A Great Start On Dealing With Conflicts Of Interest In Office
Written by Michael Lewis on March 23, 2006
By Michael Lewis
A disclosure plan Mayor Carlos Alvarez lays out for top officials is so good that it shouldn’t stop at county hall. With tweaking, it would benefit cities, too.
His reasoning is on target: Disclosure of self-interests wipes out fears of secret profits in public office.
He doesn’t propose new penalties for conflicts of interest, counting on voters to draw proper conclusions from disclosures and government to wipe out conflicts under existing rules.
As the mayor puts it:
"Public confidence in elected officials is the most precious commodity any government can count upon because, without that trust, it would be impossible to govern. … We must take steps to guarantee the highest levels of transparency in government and demand the highest ethical standards of our public servants. To be truly effective, we must foster complete trust from our community."
The proposal would require officials to file a sworn statement before taking an action affecting a private client or customer, subject financial disclosure statements to auditing and post disclosures on line.
It would be hard to disagree.
But adjusting is needed in the plan Mr. Alvarez sent to commission Chairman Joe A. Martinez to introduce – remember, the mayor cannot introduce legislation and needs cooperation from 13 commissioners he has alienated to get anything passed.
What kind of tweaking is needed? Let’s look at real-world bad examples.
Case 1: A mayor, a commissioner and a manager partner up for a real estate deal that promises a big payoff after government enhances their property’s value, which it does. While the three don’t personally act to enrich themselves, actions are taken by subordinates. This is the Manny Diaz-Johnny Winton-Joe Arriola case in the City of Miami.
The Alvarez proposal wouldn’t spot this ethical entanglement because the three wouldn’t have to file statements of action they did not take. They would have to list ownership in the land but not partners’ names, putting the burden of linking the three on investigators or sharp-eyed citizens. Someone has to put the pieces together.
Case 2: A mayor is a partner in a troubled marina and restaurant on valuable government land. The partnership falls almost $200,000 behind in rent, but government does nothing. This is the Manny Diaz case in the City of Miami.
The proposed regulations wouldn’t catch this one with a required sworn statement, either, because the mayor took no action – nor, incredibly, did anyone else. The mayor wouldn’t have to list his share of ownership on the disclosure if he didn’t get paid – and troubled as the deal was, he might not have been. He might have had to note ownership in a company but not the city leasehold, again leaving it to investigators to make the link.
Case 3: The mayor in the marina-restaurant deal sells his share of the valuable lease on government land for an undisclosed amount. Also undisclosed is how much he paid for his share, if anything, or whether his political muscle was all he invested (this happened with a county commissioner in Central Florida in 14 separate deals). Again, the Manny Diaz case.
Once more, government took no apparent action, so the sworn statement is not needed, though the beneficiary would have had to disclose how much he got for his share – though not his profit, so we’d never know if he’d paid for his share or gotten it free.
Case 4: Back to the mayor and the marina-restaurant. While he sells his share in this site to his partners, all remain partners in deals elsewhere. The partners hold the lease on city land other operators would covet. Once again, the Manny Diaz case.
The biggest flaw in the Alvarez proposal is that it requires no disclosure of third-party deals like this unless the mayor in the restaurant-marina deal were to act on his partners’ leasehold. But it is in Mayor Diaz’s best interests never to act. Action might result in someone other than his partner getting a valuable lease.
So while the spirit of Mayor Alvarez’s proposal is impeccable, it needs fine-tuning to attack real-world abuses. He in fact suggests that but offers his plan as a starting point.
Considering that all four studies in conflict of interest come from the City of Miami, the Alvarez proposal should become the starting point for action at all levels of government.
Meanwhile, Miamians should look hard at who is involved in all four cases.