MUNICIPAL OFFICIALS AND EMPLOYEES; CODE OF ETHICS;

You asked for a section-by-section analysis of HB 6594, An Act Concerning Municipal Ethics, Municipal Whistleblower Protections and the Investigation of Municipal Corruption.

SUMMARY

The bill requires municipalities and special districts to establish an ethics commission and adopt the code of ethics contained in the bill. Towns (48 listed in the Blue Book) and districts that have exercised their statutory authority to establish a commission do not have to establish another but they may have to adopt the model code if its provisions are stricter than those in their existing code.

The bill extends to municipalities the whistleblower protections and procedures currently applicable to corruption, unethical practices, or law violations by state agencies.

The bill eliminates a requirement for the chief state's attorney or a state's attorney to include in any application for a grand jury to investigate allegations of municipal corruption reasons why (1) other normal investigative procedures that were tried failed or (2) normal

procedures are unlikely to succeed or are too dangerous to use. It also eliminates the grand jury panel’s duty to find in these cases that other normal investigative procedures have failed, reasonably appear to be likely to fail, or appear too dangerous to try.

Sections 1 and 13. Applicability

Current law allows a town; city; borough; or fire, sewer, or other district to establish a board or commission to investigate allegations against a local public official or employee of unethical conduct, corrupting influence, or illegal activity. It also specifies provisions in the State Ethics Code applicable to allegations and investigations of municipal or district ethics violations. The bill eliminates the application of the State Ethics Code in theses cases.

Instead, the bill requires all towns, cities, boroughs, and special districts to create an ethics agency, unless they already have an ethics agency or establishes one before October 1, 2003, the bill’s effective date. They must comply with the bill’s ethics code provisions, unless they already have or adopt a code that provides greater ethical protections than the bill.

Section 3. Municipal Ethics Commission—Membership

The bill requires each municipality or special district to establish a five-member ethics commission. Two or more municipalities or districts may instead establish a joint commission.

The legislative body of the municipality or district appoints the members by a unanimous vote to serve a three-year term. However the first appointees serve staggered terms of one (one member), two (two members), and three (two members) years. No more than three members may be from the same political party.

Members cannot serve more than one three-year term, except they can continue in office until a successor is appointed.

Members must be electors of the municipality or special district establishing the commission. But no members can: (1) hold or campaign for public office, (2) have held or been a candidate for public office within the two years immediately prior to appointment, (3) hold office in a political party or political committee, or (4) be a member of any other municipal or district agency. Additionally, commission members and employees are prohibited from publicly supporting any candidate for municipal or special district office under the commission’s jurisdiction, including volunteering as a campaign worker, speaking at a political event, or endorsing the candidate. The bill prohibits a candidate for municipal or district office from disseminating information indicating that a commission member or employee supports the candidate’s candidacy.

Under the bill, commission members elect a chair who presides at meetings and a vice-chair who presides in the chair’s absence. Three members constitute a quorum and the number of votes necessary for commission action. The chair or any three members may call a commission meeting.

Section 4. Municipal Ethics Commission—Duties

The commission must:

1. must compile and keep a record of all reports, advisory opinions, statements, and memoranda filed by or with the commission to facilitate public access;

2. must report annually, by February 1^st, a summary of the commission’s activities to the legislative body of the municipality or special district;

3. must issue advisory opinions; and

4. must investigate allegations of code violations.

The commission may adopt implementing rules and regulations, after a public hearing, that are not inconsistent with the code; and employ necessary staff or outside counsel within available appropriations.

Advisory opinions are binding on the commission until amended or revoked and must be deemed to be final commission decisions for the purpose of appeal. Any person who requests an advisory opinion and relies on it in good faith can assert his actions as an absolute defense to any alleged code violation.

Sections 5 and 6. Commission—Complaint, Investigation, and Hearing Procedures

Complaints alleging a code violation must be filed within five years after the alleged violation was committed. With respect to such allegations of code violations, the bill requires the commission to:

1. review any complaint filed by a member of the public to determine if it alleges a code violation.

2. investigate complaints made on its own initiative or on the complaint of any person. Complaints filed with the commission must be on a commission-prescribed form and signed under penalty of false statement.

3. dismiss any complaint that fails to allege a violation and duly notify the complainant and the respondent by registered or certified mail.

4. send the (a) respondent named in the complainant notice and a copy of it by registered or certified mail and (b) complainant notice of receipt of the complaint.

5. schedule a date to hear any complaint within 30 days after determining that it alleges a violation receipt and hear the complaint within 60 days after it is received.

Investigations. When investigating an alleged code violation, the bill authorizes the commission to hold hearings, administer oaths, examine witnesses, receive oral and documentary evidence, subpoena witnesses, and request anyone to produce books and papers relevant to the investigation for the commission’s examination. The commission may ask local police for help in the exercise of its powers and the police must comply with the request.

The bill prohibits the commission from disclosing the complaint or record of the commission’s investigation without the respondent’s consent, unless it finds probable cause to believe a violation was committed. It prohibits a complainant, respondent, witness, designated party, or commission or staff member from disclosing to a third party any information learned during a complaint investigation, including knowledge that a complaint exists.

Hearings. Respondents have the right to appear, be represented by counsel, and examine and cross-examine witnesses at the hearings, which are governed by the Rules of Evidence. At least four members of the commission must agree to any finding of a code violation.

The commission must inform the complainant and respondent of its findings, including a summary of its reasons, regarding the complaint by registered or certified mail within three business days after the hearing terminates. At this time, the entire record of the investigation is open to public disclosure.

Respondent aggrieved by the commission’s decision may file an appeal within 30 days to the Superior Court in the judicial district where the municipality or special district is located.

Retaliation Against Complainants. The bill prohibits anyone from taking or threatening to take official action against anyone because he informed the commission of a possible code violation. It prohibits the commission from disclosing the identity of anyone who gives the commission information, unless the person consents or disclosure is unavoidable.

Section 7. Penalty for Code Violations

The bill subjects code violators to (1) a civil penalty of up to $ 5,000 per violation, (2) restitution of any pecuniary benefits resulting from the violation, (3) public censure and reprimand, or (4) up to a 90-day suspension or dismissal from employment if they public employees.

Section 8. Code—Prohibited Activities

No public official or employee can:

1. engage or participate in a business or transaction, including outside employment, or have an interest that is incompatible with or that would tend to impair independent judgment in the proper discharge of the official’s or employee’s public responsibilities;

2. solicit or accept a gift from anyone he knows is interested in any pending matter within the official’s or employee’s official responsibility;

3. appear on behalf of private interests before, or represent private interests against, any municipal or special district board, agency, or committee if the official or employee receives compensation for the appearance or representation other than per diem payments;

4. disclose confidential information concerning municipal affairs or use such information for his own financial interests (interests with a monetary value of $ 100 or more) or those of others;

5. ask or permit municipally-owned vehicles, equipment, facilities, materials, or property to be used for his own personal convenience or profit, except when this property is available to the general public or permitted for the employee’s or official’s use when conducting official business;

6. contract with the municipality or special district, unless the contract is awarded through a public notice, competitive bidding process;

7. use his position or office for his own financial benefit or that of an immediate family member (spouse, child, or dependent relative living in the household), or associated business;

8. accept a fee or honorarium for an article written, appearance or speech made, or for participation at an event in his official capacity; or

9. solicit or accept anything of value, including a gift, loan, political contribution, reward or contribution, reward or promise of future employment based on any understanding that the official’s or employee’s vote, official action, or judgment would be or had been influenced thereby.

A “gift” is generally anything of value given for less than its value. The bill contains 13 gift exceptions, including items valued at $ 10 or less, certificates valued at less than $ 100, and gifts up to $ 25 given at gift-giving occasions such as Christmas and Hanukkah. In addition to exceptions to the gift rule, a gift is not received by a public official or employee who refuses it, returns it, pays the donor the full value of it, accepts it on behalf of the municipality or special district (i. e. , gift is intended to remain in the permanent possession of the municipality or special district), or donates it to a nonprofit organization. If donated, the official or employee cannot take a tax deduction or credit for it.

The bill also prohibits a public official or employee from voting on or otherwise participating in any matter on behalf of the municipality or special district if he, an associated business, or an immediate family member has a financial or personal interest in the matter greater than any other segment of the population, including the sale of real estate, material, supplies, or services to the municipality or special district. If the participation is within the scope of the official’s or employee’s official responsibility, he must give the commission a written explanation of the nature and extent of his interest.

Like public officials and employees, the bill prohibits their immediate family and associated businesses from entering into private contractual agreements with the municipality or special district.

The bill does not prohibit or restrict a public official or employee from appearing before any municipal or special district board or commission on his own behalf or from being a party in an action, proceeding, or litigation brought by or against the official or employee to which the municipality or special district is a party.

Section 9. Consultants

The bill prohibits paid consultants of a municipality or special district from:

1. representing a private interest in any action or proceeding against the interest of the municipality or special district that is in conflict with the consultant’s performance of his duties;

2. representing anyone, other than the municipality or special district, in any matter in which the consultant participated personally and substantially on behalf of the municipality or special district; or

3. disclosing confidential information gained in his capacity as consultant or using it for his personal interests or those of others.

Section 10. Post-Employment Restrictions

The bill prohibits former public officials or employees from:

1. accepting compensation to appear before any municipal or special district board or agency where he was formerly employed for the first year after terminating his employment;

2. representing anyone, other than the municipality or special district, in any matter in which he participated personally and substantially while in municipal service;

3. disclosing or using confidential information gained in his official position for his own financial gain or those of others; or

4. working for a party to a contract, other than the municipality or special district, for one year after the contract is signed if he participated substantially in the contract negotiations or award and contract obligates the municipality or special district to pay $ 100,000 or more.

Section 11. Statement of Financial Interests

The bill requires all public officials and any employees designated by the municipality or special district to file with the municipal ethics commission by May 1, annually, a statement of financial interests for the preceding calendar year. The statement must be filed under penalty of false statement.

Anyone who leaves his office or position before the year ends must file the statement for that portion of the year that he held his office or position. The commission must notify affected officials and employees of their duty to file the statement within 30 days after their departure and the person must file the statement within 60 days after receiving the notice.

The statement must include the following information regarding the official or employee, his spouse, and any dependent children living in his household:

1. the names of all business associates;

2. names of all employers;

3. names and addresses of clients, patients, and customers who provided more than $ 10,000 in net income to the official’s or employee’s associated business, except when the law or the ethical standards of a professional group, society, or organization prohibit nonconsensual disclosure of the information;

4. all securities in excess of $ 10,000 at fair market value, including those held in the name of a corporation, partnership, or trust for their benefit or the benefit of their spouse or dependent children;

5. all real property located within the municipality or special district owned by the official or employee, his spouse or dependent children, or held by a corporation, partnership, or trust for their benefit;

6. the names and addresses of creditors owed debts of more than $ 10,000; or

7. any leases or contracts with the municipality or special district held or entered into by the person or an associated business.

The statement of financial interests is a public record, subject to disclosure under the Freedom of information Act. Anyone who finds it impossible to provide the information required in the statement may ask the commission for a waiver.

Section 12. Copies of the Code

The bill requires each municipal clerk to cause a copy of the code to be distributed to every public official and employee not later than December 1, 2003. Any public official or employee hired after that date must be given a copy of the code before entering office or the position. The officials and employees must sign a receipt for their copy, which the clerk must keep on file.

Section 14. Whistleblower Protections

The bill extends to municipalities the whistleblower protections and procedures currently applicable to corruption, unethical practices, or law violations by state agencies.

Reporting. Anyone who knows of any corruption; unethical practices; violations of state law or regulation, special act, municipal charter, or municipal ordinance; mismanagement; gross waste of funds; abuse of authority; or danger to public safety occurring in any municipal or special district department or agency or large municipal or special district contract may send information to the auditors of public accounts. A large municipal or special district contractor is an entity that enters into at least a $ 5 million contract with a state or quasi-public agency, other than a contract to construct, alter, or repair a public building or public work.

Investigations. The auditors must review the matter and report their findings and recommendations to the attorney general, who must conduct any investigation he considers proper. The auditors may assist with the investigations.

After his investigation, the attorney general must, when necessary, report his findings to the governor. If the matter involves a crime, he must report it to the chief state's attorney. Neither the auditors nor the attorney general may reveal the name of their informant without his consent, except where it is unavoidable during the course of the investigation.

Retaliation. Municipal, special district, or large contractor officers or employees may not take or threaten to take any negative personnel action against an employee in retaliation for disclosing information to the auditors or the attorney general. Any employee who knowingly or maliciously makes false charges can be disciplined or discharged. The bill creates a rebuttable presumption that any personnel action taken or threatened against an employee who makes a whistleblower complaint is retaliatory if it occurs within one year of the complaint.

The bill gives whistleblowers who believe they are being retaliated against (or threatened with retaliation) for their action the option of filing an appeal in accordance with their collective bargaining contract, where applicable. Employees of large contractors can avail themselves of administrative remedies and, if still unsatisfied, bring a civil cause of action.

Alternatively, the whistleblowers could notify the attorney general, who must conduct an investigation. After the investigation is concluded and apparently regardless of the outcome, the attorney general, employee, or the employee's attorney can file a complaint with the chief human rights referee.

The chief referee must assign it to a human rights referee who must conduct a hearing and determine whether the personnel action or threatened action was in retaliation for whistle blowing. If he finds that the action or threatened action was retaliatory, he may order the aggrieved employee to (1) be reinstated to his former position, (2) receive back pay, (3) have his benefits reestablished to the level for which he would have been eligible but for the violation, and (5) receive reasonable attorney fees and any other damages. Any party may appeal the referee's decision to Superior Court. For purposes of the act, the human rights referee is an independent hearing officer.

The bill requires the chief human rights referee to adopt regulations that establish the procedure for filing complaints and noticing and conducting the hearing.

Sections 15 and 16. Grand Jury Investigations

The bill eliminates a requirement for the chief state's attorney or a state's attorney to include in any application for a grand jury to investigate allegations of municipal corruption reasons why (1) other normal investigative procedures that were tried failed or (2) normal procedures are unlikely to succeed or are too dangerous to use. It also eliminates the grand jury panel’s duty to find in these cases that other normal investigative procedures have failed, reasonably appear to be likely to fail, or appear too dangerous to try.

By law, Superior, Appellate, or Supreme Court judges, the chief state's attorney, or a state's attorney may apply to a panel of three Superior Court judges specially designated by the chief court administrator, for a grand jury investigation. The applicant must have a reasonable belief that the administration of justice requires an investigation to determine whether or not there is probable cause to believe a crime has been committed. And he must include in his application a statement of the facts and circumstances that justify this belief. If he is the chief state's attorney or a state's attorney, he also must include:

1. the status of the investigation and of the evidence collected by the application date,

2. why other normal investigative procedures that were tried failed or why normal procedures are unlikely to succeed or are too dangerous to use, and

3. the reasons for the applicant's belief that an investigatory grand jury and the investigative procedures it employs will lead to a finding of probable cause that a crime was committed.

The panel reviewing applications may approve them and order an investigation if it finds that:

1. the administration of justice requires an investigation to determine if there is probable cause to believe that a crime was committed;

2. for applications submitted by the chief state's attorney or a state's attorney, other normal investigative procedures have failed, reasonably appear to be likely to fail, or appear too dangerous to try; and

3. the investigative procedures that an investigative grand jury uses appear likely to succeed in determining if there is probable cause to believe that a crime was committed.

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