Top 10 Ethical Delimmas Facing Local Government Officials. Friday September 25, :15 pm 3:45 pm Room: Deschutes C
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1 Top 10 Ethical Delimmas Facing Local Government Officials Friday September 25, :15 pm 3:45 pm Room: Deschutes C
2 Top 10 Ethical Dilemmas Facing Local Government Officials Sean O Day, General Counsel Katherine Thomas, Assistant General Counsel League of Oregon Cities 2015 Conference September 25, 2015 ORS 244: Use of Office Gifts Conflicts of Interest Nepotism We ve had record snow this year, and I need to clear my driveway. Question 1 I have a back injury, and my doctor told me I can t shovel snow. As a councilor, can I use the city s snow plow on my driveway? 1
3 Answer 1 (A) Yes, but only because you are injured and can t otherwise clear your driveway. (B) Yes, if the city allows the general public to use the snow plow. (C) No, because snow plows require a special driver s license. (D)No, because that would be a misuse of your official position as a city councilor. Discussion: Use of Office May not use official position: For financial gain or to avoid financial detriment If that gain or avoidance of detriment is available only because of the office held (ORS ) Rule extends to financial gain or avoiding financial detriment of: Relatives Members of your household Businesses with which you or they are associated Many exceptions exist ORS (2) (We will return to these later) I am a councilor, and I am planning to run for the Mayor s open seat in the next election. Question 2 There is a city-owned reader board outside city hall where I would like to post a campaign message. Can I do so? VOTE SMITH FOR MAYOR! 2
4 Answer 2 (A) Yes, as long as the city allows the other candidates to post campaign messages. (B) No, because that would be a misuse of my official position. (C) Yes, because I have a free speech right to put my message on the reader board. (D)No, because that would violate elections law. (E) It depends, the right answer could be A, B, or D (and I ve done enough multiple choice exams to know there can be more than one right answer). Discussion: Use of Office & Elections Use of Office: Avoid financial detriment of paying for campaign advertising Impermissible if available only because currently on the city council Even if the resource is available to all, elections law creates a separate issue: An elected official cannot ask public employees to engage in political advocacy, including promoting a candidate. (ORS ) If the city makes its property available for advocacy activities, it must grant equal access Subject to other election law restrictions, it s OK if available to all and no staff resources are used. I am going to attend the International City/County Management Association conference. Question 3 I booked my flight on my personal credit card, and the city is going to reimburse me. Can I keep the frequent flier miles from the trip for my personal use? 3
5 Answer 3 (A) No, because that would be misuse of your official position. (B) No, because that would be unfair to other employees who don t take flights for their job. (C) Yes, as long as the city has included frequent flier miles as part of your official compensation package. (D)Yes, because you paid with a personal credit card. Discussion: Use of Office Use of Office: Financial gain through miles that can be used for future plane tickets Available only because you hold the position of city manager Many exceptions exist: ORS (2) (2)(a): Any part of an official compensation package as determined by the city (2)(c): Reimbursement of expenses (2)(e) (g): Gifts allowed under separate ethics provisions They say there s no such thing as a free lunch, but I ve had two this week. I m new to city council, and yesterday a downtown business owner took me out to lunch. Today, the city manager took me out. I didn t pay either time. Was it okay for me to accept those free lunches? Question 4 4
6 Answer 4 (A) Yes, as long as you write a thank you note. (B) Yes, as long as you did not discuss city business. (C) No, because if you don t pick up the tab every now and then, people will stop inviting you to lunch. (D)It depends. Or at least that s what my city attorney keeps telling me. Discussion: Gifts ORS : During a calendar year, you, your relatives, and members of your household may not solicit or receive, directly or indirectly: Any gifts with an aggregate value over $50 From a single source That could reasonably be known to have a legislative or administrative interest Legislative or administrative interest Economic interest Distinct from that of the public In any matter subject to the decision or vote of a public official acting in that capacity Many exceptions exist Question 5 I am a city councilor and I own a small business in the city. Our city council is considering establishing a storefront improvement program that would allow local businesses to apply for grants to fund certain business projects. Can I vote on establishment of the program? Can I vote on a neighboring business owner s application for a grant? Can I vote on my own application for a grant? 5
7 Answer 5 Establishment: Yes Neighbor s application: Yes, after declaring a conflict Own application: No, but must declare a conflict Discussion: Conflicts of Interest Is there a conflict? ORS Financial benefit or detriment Actual conflict of interest would result in financial benefit or detriment Potential conflict of interest could result in financial benefit or detriment How do I handle a conflict? ORS Elected: declare, on the record, the nature of the conflict prior to any action on the issue Actual: Abstain Potential: Participate Appointed: written notice to appointing authority, then follow supervisor s direction Question 6 Our city council is voting on a proposal to increase water rates at our next meeting. I will be financially impacted by the vote because I pay for water as a resident of the city. Can I vote on the water rate increase? 6
8 Answer 6 (A) Yes, but only if you vote to increase rates. (B) Yes, because you have only a potential conflict of interest. (C) No, because you have an actual conflict of interest. (D)Yes, because all members of council have the same conflict. Discussion: Conflicts of Interest Class Exemption: Financial impact is the same as on other members of an identifiable group or class (ORS (12)(b); ORS (3)(a)) Exempt from disclosure requirements and participation restrictions Oregon Government Ethics Commission identifies the class and its size Rule of Necessity: Actual conflict of interest exists, but public official s vote is necessary to meet the minimum number of votes to take official action (ORS (2)(b)(B)) Make announcement No discussion Does not apply when there are insufficient votes due to absence I am a councilor, and I work for the local electric utility. At every council meeting, the council votes and approves the payment of bills, which includes the city s electric bill. Question 7 Do I have a conflict? If so, what type? 7
9 Answer 7 (A) Yes, you have an actual conflict because the utility is a business with which you are associated. (B) No, unless you are an executive in the company, in which case you have a potential conflict. (C) No, because the city has to pay the bill regardless of the vote. (D)Yes, you have a potential conflict because you are a customer of the utility. Discussion: Conflicts of Interest Conflicts analysis applies to public officials, their relatives, or a business with which the public official or the public official s relatives are associated (ORS (2), (3)) Discussion: Business with which associated Business Corporation, partnership, proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, legal entity operated for economic gain NOT 501(c) nonprofit corporations where association is only as a member, board director, or other nonremunerative capacity With which you or a relative is associated Private business or closely held corporation director, officer, owner, employee, agent; own or have owned stock, an equity interest, stock options or debt instruments worth $1,000 or more in preceding calendar year Publicly held corporation director, officer; own or have owned $100,000 ore more in stock, an equity interest, stock options, debt instruments in preceding calendar year If required to file a statement of economic interest, any business listed as a source of income 8
10 Question 8 One of our city councilors just resigned, and my husband wants to spend more time with me, so he would like to be appointed to the position. Can I vote on my husband s appointment to fill the vacant council seat? Answer 8 (A) Yes, if you want to spend more time with your husband. (B) Yes, but only if you vote against your husband. (C) Yes, if you declare a conflict of interest. (D)Yes, if you divorce your husband first. (E) No, you cannot vote on appointment of a relative to council. Discussion: Nepotism in Employment Relatives can serve together on council (ORS (4)) May appoint relative as unpaid volunteer Exception: may not appoint unpaid member of a governing body (ORS (3)(b)) What if the position is paid? May not appoint paid member of a governing body, but for conflicts reasons 9
11 I am a city manager candidate for a city where my niece is the public works director. Question 9 If offered the position, can I accept? Answer 9 (A) Yes, because the council has the conflict. You don t. (B) Yes, because your niece had the job before you. (C) No, because direct supervision creates a conflict of interest. (D)No, unless the council has adopted a policy allowing direct supervision of relatives. Discussion: Nepotism in Supervision Caution! It is an unlawful employment practice to refuse to hire or employ an individual, bar or discharge an individual, or discriminate in compensation, terms, conditions, or privileges of employment solely because another member of the individual s family works or has worked for the city. (ORS 659A.309(1)) Exception: The city is not required to hire or employ, and is not prohibited from barring or discharging an individual, if it would place the individual in a position of exercising supervisory, appointment, or grievance adjustment authority over a family member or subject to that authority of a family member. (ORS 659A.309(2)(c)) This exception allows cities to comply with state ethics laws. 10
12 Discussion: Nepotism in Supervision Relatives: broadly defined (ORS ) May not directly supervise a relative or member of the household, unless they are an unpaid volunteer (ORS ) Exception: city may adopt policies specifying when direct supervision may occur (ORS (4)) However, the council cannot adopt a policy that would remove a conflict of interest supervision allowed, but cannot make financial decisions Discussion: Nepotism in Supervision In Summary... No direct supervision of relatives unless there s a policy allowing it Not required to hire relatives to avoid unlawful employment practice claim if either the current employee or the prospective employee would be in a role with supervisory, appointment, or grievance adjustment authority over a relative In no case can the supervisor make a financial decision relating to their relative who is an employee Discussion: Nepotism in Supervision Would it be different if the city manager wanted to hire his niece? Hint: Think back to Question 8. A public official may not appoint, employ or promote a relative or member of the household to a position with the public body, unless the official complies with conflict of interest requirements. (ORS (1)(a)) Hint: Think back to Question 5. Must provide written notice of the conflict to the city council Must follow the city council s direction Issue: Can the Council authorize the city manager to hire his niece? 11
13 Question 10 I just received notice from the Oregon Government Ethics Commission that an ethics complaint has been filed against me alleging our council violated public meetings law and unlawfully held an executive session. What do I do? Answer 10 (A) Resign. (B) Call your private counsel, Citycounty Insurance Services, the city attorney, and/or the League. (C) Ignore the complaint. (D)Cash out all banks accounts and go to the Grand Cayman Islands. Discussion Ethics complaints are personal to the official not a complaint against the city Complaint Process: ORS Any person can file a signed, written complaint with the Ethics Commission Public official will get notice of the nature of the alleged violation within 2 business days Preliminary Review Phase whether to undertake investigation Investigatory Phase dismiss, continue investigation, move to contested case, settlement Notify CIS benefit for defense of ethics complaint $2,000 per individual per year $5,000 per city per year 12
14 Discussion City Attorney may or may not be able to assist Executive Sessions generate the most complaints City Attorney advice can create safe harbor LOC-TV: How to do Executive Sessions Right Resources League of Oregon Cities LOC-TV: Conflicts, Gifts, Elections, Executive Session Oregon Government Ethics Commission Guide for Public Officials Trainings and Webinars Staff Advice (503) A-Z Index: Ethics City Handbook Chapter 4 Ethics Legal Inquiry Program 13
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