Ethics Matters, Inc.

On Tuesday, June 6, Commissioner Gene Ransom introduced two amendments to the County’s new Ethics Law.  The first amendment addresses and corrects two problems ( the definition of “family member” and the exception/modification provision) raised by the State Ethics Commission in its April letter to the County stating that it could not approve the County’s new Ethics Law.         
Ransom’s second amendment deals with the level of evidence necessary to establish a violation of the Ethics Law.  When the Commissioners revised the Ethics Commission’s proposed Ethics Law, they raised the level of proof necessary to find a violation to “clear and convincing evidence” and at the same time removed the Ethics Commission’s ability to subpoena evidence.   These actions stripped the Ethics Commission of its ability to enforce the Ethics Code.  If an independent Ethics Commission is unable to gather and examine evidence, how can it find whether there is “clear and convincing evidence” of wrong-doing?  It’s equivalent to not letting the Health Department inspect the restaurant kitchen when people have complained about getting sick after eating there. This second Ransom amendment lowers the burden of proof necessary to find a violation back to “a preponderance of the evidence,” but, critically, it does not restore the subpoena power that was in the draft law proposed by the Ethics Commission.  The Ethics Commission, lacking the power necessary to gather and examine evidence from uncooperative persons, remains hamstrung and ineffective when deciding complaints.

Ethics Matters believes there are other problems with the new Ethics Law that keep it from meeting State standards.  Under the new Ethics Law:
a government official or employee can have a financial interest in or be employed by a company that is doing business with his or her government agency; 
- some officials who make decisions on behalf of the public have no accountability in the form of a financial disclosure requirement;
        - large numbers of County employees do not have to meet any of the standards of the Ethics Code; and
       - two provisions pertaining to lobbying have been weakened.

Queen Anne’s County needs to have a strong Ethics Code that county employees and other citizens can take pride in.  Sadly, we have a code the State cannot approve because it does not even meet minimum State standards.
 June 12, 2006

The State Ethics Commission has declined to approve the new County Ethics Law introduced by Mr. Cassell and adopted unanimously by the County Commissioners in November of 2005. Ethics Matters has learned that the State Ethics Commission sent a letter of disapproval to the County on April 26, 2006, citing problems with the County’s law as enacted.
Maryland State Law requires that the provisions of county ethics laws be “similar to” the provisions of the State Ethics Law governing conflicts of interest, gifts, and lobbying.  The State Ethics Commission reviews and approves county ethics laws based on this “similar to” standard.  The problems cited by the State:

The first of  two problems cited by the State in its April 26 letter is the provision in the new County ethics law that allows a government official to decide on matters that directly affect a business owned by the official’s brother, sister, parent or child, as long as they don’t live in the official’s household. That means, according to the new County law, a government official can discuss and decide on a contract between the County and a company owned by his son.  There is no longer a requirement for the County official to recuse him or herself in this situation.
The State Ethics Commission also expressed its concern over the new exemption authority.  It allows the County Ethics Commission to exempt the County (or any other part-time official) from all the major provisions of the ethics law if the official’s outside employment does not present a conflict with his or her official duties. Thus, under the new Ethics Law, a Commissioner who is retired, or manages a movie theatre, or works for United Airlines, could be exempted from all major provisions of the ethics code including the receipt of gifts or conflicts due to property ownership or business interests held.

More problems
Ethics Matters believes that in addition to the problems thus far cited by the State, there are additional shortcomings in the County’s new law that stand in the way of its approval by the State. The County misled the State about the new law.  In August of 2005, the State found problems in an earlier version of Mr. Cassell’s proposed law and recommended specific changes.  In its December 20, 2005 letter transmitting the newly enacted law to the State Ethics Commission, the County assured the State that the law “as written, now incorporates all of the recommendations made in the State Ethics Commission’s letter to us dated August 30, 2005.”  That assurance to the State was not the truth.  The truth is the Commissioners removed an important State recommendation regarding the level of evidence in ethics cases before shortly before they enacted the law. 
The Commissioners will have to provide the County with a new lawful, amended Ethics Law.  There are other questionable aspects to the law they should consider fixing.  One is the change that made it acceptable for a government official or employee to have a financial interest in, or be employed by, a company that is doing business with his or her government agency.  Another is the provision that removes large numbers of County employees from meeting any of the standards of the Ethics code.  The Commissioners should also revisit a couple of their earlier amendments that weaken some of the regulations concerning lobbyists.
Query
The Board of Ethics Matters read the State’s letter at their May meeting.  Board members wondered, “How it is possible that, after three years in the making, our County has ended up with an unlawful ethics law - one that the State cannot approve.  Many counties exceed State requirements.  Why is it so hard for us just to meet them? “

A BRIEF HISTORY OF THE NEW QAC ETHICS LAW

May 13, 2003 County Commissioners ask QAC Ethics Commission to update 1984 County Ethics Law
QAC Ethics Commission sends completed draft of proposed updated Ethics Law to State Ethics Commission for comment, is told that the State would likely approve the proposed law if passed

September 2, 2004 QAC Ethics Commission submits proposed Ethics Law to County Commissioners
Commissioners hold workshop on proposed Ethics Law
February 15, 2005 Proposed Law, with changes, introduced as 05-04 by Mr. Koval
March 8, 2005 Public Hearing on 05-04
May 17, 2005 Commissioners amend 05-04; amended law is introduced by Mr. Cassell as 05-04 - Amendment No.1
June 7, 2005 The then-chair of County Ethics Commission tells County Commissioners at Press and Public Comment that some of their amendments are unlawful, especially in regard to Conflicts of Interest and the inability of the Ethics Commission to enforce the law, and that 05-04, Amendment No. 1 could not be approved by the State Ethics Commission.
August 27, 2005 State Ethics Commission sends letter to the County both requiring changes and recommending changes to 05-04, Amendment No. 1.
November 15, 2005 Commissioners Workshop on County Attorney - Amendment No. 2 “incorporating” State Ethics Commissions comments.
               Commissioners make other changes that are incorporated into 05-04 � Amendment No. 3, introduced by Mr. Cassell.  
Chair of Ethics Matters tells Commissioners at Press and Public Comment that 05-04-Amendment No. 3 contains unlawful provisions and it could not be approved by the State

Commissioners unanimously pass 05-04 Amendment No. 3, to become County’s new ethics law December 30, 2006
December 20, 2005  County sends State Ethics Commission a copy of 05-04, Amendment No. 3
April 26, 2006  State Ethics Commission informs County Commissioners that it can not approve 05-04 Amendment No. 3.</SPAN></FONT></P>
May 16, 2006

Although there remain major problems with the County’s new ethics law and the numerous questionable provisions that the State Ethics Commission has not yet approved, Ethics Matters is pleased to report that two of our recent concerns (below) have been addressed. Another positive development is that at their last meeting, the Queen Anne’s County Ethics Commission unanimously voted to have a public comment period at the beginning and end of each meeting.

Financial Disclosure Forms
The changes in the financial disclosure form that Ethics Matters suggested were approved and put in place by the Ethics Commission. The Ethics Commission voted to send the new forms out by registered mail with a cover letter making sure the recipients were aware of their obligation to return the completed forms by April 10.

There are others besides the specified current officials and employees who must complete the financial disclosure form:
Candidates for County Commissioner must file the financial form simultaneously with their registration for candidacy with the Board of Elections.

Any official or employee who leaves an office that requires financial disclosure must file, within 30 days after the departure date, the financial form that includes all information up to the date of departure.          
 Any person newly appointed to an office that requires financial disclosure must file, with his/her acceptance, the financial disclosure form containing all the necessary information for the previous year.
The Board of Elections is now giving out the financial disclosure forms to candidates along with the other necessary information for filing.  Ethics Matters will be looking into whether those who vacate an office or are appointed to an office requiring financial disclosure are aware of and are following the law.<o:p></o:p></SPAN></FONT></P>
Human Resources Code - Conflicts of Interest
The County Commissioners amended the unacceptable provision of  the proposed Human Resources Code to make it clear that the “employee’s appointing authority” has no jurisdiction over determining whether outside employment presents a financial conflict of interest with County employment.  Such a determination is the responsibility of the independent Ethics Commission.
March 21, 2006

<P>Ethics Matters is finding that it needs to watch all County ethics-related legislation carefully. Our most recent concern is an ill-considered amendment to the Human Resources Code regarding conflicts of interest and outside employment. </P>
<P>This amendment would give an employee’s appointing authority the power to determine whether the employee’s outside employment conflicts with his/her County service. But determining employment conflicts of interest is, according to the QAC Code, the power and duty of the Ethics Commission. This is as it should be. Decisions regarding an employee’s conflicts of interest should not be made by the employee’s boss, but by an independent Ethics Commission that has no stake in the decision and is guided by the principles and precedents of the Ethics Code. </P>
<P>This amendment is not the first time there has been troublesome legislation proposed or enacted regarding conflicts of interest and outside employment. </P>
<P>1. The Ethics Code, proposed by the County Commissioners in May 2005, completely eliminated the prohibition against employees “olding an outside employment or contractual relationship that would affect or reasonably appear to affect their impartiality or independence of judgment.” This provision had been in the old 1984 code and was in the code proposed by the Ethics Commission. It is required by the State of Maryland. The State Ethics Commission made the County put this provision back into the QAC Ethics Code. </P>
<P>2. In the Amended Ethics Code passed November 2005, the Ethics Commission was given the power to exempt part-time officials and employees, whose outside employment did not create a conflict of interest, from having to comply with any provision of the Ethics Code (such as limitations on gifts, prohibitions of ownership conflicts, required financial disclosure). Ethics Matters believes that the State Ethics Commission will have problems with such sweeping and easily obtained exemptions. </P>
<P>3. Now, there is the proposed amendment to the Human Resources Code (discussed above) that gives an employee’s appointing authority (as opposed to the Ethics Commission) the power to determine whether there is a conflict of interest resulting from the employee’s outside employment. </P>
<P>February 21, 2006</P>

County distributes obsolete financial disclosure forms
Last week the County distributed financial disclosure forms to be completed and filed by January 31.  For some reason, the County used the financial disclosure form that went with the repealed 1984 ethics law.      This form falls far short of implementing the financial disclosure requirements of the new law.  It only asks for gifts received.  It does not ask about property owned or business interests held, as required by the new ethics law.  (The minimal financial disclosure requirement of QAC’s 1984 ethics law was one of the reasons that law was the weakest in the State)
           Not implementing the new ethics law’s requirements is tantamount to granting a blanket exemption to County officials and employees from the law’s financial disclosure requirements.  This is plainly unlawful.
              Ethics Matters has asked the County to tell us who made the decision not to implement the requirements of the County’s ethics law and the reasoning behind the decision.  We will share their response with you. Publishing company takes blame for discrepancies
           The company that publishes the County code, General Code, has taken full responsibility for the textual differences between the Ethics Code as passed on Nov. 15, 2005 and as published as part of the County Code.  The company has promised to produce a corrected version.
     It is good that this situation has been straightened out.  General Code, which encoded all the County’s laws last year, should not be making textual changes in the law without first securing County approval.  The County should consider whether or not it should continue to use this company, and it should examine whether other County laws may have been improperly altered by General Code
January 12, 2006

On January 12, Ethics Matters asked the County to explain why they distributed the obsolete financial disclosure form based on the repealed 1984 ethics law instead of a disclosure form that incorporates the more demanding reporting requirements of the current law (adopted Nov. 15, 2005).

The Counsel to the Ethics Commission responded:

“The old forms are being distributed now for the 2005 year to report on the activities for 2005.  They are being distributed to those who were required to report for 2005.  The Report is done after the year passes.
“You cannot hold people responsible for regulations that were not in effect.  I am not sure why you believe there is not compliance.” The County should realize that is explanation is not satisfactory.  There is a big difference between, on one hand, holding people responsible for <U>violations</U> of a law that was not in effect (which would not be right) and, on the other hand, requiring people to meet the <U>reporting requirements</U> of the current law.  The ethics law requires that by January 31 of each year, certain decision-making government officials and employees must file a financial disclosure form based on interests held during the previous year. Those who apply for these government positions or run for elected office are required to file the same financial disclosure form based on information from the prior year along with their job application or their registration as a candidate.  There is no reason why these requirements of the current law, the one that is now in effect, should not be adhered to.

Ethics Matters’ attorneys Stephen Sachs and Avery Aisenstark contacted Patrick Thompson, County Attorney and Lynn Knight, Counsel to the Ethics Commission, expressing Ethics Matters’ distress that the County issued obsolete reporting forms instead of the form required by the ethics law.  Mr. Sachs also wrote Mr. Thompson stating Ethics Matters’ belief that using a reporting form appropriate to the new law is legally required. Commissioners Koval and Ransom expressed to Ethics Matters their surprise at the issuance of the obsolete financial disclosure forms.  At their meeting on January 17, the County Commissioners voted to ask County Attorney Patrick Thompson for an opinion as to which form should be used. It is our understanding that as of today, January 19, the Commissioners request for an opinion has not been transmitted to the County Attorney
Ethics Matters will continue to follow this matter closely.  These reporting forms are a cornerstone of ethical governance.  They give assurance that government officials and employees are acting in behalf of the citizens and not for personal financial gain.  They provide accountability and build trust. The County needs to act in a lawful manner and meet the requirements of the ethics law.

THE NEW ETHICS LAW:
The new Ethics Code was adopted November 15, 2005 and became effective December 30, 2005.
There are a number of provisions in the new law that we believe are unlawful - that is, they will not be approved by the State Ethics Commission because they do not meet the standard for county ethics laws that is required by State law.  See Commentary on this website for a list of the provisions we believe do not meet the State standard.  There are other worrisome provisions, as well.

OF IMMEDIATE CONCERN:
A month after the County had adopted the ethics law, it still had not sent the new law to the State for approval. (It is common practice to send a draft of an ethics code to the State before voting on it to make sure it meets the State requirements.)  Concerned that the County Ethics Commission would be put in the position of administering a law with unlawful provisions, Ethics Matters sent the State Ethics Commission a copy of the law.  In the process of copying the law from the County code, we noticed that there was a discrepancy between the text of the law as adopted and the law as it appears in the County Code. The discrepancy is in the exemptions section, a section we were already questioning because of the last minute insertion of an over-broad provision allowing exemptions for the County Commissioners and members of Boards and Commissions.  The altered text made exemptions to the Conflicts of Interest, Financial Disclosure and Gifts requirements even easier to obtain, and we were alarmed.

Printed below is Ethics Matters’ statement of concern about the exemption provision at Press and Public Comment on January 3.  

STATEMENT OF ETHICS MATTERS TO THE COUNTY COMMISSIONERS JANUARY 3, 2006

We told you earlier there are unlawful provisions in the new ethics law.  These provisions do not meet the State’s minimum requirements for County ethics codes.
Tonight I want to share two specific concerns we have about the new law.

First, a special exemption provision in your law permits the Ethics Commission to grant exemptions to you five and to part-time members of Boards and Commissions.  Exemptions can be had solely by establishing that your regular employment does not conflict with your official duties.  Thus, for example, an insurance agent, a doctor, or a retired person serving on the Planning Commission can be excused from disclosing lands held, interests in local development companies, or gifts received from developers.

The provision that permits such exemptions is surely unlawful under State law.  The County Ethics Commission may soon be receiving requests for exemptions from the ethics code, especially from its financial disclosure requirements.  What is our Ethics Commission supposed to do?  Should they administer an unlawful provision?

Our second concern.  The exemption provision in the new ethics law as it is published in the County Code has been altered.  It is different from, and broader than, the exemption provision in the law you passed on November 15.  You can see the differences by looking at the two versions on the County website.

The altered exemption provision in the County Code makes it even easier - much easier-- for not just for you and members of Boards and Commissions , but for any County official or employee to gain an ethics exemption.
Citizens pay for county government with their tax money.  They are entitled to the assurance that decisions made by their government are made in their behalf and not for personal financial gain.  It is a betrayal of citizens and the vast majority of government employees to undermine the County’s ethics law with easy-to-get, unlawful exemptions.

You should fix this ugly situation by amending the exemption provision on an emergency basis.  You should adopt the exemption provision that is standard in other Maryland counties, in the State, and was, in fact, in all earlier versions the County’s new ethics law.
And, please, find out who improperly altered the ethics law.  The ethics law as adopted and the ethics law in the County Code should be the same. The citizens are due an explanation.

Three former members of the QAC Ethics Commission have joined with other County citizens to launch a volunteer group to promote ethical, accountable governance in Queen Anne’s County.  The new organization, Ethics Matters, Inc., is a member of the CHARACTER COUNTS!SM Coalition and will be advised by former Maryland Attorney General Stephen Sachs.

I am here this evening as a volunteer with a new citizens organization, Ethics Matters.  The mission of Ethics Matters is to promote understanding of ethical governance.

We look forward to serving the cause of ethical government for Queen Anne’s County.
Our current 1984 County’s Ethics Code is the weakest in the State.  You have now prepared another proposed revision, after your first revision was not approved by the State Ethics Commission.  Underlying these revisions is the ethics code proposed over a year ago by the County Ethics Commission and introduced by Commissioner Koval -- a code that the State Ethics Commission indicated it would approve.