SCLPC Ethics Advisor

Ethics Advisor

By Ruben Duran

¿Qué fue primero, la gallina o el huevo? Which came first? The chicken or the egg – politics or the law?

Religion and comedy aside, I think we can all attest to how the axiom sometimes doesn’t even matter given the reality on the ground.

And the reality on the ground today is that national politics and law have thrust into the national spotlight the undeniable role local governments play in the lives of our people. Whether and how cities choose to react to the immigration debate and the policy pronouncements coming out of Washington, DC is a decision unique to, and uniquely suited for, the men and women elected at the local level to ensure that government serves the needs of the people.

This edition of the Ethics Advisor will give you a brief lowdown on what the law provides with respect to so-called “sanctuary cities,” so that you can make policy decisions more fully informed of the legal landscape, confident that a policy choice can be an ethical choice when it is made in full awareness of what the law requires and allows.

The Basics
The federal government has the exclusive authority to enforce the civil provisions of federal immigration law relating to issues such as admission, exclusion, and deportation. Current law generally allows the federal government to permit, but not require, the assistance of local officials in such efforts.

The Immigration and Nationality Act (INA) includes both civil and criminal provisions. Most people arrested by the U.S. Immigration and Customs Enforcement (ICE) go through civil administrative proceedings to determine whether they should be deported. Violations of the INA that result in deportation are civil in nature and are only enforceable by the federal government.

Sometimes ICE will issue “detainers” to local police requesting that they hold individuals for no more than 48 hours beyond the time when the detainee would otherwise be eligible for release to allow ICE to assume custody. There is no legal requirement that agencies comply with these requests.

Recent Developments
On January 25, 2017, President Trump issued an Executive Order entitled “Enhancing Public Safety in the Interior of the United States.” This order focuses on immigration and is directed at eliminating access to federal funding to “sanctuary jurisdictions.”

Although Federal immigration law provides a framework for Federal–State partnerships in enforcing our immigrations laws to ensure the removal of aliens who have no right to be in the United States, the Federal Government has failed to discharge this basic sovereign responsibility.

In furtherance of this policy the Attorney General and the Secretary [of Homeland Security], in their discretion and to the extent consistent with law, shall ensure that jurisdictions that willfully refuse to comply with 8 U.S.C. 1373 (sanctuary jurisdictions) are not eligible to receive Federal grants, except as deemed necessary for law enforcement purposes by the Attorney General or the Secretary. The Secretary has the authority to designate, in his discretion and to the extent consistent with law, a jurisdiction as a sanctuary jurisdiction.

In addition to the requirements under Section 1373, it is unclear how the Secretary of Homeland Security will determine what constitutes a “sanctuary jurisdiction.” Although the order specifically includes jurisdictions that violate Section 1373, it also appears to include jurisdictions that do not comply with detainer requests.

The inclusion of jurisdictions that do not comply with detainer requests creates uncertainty for many local agencies because, under federal case law, local agencies are not required to comply with detainers. Further, holding individuals beyond the time they are eligible for release creates potential civil rights liability.

The term “sanctuary jurisdiction” is not defined in the Executive Order. Although the term “sanctuary city” is not defined by federal or state law, it is often used to refer to jurisdictions that have policies that restrict local enforcement of federal immigration laws and limit the expenditure of local resources in cooperating with ICE’s enforcement efforts.

Some cities, including the City and County of San Francisco and the County of Santa Clara, are challenging the Executive Order as it pertains to local government on Tenth Amendment grounds.  The Tenth Amendment states:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

These challenges, and others, remain in progress, and so, the issue remains unresolved. Given the uncertain state of the law, then, cities and other local jurisdictions must weigh their own policy objectives and community values against the risk that the federal government will either seek to cut off funding outright or prevail in the various legal challenges currently pending.

 

Ruben Duran serves as general and special counsel to public agencies throughout Southern California, including cities, special districts, school districts and special-purpose entities in health care, job training and development and air quality management. He is a member of the Cannabis Working Group at Best Best & Krieger, which advises the firm’s clients on all aspects of marijuana laws and regulations.
ruben.duran@bbklaw.com
@BBKRubenDuran
(213) 787-2569

Ethics Advisor

Cuidado with Decisions that Hit Too Close to Home (Literally)

By Ruben Duran

Mi casa es su casa is a good rule of thumb in a close, tight-knit community, and welcoming friends and neighbors into the fold for celebrations and gatherings is ingrained in many peoples’ DNA. Nevertheless, when it comes to complying with ethics requirements for potential conflicts of interest involving your house or other property you own or lease, there are some things you must always keep in mind.

For public officials, statewide regulations set strict requirements when decisions may impact the use, enjoyment or services to your property, with a different set of rules (the FPPC calls them “materiality standards”) applying depending on whether you own or lease the property. In fact, when the decision’s impact is likely to affect property values within a certain distance of your property, whether a personal residence, income property or commercial property, recusal from that decision is generally the rule, not the exception.

There are lots of obvious, “reasonably foreseeable” financial effects that disqualify you from making decisions likely to impact your property. These include decisions that could impact your property taxes or change whether you can sell your house. But the property-related ethics rule that gives public officials the biggest headache, and that I field the most questions about, is the“500 foot rule.”

When a decision has any possibility of affecting property values within 500 feet of your property line – you cannot participate in that decision.

This can be especially frustrating for public officials in a small town or city, where a high percentage of decisions affects constituents in the vecindad.

Some examples of where the law presumes the financial effect of a decision is material to your real property interests:

  • If the decision involves adopting or amending a general plan or a specific plan that covers your property;
  • If the decision relates to the zoning or rezoning of your property;
  • If the decision imposes, repeals or modifies any tax, fee or assessment on your property;
  • If the decision is to sell, buy or lease property in which you have a financial interest (that’s an easy one, right?);
  • If the decision involves a license, permit or other land use entitlement (such as a conditional use permit or a variance) on your property;
  • If the decision relates to improvements to streets, water, sewer, storm drain or other public facilities that affect your property, unless that effect is the same as for the public generally.

There is one exception if you believe the decision affects property values within 500 feet of yours, but also believe it would not have a reasonably foreseeable impact on your property specifically. You can request (or ask your public agency’s attorney to request) a written opinion from the FPPC allowing participation based on the specific facts of the decision in question. A couple important qualifiers: there are different ethical standards than the “500 foot rule” when the decision may impact commercial property where you have a business, and real property that you lease to others. Be sure to check with your agency counsel on specifics, because the rules can be tricky.

In any situation where you will be asked to make a decision regarding property located close to property in which you have either an ownership or a leasehold interest – be sure to check with your public agency’s attorney. Property-related ethics rules help all of us ensure the public has full confidence that a decision maker is looking out for the community at large, and not his or her own property values or real estate investments.

 

Ruben Duran serves as general and special counsel to public agencies throughout Southern California, including cities, special districts, school districts and special-purpose entities in health care, job training and development and air quality management. He is a member of the Cannabis Working Group at Best Best & Krieger, which advises the firm’s clients on all aspects of marijuana laws and regulations.
ruben.duran@bbklaw.com
@BBKRubenDuran
(213) 787-2569

Ethics Advisor

Can Marijuana be Ethical?

By Ruben Duran

Cheech and Chong jokes aside, the reality in California today is that marijuana, also referred to as cannabis, is legal under state law for both medical and recreational uses. While federal law still classifies cannabis as a Schedule 1 illegal substance, the landscape of laws and regulations at the state and local levels is evolving almost daily, and if the issue hasn’t hit your jurisdiction yet, odds are it will, and soon.

So what should a local elected official know about cannabis law in California, and what the heck does this have to do with ethics? From a broad public policy perspective, local leaders must be prepared to deal with the issues that their constituents know and care about, and the fact that marijuana is in the news regularly likely means that residents and stakeholders are interested to know what, if anything, their local leaders may do about it.

To that end, here is a brief summary of the California laws applicable to the use and regulation of marijuana.

First, understand the distinction between medicinal and recreational use of cannabis under the law. Medical marijuana has been legal in California since the adoption of Prop 215 (the Compassionate Use Act) in 1996. Under that law and the rules and regulations adopted pursuant to it, qualified patients can obtain marijuana for medicinal use with a prescription, often through purchases at dispensaries, which some jurisdictions allowed and others banned outright. Mobile medical marijuana delivery systems have also been established in various areas of the state.

In 2015, the State Legislature enacted the Medical Marijuana Regulation and Safety Act (MMRSA), consisting of three bills (AB 243, AB 266, and SB 643). The MMRSA created more robust regulations of medical marijuana while also allowing for strong local control. It also created the Bureau of Medical Cannabis Regulation within Department of Consumer Affairs, which is expected to begin issuing licenses by 2018. The MMRSA also allows local taxation and regulatory licensing fees.

In summary, the MMRSA allows local governments to regulate or to ban outright:

  • Medical marijuana dispensaries
  • Medical marijuana delivery services originating or terminating in jurisdiction
  • Medical marijuana cultivation
  • Medical marijuana manufacturing
  • Medical marijuana testing
  • Other medical marijuana uses

 

Prop 64 – Adult Recreational Use
California voters approved Prop 64 in November 2016 with 57% of the vote. Known as the Adult Use of Marijuana Act (AUMA), Prop 64 legalized recreational use of marijuana by adults in California.

AUMA allows:

  • Personal use by those 21 years of age or older
  • Possession of up to 28.5 grams of cannabis plant material or 8 grams of concentrate
  • Indoor cultivation of up to 6 plants for personal use inside a private residence or accessory structure, and possession of any marijuana produced by those plants.

AUMA also established a state tax for both medical and recreational cannabis, including a state excise tax of 15% on medical and recreational marijuana and a state cultivation tax of $9.25 on flower/$2.75 on non-flower plant leaf for medical and recreational use. It also created a new Division 10 of the Business & Professions Code to license marijuana businesses.

Notwithstanding these taxation provisions, AUMA allows local governments to ban:

  • Recreational retailers
  • Medical dispensaries
  • Any delivery service originating from or terminating in jurisdiction
  • Outside cultivation
  • Any other state-licensed marijuana business licensed under Division 10

Finally, under AUMA, commercial licenses may be issued by the State beginning January 1, 2018, and as of April 2017, the Bureau of Marijuana Control has issued a notice of rulemaking with hearing dates starting June 1 and draft regulations for retailers, distributors, and labs. The California Department of Food and Agriculture has proposed regulations for cultivation, nurseries, and processing, and the Department of Public Health has proposed rules for manufacturing, including extraction, processing and infusion. Now is the time for local government leaders to act if they want to comment on any of these forthcoming rules.

 

Options for Local Government
Given the legal and regulatory framework discussed above, cities (primarily, as the local land use authorities) have the following options to consider:

  • A city MAY NOT ban personal use in a private residence
  • A city can ban use of marijuana in all other contexts, including use in public spaces, on-site use at dispensaries or retailers, or use in any public space within 1,000 feet of a school, park, or other public gathering space.

With respect to outdoor cultivation for personal use, a city may:

  • Ban outdoor cultivation outright
  • Allow outdoor cultivation if plants are in enclosed spaces or screened from view
  • Require property owner approval of cultivation on property
  • Limit the number of plants that can be cultivated outdoors.

For indoor cultivation, a city must allow cultivation of up to six plants, and can “reasonably regulate” indoor cultivation by:

  • Requiring a cultivation permit
  • Allowing cultivation for personal use only
  • Allowing cultivation for commercial use with a business license
  • Imposing an alternative set of public welfare regulations, but requiring no permit.

With respect to the regulation of commercial uses, a city may:

  • Ban all commercial marijuana activity, including commercial delivery, commercial cultivation, commercial manufacturing, commercial testing, and commercial dispensaries or recreational retailers
  • Allow commercial cultivation with a local tax imposed on growth
  • Allow retailers with zoning limitations on location or number, or a local tax on retail sales
  • Allowing delivery services to originate or terminate in the City.

Finally, some important points to remember about taxing authority, should your local agency decide to explore options that allow marijuana but seek to also raise revenue:

  • Any tax imposed must be passed by the voters, per Prop 218.
  • A special tax (which is set aside for specific uses, such as law enforcement) must be passed by a 66% vote
  • A general tax (which goes into the general fund for unrestricted use) must be passed by a 50% +1 vote
  • The earliest opportunity to place a measure on the ballot to tax marijuana is November 2018.

Whether these issues come to your jurisdiction at the behest of advocates on behalf of the cannabis industry (and, a large and diverse industry is indeed developing, organizing and acting at the state, local and national levels) or through individual constituents who feel strongly about these issues one way or another, you would be well-suited to prepare by learning about the law and the issues. As always, don’t hesitate to reach out if I may assist in any way.

Ruben Duran serves as general and special counsel to public agencies throughout Southern California, including cities, special districts, school districts and special-purpose entities in health care, job training and development and air quality management. He is a member of the Cannabis Working Group at Best Best & Krieger, which advises the firm’s clients on all aspects of marijuana laws and regulations.
ruben.duran@bbklaw.com
@BBKRubenDuran
(213) 787-2569

Ethics Advisor

It’s All About the Content – Communications on Private Devices May be Subject to Disclosure Under the Public Records Act

By: Ruben Duran

Open government and transparency have long been the standard in California. Laws like the Brown Act, the Political Reform Act and the Public Records Act grant the public rights to attend meetings, know about government officials’ financial interests and review and obtain copies of documents containing information relating to the business of the public, respectively, and help promote public trust and confidence in our local governments.

Last month, in the long-awaited case City of San Jose v. Superior Court (Smith), the California Supreme Court decided unequivocally and unanimously that electronic communications about public business on public employees’ and officials’ private devices and accounts are indeed public records subject to disclosure under the Public Records Act (PRA). The question had been unsettled under previous cases, and governmental officials and employees were unsure whether they would have to provide copies of communications like emails and text messages on their private devices like cell phones and private accounts like AOL, Hotmail and Gmail in response to records requests made to their public agencies.

Answering that question in the affirmative, the court laid out a four-part test to determine if any communication, even one on a private device, is a public record that must be disclosed in response to a records request:

(1) Is it a “writing?” The law has already established that emails and other electronic records are writings for PRA purposes.

(2) Does it contain content relating to the conduct of the public’s business? This is where the court spent most of its time and analysis, suggesting that context matters. For example, an email from a public employee to a spouse complaining “my coworker is an idiot” is likely not a public record. However, an employee’s email to a manager about a co-worker’s mismanagement of an agency project might be.

(3) Is it prepared by a state or local agency? The Court found that if the communication was prepared by a local official or employee, then this prong of the test was met. The fact that it was prepared on a private device or using a private account did not make it purely private if the subject of the communication was about public business.

(4) Is it owned, used, or retained by a state or local agency? The Court held that an agency is considered to own, use or retain such communications because it has constructive possession of them through its control over its own employees. “A writing retained by a public employee conducting agency business has been ‘retained by’ the agency…even if the writing is retained in the employee’s personal account.”

Although the court’s opinion essentially expanded the definition of what constitutes a public record subject to disclosure under the PRA, it still acknowledged the important public interest in maintaining personal privacy even when complying with records requests, noting that privacy concerns could and should be addressed on a case-by-case basis, starting with the statutory exemptions from disclosure contained in the PRA (Government Code section 6254). Those exemptions include many familiar to readers of the Ethics Advisor: Personal and medical information, employee records, litigation records, for example.

Finally, the court touched on important practical and policy considerations for local agencies in complying with its ruling in the San Jose case. For example, how a public agency should search for agency-related communications on private devices while protecting officials’ and employees’ privacy. The Court stated that agencies should make a “reasonable effort” to locate records, but they are not required to launch “extraordinarily extensive or intrusive searches.” The Court suggested that public agencies should adopt internal policies for conducting such searches. When the request is for records in employees’ nongovernmental accounts, “an agency’s first step should be to communicate the request to the employees in question.” The Court concluded that the agency could then “reasonably rely on employees to search their own personal devices and accounts for responsive material.”

Thus, depending on the contours of any policy established by your local agency, it will be up to individual officials and/or employees to search for and provide to the agency records responsive to requests, even if those documents are stored on private devices or accounts. Finally, public agencies should consider adopting a policy that requires all officials and employees to use agency-owned accounts or devices when conducting public business to simplify the process of responding to records request after San Jose.

Ruben Duran is a partner in the Los Angeles office of Best Best & Krieger, LLP. He serves as the Southern California Latino Policy Center’s Ethics Advisor and represents cities, school districts and special districts throughout California. 
ruben.duran@bbklaw.com
@BBKRubenDuran
(213) 787-2569

Ethics Advisor

Officials’ Top Ten Things to Remember About Public Participation in Local Government

Do I Have to Let Them Say/Do That?

By Ruben Duran

As the national political climate heated up recently, some local governments are facing spillover effects, with local and sometimes even out-of-town activists and provocateurs attending city council, school board and other meetings to let their voices be heard. While representative democracy usually benefits from a free flow of information and public input, unfortunately some recent incidents have made clear that the rancor and divisiveness that ensures high ratings on cable TV news programs can interfere with the work of local government.

Here are the top ten things to remember about public involvement in local government meetings in California:

  1. The basic rule in California under the Brown Act is that the work we do as public officials is the “people’s business.” As such, the public has broad rights to attend meetings of the legislative body (anytime a majority or more of your council or board is gathered to hear, discuss, deliberate or act on an item of agency business). Those meetings, of course, must be conducted after proper notice and posting of an agenda. Additionally, the public has the right to comment on the items we discuss and act on prior to our taking any actions on the items.
  1. The public also has the right to comment on any other issue “within the subject matter jurisdiction” of your agency during any regular meeting of the body. This can sometimes be tricky, and may require some deft handling of meetings. For example, most city councils in California have no control over schools within their jurisdiction; locally elected school boards have that authority. Thus, it would be acceptable to stop someone from commenting on school-related issues at a city council meeting. The converse is also true: a school board does not have to allow comments that should be directed at city officials at a school board meeting.

Does that mean a city council can stop public comment on national immigration policy issues, for example? Strictly speaking, local governments have no policy control over federal immigration decisions. To the extent public input is focused on issues or decisions over which the local governing body has no input, decision-making authority or control, there is a strong argument that commentary on such issues need not be allowed.

The reality in 2017, however, is that some local governments are taking public and policy-related stands on immigration issues, usually in the context of “sanctuary city” questions or local law enforcement stances vis-à-vis federal immigration enforcement. As some of us have experienced recently, those issues and debates can quickly devolve into shouting, catcalls, whistles and other disruptive activity.

  1. Which leads to the third point to remember: while the law protects speech rights for members of the public to address the legislative body, those rights are not without limits. The agency has a right to halt speech that disrupts the body’s ability to complete its business on the posted agenda.
  1. Here, it is critical to remember that the agency’s rights to limit or prohibit speech cannot be based on the content of that speech only. Content-based restrictions on speech have long been held unconstitutional by courts across the U.S. Instead, the local agency’s right to stop speech at a public meeting arises only when that speech becomes disruptive – interfering with the agency’s ability to do business. There must be actual disruption resulting from the speech, not merely the potential for disruption or discomfort, anger or disbelief for the audience, the body or the staff.
  1. Examples of disruptive speech (as found by courts) include:
  • Speech that is too long
  • Speech that is unduly repetitious
  • Speech that includes extended discussion of irrelevancies
  • Yelling
  • Interrupting
  • Personal, slanderous, or profane remarks that are also disruptive (personal, slanderous, or profane remarks on their own are not necessarily disruptive)

This means that you can legally remove from the meeting room individuals who engage in speech that disrupts your meeting.

  1. Your options when your meeting is disrupted by members of the public are laid out in the Brown Act. You can eject the disruptive person(s) from the room or clear the entire room, except for non-disruptive press, if necessary.
  1. You must allow criticism of the “policies, procedures, programs or services of the agency [and] of the acts or omissions of the legislative body,” so long as that criticism does not result in a disruption of the meeting.
  1. For cities, there are also options for when the disruption is caused by a member of your own city council. The California Government Code authorizes a city council to “punish a member or other person for disorderly behavior at a meeting.”
  1. Although not legally required, it makes policy sense to consider adopting a policy that lays out the rules so everyone knows what to expect and what to do when things get out of hand. The policy should include notice and warnings if necessary so that the people involved are given fair opportunity to conform their behavior to the rules.
  1. Finally, remember that the main reason you hold regular and special meetings of your city council, school board or other legislative body is to get the business of your agency done and serve the public. The law allows and expects that your meetings can and should be run effectively and efficiently in an environment of respectful decorum and transparency.

Ruben Duran is a partner in the Los Angeles office of Best Best & Krieger, LLP. He serves as the Southern California Latino Policy Center’s Ethics Advisor and represents cities, school districts and special districts throughout California. 
ruben.duran@bbklaw.com
@BBKRubenDuran
(213) 787-2569

 

Ethics Advisor

Seven Billion Dollars Soon to Hit the Streets in Disadvantaged Communities Across the U.S.

New Markets Tax Credits – the Best Kept Secret in Financing Public Projects

By: Ruben Duran

Right before Thanksgiving 2016, the federal government announced the release of $7 billion of tax credits aimed at spurring private equity investment into projects in low income communities. Administered through the U.S. Treasury’s CFDI Fund, the tax credits are known as “New Markets Tax Credits,” and have proven to be a flexible and powerful tool for development in underserved communities across the country.

If you’ve never heard of New Markets Tax Credits, also known as “NMTC,” don’t feel bad. Many public officials and their staffs, although they might have seen the term somewhere, don’t really know a lot about the program. That’s a shame, because under the right circumstances, NMTC can and does provide significant capital for qualified projects, ranging from community centers and sports facilities to charter schools and retail developments.

The NMTC was authorized in the Community Renewal Tax Relief Act of 2000 as part of a bi-partisan effort to stimulate investment and economic growth in low income neighborhoods and rural communities that lack access to the capital needed to support and grow businesses, create jobs, and sustain healthy local economies.

The NMTC program attracts capital to low income communities by providing private investors with a federal tax credit for investments made in businesses or economic development projects located in some of the most distressed communities in the nation – census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median.

California public agencies, including cities, counties and special districts, can use NMTC to provide significant cash contributions to qualified projects in qualified areas, and NMTC presents a meaningful opportunity to leverage funding and assets that public agencies already own or anticipate receiving for individual projects.

Public agencies throughout the nation regularly sponsor qualified projects that successfully compete for and receive NMTC. A successful transaction will involve a project in a qualified census tract that produces community benefits such as the creation or retention of jobs, the provision of services to underserved populations and/or environmental benefits and improvements. The tax credits are provided through the participation of a Community Development Entity (“CDE”) that has received an allocation of tax credits from the CDFI Fund. A public agency seeking to use NMTC will first need to identify qualified projects and then enlist the support and participation of a CDE with NMTC allocation.

Proceeds from a NMTC transaction may be used for a wide range of project costs, from pre-development expenses to construction (including infrastructure), purchase of supplies and equipment and provision of services to qualified communities. Infrastructure costs are generally only funded to the extent they are part of a larger qualified project and can be directly tied to the community benefits attributable to the project.

Although the program is highly competitive and can be complex, over the last several years I have successfully closed two NMTC deals for public agencies. The first was for a city-sponsored state-of-the-art health and wellness facility and the other for a port infrastructure project plus a mobile pantry bringing healthy food and nutrition education to needy communities. These two examples show the breadth and flexibility of the program; only a handful of projects cannot use NMTC, including strictly residential (though mixed-use projects do qualify), massage parlors, racetracks, and liquor stores.

NMTC has been used for YMCAs, office and retail, hotels, industrial development and many other types of projects. The main restriction is ensuring that the tax credits are deployed in a qualified census tract. To find out whether a project in your jurisdiction qualifies and NMTC can be used to attract private investment dollars, contact me anytime.

Ruben Duran is a partner in the Los Angeles office of Best Best & Krieger, LLP. He serves as the Southern California Latino Policy Center’s Ethics Advisor and represents cities, school districts and special districts throughout California. He helped his clients the City of Desert Hot Springs and the Oxnard Harbor District use New Markets Tax Credits to fund exciting, high-impact projects.

ruben.duran@bbklaw.com
@BBKRubenDuran
(213) 787-2569

The Ethics Advisor

Good Governance Floats on a Sea of Integrity

images

By: Gary Schons

“In civilized life, law floats in a sea of ethics,” the late Earl Warren, who served as a U.S. Supreme Court chief justice and as California attorney general and governor, stated in a 1962 speech. In a closely related sense, good governance floats on a sea of integrity. Only when government institutions abide by the norms of public integrity established by our laws and traditions can good governance take root and flourish.

When we speak of public integrity, foremost are qualities of individual virtue, undivided loyalty, transparency and accountability. Only when these principles are maintained by the individuals who serve will government institutions function with economy, efficiency and effectiveness. And when those virtues fail or cease to exist, waste, fraud, abuse, mismanagement and even corruption eventually corrode the processes of governing.

After an election that ushered in a host of new public officials and laws at the national, state and local levels, it is an appropriate time to reflect on the preeminence of integrity in our public institutions.

A recent survey conducted at Chapman University in Orange, revealed that people’s greatest fear is government corruption. At first blush, this seems surprising given the risks and harms posed by international terrorism, climate change and environmental degradation or economic disruption. But, on second thought, it is an understandable reaction. Individuals create their government through the ballot box, fund it through their taxes and are served and controlled by it in their daily lives. Government is constant and omnipresent in the lives of all citizens. Trust in its proper workings is fundamental to the social compact in which citizens cede certain of their freedoms, liberty and property to the state.

California is blessed with a public integrity infrastructure that is second to none in the country. In surveys of the states for public integrity practices, California consistently ranks at the top. The Political Reform Act and Government Code section 1090, which prohibit conflicts of interest, seek to ensure that government agencies have the undivided loyalty of its officials, in addition to promoting transparency in the political process. The Brown Act “Open Meetings” Law and the Public Records Act promote transparency and accountability by affording the public (and press) open access to government meetings and public records.

However, these laws alone are not self-executing and are no guarantee the goals they serve will be achieved. They must be put into regular practice and enforced. A robust system of checks and balances among the various organs of government provides the architecture for enforcement. The FPPC, the local prosecutor, the county grand jury exercising its civil “watch dog” function, and the State Auditor each serve important roles in monitoring, ensuring compliance with and sanctioning those violate these statutes.

However, the single most important guarantor of public integrity is an engaged citizenry informed by a principled press.

Case after case of local government malfeasance have come in communities where the citizens are not engaged and watchful of the processes of local governance. In such circumstances, open meeting laws are violated and “backroom” deals and decisions are made. Officials act despite clear conflict of interests. And, inevitably, mismanagement, abuse, fraud and corruption permeates the governing processes. This leads to massive losses to the public fisc, diminished public services and, eventually, a loss of public trust and faith in the governing entity. Thus, citizen participation is critical not just on Election Day, but on an on-going basis as the ultimate watch dog of official probity, transparency and accountability.

In a future installment of the Ethics Advisor, we will examine some case studies of failed governance directly attributable to lack of oversight and enforcement of public integrity norms and laws.

 


Gary Schons
 heads the Government Policy & Public Integrity practice. He served as trial counsel for the Commission on Judicial Performance.
Gary is an active member of the California District Attorneys Association, lecturing and authoring articles for the association.

Gary.Schons@BBKLaw.com   (619) 525-1348

The Ethics Advisor

The Details Matter: Recusing Yourself Due to Conflict of Interest

By Ruben Duran

imgresOnce, when I had put a lot of time and attention into arranging the particulars of social engagement, an old acquaintance called me a “detallista.” At the time, I think she may have meant it more as a slight than a compliment, but today – as a lawyer – I understand the value and importance of being meticulous with details, especially for clients in the area of ethics.

A common situation that can sometimes trip up elected officials is the correct way to declare a conflict and recuse one’s self from any consideration of the matter.

As a refresher, you may remember from prior Ethics Advisor columns that it is not necessarily always illegal or unethical for a public official to have a financial conflict of interest in some item that is making its way through the channels of approval at a local agency. The ethical and legal problems arise when you try to influence – in any way – the outcome of the decision on the matter.

For example, suppose you learn that a future agenda item concerns your compadres’ property down the street. The house is within 500 feet of yours, and you and they have jointly invested in a small business venture (your investment is more than $2,000). You have correctly determined that you have a disqualifying conflict of interest and you fully intend to recuse yourself from voting on the matter when it comes to a vote at the meeting.

Prior to the public meeting, is it enough that you are aware of the conflict and intend to refrain from voting? No. You must also be sure that you say and do nothing prior to the meeting that could be seen as an attempt to influence the decision regarding your compas’ property. Under case law and FPPC decisions, “the decision” or “the action” is given a very broad meaning, and encompasses much more than the actual vote on the item. It means the planning, analysis and staff work leading up to a vote or other final action, and you could get into trouble for trying to sway or affect the decision in any way. The best way to avoid even the appearance that you might have tried to influence a decision is simply to stay away from the issue altogether.

At the public meeting, the law prescribes some very specific procedures for removing yourself if you have a conflict. First, once the item is announced by the presiding officer, you must state on the record the reason for your recusal and then you must leave the room while the item is being discussed. For example, “I have a conflict of interest on this matter because it involves property within 500 feet of my residence and the property owner and I are joint investors in the ACME Business Co., Inc.”

Then, you must leave the room.

Yes, leave the room. There are only a couple of exceptions to this rule:

443138First, you may remain in the room if the item on which you are conflicted is on the body’s consent calendar. The announcement would still be the same, and the minutes would reflect an abstention from that particular item on the consent agenda. You may vote on the remaining items on the consent calendar.

The second exception applies in the very narrow and limited circumstance where the item on which you are conflicted relates directly to your “personal interests.” These include:

  • Interests in real property wholly owned by you or your immediate family (in our example above, you might be allowed to rely on this exception to offer input as a member of the public if you did not also have a business investment with your compadres);
  • Interests in a business entity wholly owned by you or your immediate family; and
  • Interests in a business entity over which you (or you and your spouse or domestic partner) exercise sole direction and control.

Even though the regulation allows a public official to remain in the room when these interests are at stake, some officials balance their rights as individuals with their responsibility to maintain the public’s trust in both their leadership and the agency they serve by leaving the room after providing input related to their personal interest.

Apart from allowing us to maintain the public’s trust by compliance, strictly following these rules will keep us out of hot water with the Fair Political Practices Commission. The FPPC regularly prosecutes enforcement actions against public officials for failing to observe the rules, or even for failing to observe them completely. In other words, some public officials, even though they have gone through the trouble of identifying a potential conflict and have even attempted to put the conflict on the record and remove themselves from the decision, may still face scrutiny and potential liability if they failed to announce the conflict properly, or if they failed to leave the room at the appropriate time. Neither the Southern California Latino Policy Center nor the Ethics Advisor want you to be another headline or report on the FPPC’s website.

The Ethics Advisor: "It's Getting Hot"

Ruben Duran
ruben.duran@bbklaw.com
Follow me on Twitter @BBKRubenDuran
(213) 787-2569

Ruben Duran is a partner in Best Best & Krieger LLP’s Los Angeles office. He has counseled elected officials for nearly 17 years and offers training throughout California on good governance and ethics. A former city attorney, he is a regular speaker for the California Institute for Local Government and serves as the general counsel to the Oxnard Harbor District, which owns and operates the commercial Port of Hueneme.

The Ethics Advisor

Thirteen Things You Need to Know About Campaign Restrictions

Ya no aguanto.
Can we POSSIBLY get away from campaigning and politics for a little while?
Sorry folks, pero, no. Puntada.

With the 2016 Presidential election campaign in full swing, and the constant barrage of tweets, posts, headline stories, evening news specials, and Goodness-knows-how-else we all receive our daily [over]dose of la política, there really is no way to escape this year.

But don’t let all the noise fool you. Local elections and campaigns are likewise about to heat up now that filing deadlines for many local races have come and gone. Here are the top 13 things to remember when embarking on local elections and campaigning.

  1. First, remember the rules apply to almost anyone running and anyone supporting someone running for office in California. This means the candidate her- or himself, a campaign committee, a general purpose committee, a political party committee, a slate mailer organization, a major donor, or any other person or entity making independent expenditures on behalf of a candidate or ballot measure.
  1. By “the rules,” we mean the Political Reform Act, which generally requires candidates and committees to file campaign statements by specific deadlines AND any local rules or ordinances that your local jurisdiction might have adopted. Click here to see if your local agency has a special campaign ordinance.
  1. Those statements generally will include contributions and expenditures made on behalf of the candidate or ballot measure.
  1. What makes a “committee”? There are 3 ways a person or entity becomes a committee:

– Receive contributions of $2,000 or more per year for political purposes (Recipient Committee); includes candidate controlled committees; committees primarily formed to support or oppose candidates or ballot measures; political party committees; and other general purpose committees.

– Make at least $1,000 worth of independent expenditures per year (NOT in consultation, cooperation or coordination with a candidate) on behalf of a candidate or ballot measure (Independent Expenditure Committee).

– Make at least $10,000 worth of contributions per year to or at the request of a candidate or ballot measure proponent (Major Donor Committee); can be a business, individual, or a multi-purpose organization (including a nonprofit organization).

  1. Paperwork and deadlines matter. A cursory Google search over the past couple of months will reveal examples of candidates who have faced intense public scrutiny and harsh penalties from the FPPC for missing deadlines and/or failing to properly disclose contributions and expenditures. The FPPC warns that “missing a filing deadline can have serious consequences ranging from monetary penalties, failure to be listed on the ballot, or FPPC enforcement action.”
  1. Filing deadlines vary, and are set forth regularly by the FPPC on its website. For example, candidates running for local office on the November 8, 2016 presidential election ballot must file their First Pre-Election Form 460 (if you have a controlled committee and plan to receive and/or spend more than $2,000 during the calendar year) or 470 (if you don’t have a controlled committee and don’t plan to receive or spend more than $2,000 during the calendar year) no later than September 29, 2016. The Second Pre-Election statement must be filed no later than October 27, 2016.
  1. Candidates for local office typically file with their local elections official, usually the City Clerk for municipal-run elections or the County Registrar of Voters for county-run elections.
  1. While the State has specific contribution limits for various State offices, there is no generally-applicable state law that imposes campaign contribution limits on local offices. Instead, many local jurisdictions have adopted their own contribution and/or expenditure limits.
  1. You must reveal the true source of any contribution of $100 or more (in the aggregate over a calendar year) on your Form 460. If a contribution is received through an intermediary, both the intermediary and the true source of the contribution must be identified. Failure to disclose the true source of a contribution is considered campaign money laundering, and a serious violation of law. For example, it is illegal for an employer to “reimburse” an employee for a political contribution made in the employee’s name, as the employer would be considered the “true source” of the contribution.
  1. Anonymous contributions of $100 or more are prohibited. Additionally, neither a committee nor a candidate may accept cash contributions of $100 or more.
  1. Do not ask individual employees of your agency for political contributions. Government Code section 3205 prohibits a local candidate from knowingly, directly or indirectly, soliciting a political contribution from any employee of his or her agency.
  1. Do not use public funds or public resources for your campaign. This means not only agency moneys, but also agency offices, telephones, computers, copiers and other equipment and staff time.
  1. You’re not in this alone.  There are many resources available to assist you in complying with campaign finance laws and regulations. The FPPC has an online Toolkit and Campaign Disclosure Manual that answer many questions and the Institute for Local Government offers valuable resources “to help you run a clean and ethical campaign.”

Good luck on the campaign trail!

Ruben Duran: The Ethics AdvisorRuben Duran
ruben.duran@bbklaw.com
Follow me on Twitter @BBKRubenDuran
(213) 787-2569

Ruben Duran is a partner in Best Best & Krieger LLP’s Los Angeles office. He has counseled elected officials for nearly 17 years and offers training throughout California on good governance and ethics. A former city attorney, he is a regular speaker for the California Institute for Local Government and serves as the general counsel to the Oxnard Harbor District, which owns and operates the commercial Port of Hueneme.

 

 

 

The Ethics Advisor

It’s Getting Hot in Here

Ah, summertime. Beaches, BBQs, visits with familia, ethics developments, balmy nights …

Wait – ethics? Yes, it’s true. The world of ethics and conflicts of interest es muy caliente this summer, with a couple of interesting developments to think about and keep an eye on.

imgres
Former VA Gov. Robert McDonnell and wife Maureen. Courtesy USA Today

First, in late June, the United States Supreme Court issued its ruling in a case involving former Virginia Governor Robert McDonnell and his wife, who were indicted and convicted on federal criminal charges relating to bribery and fraud when they accepted $175,000 in loans, gifts, and other benefits from a Virginia businessman. Following its precedent in cases like Citizens United, Skilling (the case involving the Enron scandals) and McCutcheon v. FEC, the court held that because the Governor did not take any specific “official acts” beyond merely exerting influence over or granting special access to a politician or an officeholder, his convictions could not stand. Writing for a unanimous eight-person court (the President’s proposed appointment of Justice Merrick Garland continues on-hold in the Senate), Chief Justice Roberts emphasized that the only actionable public corruption is “quid pro quo” bribery. Read more about the decision in this piece by my friend and colleague, Gary Schons.

box seats wine partygolf

Does that mean that California local elected officials now have the green light to engage in what we have consistently warned against as unethical and illegal behavior by accepting gifts in exchange for providing access and influence? The answer, of course, is a resounding “no,” and not only because we continue to believe that a strong reputation for ethical behavior is essential to public service (recall our inaugural message No Estés Chillando, C@#$%n).

Importantly, the McDonnell decision does not change state law in California; that case was a federal criminal prosecution. California’s restrictions on accepting gifts (including reporting requirements for gifts valued at $50 or more and an outright prohibition on accepting gifts valued at over $460) continue to govern, and the Political Reform Act’s (the “PRA”) prohibition on making a decision or attempting to influence a decision in which you have a financial interest is as strong as ever (the giver of gifts generally being a triggering economic interest).

This leads to the second hot topic of the day: major reforms to the PRA are on the horizon. The law has already undergone dozens of minor amendments since its adoption over 40 years ago. The Fair Political Practices Commission (FPPC), in conjunction with California Forward and the University of California, is embarking on a process to solicit public input on needed revisions to the PRA, all with an eye to modernizing the law and making its application more practical. The FPPC is charged with interpreting and enforcing the PRA, and has adopted an extensive set of Regulations to address conflicts of interest, campaign finance and disclosure and the reporting of public officials’ economic interests through the Form 700.

P1010541California Forward reports that the “project will include two rounds of public participation over the course of several months, to ensure what the FPPC plans to be an inclusive and transparent process.” The Ethics Advisor plans to take part in that process, and respectfully encourages readers to do the same. Our legal landscape in the area of ethics and conflicts of interest can surely benefit from the real-world experience and input of those countless public servants who attempt to successfully navigate the sometimes cumbersome and confusing laws and regulations aimed at ensuring public decision-making free from corruption and undue influence. Sí vale la pena. In the meantime, as always, please feel to reach out with any questions or comments, and enjoy the rest of your summer!

 

 

FullSizeRender (1)Ruben Duran
ruben.duran@bbklaw.com
Follow me on Twitter @BBKRubenDuran
(213) 787-2569

Ruben Duran is a partner in Best Best & Krieger LLP’s Los Angeles office. He has counseled elected officials for nearly 17 years and offers training throughout California on good governance and ethics. A former city attorney, he is a regular speaker for the California Institute for Local Government and serves as the general counsel to the Oxnard Harbor District, which owns and operates the commercial Port of Hueneme.