New Cecil County Ethics Code Could Alter Political Landscape [Cecil Times News Analysis]

May 18, 2011

An advisory panel has drafted an overhaul of the Cecil County ethics code that could significantly alter the local political candidate landscape, including requirements for candidates and elected officials to disclose their in-laws financial dealings.

Mike Burns, the current chairman of the county Ethics Commission and [CORRECTION: an accountant], presented the draft proposal to the County Commissioners at their Tuesday 5/17/11 worksession. Burns, a Democrat, and a bipartisan panel worked to draft the update in 2009 but had to revisit the plan last year after a new state law mandated certain revised provisions and standards.

Burns outlined the scope of the new ethics code, along with voluminous background information, including correspondence with state ethics officials who must review a local plan to make sure it complies with the state-mandated standards.

But the newly proposed Cecil County plan goes beyond the state mandates and includes some uniquely Cecil-centric proposals, including the requirement to disclose financial information about in-laws and dependent relatives and their spouses even if they have no business dealings with county government.

Some of the proposals seem to be fall-out of ethics concerns raised about former county Commissioner Brian Lockhart. Lockhart’s father-in-law, Barry Montgomery, is a well-known developer in the county. Although current county law did not require disclosure of his in-laws businesses, Lockhart routinely recused himself from votes relating to Montgomery’s business interests.

Indeed, Commissioner Diana Broomell (R-4) obliquely referenced Lockhart during the worksession. Lockhart was accused of ethical misconduct relating to his discussion of, but not voting upon, issues involving a housing development that was financed by Cecil Bank, where Lockhart was a board member. But he had failed to disclose his bank ties on his county ethics form even though it was widely known in the county.

The new proposal addresses several shortcomings in current law and reflects a good-faith effort to correct them, as well as comply with new state mandates. But the proposal could have some political unintended consequences.

In practical political terms, the proposed code could influence who runs for elected office in the county, due to new disclosure rules that would require exposure of extended family members’ financial information and investment partners with no connection to county business and other provisions. The rules would apply to candidates, as well as already-elected public officials. In the past, disclosures focused on potential conflicts of interest with county business, but the new rules would require disclosure of “all assets,” Burns said, even if there is no evident tie to county business.

The proposals could tend to encourage candidacy by people without businesses or investment partnerships (and who have relatives in a similar position) and might also favor very wealthy candidates who have cashed out of past business interests but now have bank or stock accounts and trusts that would be shielded from exposure under the proposals.

In terms of the local political landscape, the new ethics rules would seem to favor a candidate like Michael W. Dawson, a technician for Verizon with no business interests who ran as a Constitution Party candidate last year, or Sen. E.J. Pipkin (R-36), a former junk bond trader in New York who cashed out much of his business profits years ago.

The new rules could tend to discourage business owners or people with LLC’s, which are normally shielded under state law from disclosure of all involved investors in the limited liability company, or real estate investment partnerships.

The proposals also create some potential marital issues, such as whether spousal privilege would apply if a wife told her candidate-husband that her father owned a certain business but the father/father-in-law refused to state his business interests in public.

(That could create quite a family scene at the Thanksgiving dinner table…)

Burns told the county Commissioners the draft plan “expanded the definition of family members” and requires “much more detailed” financial information, including disclosure of all real estate, business and investment property “regardless of whether such businesses or properties have anything to do with the county’s business.”

The new state mandates require disclosure of financial ties with spouses, children or siblings, Burns said, but his proposal would also apply to in-laws, dependent relatives and their spouses.

Theoretically, that mandate would cover your ne’er-do-well brother-in-law who lives in your basement and his wife he hasn’t talked to in years.

Under current ethics disclosures, elected Commissioners only had to disclose business interests that might be involved in county oversight matters. But the new rules would require disclosure of any and all business interests, including financial holdings of business partners or investors in a candidate or Commissioner’s business operations.

Recently, the Cecil Times obtained financial disclosures filed by the current county commissioners. All members complied with the bare bones requirements, while Commissioner Robert Hodge (R-5) voluntarily disclosed much more than was required. He listed all his businesses and noted that two properties he owns—two trailer parks—have county operating licenses.

In contrast, Commissioner James Mullin (R-1) listed no business holdings, although he owns and operates a real estate appraisal business—Mullin Appraisal, based in Delaware—that has been a political donor in many local election campaigns. Under current law, he did not have to list that business if it has no business relationship with county government or properties dealing with county planning or related agencies. But under the new ethics rules, he would have to list his business ownership even if it had no dealings with the county.

Overall, the new ethics proposal strives to ensure accountability and tightens past loopholes. But in terms of its extended family disclosure rules and business ties reports, the new rules could inhibit the depth of experience that potential political candidates will have since many successful business people are hesitant to expose their personal, family and business associates’ financial information.

The new ethics proposal will be reviewed by the County Commissioners and a final plan presented at a public hearing before adoption. It will also be subject to review and approval by state ethics officials.

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4 Responses to New Cecil County Ethics Code Could Alter Political Landscape [Cecil Times News Analysis]

  1. Curious George on May 18, 2011 at 9:56 pm

    Why didn’t Mike Burns recuse himself in the Lockhart/Cecil Bank/Aston Pointe matter? Wasn’t he an officer of both CLUA and ARCA, the anti-development groups that fought the project?

    • Michael Burns on May 19, 2011 at 1:54 pm

      There is no “requirement to disclose financial information about in-laws and dependent relatives and their spouses even if they have no business dealings with county government.” This is true only of immediate family members, mainly spouses’ employment and any family-owned businesses.

      There is a provision to include immediate family members, siblings, in-laws and dependent relatives, and their spouses, in the definition of “qualified relative” in the area of conflicts of interest; that is, an official, employee, or Board member should refrain from voting or acting in most situations that may provide a known economic benefit to a qualified relative.

      The new law mandated by the state does require elected officials and candidates to list co-owners (relatives or not) of real property (real estate). I mis-spoke during the hearing and implied that was required for all business property, for which I will inform the Commissioners and correct the record as best I can. I apologize to all hearing attendees for this mistake.

      The new law also requires elected officals and candidates to report their (and only their) ownership in investments in private entities (companies) and stock in public companies, and any immediate family members’ interests in business entities and other sources of earned (as opposed to investment) income.

      I was never an officer of CLUA or ARCA. I am a member of CLUA, and try to be an informed citizen by attending various hearings and meetings. I am a past Democrat Club Board member (Treasurer 2004-2008), and was when I was appointed to the Ethics Commission.

      I am not a lawyer and stated so during the hearing.

      My term on the Ethics Comm. has officially expired, and I am willing to be replaced. I have stayed on due to request and to guide the new ethics law through the arduous process of adoption. If anyone feels I should be removed or not suited for the position please inform County Commissioners who have power of appointment.

  2. Cecil Times on May 19, 2011 at 4:05 pm

    Cecil Times apologizies to Mr. Burns for calling him a lawyer. We appreciate his clarification on his status as a CPA.

    As this article was titled– as a news analysis– our chief concern was how the proposed new rules would affect the willingness of local candidates to put themselves, and their families, out into the public arena to run for public office.

    As Mr. Burns told the Commissioners, the proposed local ethics code expanded upon the state-mandated code to include in-laws and other relatives. Our analysis dicussed the potential pitfalls of expanding coverage to such extended family members, especially in light of today’s realities of distant family relations.

    We appreciate Mr. Burns’ clarification of his mis-statements at the worksession on some of the extent of application of the proposed rules to unrelated businesses. That should go a long way toward alleviating concerns about possible intrusiveness into business activities unrelated to government activities that could discourage otherwise highly qualified candidates from seeking office.

    Our article did not address the matters commented upon by a reader, and we do not share that commenter’s views. (We try to allow reasonably civil comments even if we do not agree with them.)

    As the article noted, the arduous work performed by Mr. Burns and his bipartisan task force to review these difficult matters was a good-faith effort to address past problems in the county ethics code and to bring the county law into compliance with new state mandates. For that, all citizens owe Mr. Burns a debt of gratitude.

  3. Michael Burns on May 19, 2011 at 10:55 pm

    This is admittedly a complex law, and it is only at this stage a draft; the Commissioners have the final say, as long as the county conforms to state minimum standards and recommendations.

    I appreciate the clarification above. My one mis-statement that I discovered (due to the concerns expressed in the Times) upon reviewing the county’s audio recording of the admittedly strenuous hearing certainly contributed to the misunderstanding. However, I must reiterate that the Ethics Comm. is not proposing to expand the definition of relative in regard to financial disclosure requirements (although the state does require more stringent standards), but only in regard to conflict of interest rules; that is, an official, employee, or appointed board member should refrain from voting or acting in most situations that may provide a known economic benefit to a “qualified relative,” which we expanded to include in-laws and dependent relatives in addition to the state’s definition which was for immediate family, parents, and siblings. The reason I added “and their spouses” was precisely because of the increased commonality of “step”-relatives.

    The Ethics Commission does take into account public comment and complaints and this is such an example, as the state allows and even encourages the counties to modify the law to their own particular needs and circumstances as long as counties do not weaken the state-mandated minimum standards.

    I appreciate the intelligent discussion of this important law, which, at the county level, has been two years in the making, and, at the state level, passsed without a single no vote in both houses.

    Once a final bill is produced, the Commissioners will establish a public hearing date for public comment.

    Please contact me (see our web page on the county’s website) if you have any questions or concerns.

    Thank you,
    Michael Burns, Chair

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