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County, municipalities question state ethics law

Mount Airy Councilman Bob King
Mount Airy Councilman Bob King (HANDOUT)

Several local municipalities have failed to implement a five-year-old state ethics law that has been called confusing by some Carroll County officials.

State jurisdictions were supposed to comply with the law by late 2011, but confusion regarding interpretation and enforcement has amounted to somewhat of a standoff between state and local officials.

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Of the state's 23 counties and Baltimore City, Carroll is one of three that have yet to enact an ethics ordinance that is at least as stringent as Maryland's ethics law; and of the state's 157 municipalities, Hampstead, Westminster and Mount Airy are three of the four that have yet to do the same.

Anne Arundel and Montgomery are the other two counties that have not complied. Gaithersburg, in Montgomery County, is the fourth municipality not yet in compliance.

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At the crux of the dispute is a new requirement prompting local elected officials to potentially disclose far more about their personal finances and property holdings than before.

The Maryland General Assembly amended the state's ethics law in 2010 to require local governments to follow the same guidelines as state employees. The deadline to comply with the state's ethics law was Oct.1, 2011.

The issue isn't necessarily that the disclosure requirements are so onerous, Mount Airy Councilman Bob King said, but instead the fact that the law has been interpreted differently by various jurisdictions.

For years, the state has claimed that there are still misperceptions held by these remaining local jurisdictions as to what is meant by the law. However, King said the law gives discretionary power to these jurisdictions' local ethics commissions to interpret, leading to a significant difference in what is required to disclose.

"If you are going to have an ethics law that holds all elected officials to the very same standard, then the interpretation ought to be exactly the same," King said. "What the [state commission is] telling us is we have to comply to our interpretation, and the law is not something that should have multiple interpretations. This is why some of us have taken a strict stance on changing the law just a little bit."

King said state officials have told Mount Airy that its law needs to be as strict or more than the state's but if the town didn't want to enforce the law, "that would be OK."

"The state just wants to make sure we are all along the same lines," King said. "We aren't going to just sign it and then enforce whatever we feel like enforcing. If the law is the law, then you enforce the d---law. That is my biggest issue more than anything."

The state commission's responsibility is to determine whether local governments' ordinances are in compliance with state law. Once that approval is received, and a governing body enacts it, it is their duty — not the commission's — to then interpret and enforce the law, said Michael Lord, executive director of the State Ethics Commission.

Lord said there are misunderstandings as to what needs to be disclosed.

"They are the same things that a member of the General Assembly or a state employee has to disclose," Lord said. "There is a disconnect between what needs to be reported and what people think needs to be reported."

"It's not that we don't want to; we don't have the authority," Lord said. "The General Assembly has put the power in the hands of local jurisdictions. They can interpret provisions in law that read exactly the same differently, they can apply the law differently and [the state commission] has no authority to address that."

Old law vs. new law

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The impetus behind the state's ethics law change was the 2010 indictment of then Prince George's County Executive Jack Johnson on federal charges of extortion as well as witness and evidence tampering, King said. Johnson would later plead guilty and be sentenced to seven years in prison.

Legislators concluded that local officials needed to be held as accountable as state employees. Had the same requirements been in place at the local government level before 2010, it might have been more difficult for Johnson to conduct his unethical actions, Lord said.

When Senate Bill 315 — sponsored by Sen. Jamie Raskin, D-District 20 of Montgomery County, and co-sponsored by 26 other senators — was passed in 2010, the majority of local jurisdictions had to create more-comprehensive ordinances concerning three areas: lobbyists, financial disclosure and conflicts of interest.

"No one is out there saying they want to have less conflict of interest laws," Lord said. "The angst is on financial disclosure. When it became equivalent [to the state], local law had to upgrade and make more stringent their requirements. They also previously may not have had to disclose holdings in corporations, like stocks. They now have to do what [state elected officials and employees] have to do."

Carroll had an ethics ordinance draft approved by the State Ethics Commission in February 2014 but has not enacted it. County Administrator Roberta Windham said Wednesday that the county commissioners will be presented with the approved ordinance on Thursday, June 11, along with a request to hold a public hearing to discuss it.

Over the past few months, several Carroll County commissioners have expressed distaste with the ordinance and its disclosure requirements.

The state's ethics law also acts as a deterrent for people who might otherwise be considering running for office, said Richard Rothschild, R-District 4, earlier this year.

"It penalizes successful people and discourages them from running for office, and it rewards unsuccessful people, giving them a free pass, and hides their irresponsible behaviors," he said.

Chris Nevin, mayor of Hampstead, said that during the recent town elections in May, several potential candidates chose not to run once they realized what would have to be disclosed.

"It's having a chilling effect on people willing to participate on the political level," Nevin said. "What is the public's right to know versus the right to privacy?"

Several Carroll legislators who weighed in said the uncertainty regarding the intent of the law was due to a lack of direction outlined in the it.

Del. Warren Miller, R-District 9A, said the decision to not offer specifics in the law created some of the confusion.

"A lot of times, the state will say you have to do something but with no specificity," he said. "They will require the governing body to adopt it and determine how stringent to be. Sometimes the state leaves some latitude up to the jurisdictions because the local governments might want a more-strict law. The state usually steps in when they do less. These municipalities [and counties] aren't willing to meet the base law."

Del. Susan Krebs, R-District 5, said the new ethics law has the potential to impact smaller jurisdictions to a greater degree, making it important to ensure local governments have a clear understanding of what was intended when the law was amended.

"[The State Ethics Commission] needs to sit down with the local jurisdictions and figure this out," Krebs said. "The local jurisdictions shouldn't over-interpret it; it's a matter of the spirit of the law versus the letter of the law. It's a fine line, trying to keep transparency; it is invasive but it's necessary."

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City files suit

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Westminster took legal action against the state in December, filing a lawsuit requesting judicial review of the State Ethics Commission's role in determining local governments' compliance of the law.

The suit was dismissed in late April as being a moot point, City Attorney Elissa Levan said. Since the submittal of an ethics ordinance to the state commission for approval is a voluntary process, it had no true bearing on whether Westminster is in compliance, she said.

"That is what made it moot," Levan said. "[Westminster] doesn't need [the state commission's] approval at this stage."

Since the dismissal, the city has enacted an ethics ordinance that they feel is in compliance, said Robert Wack, president of Westminster's Common Council.

"As far as we are concerned, we are done," Wack said. "The [State] Ethics Commission basically said that this was a voluntary process. We passed the ordinance we felt was in compliance. Ours is indistinguishable from the state model."

The letter dismissing the city's lawsuit said the court considered the submission of an ordinance to the state commission voluntary, thus there is no basis proceeding with litigation, Wack said.

"So we passed our ordinance based on [the state's] lack of objection; they didn't want to test [the law] in court," he said.

Gaithersburg chose to follow an internal state procedure to challenge the state commission's opinion that they are not in compliance rather than to join Westminster in its lawsuit, said Thomas McCarron, Mount Airy's town attorney.

Although it is Westminster's position that it is in compliance, the state commission issued a letter stating it was not. Westminster and Gaithersburg cited a section of the state ethics law that they have interpreted as meaning municipalities can amend or revise their ethics ordinance to meet local needs.

"[The section] has been taken to mean by the state that certain things can be changed but not substantively," McCarron said. "Gaithersburg and Westminster are saying this could mean substantial changes."

Lord said these municipalities are misinterpreting the law.

"We've had a difference of interpretation, but the State Ethics Commission is the determiner," he said. "If a municipality suggests we aren't interpreting the law correctly, they are wrong. That discussion has been had. Most of the municipalities have accepted the fact the commission makes final determination."

Mount Airy's Town Council asked McCarron on June 1 to draft an ethics ordinance with the state commission's suggested changes and present it to the council at its next meeting in July.

McCarron said that in order to be in compliance, Mount Airy would have to alter the ordinance's text in regard to financial disclosure and amend its section referring to financial holdings of elected officials.

"Our ordinance does require the disclosure of all real property but doesn't spell it out exactly the way the state does," he said. "It is the same substance."

The state requires the disclosure of all financial holdings, such as stocks, but Mount Airy's ordinance states this information must only be disclosed if the individual owns at least 5 percent of the company, McCarron said. This would need to be changed in order to comply, he said.

Council President Peter Helt said they will only be introducing the revised ordinance in July and a vote would not take place until at least August.

"We are not saying we are going to pass it, just introduce it," Helt said.

State can take counties to court

Lord said the state ethics law authorizes the State Ethics Commission to sue local governments that refuse to comply, but he has not made the decision to take this step.

"The commission doesn't like the notion of going around and suing local governments," Lord said. "We are happy with the progress being made and would rather try to work with them. If an entity stops working with us, though, we put them on public notice."

The state commission has done so with Hampstead by posting such a notice on its website. The notice claims the town has not only failed to comply but has not put forth a good faith effort to do so. It also states the commission has requested a revised ethics ordinance from Hampstead eight times since September 2012 but has not received one that incorporated the more-stringent requirements.

"We are optimistic most of the jurisdictions will soon comply," Lord said. "The only one that has been the subject of any action is Hampstead. It takes a lot to reach that stage."

King said he is not afraid of being sued by the state; in fact, he would welcome it.

"I do not agree with the law, and [other governments] don't agree with it," King said. "This [revised state law] was to address one person that was acting unethically. It's not about applying standards; it's about making it impossible to act unethically. Well people will find a way. All the state wants us to do is sign a piece of paper so this goes away."

Nevin agreed with King and said that for the most part in Carroll, ethical violations have not been a story. If the state pursues a course of litigation, Hampstead will be ready, he said.

"We know what the guidelines are," Nevin said. "Our ordinance has served us well for the long term and is in tune with what other towns are doing, and we will adjust and react accordingly."

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