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A prudent approach to municipal investigations.

PROFESSIONAL INVESTIGATORS often have a background in criminal investigation. They have been trained to search for a criminal and to answer variations on the basic question, "Who struck John?" Yet in the investigation of municipal impropriety, villains are often not so villainous, and the questions that must be asked are often more complicated.

Municipal investigations usually begin with an allegation made by a complainant. Before beginning a full-blown investigation, the municipal investigator should examine the initial statement closely with an eye toward the many motives someone may have for bringing charges.

To ensure the veracity of a complaint, an investigator should request an affidavit from the accuser. Often an individual will not have all the facts, or his or her complaints will be rooted in vengeance. The complainant may not understand the law. A municipal investigator must be mindful of all of these factors.

Once a municipal investigation begins, it must be kept at a low profile. The prudent investigator should understand the workings of a municipality before beginning. For example, in a small town, where news travels fast, a discreet background check on both the complainant and the subject of the complaint is wise. A second interview with the complainant might help clarify and encapsulate the story. Lastly, a review of the history or background of any municipal board or agency involved in the case will provide a broader perspective on the complaint.

Often investigations come to a close without revealing criminal activity. Instead, the investigation may find that a particular process or activity must be modified to eliminate the appearance of impropriety. Not all municipal investigations are resolved by removing someone from office. A municipal investigator must keep this in mind as he or she pursues information and evidence.

In some cases, however, the evidence proves that a crime has been committed. If the agency monitoring local government ethics has no authority to prosecute, a referral of all the facts to the district attorney is required.

The investigation. After a complaint is received, the investigator must interview the complainant. The investigator must gather all the facts and try to verify every statement made. Gathering supportive documents is one good method of verifying statements. (An example of a supportive document is the minutes of the town's board of trustees meeting.)

The next step is to interview all relevant witnesses. Investigators should keep track of all their trips, interviews, and notes involving witnesses. In a complex case involving many witnesses, a picture is worth a thousand words. The investigator should prepare a flowchart; it can be useful when explaining the case to a supervisor. It also helps to ensure a better understanding of the facts in the investigator's mind.

To uncover information about a person's background, other investigative bureaus or departments can be helpful. The investigator must first determine what investigative body would be the most useful--and the most discreet.

Once contact has been made with pertinent people and agencies and all the information has been gathered, the case's details should be analyzed. The investigator should write a report on the facts for supervisory review. The direction of any municipal investigation must be determined by consultation with a supervising attorney familiar with the intricacies of municipal law.

Case studies. In a suburban town of more than 20,000 people, a tax assessor came under review. The assessor wore four hats. He was a realtor, developer, contractor, and the assessor for the town. His four occupations raised the potential for a conflict of interest.

It was alleged that the assessor was raising taxes unfairly. The complainant reported that one man's property, assessed at $294,000, was assessed the previous year at $26,000. The assessor apparently wanted to buy the property, tear down the existing house, and build a development of modular homes. By raising the assessment, the assessor allegedly was attempting to squeeze the owner and force him to sell.

The municipal investigator assigned to the case enlisted the complainant to gather certain facts. This was done for two reasons--to make up for the lack of a large investigative staff and to maintain a low profile.

The complainant was asked to provide backup material, including the assessor's pay stubs, advertisements in the newspapers, and newspaper articles that proved the assessor maintained a private development business. Other citizens were interviewed to establish a pattern of activity. A flowchart was drawn up to illustrate the breadth of the problem. All points were examined.

It was determined that the assessor was in fact doing business as a contractor and developer in the same community in which he was a municipal official. Consultation with the supervising attorney of the local government ethics commission, however, revealed that the state law contained no provision prohibiting a tax assessor from conducting a realty and contracting business, despite the opportunity for abuse.

The chief counsel for the local government ethics commission wrote a letter to the complainant advising him that the state attorney general had written an informal opinion on a different situation with the same circumstances. It was pointed out that the activity was discouraged by the attorney general and the commission. While no mechanism existed to authorize the commission or direct the town to remove the assessor, the commission's letter prompted the town to review the situation. The assessor was subsequently suspended pending the conclusion of that review.

In another case, it was alleged that the mayor of a city with a population of more than 50,000 received campaign contributions totaling $3,500 from the owner of a local construction firm. Subsequently, the firm was given a building contract worth $1.4 million to refurbish the city police station.

The complainant requested an investigation. First, the complainant was interviewed. The chief allegation was that favors were being granted to major political contributors. A list of suspected contributors was obtained from the complainant. Next, these contributions had to be confirmed. A review of the files at the county board of elections revealed firms that made contributions of more than $1,000 to the mayor's campaign. The city comptroller was then asked to supply the investigating commission with a list of all companies having business contracts with the city. This information is available under the state's freedom of information law.

A comparison between the contributors and the firms contracting with the city resulted in a significant finding. At least a dozen firms had made contributions to the mayor; all of them had lucrative city contracts. Thus, when all of the facts were gathered, the complainant's allegation was verified. Yet was this a violation of law?

A meeting with the supervising attorney revealed that no violation of law had occurred. Despite the tawdry appearance created by the pattern of political contributions, the current law did not prohibit this activity. Still the investigation was not for naught. The evidence gathered was used by the investigating commission to argue for reform.

A lesson may be learned from how this case was handled. Because a low-key approach was taken, the case didn't embarrass the subject or the commission. Although no criminal activity was uncovered, the case did prove the need for reform.

In another case, a complainant alleged that the former chairman of a municipal agency was doing business with a law firm he subsequently joined immediately after resigning from the agency. The complainant questioned the appearance of impropriety in this scenario.

Initially the complainant was asked to provide the specific dates of the subject's service in the agency involved. He was also asked to obtain copies of bills from the law firm to verify that the firm in fact did business with the agency.

The complainant gathered receipts totaling $212,000. These receipts proved that business had been contracted between the agency and the law firm. The complainant subsequently procured the minutes of the pertinent agency meeting that showed that the municipal official had resigned two months before the agency contracted to do business with the law firm.

After all the facts were gathered, a meeting with the supervising attorney disclosed that no violation of law had been uncovered. However, the commission was able to argue that a change in the law was needed.

A very important point can be made here: A good municipal investigator will enlist the help of a complainant to do basic legwork. The reason is that a state investigator's presence raises eyebrows. Newspapers are informed that a municipal official is embroiled in a major investigation, and the official's career might be hampered or destroyed, even if it turns out that he or she did nothing wrong. Things must be kept quiet until all the facts are determined.

Sometimes municipal investigations will uncover a criminal matter. In one instance, a municipal official brought to a state commission two allegations of impropriety, which were determined to be misdemeanors. Since crimes are not under the purview of the commission, the matter was referred to the county district attorney's office for further investigation.

Ethics commissions. According to the Cogel Blue Book, put out by the Council of State Governments, in the United States, 35 active commissions are empowered by state governments to monitor the ethical conduct and financial disclosure of municipal officials. Following are a few examples.

Washington. The Public Disclosure Commission (PDC) in Washington state was created in 1973 primarily to act as a repository for data. In addition, it makes information available to the public. A disclosure law mandates that officials and lobbyists disclose personal financial affairs and campaign finances. Political sponsors must identify themselves, and public records must be available for inspection free of charge.

PDC is charged with enforcing the mandates of the disclosure law. The commissioners interpret law and adopt administrative rules. The appropriation of monies allotted to the PDC for the 1991-1993 biennium is approximately $1.8 million.

The staff consists of 18 people. Its responsibilities are to receive, collate, examine, and file reports submitted by those subject to the law. In addition, staff members provide information, conduct investigations, and produce technical studies.(1)

Ohio. In late 1973, in the wake of Watergate, the Ohio General Assembly passed the Ohio ethics law, Chapter 102 of the Ohio Revised Code. This law created the Ohio Ethics Commission.(2) The commission was instituted to implement Ohio's ethics laws. Implementation includes the administration and enforcement of financial disclosure and the issuance of opinions. The commission conducts investigations and reviews 150 to 200 requests for opinions each year. Between 7,500 and 9,000 officials annually file disclosure forms with the commission. In 1991, the commission's three investigators investigated more than 300 complaints. Since 1986 the commission has had a 150 percent increase in the number of allegations received.

This commission, one of the oldest in America, has served as a model for other states.(3)

Alabama. In Alabama the State Ethics Commission exists primarily to inform its citizens of the Alabama ethics law. However, the commission investigates all written verifiable complaints and works to eliminate conflicts of interest on the part of public officials or employees.

The commission was founded in September 1973. It is responsible for collecting and making available to the public reports of the financial interests of certain public officials, employees, and candidates. It also renders opinions and investigates complaints of wrongdoing.

Appointed officials and public employees at all levels of government earning $25,000 dollars or more annually must file financial disclosure statements each year. State, county, and city elected officials must also file with the commission. Candidates for all elective offices must file no later than 10 days after qualifying for a particular office. Financial disclosure statements are available for review at the commission office.

The commission accepts complaints from officials and citizens alike. It undertakes an immediate inquiry to determine whether an allegation is true and whether it is a violation of law. In a unique procedure, a meeting is immediately arranged with both the complainant and the subject of the complaint. Matters are ultimately resolved through referral to a law enforcement agency, dismissal, or the issuance of an advisory opinion. All commission activity in the investigation of a complaint is kept confidential until the investigation is complete and the commission takes final action.(4)

The subtle approach. In municipal investigations, investigators can't ride into town with guns blazing. They must remember that they are dealing with reputations, and that the information they gather should remain confidential until all the facts are substantiated. The mere presence of an investigator or an investigative team in a community can become newsworthy. Smart municipal investigators will use the complainant to gather as many facts as possible.

Smart and resourceful municipal investigators also know that valuable information can be gleaned from public documents. Freedom of information laws have made it easier to access such information. Investigators in this field must keep in mind that most often their investigations will not reveal a violation of law. Instead, they will reveal situations that have an appearance of impropriety and demand a modification of procedure or law.

Since most investigations will not result in the identification of a villain, and almost certainly will not result in an arrest, the municipal investigator should approach each investigation tactfully. Otherwise, the investigator and his or her agency could be identified as villainous for having sullied the reputation of an official who has not violated the law.

Joseph A. Reilly, CPP, is the staff investigator for the New York State Temporary State Commission on Local Government Ethics in White Plains, NY. He is a member of ASIS.

1 Public Disclosure Commission. Public Disclosure Commission in Washington State, (Olympia, WA), June 1991, pamphlet.

2 Ohio Ethics Commission. Perspectives on The Ohio Ethics Commission, (Columbus, OH), undated white paper.

3 The Citizen League of Greater Cleveland, Janis Purdy, ed., Citizen Participation, (Cleveland, Ohio, December 1991), p. 5.

4 Alabama Ethics Commission, Ethics is Everybody's Business, (Montgomery, Alabama), undated pamphlet.
COPYRIGHT 1992 American Society for Industrial Security
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Author:Reilly, Joseph A.
Publication:Security Management
Date:Sep 1, 1992
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