Ethical Concerns and Public Entities CASBO & GFOA Conference Kevin M. Roy, Esq. November 19, 2013
Introduction • Concern over ethics has never been greater. • Over the last several years, Connecticut has seen several mayors go to jail, as well as a governor. • Academic cheating scandals in Waterbury and Hartford. • The arrest of a Connecticut town's finance director -- accused of embezzling over $2 million has left Winchester in financial crisis.
Introduction • “If local officials consider [proposed ethics legislation] intrusive or onerous, they shouldn't be serving. They’re probably up to no good.” Michelle Jacklin, Hartford Courant, May 1, 2005. • The goal here is to provide an overview of current ethics from a legal and practical perspective and to provide recommendations for the future.
Legal Sources of Ethics Regulation • Criminal Statutes • Federal Law • Use of mail or telephone (or computer) to participate in a “scheme or artifice to defraud,” including “theft of honest services,” is a criminal offense. See 18 U.S.C. §§1341, 1343, 1346.
Legal Sources of Ethics Regulation • State Law • Various criminal statutes can apply, including the following: • Larceny, including defrauding a public community of any value. Larceny in the first degree is a Class B felony. See Conn. Gen. Stat. §53a-122. • Bribe Receiving. Class C Felony. See Conn. Gen. Stat. §53a-148. • Receiving kickbacks. Class D Felony. See Conn. Gen. Stat. §53a-161c.
Legal Sources of Ethics Regulation • Academic Crimes, Conn. Gen. Stat. §§ 53-392a, 53-392b, Preparation of assignments for students attending educational institutions prohibited. • Computer Crimes, Conn. Gen. Stat. § 53-451, Unauthorized use of a computer or a computer network.
Legal Sources of Ethics Regulation • Town/City Code of Ethics. Any town, city, district, or borough may, by charter provision or ordinance, establish a board, commission, council, committee or other agency to investigate allegations of unethical conduct, corrupting influence or illegal activities levied against any official, officer or employee of such town, city, district or borough. See Conn. Gen. Stat. § 7-148h. • Connecticut Association of School Business Officials-Code of Ethics • Code of Professional Ethics for the Government Finance Officers of the United States and Canada
Legal Sources of Ethics Regulation • Public Act 13-247, Effective July 1, 2013 • This Act bans any person from using or authorizing the use of municipal funds to send unsolicited electronic communications to a group of residents regarding a referenda. • School districts may use regularly published newsletters or similar publications to remind and/or encourage residents to vote on a pending referendum. • A chief elected official may authorize such communication through a community notification system.
Legal Sources of Ethics Regulation • It is illegal for any municipal employee to solicit “a contribution on behalf of, or for the benefit of, any candidate for state, district or municipal office, any political committee or any political party, from (A) an individual under the supervision of such employee, or (B) the spouse or a dependent child of such individual.” See Conn. Gen. Stat.§ 9-622.
Constitutional Issues • Whistle-blower Law, Conn. Gen. Stat. §31-51m • Equal Protection • Due Process • Property Interests • Liberty Interests
Ethical Issues in the School and Town Settings • Examples: • Conflict of Interest • Gifts • Nepotism • Bidding and Procurement
Illustrative Situations Scenario 1 • You have just been hired as a business administrator for a local school district. One of the Board of Education members has a moving company and solicits your business. • Is that his ethics problem or yours? • Does your answer change if the moving company is owned by a similarly situated colleague as opposed to a Board member?
Illustrative Situations Scenario 2 • You discover that one of your staff has been secretly monitoring telephone conversations of town employees. • Do you report it to the police? • So you inform the employees?
Illustrative Situations Scenario 3 • One of your strongest supporters on the Board calls you to say that the daughter of a friend has applied for a job in your town/district. She asks that you put in a good word with the team that is interviewing and making the recommendation. • What do you say? • What do you do?
Illustrative Situations Scenario 4 • You have just discussed with legal counsel the long standing practice of requiring that custodians stay on site during their unpaid lunch break. She informs you that employees on-call are entitled to compensation for that time. It would cost $75,000 to provide back-pay to custodians for they time they have “worked” without pay. • What do you do?
Illustrative Situations Scenario 5 • You have just succeeded in negotiating a resignation of one of your employees. He tried hard, but he was not effective in his position. A neighboring town/school district calls to do a reference check, and the caller asks why the employee is leaving your town/district. • What do you say?
PRACTICAL RECOMMENDATIONS 1. Be proactive. • Read your Ethics Code and Board policies. • See advice if you need it. 2. Lead by example. • The standard that you set is a message/model for the district. • There is an increased scrutiny of public officials. Don’t be the subject of an exciting newspaper story.
PRACTICAL RECOMMENDATIONS • Ethics violations, however innocent, can be explored by political enemies. • Review and address ethical standards for academic violations. • Be suspicious of self-interest. • Confidentiality • Authority • Fairness
PRACTICAL RECOMMENDATIONS • Bite the Bullet. • The cover up can be worse than the crime. • Ask yourself, will I be comfortable explaining why I did not say anything? • Addressing problems directly, even with a public fall out, is a matter of public accountability. • Candor and truthfulness buys you good will.
PRACTICAL RECOMMENDATIONS • Educate yourself and your staff. • All employees must understand their legal responsibilities. • Education serves as a warning that will help sustain serious discipline if there is a subsequent violation.
PRACTICAL RECOMMENDATIONS • Remember that all ethics requirements cannot be legislated. • Maintain sensitivity to public perceptions. • Help board members and colleagues see potential conflicts. • Use common sense.