Derouin: Proposed changes to ethics code wholly inadequate
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The proposed changes do not solve the problems created by the panel’s decision in the Phillips matter. The normalization of unlimited “personal” gifts and unlimited gifts for a “benign purpose” are today “ethical” in Scottsdale and will continue to be so under the proposed changes.”
Jim Derouin, Scottsdale resident
By Jim Derouin
As a citizen of the city since 1985 and one of the authors of the city’s Ethics Code, I have written before about my concerns relating to the “independent” ethics panel decision in the Guy Phillips matter, which a 5-1 majority of the City Council unwisely accepted.
The panel manufactured loopholes in the ethics code as a result of the efforts of former City Attorney Bruce Washburn who secretly represented Councilmember Phillips in his anonymous GoFundMe gift-generating escapade.
The proposed changes recommended by the current city attorney to amend the ethics code are grossly inadequate. Today Scottsdale has an ethics code in name only. Under the changes proposed by the city attorney, crowd source funding of councilmembers and treating gifts as “personal” to avoid the ethics code would still be allowed.
Gifts for “benign purposes” are not prohibited—regardless of amount.
With help from Mr. Washburn, limitless gifts can be given to a councilmember for a “benign purpose” (such as medical expenses) even though gifts do not need to be spent for the “benign purpose.” That was the case with Mr. Phillips who received $2,400 in gifts for medical purposes, yet the vast share of the money was spent for personal or business expenses.
The proposed changes to the ethics code do not eliminate the “benign purpose” loophole.
“Personal gifts” are not prohibited --- regardless of amount.
Mr. Washburn told the panel that the “norm” for members of the City Council is that they can take limitless gifts from limitless persons provided that they are “personal” in nature. When he was City Attorney, he advised councilmembers that this was the “box of chocolate” exception.
When representing Mr. Phillips, it became the $2,400 “personal gift” exemption. The proposed changes to the ethics code do not eliminate the “personal gift” loophole.
Soliciting and receiving gifts from charter officers and city employers are not prohibited.
When Mr. Phillips finally decided to disclose who his benefactors were, it turns out that three charter officers, including the city attorney, were included.
Soliciting or taking gifts from city employees and charter officers should be explicitly prohibited in the ethics code.
Conflicts of interest by the city attorney are not prohibited.
The city attorney was one of the secret contributors to Mr. Phillips’ “benign purpose” GoFundMe account. The identity of the donors was central to the complaint against Mr. Phillips. Yet the city attorney not only did not disclose her involvement, she continued to be fully involved in overseeing the ethics complaint process --- including drawing up rules that prevented the disclosure of who the donors were. As a result, she tainted the process.
This is classic example of Conflicts 101. This was a clear conflict and an egregious lack of judgment. Yet the code changes do not prohibit this conduct.
Votes by councilmembers on matters involving their spouses are not prohibited.
The panel found that Bob Littlefield was responsible for the “benign purpose” GoFundMe account being anonymous. If the city attorney had allowed the panel to call witnesses, Mr. Littlefield would have been a witness. In fact, he too, was one of Mr. Phillips’ secret donors.
Yet Councilmember Kathy Littlefield voted to accept the panel report, even though she clearly violated the mandate in the ethics code providing that the appearance of impropriety should be avoided. So much for what the council thinks about the appearance of impropriety.
If you can get away with it, go for it. Yet the code changes do not prohibit this kind of conduct.
Representation by former city attorneys on ethics matters is not prohibited.
Mr. Washburn, while city attorney, advised Mr. Phillips on ethics matters. He left city service less than a year ago and was prohibited, by state law, from representing Mr. Phillips --- for pay. So Mr. Washburn, secretly, represented Mr. Phillips in the GoFundMe matter for free.
In the process, he convinced the panel to create the “benign purpose” and “personal gift” loopholes so that Mr. Phillips could receive $2,400 from what were then anonymous sources --- and have it spent on whatever he wanted.
The panel, at Mr. Washburn’s urging, even found that this type of conduct was “normal.”
And the beauty of the scheme is that a councilmember can take limitless gifts as long as he or she considers them “personal.” The box of chocolate exemption became the limitless “personal gift” exemption.
Thanks to Mr. Washburn, and the failure of the city attorney to conflict him out of representing Mr. Phillips, unlimited gifts from unlimited people can be “personal” and acceptable. Yet the code changes do not prohibit this kind of conduct.
Public input critical.
The ethics code was gutted by the “independent” panel operating under the rules set by the current city attorney and based on arguments made by the former city attorney. The process was a joke. It was filled with conflicts of interest.
The proposed changes do not solve the problems created by the panel’s decision in the Phillips matter. The normalization of unlimited “personal” gifts and unlimited gifts for a “benign purpose” are today “ethical” in Scottsdale and will continue to be so under the proposed changes.
Editor’s Note: Jim Derouin is an attorney who has lived in Scottsdale since 1985. He does not represent developers and has never represented a client before the city of Scottsdale. He was one of the authors of the City’s Ethics Code unanimously adopted by the City Council in 2006 and has served on various city task forces.