Sonoma County Grand Jury • 2004-2005

Conflict of Interest in Sonoma County Facilitating Prevention, Detection, and Early Intervention

Published: June 18, 2005 15 pages
Ver PDF original

Findings and Recommendations 12 findings

F1
Failure to Submit Statement of Economic . Conflict of Interest Interests The grand jury observed five individual cases identifying officials who did not file Failure to Submit Statements of Economic Interests (Form Economic Interests 700) until repeatedly notified of non- Failure to Failure to Self- compliance. Disclose Disqualify .m M Economic From Debates Interests and Decisions
No recommendations for this finding
F2
Failure to Disclose Economic Interests Result: Three cases indicated failure to disclose Administrative, Civil economic interests; a fourth individual failed and Criminal Penalties to report expenditures and sub-vendor payments. .m
Related Recommendations (1)
R5
Re-file Form 700 on a material change Sonoma County administration and respective cities in Sonoma County should require all Designated Filers to file amendments to Form 700 with clerks of the county or city of a material change. “Material Change” is defined in Government Code § 87103.
F3
Failure to Self-Disqualify from Debates and Decisions Three cases listed individuals who did not self-disqualify from decisions in which they had a financial interest.
No recommendations for this finding
F4
Ten violations in Sonoma County In the past seven years, the FPPC has taken action in ten instances in Sonoma County for violations of the Political Reform Act, imposing fines totaling $64,200 against officials. Nine of the cases were violations of the conflict-of-interest provisions, one case involved campaign finance filing requirements (Refer to following chart, Ten Violations of the Political Reform Act – Sonoma County). 5
No recommendations for this finding
F5
Lack of communication, notification, collaboration There appeared to be little communication, collaboration and/or notification between the FPPC and city/county agencies in investigation of conflict-of-interest cases. The FPPC doesn’t formally notify city or county officials when investigating a complaint until administrative resolution. It is not unusual for officials to learn through the media and newspaper articles of administrative actions. The above chart, “Reason Violation not Investigated” shows that of the 22 alleged conflict-of-interest violations, nine complaints were not investigated due to insufficient agency resources. Those nine cases could have been referred to the District Attorney’s office for review and possible investigation. This would assure that all future cases are examined.
Related Recommendations (1)
R7
Improve collaboration/cross reporting There should be closer collaboration between the Sonoma County District Attorney’s office and the FPPC. The grand jury recommends a Memorandum of Understanding be proposed by the District Attorney to specify the respective responsibilities, including a provision for cross-reporting. Additionally, a formal chain of communication and referral protocol relative to assigning administrative/civil and criminal complaints should be developed. Since investigation is the first step to an action, one of the offices has to provide the investigation resource, and each entity should know at what stage a case is being reviewed. The rationale is to have the quickest action by the appropriate enforcement agency of the suspected violations, and, as mentioned in “Findings,” nine cases were not investigated by the FPPC due to insufficient agency resources. In the future, such cases ought not to be omitted from investigation just because of insufficient resources at the state level. Best Practices A number of “Best Practices” were noted and are included here for recognition: • The Santa Rosa Press Democrat newspaper, for conflict-of-interest news reporting. • The County Counsel’s effort to close loopholes in the conflict-of-interest filing process. • Cities that have their city attorney present at meetings where guidance can be given prior to there being a conflict-of-interest issue. • The FPPC for responding to every call with a live person to answer Political Reform Act questions. • The FPPC for providing an array of publications and training to inform and educate the public and elected/appointed officials. • Citizen advocates who attend public meetings and become involved. • The City of Santa Rosa for maintaining additional disclosure forms and other information the City of Santa Rosa requires. This was above and beyond state requirements. • Cities of Windsor, Santa Rosa; the Cloverdale and Healdsburg Planning Commissions for identifying in their agendas and minutes, a “Conflict-of-Interest Declaration” or “Statement of Abstention.” • The Sonoma County Board of Supervisors for adopting a resolution in February, 2005 to expand Designated Filers and disclosure categories. • The City of Sonoma for enacting a Code of Ethics for its officials and employees. • The League of California Cities for providing continuing education, training and web- based resource information. Required responses to Recommendations: Sonoma County Board of Supervisors – R3a, R3b Sonoma County Board of Supervisors – R1, R2, R4, R5 Nine City Managers and City Councils: Petaluma, Rohnert Park, Santa Rosa, Cotati, Healdsburg, Windsor, Cloverdale, Sebastopol, Sonoma – R1, R4, R5 City Managers and City Councils: Petaluma, Santa Rosa, Cotati, Healdsburg, Windsor, Cloverdale, Sebastopol – R2 Sonoma County District Attorney - R7 13 Sources of Information 1. The grand jury reviewed the following documents: • A Guide to the Political Reform Act of 1974, California’s Conflict-of-interest Law for Public Officials, University of California • Political Reform Act 2004, Fair Political Practices Commission • FPPC Stipulations, Decisions and Orders and Admonishment letter • California Government Codes §§ 87100-87313 and §§ 56010-56081 • The Maddy Act, California Government Code, §§ 54970-54975 • The Brown Act, California Government Code, § 54950 • The Hatch Act, under Title 5, United States Code, § 7321 et seq. • The California Land Conservation Act of 1965, commonly known as the Williamson Act, Government Code § 51200-51297 • The State of California, Little Hoover Commission Report, dated July 12, 2004, entitled “Governing the Golden State, A Critical Path to Improve Performance and Restore Trust” • The State of California, Little Hoover Commission Report, dated May 3, 2000, entitled “Special Districts: Relics of the Past or Resources for the Future?” • San Diego County Grand Jury Report 2002-2003 (March 6, 2003), San Diego City Ethics Commission: “Can It Attain Its Purpose?” • Orange County Grand Jury Report 1998-1999 • Orange County Sheriff-Coroner, Conflict-of-Interest Study • Humboldt County Grand Jury Report of 2003/4 (#2004-AF-01) The Absence of Ethics Codes in Humboldt County • Fair Political Practices Commission, publications: - “Adopting a Conflict-of-interest Code” - “Can I Vote?” - An Overview of the Conflicts Laws - “Where to Find Copies of Form 700 Filed by Public Officials” - “Your Resource for Advice, Education, Enforcement.” • Municipal Codes: - City of Rohnert Park Municipal Code - City of Sebastopol Municipal Code - Town of Windsor Municipal Code - City of Petaluma Municipal Code - Santa Rosa City Code - Sonoma County Code • Over thirty articles from The Press Democrat newspaper (1998-2005) • More than one-hundred state and national articles 2. The grand jury interviewed the following persons: • State: o Fair Political Practices Commission: Chief, Technical Assistance Division; Senior Counsel, Enforcement Division; Enforcement Officer • County: o District Attorney, Deputy District Attorney, Staff attorney o Member, Board of Supervisors o Deputy County Counsel o Local Area Formation Commission (LAFCO): Executive and Assistant Executive officers o Public Defender • Cities: o Cotati: Former Mayor o Petaluma: City Attorney o Rohnert Park: City Clerk, Assistant City Manager, Assistant City Attorney o Santa Rosa: City Manager, City Attorney, Deputy City Attorney, Director of Community Development, Former Mayor, two former Planning commissioners. • Other Respondents: o Three Citizen Advocates 14 • MESSAGE TO SONOMA COUNTY RESIDENTS FROM THE GRAND JURY We commend those individuals, past and present, who sought elective and appointive office on boards, committees, and commissions in city and county governments. They act as fiduciaries for our interests, putting in many hours of personal time at little or no remuneration. While we must commend those who offer their time and expertise in public service, we have a right to expect these individuals to fulfill their responsibilities with integrity and ethical conduct; that is, they cannot use their position of public trust to benefit themselves, their business interests, families, or colleagues. We expect elected/appointed officials to recognize actual and apparent conflicts of interest. But, this does not always occur. Thus, it may fall on other parties, including informed citizens, to raise the issue. The key is an informed citizenry. Issues that create conflict of interest can be complex. We elect officials to work on our behalf; however, our duty as citizens does not end at the voting booth. We must be ready to assist and monitor them by being sensitive to the issues they face, particularly if they are contributing their expertise and time to assist in decisions that improve our communities. Being informed requires that you, as a citizen, pay attention to current issues. It requires study and analysis of positions of our elected and appointed officials, and may even require attendance at government meetings. Ultimately, it may require you to speak up if there is an actual or an appearance of a conflict of interest. The goal is to preserve the integrity of our governmental functions. The reward is a more responsive government and a more satisfying environment for all of us to live in. We have set out information below that can help you, the citizens of Sonoma County, fulfill this goal should a situation arise. Complaints concerning violations of the conflict-of-interest provisions of the Political Reform Act should be made to the local District Attorney, or the Enforcement Division of the FPPC. Fair Political Practices Commission Phone: 1-866-ASK-FPPC (1-866-275-3772) 428 J Street, Suite 620, Sacramento, CA 95814. Website: www.fppc.ca.gov FPPC Publications, Training and Education: (cid:131) “Your Duty to File” – A basic overview of State Economic Disclosure Law (cid:131) “Can I Vote.”? An overview of public officials’ obligations (cid:131) “How Do I Get Advice from the FPPC?” (cid:131) Statement of Economic Interests – Form 700. (cid:131) Publication, “Your Resource for: Advice, Education, and Enforcement” (cid:131) “How to File a Violation of the Political Reform Act. (cid:131) “Violation Report Form.” (cid:131) “What happens after I file a complaint?” (cid:131) FPPC seminars for cities, counties, multi-county and state agencies League of California Cities – Institute for Local Self-Government - Website: www.ilsg.org Local City and County Attorneys’ offices: Sonoma County District Attorney........ 707-565-2311 Cotati ...........................707-665-3623 Sonoma County Counsel.................... 707-565-2421 Healdsburg...................707-431-3317 Rohnert Park....................................... 707-588-2227 Windsor........................510-351-4362 Petaluma............................................. 707-778-4362 Cloverdale....................707-894-2521 Santa Rosa......................................... 707-543-3040 Sebastopol....................707-823-7865 Sonoma........................707-938-3743 15
F6
Enforcement jurisdiction unclear It was unclear to the grand jury how cases were prosecuted as criminal, civil, or administrative, or by whom this distinction was determined. The average citizen does not know who to contact if a conflict-of-interest violation becomes apparent. The Act designates the Sonoma County District Attorney (criminal cases) and the FPPC (administrative/civil cases) as first points of contact for conflict-of-interest complaints, depending upon whether the violation appears to be administrative or criminal in nature. Beyond this distinction, there is no further direction on filing a complaint. Because the FPPC assumes primary responsibility for complaint analysis and enforcement, there are no procedures/protocols between the FPPC and the County District Attorney. Complaints are not analyzed for criminal prosecution, only administrative/civil. The Code specifies which sections can be prosecuted as administrative, civil or criminal. The grand jury’s interpretation of the three provisions of the code is shown below; however, precise interpretation requires clarification by legal authority, e.g. FPPC, County District Attorney, or City Attorney. Administrative/Civil Jurisdiction Criminal Jurisdiction Fair Political Practices Commission County District Attorney, or Attorney General Prosecutes violations of the Prosecutes violations of the Political Reform Act Political Reform Act designated as Administrative/Civil designated as criminal Administrative – Hearing before an Trial before a Judge of the Superior Court Administrative Law Judge Civil – Trial before a Judge in the Superior Court Regulatory enforcement requires: Criminal prosecution requires: A preponderance of evidence Evidence beyond a reasonable doubt
No recommendations for this finding
F7
Cases may take years to resolve Of the ten conflict-of-interest cases investigated by the FPPC, one was settled in six months. The remaining nine cases took from 18 months to five years to settle.
No recommendations for this finding
F8
Lack of increased awareness and local action The county and city filing officers were effective in notifying the FPPC of individuals failing to file Form 700; however, they were not a source of complaints for failure of officials to disclose or disqualify themselves from decision-making. Such complaints appeared to be from other sources, not by colleagues, staff, or supervisors of those officials. The grand jury found hesitancy on the part of city and county officials to initiate a referral either to the FPPC, or the County District Attorney when suspected misconduct was identified. Additionally, such cases are not considered to be a priority. It appeared only publicized cases of violations have influenced city and county entities to recognize, respond, and deter future incidents. Following a series of reports appearing in the Santa Rosa Press Democrat newspaper, the City of Santa Rosa put policies and procedures in place that were above and beyond state requirements. However, in other Sonoma County jurisdictions, awareness and systemic improvements were not apparent.
No recommendations for this finding
F9
Conflict of Interest and Campaign Financing The grand jury noted elected officials cited with conflict-of-interest violations resulting in settlement fines, were reported in the Press Democrat newspaper as intending to use campaign funds to pay off the FPPC fines. Government Code § 89513 (c) states that campaign funds cannot be used to pay or reimburse fines, penalties, judgments, or settlements, with the exception that if the FPPC action results in the respondent hiring an attorney, then payment of the attorney’s fees, as well as the fine itself, can be paid with campaign funds. As a result, the fine creates no incentive to desist from further violations, since there is no financial hardship on the fined official, as long as the official has campaign funds (or contributors) available to pay the fine. (§§ 89513(c) - 89514).
Related Recommendations (1)
R3
Increase fines and penalties; prohibit use of campaign funds to pay penalties The grand jury recommends that local officials from the county and the nine cities contact their senate and assembly members to consider amending the Political Reform Act to address the following two issues:
F10
Code of Ethics Ethics – A philosophy or system of morals A written system of standards of ethical conduct; principles intended to aid members of the field individually and collectively in maintaining a high level of professional conduct. The fundamental concept of a Code of Ethics, as related to conflict of interest, is that a public official’s decision is based solely on what is best for the public--not the official, his/her friends, or owned businesses. A Code of Ethics aims at perception, as well as actuality. A public official should consider abstaining from participating on a matter if there appears to be a conflict. A recent Humboldt County Grand Jury statewide survey found only 10 out of 41 respondent counties had established codes of ethics for officials and employees, but state agencies mandate the requirement. Although a number of California cities have adopted codes of ethics, only a few cities in Sonoma County have an established Code of Ethics. Also noted was one Santa Rosa official who voluntarily added ethics training as his personal effort to be above reproach, and set a standard for his employees.
Related Recommendations (1)
R2
Adopt a Code of Ethics Sonoma County and each city should establish and implement a Code of Ethics. All commissions, committees and boards, as well as elected and appointed officials, should review the Code of Ethics and attest to understanding the policy as it pertains to their position. Thereafter, the county and city officials should mandate periodic ethics training and testing, just as is required of federal and state employees. For establishing a Code of Ethics, the Attorney General’s Office and the FPPC, have developed a web-based ethics training course. The California League of Cities also has information and guidelines. 11
F11
Incompatible activities dilemma Professional expertise of elected and appointed members of committees, commissions or boards is valued because it is a public service offered by civic-minded individuals at little or no remuneration; however, these same individuals often have businesses or full- time occupations related to their public positions. Because an official should be wary of an actual conflict of interest, as well as the appearance of conflict of interest, the system itself is vulnerable.
Related Recommendations (2)
R1
Adopt an Incompatible Activities List Each commission, committee, board and public agency should have their own Incompatibility Activities list as a supplemental resource. This list would assist the officials in understanding how to avoid conflict-of-interest issues, enhance the assurance of public trust--the integrity of officials--and political processes as well. The following is a sample of the type of list the grand jury recommends: Incompatible Activities – Sample List Each commission, committee, board and public agency should tailor this list to their own duties and responsibilities 1. Cannot have an interest in a contract made by the board, commission, or committee that one is involved with. 2. Cannot request, receive or agree to receive anything of value or other advantages in exchange for a decision. 3. Cannot influence decisions relating to potential business or prospective employers. 4. May not acquire property interests within redevelopment areas over which one has decision-making influence. 5. Cannot receive compensation from third parties for speaking, writing an article or attending a conference. 6. Cannot use public agency resources (money, travel expenses, staff time and agency equipment) for personal or political purposes. 7. Cannot participate in decisions that may affect (positively or negatively) their personal interests, interests of their immediate family or their business partners. Excerpt from: League of California Cities – Institute for Self-government
R6
Prevent actual and appearance of conflict of interest The individual committee, commission, board, or public official should review whether an actual or appearance of conflict of interest exists. If an actual or appearance of conflict of interest exists, there should be a personal discussion with the official, suggesting abstention. If the individual cannot recognize an inherent or potential conflict situation and abstain, he/she should confer with their designated attorney, or the FPPC. 12
F12
Form 700, Statement of Economic Interests is complex, due to the Act The FPPC manages 18,000 Designated Filers and receives over 50,000 inquiries a year from state and local officials seeking assistance on how to understand and respond to the Statement of Economic Interests (Form 700) and other questions related to the Act. It was determined that the Form 700 is not user friendly because the Act itself is complex and not user friendly. Conclusions The grand jury found conflict-of-interest violations occurred at all levels of government, whether deliberate and intentional, or inadvertent and unintentional. Because the FPPC has authority and responsibility under the Political Reform Act, too often the cities and counties defer to the FPPC, rather than taking responsibility, or collaborating in a mutually reinforcing effort to take action when identified (this specifically pertains to disclosure omission and self-disqualification failures). The cities or counties need to be proactive and collaborative in resolving conflict-of- interest situations. This method would result in timelier case resolutions and fewer violations. Ultimately, it is a matter of personal responsibility--the ethics and integrity of the elected or appointed official, and is a view confirmed by a number of respondents interviewed by the grand jury. The Statement of Economic Interests (Form 700) is a tool driven by the law and starts the process for the Designated Filer. The form isn’t a major point of vulnerability, except that it is difficult to understand due to the complexities of the Act itself. The public has been active in detecting and alerting authorities of officials in conflicted situations. The grand jury highly encourages more public monitoring of our elected and appointed officials through regular attendance of public meetings, viewing televised meetings, and availing themselves of the opportunity of reviewing an official’s Form 700, or county charters, all of which are public documents. The grand jury concluded major weaknesses in the application of the system are: (cid:131) Failure to understand Form 700 and its requirements; (cid:131) Individuals not declaring all economic interests; (cid:131) Individuals failing to disqualify themselves from making or influencing decisions in which they have a financial interest; (cid:131) Lack of communication between the FPPC and the office of the County District Attorney; (cid:131) The loophole in the government code that allows fines to be paid with campaign finances. Opportunities for Improvement: Filing/Monitoring: The most effectively managed provision of the Act is the Statement of Economic Interests (Form 700) reporting requirements to prevent influencing government decisions in which the person has an economic interest. All state, county, and cities maintain a Form 700 filing system. The management of reporting is shared by individual agencies/organizations within the FPPC with forms monitored individually for completeness on the local level. They are not monitored for information relative to their particular committee, board, or commission association, i.e., the documents are supposed to serve as an identifying means so the public, and when necessary, the judicial system, has a reference point to determine whether violations occurred. Disclosing financial interests is a vulnerability in the system as it relies on Designated Filers’ understanding of the disclosure requirements covered by §§ 87200-87210 of the Act. Early Intervention: Cases are not detected or acted upon early. The individual committee, commission and board, along with the office of the district attorney, county counsel, and city attorneys, should take more proactive, organized roles to assure the preservation of the integrity of our government is of the highest priority--be it actual conflict of interest--or appearance thereof. A more effective coordinating procedure at the city and county levels to reinforce and support state effort is needed. 10
Related Recommendations (1)
R4
Institute regular, mandatory training (cid:131) Provide Designated Filers with basic informational training. (cid:131) Increase utilization of FPPC for training of Form 700 Filing Officers and Clerks (cid:131) Require Code of Ethics training at the city and county level as similar to that as mandated by state agencies (available online). (cid:131) Require basic conflict-of-interest training for: - Incumbent elected and appointed officials - New appointees and elected officials

Conclusions 1

No Responses Found 2

Government entities assigned to respond to this report. No response documents have been linked in our database.

Sonoma County Board of Supervisors Elected County Office
Sonoma County District Attorney Elected County Office