DFW Regional Concerned Citizens (DFW-RCC) announced earlier this week that we will begin a survey of member government's (in this 16-county region) ethics codes and practices. This week we have noted that a substantial number of the visitors to our website are entering, exiting or visiting links related to Chapter 176 and/or Ethics.
In preparation for this study, our team has posted links in the side bar of this site to the Texas Ethics Commission's forms CIS and CIQ which Texas Local Government Code 176 mandates are to be filled out and updated regularly by elected officials, officers and advisors or vendors seeking to do business with that governmental entity. See Texas Ethics Commission Promoting Public Confidence in Government.
We have also posted the Texas Attorney General's opinion of the application of Local Government Code Chapter 176.
Most governments are cognizant of financial disclosure for incumbents. Most are aware of the language in Local Government Code Chapter 171 (10% rule for voting or debating an issue).
Local Government Code Chapter 176 is an area where many governments in this region seem to fall short on compliance. I've personally examined a number of city and county websites this week looking for posting of filled in CIS and CIQ Forms. Several have links where vendors can get the forms to fill out yet fail to comply with the law which stipulates that the FILLED IN DISCLOSURE FORMS are to be posted on the website in a timely manner to inform the public about the relationships between decision makers and those seeking to benefit by doing business with "the people.
I have been encouraged this week as I've read several Codes of Ethics on some municipal websites. It is apparent that some cities truly consider ethics important. Many have Ethics Codes which incorporate sound ethical practices which go much farther than the "barebones standards" required by Texas Law. It is our recommendation that governmental leaders examine their Codes of Ethics. If they have not been updated in the past two years, they probably need revisons in the language which defines disclosure by officials to language prompting compliance with Chapter 176. Please see the sidebar for the text of that language. Prior 2005, some ethics codes state that governmental officials who serve as officers or members of boards of directors or organizations/business entities.. but who who not receive 10% of their income... do not have to disclose." More recent legislation now requires that elected officials serving paid or unpaid as officers or on boards of directors must disclose relationships with parties seeking to do business with the governmental entity...
MAJOR DIFFERENCES IN DEFINITION OF CONFLICT OF INTEREST
For voting and debating an issue,(CHAPTER 171) at this time Texas State Law has a very narrow financial rule. However, when it comes to participating in decision making on awarding contracts and spending taxpayers funds, the law (CHAPTER 176) is more broad. The Texas Legislature decided that the citizens have the right to be informed about relationships between elected officials and governmental staff/ or advisors on bids/contracts and those seeking to bid or receive financial benefit from doing business with a city, county, or political subdivsion, board or authority.
In addition to appling the familiar 10% rule, Chapter 176 stipulates that elected officials and officers who recieve 10% of their income OR serve on boards must disclose relationships with prospective bidders/vendors within 7 days of discovering that someone they learn are considering bidding or proposing to do business with the city/county/or political subdivision. The Attorney General's opinion is very clear. It states that there is no financial threshold in this rule. Also, the elected official need not receive pay for serving on the Board. Compliance with Chapter 176 requires elected officials who serve on boards of directors (even of non-profit bodies) with other members who seek to do business with the city they should disclose that relationship on a FORM CIS as soon as the governmental official learns that their colleague on the board is seeking to bid on the project. If an elected official serves on the Board of Directors of an entity which benefits from funding by persons seeking to do business with the city, county, political subdivision, to be in compliance with Chapter 176, the governmental official should update their FORM CIS and disclose their affiliation to their who serves on "X, Y, Z Board" with them or financially supports "X, Y, Z organization" which the elected officals serves as a board member.
Chapter 176 is a tool the Texas Legislature enacted so that CITIZENS can understand what relationship elected officals have with people who get (or seek to acquire) contracts which are paid from tax revenue. Compliance with Chapter 176 is more difficult than complying with Chapter 171. However, if you have too much to report and it becomes too burdensome, that is probably a good indication that you are too conflicted to give fair and impartial consideration to the issues that you are charged to consider for the citizens.
These laws are not intended to prevent elected officials from belonging to non-profit organizations. However, they may help discourage elected officials from becoming STAKEHOLDERS (members of Boards of Directors and/or officers) with individuals/entitities who earn income from the taxpayers.
When things get too complex, they probably should be simplified.
If you are an elected official, and you are having to spend a great amount of time updating CIS forms listing friends, relatives, business associates, board members on "X, Y, Z non-profit or coroporate board of directors" with whom you serve who you've discovered are bidding on a contract with the city, county or regional government where you particpate in setting public policy, voting on or advising those who vote on awarding contracts YOU NEED TO SIMPLIFY.
Here are some choices:
1. Don't run for elected office unless you will place giving fair and impartial consideration to the issues you are charged to consider for the people as your highest priority.
2. Defer serving on some non-profit boards or directors and/or corporate boards of directors (or accepting an office in an organization with a mission statement to lobby for one of several policy positions considered by your governments) until after you leave office.
3. Spend a lot of time examining your relationships while keeping on top of the vendors/bidders with the government you serve looking for alliances so that you can file updates regularly (within the stipulated 7 day timeframe prescribed by law) when people / entities that associated/affilated with you financially or through the organizations you serve on boards begin to seek to do business with the city, county or political subdivision where you are an elected or appointed official.
This week I found one city with an excellent disclosure policy. I found the link to the blank CIQ forms for Vendors. I found a link where elected officials and officers /staff filled-in CIS disclosure forms were posted. Unfortunately there was only one form posted -- that of the CITY MANAGER. They has a list of officials posted for vendors. Every person named on that list should have an up-to-date CIS form posted on the website or the city is out of compliance with Chapter 176.
Another City lists its vendors with a link to the forms. However, this is a city which ranks within the top 10% in population in the USA. They only list 14 vendors. Off of the top of my head I can name at least 30 entities which I know have contracted with that city this year and there are probably many times that actually bidding and/or contracting with the city.
To comply with Chapter 176 a government must provide a list of officers/staff/ elected officials (and those who advise on contracts) to prospective vendors. These vendors are to list any relationship they have with those officers. In an ideal world there would be a 1:1 relationship between affiliations/relationships disclosed on elected officials CIS forms and relationships to elected officials disclosed by prospective bidders/vendors on CIQ forms.
Common sense dictates that if you have to provide a list of your decision makers to a vendor, then you should have a disclosure form posted on your website for every person on the list thatyou give to the vendor!
The language in Chapter 176 instructing vendors (or persons seeking to contract with a government) about disclosing their relatonships to elected officials clarifies what relationships needs to be disclosed by elected officials. We highly recommend that elected officials read ALL OF CHAPTER 176. Don't stop when you get passed the section on elected officials disclosing information. Read on! Think! As you read the instructions given in the law to vendors/bidders and what relationships they are by law required to disclose -- think of it from the prospective bidder's perspective. Is there anyone you know of contracting with your city/county/political subdivision or who you know is planning to bid on a project who might put your name down as someone who serves with them on a board, or is on a board of an organization of which they are a contributor.
It's a very small world. If you are doing it right "feller's and gals", your disclosure form should have a number of relationships disclosed. One does not get to be a community leader without establishing relationships. Chapter 176 doesn't say that you're going to receive any money from a relationship with people doing business with the city. This law is about INFLUENCE as much as it is about DOLLARS.
Usually the formulation of policy "hinges" as much on INFLUENCE as it does on PROFIT. This is why DFW REGIONAL CONCERNED CITIZENS places a very high priority on seeing that local governments come into full compliance with CHAPTER 176 of the Texas Local Government Code.
In my discussions with other Councils of Governments from other regions, the Executive Director of the Deep East Texas Council of Government said: "Being a small fraternity is not a good enough excuse for not putting as much distance as possible between those who are involved in the contracts and those who those who make the decisions on awarding them!"
PUBLIC ACCESS TO INFORMATION:
The intent of the legislature when enacting the law establishing Chapter 176 is clear. The purpose is so that the people can be informed about the relatioships. Some governmental administrators think that the purpose of the disclosure forms is for the state auditors office. Some financial disclosure records are examined by the State Auditor. However, to be in compliance with Chapter 176, a governmental entity which maintains a website is supposed to post the CIS and CIQ forms on the website to inform the people. The law stipulates that vendors and officials are to fill them out and update them within 7 days of learning of an entities intention to bid or seek to do business ... It is reasonable to assume that the record administrator should post the forms very soon after they are turned into the record administrator.
WHY DOES TIMING MATTER?
The people have a right to understand relationships. We have a right to address issues while they are in progress. Having the disclosure forms posted in a timely manner in an easy to find place on the website, enables citizens to question and monitor the process before the dollars have already gone out of the government's coffers!
We have observed a number of governmental entities adopting stricter guidelines than those mandated by Chapter 171 or Chapter 176.
The Attorney's General's 2006 Texas Ethics Conflict of Interest Laws Made Easy states:
18. May a home rule city provide further conflict of interest limitations on its city officials and employees?
A home rule city (a city with a population of 5,000 or more that has adopted a city charter) may provide further and more restrictive conflict of interest limitations on its officials and employees.
Such restrictions may be contained in a city ordinance, city policy or within the city charter. For example, some cities have ethics ordinances or city charter provisions that prevent their city officials from discussing or voting on items if the official has any financial interest in the item
Under 19 in the same publication:
Chapter 176 of the Local Government Code, adopted in 2005 through House Bill 914, requires members of the governing body and executive officers of local government entities to file a conflicts disclosure statement relating to a person that the entity has contracted with or is considering contracting with if the local officer or her family members have certain business relationships with that person. It also requires a person who contracts or seeks to contract with for the sale or purchase of property, goods, or services to file a statement disclosing the person’s affiliations and business relationships with each member of the governing body and executive officer of the entity. The disclosure statement forms are prepared by the Texas Ethics Commission, available at http://www.ethics.state.tx.us/whatsnew/conflict_forms.htm,
and these must be filed by the entity’s records administrator and posted on the internet. This statute is broad in scope, and local officials are urged to study a pending opinion request with the Attorney General’s Office designated RQ-451-GA
and the resulting opinion that will help interpret this statute.
These rules impact citizens serving on governmental boards and commissions:
2. Do conflict of interest laws apply to persons appointed to local boards and commissions (e.g., planning and zoning commission members)?
Chapter 171 conflict of interest laws apply to persons appointed to local boards and commissions if the board or commission exercises powers that are more than advisory in nature. For example, members of a city’s planning and zoning commission would be subject to chapter 171 conflict of interest provisions. Accordingly, the ability of such officials to discuss or vote on an item would be limited by these laws if the official has what is considered a conflict of interest on the issue.
REFERENCE: HB 914 79th Legislature passed 2005
HB 1491 80th Legislature effective May 25, 2007
Attorney General Opinion No. GA-0446
Office of the Attorney General: 2006 Texas Conflict of Interest Laws Made Easy