NC’s political watchdogs: The State Ethics Commission’s strengths and weaknesses

Posted on September 17, 2014

RALEIGH— The state office charged with the huge task of keeping North Carolina’s public officials on the up-and-up meets in a surprisingly small space. At least four times a year, the State Ethics Commission convenes in what was once the dining room of a Victorian-era home in downtown Raleigh.

The room, in a Blount Street house that serves as the commission’s headquarters, has proved sufficient, provided that few members of the public or the press show up, and both groups rarely do. The modest setting hints at the challenges for the commission, which is confined by its budget, usually under the public’s radar and buffeted by shifting mandates and the digital revolution.

The commission “is charged with ensuring that standards of ethical conduct and standards regarding conflicts of interest are adhered to by public officials” and “ensures that lobbyists and lobbyist principals understand and comply with their duties and responsibilities under the Lobbying Law,” according to its mission statement.

The commission “accomplishes this mission through a combination of disclosure (transparency), education, advice and enforcement,” as the statement puts it.

Despite the scale of its work, and its important role in monitoring public officials on behalf of the public, the commission usually toils in silence and rarely makes headlines. “For the most part, there’s not a lot of outside interest” in state ethics enforcement, Perry Newson, executive director of the commission, said in an interview last week.

There was a recent exception to that inattention in Western North Carolina, though: the much-reported dustup between state Rep. Tim Moffitt (R-Buncombe) and his Democratic challenger in this year’s election, Brian Turner. In March, Turner filed an ethics complaint against Moffitt alleging that Moffitt asked Turner to resign from the race in exchange for a job with UNC-TV. Moffitt denied the allegation, and after investigating, the commission dismissed the complaint in May.

Turner’s complaint and the commission’s ruling can be read in the collection of documents below.

In the wake of that high-profile dispute, Carolina Public Press launched an in-depth review of the commission’s work during its first seven years of operation.

In it, we found a bipartisan and vigorous effort to enforce ethics laws that’s constrained by a lack of resources, strict confidentiality rules and limited enforcement powers, and burdened by an ever-expanding mandate.

We also found that the commission has referred only two of the more than 500 ethics-related complaints it has received for prosecution. Details on those cases have not been disclosed. And while the number of ethics advisory opinions the commission offers has steadily increased through the years, the vast majority of them remain confidential.

For all of the commission’s work overseeing public officials, its operations have remained something of a mystery to the public. Below we profile the commission’s members, detail what the commission does and doesn’t do, and assess what outside observers say are its strengths and weaknesses.

A bipartisan board of eight appointees

The commission was created by the N.C. General Assembly in 2006 after a wave of ethics scandals rocked state government, and began operating in 2007. It replaced a previous Board of Ethics, in existence since 1977, that had a tiny staff and limited oversight powers. The eight-member commission currently has a professional staff of 13 employees and a $1.2 million annual budget.

The State Government Ethics Act, which created the commission, directs that four of the members be appointed by the governor and four by the General Assembly. The lengths of their terms have varied, and the law has provisions that keep the membership evenly split between Democratic and Republican appointees.

The commission is required to hold at least four meetings annually to review new or proposed ethics rules, discuss enforcement and review alleged violations of ethics and lobbying laws. The meetings are announced on the commission’s website and are open to the public.

The graphic below lists the current membership, the members’ terms on the commission and their backgrounds. Note that, at present, there is a vacancy on the commission, as one member recently resigned to run for a judge’s seat. That slot is awaiting a new appointment from the General Assembly.

An eye on ethics violations

The commission is responsible for fielding and dealing with complaints about alleged violations for persons covered by state ethics laws, including state legislators, legislative employees, judges and justices, district attorneys, clerks of court, a host of other public servants and lobbyists.

Generally speaking, the commission investigates two categories of violations: those relating to ethics laws and lobbying laws.

Anyone can file an ethics complaint against a covered person, at no cost, but the complaint cannot be anonymous, and it must be issued in writing, signed and sworn. Furthermore, it must allege specific violations in order to be considered by the commission.

Complaints and any documents generated from commission investigations are confidential, though some of them are shared with the targets of a complaint. In the event the commission moves forward with a full-fledged investigation — a rare development — public hearings are initiated.

The commission has varying enforcement powers when it comes to complaints. It can pursue investigations of some state employees, but it’s required to refer some matters to other bodies. For example, if the commission finds probable cause of a violation by a legislator, it must refer the complaint to the General Assembly’s Legislative Ethics Committee. And if it finds the same for a judge or justice, it must refer the complaint to the Judicial Standards Commission.

In practice, the commission has received an average of about 70 ethics complaints per year since its inception. Complaints have generally declined since peaking in 2010, and the vast majority have been dismissed after a preliminary review, according to CPP’s analysis of the commission’s annual reports. However, in the past two years, the number of complaints accepted for investigation has risen substantially.

In its seven-year run, the commission has referred only two complaints for prosecution of the alleged violator. Both cases occurred in 2011, and the commission is barred from talking about them.

“We are legally prohibited from discussing certain types of information that we have about complaints,” Perry explained in an interview last week.

That’s true even of most of the cases that have been resolved. Asked to comment about Turner and Moffitt’s ethics dispute, for example, Perry said: “I’m not even allowed to acknowledge that that, or any other case, existed. As a general matter, complaints that are filed with us are confidential.”

Moffitt, not the commission, released documents relating to the complaint.

Advisory opinions, formal and informal

When state legislators want to know if a particular fundraising method or a subsidized research trip is in line with state law, they call the ethics commission. Last year, the commission fielded almost 700 requests for such advisory opinions.

The opinions fall into two very different categories, formal and informal.

The informal opinions are issued by the commission’s staff and are confidential. They can be written or oral, and they provide the requester no immunity for future violations.

The formal opinions are issued by the commission and must relate to “reasonably anticipated facts and circumstances,” as the commission puts it. And they can provide the requester with some immunity in the future.

Formal opinions are confidential as well, but the commission does prepare, and post online, versions of formal opinions that remove the identity of the requester. Links to those opinions can be accessed here.

The graphic below shows the number of advisory opinions issued the commission, by year. The data indicate that formal opinions have always been a small number of those issued, and that they’re generally on the wane, while at the same time the number of informal opinions is climbing.

Just what kind of ethics advice do North Carolina’s public officials seek? In 2012, a typical year, exceptions to the gift ban law were the chief subject of ethics queries. The graphic below shows the spread of concerns raised in advisory requests.

Monitoring potential conflicts of interest

Each year, certain public officials are required to file a Statement of Economic Interest — a lengthy form disclosing financial, professional and personal information about the individual and their immediate family — with the commission. Those who must file include legislators, judges, district attorneys, clerks of court, members of the Council of State and some other categories of public employees. In addition, candidates for most of those offices also must file the statement.

The SEI form, which can be read in the document collection below, is used by the commission to determine if public officials face any conflicts of interest in the performance of their official duties. This year, the commission will review some 7,000 SEI forms.

There is a $250 for failing to file the document or filing after the annual deadline, and there are criminal penalties for concealing information or filing false information. The fines are exceedingly rare, though. In 2013, for example, the commission fined only two of the estimated 6,600 filers.

All SEI forms are public records and can be requested from the commission by anyone.

Ethics education

The commission directs ethics education sessions that are required for public servants, ethics liaisons in the executive branch, legislators and legislative employees. As of last year, some 7,300 individuals were required to take the class, which is offered live and online.

The requirement is something of a technicality, however, as there are no penalties for not taking the class.

The commission also provides a class on lobbying laws, for lobbyists and stage agency legislative liaisons, but unlike the ethics class, it is not mandatory.

In addition, several times a year, the commission publishes a newsletter on the latest developments in ethics and lobbying rules. All of the newsletters can be read on the commission’s website, here, and the most recent one, published in July, is included in the documents below.

‘We’ve had to make do’: Commission’s work is never done and ever-expanding

Every time the General Assembly has a session, it adjusts parts of ethics and lobbying laws, and most of the changes lead to an increase in the commission’s workload. 

“They are constantly giving us more to do,” said Newson, the commission’s executive director. “They are expanding our jurisdiction. And, in fairness, they have given us more resources at various points.”

Most recently, the legislature added new categories of individuals who must file SEI forms each year: Technical Advisory Committee members of Metropolitan Planning Organizations and Rural Planning Organizations.

That means that the commission suddenly has hundreds more forms to evaluate. To handle the influx of paperwork, the General Assembly budgeted for an additional full-time staff worker.

“If you find a state agency that will say, ‘We have all the resources we need,’ let me know, because that’s a rare entity,” Newson said.

“But the bottom line is, yeah, we’ve had to make do. We’ve had to spread various work around the staff, divide it within areas that were not their area of speciality, necessarily, just to get things done. We were really hopelessly behind for the first three or four years. There was no way humanly possible, with the resources we were given, that we could do the job that was assigned to us. But it’s gotten better, I will say that. It’s not 100 percent, but it’s way better than it was when we first started out.”

Newson’s staff has become more efficient over the years, he said, “but just in general, we’re pretty pressed to get it all done.”

Without more funding, the commission simply can’t do the full range of what’s expected of it, according to Jane Pinsky, director of the Raleigh-based N.C. Coalition for Lobbying and Government Reform, a nonpartisan nonprofit that pushes for good-government policies and has long observed the commission’s operations.

“They have grown and continue to grow into ever-changing jobs,” Pinsky said in an interview last week. “They are way understaffed, and they are hampered by lack of money and lack of adequate IT.

“One of the problems with the commission is that they are funded by the very people they are supposed to regulate. I think that there somehow needs to be a dedicated funding stream, so that they are not at the whim of legislators.”

State’s ethics enforcement ranks relatively high, but lacks in key areas

In 2012, a consortium of media outlets did a nationwide study, called the State Integrity Investigation, to document and compare how states seek to counter official corruption. The project took a close look at each state’s ethics enforcement laws and agencies.

In a 2012 report, a collaborative media State Integrity Investigation ranked North Carolina’s ethics program the 15th best in the nation. Still, the project gave the ethics commission’s statutory powers a grade of “C.” Click here to see the project’s full report card on ethics enforcement in North Carolina.

North Carolina’s ethics commission ranked comparatively high in the study, being judged the 15th best in the county. But its overall work was assigned the grade of “C,” largely because of statutory limitations on its investigation and enforcement powers.

Key areas where enforcement was found lacking included: the commission’s inability to discuss most ethics complaints, limited options for imposing penalties on offenders, jurisdictional shortcomings when it comes to monitoring all branches of state government and lack of provisions for accepting anonymously lodged complaints.

Pinsky offered a similar assessment, saying she’d grade the commission “C+/B-,” while noting that many of its limitations are not of its own making.

Most recently, concerns have arisen about the commission’s ability to widely share important information about potential conflicts of interest. This summer, the commission published an online database of recent SEI filings. The data was available for about six weeks before it was removed from the web, and it’s unclear when it will reappear.

“I wish I had the answer for when it’s going to return,” Pam Tidwell, the commission’s assistant director, said in an interview last week. “We discovered some technical glitches with it. We knew that is was likely that when we were dealing with that many documents and a brand new system that there would be some glitches, and so we made the decision to take that down.”

And that’s not the only factor that could keep these public records from being readily available, Raleigh TV station WRAL reported.

Some folks at the commission’s most recent meeting, on Aug. 20, were worried about the extent of their personal information that had become available in online SEI forms. “That did happen,” Tidwell said. “That’s not why we pulled it down, but there were people who expressed that concern, law enforcement, primarily. Their concern was having their personal contact information online, and the commission is looking at that issue.

“The documents are public, but should we ultimately consider hiding someone’s home address?” was a key question, she said.

It’s past time to have the SEI filings online, Pinsky said.

“Years ago, citizens should been able to check anybody’s Statement of Economic Interest on the Internet,” she said. “They should have been up there, frankly, five years ago. There’s no excuse, in a day and time when you and I can deposit a check by scanning it with our phone, for them to not be able to get that material online.

“What the State Ethics Commission does is, one, obviously, keep ethical standards high, but, secondly, it should provide ways for citizens to have confidence in their government and know it’s operating on our behalf. Without information, it’s pretty tough to have confidence.”

This report includes reporting by Kirk Ross, CPP’s Raleigh Bureau chief.

Correction: This story has been updated to reflect how the referenced ethics complaint against Rep. Tim Moffitt was released.



Office: Common Cause North Carolina

Issues: Money In Politics

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