There are important State laws in place concerning conflicts of interest, campaign contribution limits, and campaign financial reporting.
The recently established Winter Park Ethics Board was formed at the behest of a small group of citizens more concerned with limiting the voice of interests with whom they disagree than in doing the work required to compete for votes in the marketplace of ideas. The purpose of the Ethics Board in the eyes of those demanding its formation is to rubber stamp campaign finance restrictions more stringent than State requirements under the righteous banner of improving “ethics” in Winter Park.
The funny thing is that few if any of the people expecting the Ethics Board to do their bidding have demonstrated any understanding of ethics and in some cases have behaved in a clearly unethical manner.
There are fundamental issues at stake and I encourage Winter Park citizens to grind through the details and express your thoughts to the Ethics Board and City Commission before important rights are legislated away by the over zealous among us.
Below are my responses (in blue) to the questions posed by the Ethics Board.
May 13, 2009
To: Mayor and City Commissioners, Ethics Board Members
My responses to the questions posed by the Ethics Board for their May 13, 2009 public meeting follow. I welcome all constructive criticism as we all seek to improve the governance of Winter Park.
Regards, Pete Weldon
700 Via Lombardy
Winter Park, FL 32789
Conflicts of interest:
What are your thoughts, experiences and suggestions for city board members when a conflict of interest arises?
Accepted standards of ethical behavior require disclosure of conflicts of interest and compliance with related State laws. Let’s explore the scope of “conflict of interest.” The “interest” here is that of the City of Winter Park, the entity. A potential “conflict” arises when a city employee, city board member, or city commission member acts in a way that serves their personal interest to the detriment of, or without full consideration of the interests of the City.
The law limits consideration of “conflicts” to financial interests as a practical matter because it is virtually impossible to prove a gain or loss associated with another type of “conflict.” (For those interested, look up Florida Statutes Title X 112.3143.) However, the concept of ethics encompasses all interests, including political interests.
The desired standard of behavior is that each person serving the City in a fiduciary capacity fully understand the distinction between their interests and the interests of the City, that they fully disclose their interests, and subjugate these to those of the City. Let’s look at recent documented ethics issues in Winter Park to help clarify the important distinction between personal interests and the interests of the City of Winter Park.
Case #1: Beth Dillaha is now on record as being a strong opponent of the Sun Rail commuter project that has recently been voted down by the State legislature. She has a strong personal interest in this issue. However, when running for election she intentionally mislead the voters about her interest, deflecting direct questions about her position and posturing as if she embraced the project based on the commuter rail vote approved by the citizens of Winter Park. After being elected she expended most of her time and energy working to terminate the commuter rail agreement with Orange County.
In emails to State Senator Paula Dockery shortly after her election, Beth Dillaha acknowledged her fiduciary duty to serve the City’s certain interests (based in this case on a vote of the citizens), while simultaneously offering to help Ms. Dockery kill the commuter rail project.
It is clear Beth Dillaha, as a candidate, had a conflict of interest and deliberately failed to disclose that interest to the voters prior to her election. It is clear that Beth Dillaha, as a City Commissioner, put her personal interest ahead of the known interests of the City.
Case #2: David Strong fully disclosed his personal interest in having the City purchase the existing post office property. However, he did not fully disclose material financial realities he was aware of and understood that impacted the interests of the City. He promoted voluntary contributions to help pay for the purchase without disclosing that existing pledges had conflicting conditions, putting their collection in jeopardy. In at least one instance, he knowingly misstated a material fact about the cost of purchasing the post office property in a public meeting. In doing so (for whatever reasons and however noble in his mind) he placed his personal interest in purchasing the post office property above the interests of the City. David Strong used his office to promote his personal interest in conflict with that of the city.
There has been some confusion about financial conflicts of interest in Winter Park.
Some have suggested newly elected mayor Ken Bradley has a conflict of interest because he is the head administrator of Winter Park Memorial Hospital. In running for office he fully disclosed his personal interest in and support for the Sun Rail project arguing that it was good for the hospital and good for the City. He fully disclosed his personal interest in this issue and acknowledged that he would recuse himself from voting on any matters before the City connected with the hospital, as is his legal obligation.
We need to avoid the conclusion that someone who does not share our particular interest therefore has a conflict of interest. The most important point is that conflicts of interest exist in the normal course of affairs for the City. Conflicts of interest are not “bad,” they are expected and should be disclosed.
My suggestion is to have an education program about conflicts of interest for those with a fiduciary duty to the City of Winter Park so each such person is aware of their duty and can gain perspective to distinguish their interests from those of the City.
Is the city too lenient or too restrictive in regards to conflicts of interest?
All reasonable requirements are already in place in State statutes (Florida Statutes Title X 112.3143). Any person with a fiduciary duty to the City need only read and understand what is already in place at the State level regarding conflicts of interest. There is no need for the City to re-invent the wheel with new laws.
Have you experienced a conflict of interest, and if so, how was it resolved?
Yes. As an investment adviser and Chartered Financial Analyst I have a professional duty to understand ethics issues and to strive to be aware where my interests may be in conflict with my clients’ interest. There came a time when I decided my interests could supersede those of certain of my clients. I managed this conflict by asking certain clients to find someone else to manage their money.
Campaign finance reform:
What are your opinions about the cost involved with running for office?
Having run for office myself I found the cost of competitively communicating with the voters currently runs between $40,000 to $50,000 per campaign. Virtually all the money goes to communication of one form or another, whether it be neighborhood meetings, print, or other media.
This question can only exist for the purpose of exploring some kind of financial cap on election spending in Winter Park. This would be a grave error. Spending caps can only serve to aid re-election of incumbents by limiting communication about alternative policies and priorities offered by a non-incumbent. Caps on campaign spending would make elections less open and fair, and would likely be unconstitutional.
Do you consider the current system of campaign finance open/transparent/fair?
When I ran for City Commission I decided to accept contributions only from individuals. I did this to assure the voters of my independence. I have no problem with candidates accepting contributions from all “persons” as defined in the law (see below). Each candidate should be free to make their own decision on this aspect of campaign contributions and the voters are free to judge each candidate’s actions accordingly through review of required campaign financial reports.
While any citizen can easily look up information about an entity contributing to a candidate I think it is a good idea to make this even easier. We could have a direct Internet link to State information about each contributing entity available on financial reports (as I believe has been suggested). I would note, however, that the public versions of these reports can be in “image” format which would require a citizen to transcribe a complicated Internet address (in which case a simple lookup by name here would be easier: http://www.sunbiz.org/corinam.html). Perhaps just including this search link on financial reports would help.
I conclude that campaign finance in Winter Park is sufficiently open, transparent, and fair.
Is it good policy to allow businesses to legally contribute to candidates?
Quotations from Florida Election Law: http://election.dos.state.fl.us/publications/pdf/2008-2009/08-09ElectionLaw-highlighted.pdf
“Except for political parties, no person, political committee, or committee of continuous existence may, in any election, make contributions in excess of $500 to any candidate for election to or retention in office or to any political committee supporting or opposing one or more candidates.”
“‘Person’ means an individual or a corporation, association, firm, partnership, joint venture, joint stock company, club, organization, estate, trust, business trust, syndicate, or other combination of individuals having collective capacity. The term includes a political party, political committee, or committee of continuous existence.”
Any “person” as defined above can by law make up to a $500 contribution to any candidate per election. Such “person” could be a homeowners association, a 501(c)(3) non-profit, even a club. For example, a group existing to promote an off-leash dog park can give money to support a candidate who they believe will protect and promote their interest. The Winter Park Historical Association can contribute to candidates they believe will support their interests. The Winter Park Library can do the same as can any group of citizens who act in a collective capacity.
So, why does the Ethics Board suggest through this question that contributions by business interests are any different than contributions by entities that have non-business interests?
There is a false perspective in this question. The interest of a business owner is of no lesser or greater value than the interest of a group supporting off-leash dog parks. If the Winter Park Historical Association gives $500 to candidate “A” and candidate “A” votes to increase City support for the Winter Park Historical Association after being elected, has candidate “A” been bribed by the Winter Park Historical Association? That is exactly what this question presumes results from contributions by business interests.
Here are some numbers related to the recent Mayoral election that offer perspective:
Estimated number of Winter Park residents: 28,000
Estimated number of Winter Park registered voters: 17,000
Estimated number of Winter Park single family residential properties: 8,500
Estimated number of Winter Park commercial properties: 3,000
Actual number of votes cast in the recent Mayoral election: 6,416
Approximate number of campaign donors to David Strong: 178 (18 entities)
Approximate number of campaign donors to ken Bradley: 256 (34 entities)
Less than 6% of those actually voting contributed to a campaign.
37% of registered voters cast a vote.
- The political contribution system in Winter Park is both fair and transparent.
- Significant opportunity exists for many more individuals, business interests, and other interest groups to contribute to Winter Park political campaigns. If you want your voice heard through dollars contributed to a political campaign there is ample opportunity to do so and to organize others.
- Citizens of Winter Park should be more concerned with letting their voice be heard and less concerned with stifling the voice of those with whom they may disagree.
- Setting policies and priorities should be an open debate, not a debate made one sided by laws restricting the voice of any particular interest or interest group.
Should board members/elected officials disclose contributions when their contributor appears before their board?
No. What good would it do? The campaign finance reports are available for all to see. Further, there are ample numbers who make a hobby of analyzing campaign financial reports and telling everyone they know about their conclusions. So, disclosure is not an issue.
Further, as an example, does anyone think the members of the City Commission who received campaign contributions from Charlie Rosenfelt would change their vote to support his request to annex his property in the Stonehurst enclave into the City of Winter Park if they had to make a statement that they accepted contributions from Charlie? Of course not. So what’s the point?
What can be done to promote transparency, goodwill and open government in Winter Park?
The best and only effective means of encouraging ethical behavior is through building a culture of full disclosure. No procedure or law can force anyone to be forthcoming and candid. This cannot be accomplished by having an “Ethics Board” or by passing laws beyond those already in State Statute. It can only be accomplished by setting standards of behavior and allowing the citizens to draw their own conclusions each year at the ballot box
I suggest the Ethics Board take the following actions:
1. Recommend to the City Commission that the Ethics Board be dissolved in favor of supporting the ethical standards and conflict of interest laws already included in State Statute.
2. Recommend to the City Commission that an ethics education program be instituted for new employees, new board members, and new City Commission members, with an annual refresher course. The greatest “ethical” issue in our current environment is that those speaking most loudly about the need for ethics have not demonstrated an understanding of the subject, and in some cases are the only people with documented ethics violations.
3. Recommend to the City Commission that the City of Winter Park discuss ethics in communications with the citizens on a routine basis, letting them know that the best way to protect and preserve the character and quality of our city is to encourage people of character and quality to participate in their local government.
First of all, good for you sharing your ideas with the Mayor and Commissioners on this important topic. You are an excellent example of an informed and active citizen, and a good example for the rest of us. However, I would respectfully disagree with some of your perspectives. First of all, should campaign contributions be limited to living people only.
Another perspective to consider here is that one of the most abused areas of campaign finance in Florida is the use of LLC’s for giving contributions. You and I are limited to a $500 contribution. However if someone owns five restaurants or 25 real estate developments, they would be permitted under current law to give $500 five times or 25 times with NO DISCLOSURE OF THEIR NAME or the fact that these contributions all flow from one person. The City of Sarasota, similar in size to Winter Park passed a referendum last year, approved by almost 85% of voting citizens, that restricted contributions to living persons only. This law has not been challenged. There are several other cities around the country that also have instituted this requirement.
I will add to your point, that the key here is disclosure, more than how much the limit is.
Secondly, you suggest that our commissioners and mayor should not need to bring forward to their peers. According to Florida State Lawa SS 617.0831, any director of a non profit organization must disclose any conflicting relationship or interest in any matter to be considered by the Board of Directors (or Committee). An interested director will be counted in determining the presence of a quorum, and although the interested director may vote, her or his vote cannot be the deciding vote (that is, the votes cast for the action must be sufficient without counting that director’s vote). Citizens, our Ethics Board, and our Commissioners should ask, why should our elected officials be any different?
Thank you Pete, and keep up your excellent dialogue and input.
Thanks for taking on the substance.
I fully understand the desires of those concerned about LLC contributions. I too believe that the ability to hide behind an organizational shield is not desirable. However, anyone with any interest can form entities to support candidates and I believe this is a net positive for the electoral process. The issue is full disclosure, not the act of making the contributions. If the State adds a requirement that any partnership and LLC making a political contribution must name their officers, directors, and owners, I am all for it.
Once disclosure is made the voters are free to factor that reality into their decision. I am sure some people voted for me in 2007 because I demonstrated my independence by not taking “entity” money from any interest. I am sure some people voted against David Strong in 2009 because he wrote sixteen $500 checks to Beth Dillaha’s campaign from business entities he controlled. All this was disclosed.
The people of Sarasota, like some people in Winter Park, are trying to stop a particular interest group (commercial property owners) from having a voice in their governance. If 85% voted for this then 85% do not understand the breadth of the issues involved.
Look at the numbers in Winter Park that I referred to. Where is the hidden advantage of all those undesirable commercial interests? For example, the Holler family must have many business entities they could use to contribute to candidates of their choice but instead, members of the family elected to write their own checks under their own names. Look at the actual number of contributions and the total dollars on both “sides.” In the annual Winter Park cartoon of anit-developers and pro-developers, anti-growth and pro-growth there is no evidence the electorate is willing to play the game. The game, in fact, distracts us from real progress and I think the Winter Park electorate is getting smarter about this.
In Winter Park where is the justification for: contribution limits, singling out particular interests for non-participation, caps on election spending? There is no justification. It is just one set of interests trying to limit the influence of another at the expense of open and fair elections in Winter Park.
I need your help on your last paragraph. What did I say that prompted this? I believe State Statute requires local elected officials to recuse themselves where financial conflicts arise. I can see the wisdom of the non profit rule you note when non-financial conflicts arise but there is mucho gray area here that needs to be sorted out.
Finally, I know your perspective is state wide and I appreciate the larger context. My efforts here, however, are focused on documenting the realities in Winter Park and relating these to the actual needs of the city. In that regard, local efforts for “ethics” reform in Winter Park exploit the coattails of the larger issues out of context. The current case is not about ethics, it is about political control.
Thank you for your participation in yesterday’s meeting.
One of my biggest complaints about campaign finance is the artificial maximum of $500 per donor. This amount has not been changed since 1991. It’s ridiculous to talk about “too much money” in a campaign when inflation has eroded the value of a donation. The limit should be raised to keep pace with inflation and the increased costs of a campaign in 2009 vs. 1991. If costs rise and donations are restricted the only people able to run for office are the well-known, well-connected and well-off. Our system rewards the incumbents (no surprise) and the established insiders (duh) who can raise money from their friends.
If we want to see real campaigns and real debates let’s raise the donation limits to the point where someone can move to town tomorrow and if he can convince 5 or 6 people to stake his $50,000-$70,000 transparent campaign for mayor or commissioner, let ’em go for it. The newbie can spend his time explaining his positions and not worrying about money. Let the voter decide if the newbie is worthy-not the campaign finance system. The same with LLC donations. Let’s let the voter decide if a donation is questionable. This is a scary proposition to a) an incumbent, b) an insider. In my thinking, this would “level the playing field” for everyone.