Daily Archives: September 6, 2019

State ethics panel whitewashes its own past

This week, the Vermont State Ethics Commission withdrew its October 2018 advisory opinion about Gov. Phil Scott’s relationship with DuBois Construction, the firm he co-owned before becoming governor. It was a thorough exercise in retconning: The panel retroactively changed the rules of its own game.

Ironic, isn’t it, that a government body that’s all about ethics would try to whitewash its own past. It has even removed the original opinion from its website, replacing it with the following brief statement:

The Vermont State Ethics Commission at its September 4, 2019 meeting approved Executor Director Larry Novins’ recommendation to withdraw Advisory Opinion 18-01 issued on October 1, 2018. The opinion discussed the governor’s financial relationship with his former company which contracts with the State of Vermont. The Commission concluded that the process used at the time was incorrect.

Yeah, great, whatever. I don’t know why the commission chose to make this move almost a year after the fact. I suspect (but cannot prove) that there was pressure from the Scott administration to remove this blemish from the gov’s record. After all, Scott and his minions seem far more concerned about the opinion than anyone else in state government or politics. The voters certainly didn’t care when they overwhelmingly re-elected the guy last November.

To recap the DuBois saga… When Scott became governor, he had to divest himself of his half-ownership in DuBois, which frequently bids on state contracts. His $2.5 million stake represented the lion’s share of his own net worth.

The simplest remedy was to sell his share. Problem is, DuBois’ net worth is tied up in land, buildings and equipment. And a $2.5 million bank loan would have been a millstone around DuBois’ neck. Scott’s solution: He financed the loan himself.

That removed him from ownership and management. However, it tied up most of his net worth in a long-term loan to DuBois, and it provided a nice $75,000 per month year income stream from the company’s monthly payments. In short, Scott had no ownership interest, but he still had a huge financial interest in DuBois’ prosperity.

And that’s clearly a violation of the state ethics code as it’s currently written.

Of course, part of the commission’s retconning exercise is a rewrite of the ethics code. Something tells me it will be carefully crafted to put DuBois-style arrangements in the clear. The other part is a rewrite of its internal processes, which will prevent future cases like l’affaire Scott.

The commission’s current processes were established by legislation in 2018. Those processes occur entirely behind closed doors, exempt from open-meetings and public-records law — with one exception: The issuance of advisory opinions at the request of state officials, employees, or anyone else. Those opinions were the only commission function subject to public release.

It was the “anyone else” that triggered all this mess. The Vermont Public Interest Research Group requested an advisory opinion instead of filing a complaint, because VPIRG wanted the end product to be made public. And it got exactly what it wanted. The state ethics commission ruled that the DuBois deal was in violation of the ethics code — and released that opinion, as it was bound to do.

The opinion was not enforceable. It was purely advisory. But Scott didn’t like it, not one little bit.

Ironically enough, neither did Democratic lawmakers, who might have been expected to exploit the opinion for political gain. Instead, legislative leaders sided with the governor, and raked the commission over the coals during the 2019 session. Their intent, they asserted, had never been to allow outsiders to seek advisory opinions. Well, they had only themselves to blame; they wrote the law that allowed such a move. The commission made submissive noises and promised to make changes, so the legislature dropped any effort to rewrite the law.

And now the commission is following through on the submission routine.

Let me make one thing clear. I don’t suspect the governor of any actual wrongdoing. He’s an honest guy, and it would take a determined (and criminal) effort to subvert the state’s contracting process.

But the ethics code is designed to prevent the appearance of conflict as well as actual conflict itself. I know Scott was between a rock and a hard place on how to divest from DuBois. But ethical standards exist for a reason.

Retconning the standards to benefit a single individual who’s in a tough spot is fundamentally antithetical to the purpose of having an ethics code in the first place. It’s just one more sign that no one in state government is actually serious about ethics — they just want to make it look like they’re serious, so folks like me and VPIRG will shut our yaps and go away.

 

Advertisements