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Friday, May 31,2013

Toothless

by Walt Sorg

This story was corrected on May 31 to say that Aegis does not stand to gain millions if CISPA is passed, as it does not provide Internet security services. Also, Kristi Rogers is managing director at Manatt, not a lobbyist. 

So what’s the problem with the city of Lansing’s ethics ordinance? The same thing that plagues too many disclosure requirements for public officials. While on paper it has most (if not all) of the elements necessary for an effective ordinance, it has one major shortcoming: lack of real teeth.

When compared with principles as outlined by the nonprofit City Ethics organization, the ordinance seems consistent with the “model” ordinance:

Clear and concise

Provides for three kinds of disclosure: annual disclosures, disclosures when a conflict arises (transactional disclosure) and disclosure when someone bids for city business

Provides for effective administration through a city ethics commission

Includes whistle-blower protection.

Lansing’s ordinance requires annual disclosures, demands those with conflicts of interest to recuse themselves from relevant decisions and includes whistle-blower protection. But last week’s revelations in City Pulse about filings by City Council members Carol Wood and Derrick Quinney demonstrate a lack of “effective administration.”

Wood did not report at least $4,700 in 2012 consulting fees paid to her by two local political candidates. Quinney did not report his employment at the Michigan AFL-CIO in 2010 or 2011. Calls and emails to both Council members regarding the omissions were not returned.

You’d think Wood’s non-disclosure of $4,700 in income to her consulting company is a clear violation of the ethics ordinance. But it’s not. The reporting form asks, “Who are your clients and who receives your goods or services?” Wood answered: “I have none at this time.” Since the form is vague about what period it covers, Wood could contend this answer was true on the day she filled it out this year — a loophole that allowed her not to disclose who paid her the previous year. Or she could have knowlingly answered incorrectly, but Wood was unavailable to answer that. And as City Clerk Chris Swope said last week, that information is merely requested of Council members: It is not explicitly required in the city’s ordinance. The ordinance requires Council members to list the name and address of the business or employer, which in this case is CEW Consultant, 1018 Lapeer St. in Lansing. The ordinance is enforced only if a signed complaint is handed to the city’s Board of Ethics.'

The Wood consulting case illustrates a gaping loophole in ethics disclosures: Money can be legally and anonymously laundered through an employer, or a company owned by the official.'

The only full disclosure would be requiring the official to reveal the company’s entire client list and fees paid by those clients throughout that year.

It was exactly that level of required disclosure that led former state House Speaker Bobby Crim to resign from the Michigan State University Board of Trustees in the 1980s. Crim, who became a multi-client lobbyist in partnership with former Senate GOP leader Robert Vanderlaan after leaving the Legislature, was told by then-Attorney General Frank Kelley that he had to disclose his firm’s clients and the fees they paid. He instead resigned from the MSU board.

Most financial disclosures by public officials are routine. But disclosure requirements exist because, in some cases, they provide significant information about potential conflicts and possible personal motives behind official decisions. Two real-world examples:

For years, U.S. Supreme Court Justice Clarence Thomas failed to disclose the fact that his wife, Ginni, was a highly paid employee of organizations lobbying against Obamacare. Thomas finally fessed up in 2011 after multiple news stories. The notoriously tight-lipped justice has never explained the omission or been sanctioned for filing a false report.

Thomas voted to find the Affordable Care Act unconstitutional, presumably much to the delight of his wife.'

Mid-Michigan Congressman Mike Rogers, while properly disclosing that Aegis LLC employed his wife, only tells part of the story in the one-line entry in his annual report.

What the disclosure (legally) omits is that, until recently, Kristi Clemons Rogers was not just an employee of Aegis, but president and CEO. Aegis is a security defense company.'

According to her official online biography, “Ms. Rogers successfully developed and led a two-year pursuit-and-capture strategy to win a five-year, $10 billion contract under the Department of State’s Worldwide Protective Services program, which enables U.S. diplomats and government representatives to operate in strained, if not hostile, foreign environments.”

Mike Rogers chairs the House Intelligence Committee. The bill, sponsored by Rogers, has twice passed the House but stalled in the Senate under the threat of a presidential veto due to concerns over potential civil liberties violations.

Kristi Rogers left Aegis recently to become managing director with Manatt, Phelps & Phillips. At Manatt she will lobby on security and defense issues.

A conflict? Maybe, but you’d never know it from Rogers’ perfectly legal but very incomplete disclosure statement.

If financial disclosures by public officials are to have any value, they must be complete and accurate. We have a right to know what personal considerations may drive public policy decisions by our elected officials. With incomplete or inaccurate disclosures, we are denied that right.

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