinced it's in the best interests of the community • Right versus right dilemma (loyalty versus responsibility) Doing the right thing (acting on responsibility) then becomes a personal cost dilemma Questions to Ask • What would make the public feel best/inspire public confidence? • What would you want to read about on the front page? • How do you want to be remembered? Creating a Culture of Ethics ✓ Tone at the top ✓ Support speaking truth to power ✓ Who you hire and how they are evaluated Key Lessons • The law sets minimum standards for ethical behavior Violations of ethics laws carry stiff penalties When in doubt, ask and ask early • It's your choice how high you want to set your sights above the minimum requirements of the law Is it a Job to Do, or a Job to Have? Determine your boundaries before you are in a difficult situation Is it worth compromising your values to keep your job/position? Think long term: People will ask "what did you know and what did you do about it?" AB 1234 Compliance 9 Sign in 9 Proof of participation certificate 9 Provide to City Clerk as public record 9 Consider going beyond the minimum in terms of education 0 0 Key Things to Remember It's about the public's interest Not about the money One Last Quote • I would rather go out of politics having the feeling that I had done what was right than stay in with the approval of all men, knowing in my heart that I have acted as I ought not to." — Theodore Roosevelt Questions ?