By Caitlin Ginley
Center for Public Integrity

The North Carolina Ethics Commission has received more than 300 ethics complaints since its establishment in 2006 — but it has initiated just 18 investigations through 2010.

The Tennessee Ethics Commission, also established in 2006, has yet to find anyone guilty of an ethics violation. It has heard five complaints in five years — and thrown all of them out.

The Pennsylvania Ethics Commission takes in between 400 and 600 complaints each year. But severe budget cuts have left the panel with only five full-time investigators to handle the workload.

And last year, the Colorado Independent Ethics Commission had its full-time support staff reduced from two people to one. “It’s just me,” said Jane Feldman, the Colorado commission’s executive director. Feldman said she has an annual budget of $224,000 but — unlike commissions in many other states — no investigators or lawyers to initiate real enforcement.

"I don’t think we’re a dirty state. I think we’re a pretty clean state,” Feldman said. “But I think there are cases, especially conflicts of interest issues, where since we don’t have an investigator we don’t follow up.”

Such tales are far from unusual. Some 41 states have government bodies that oversee and enforce state ethics laws. But an examination by the Center for Public Integrity reveals that many of them do little more than provide a false sense of security. In fact, the State Integrity Investigation — a first-of-its-kind probe of accountability in state government — gave grades of either D or F to 28 f those state ethics panels.

The problems and challenges are many. In some states, it boils down to a question of resources — short-staffed agencies with dwindling budgets, outdated, crumbling technology and an increasing workload. Other agencies face restrictions in the law; they can only investigate a complaint if the complainant is willing to be named, or if a majority of commissioners, who may be divided along party lines, agree to pursue a case.

Beyond those obstacles, though, is a more basic and troubling common thread; many of these state ethics watchdogs sport no real teeth. According to the State Integrity Investigation, state ethics commissions remain woefully ill-equipped to properly investigate complaints and dole out punishment.

That’s partly because an inherent conflict stands at the core of the mission: the ethics agency commonly is tasked with policing the same government officials who control its funding, resources and regulatory power.

“The people who it’s policing are the people who give it power,” said Craig McDonald, director of the nonprofit watchdog group Texans for Public Justice. “It has to be independent, or it doesn’t work so well.”

The ethics enforcement gap
Hawaii created the first ethics commission in 1968, but the real spike in the number of state commissions occurred in the 1970s, as the post-Watergate era gave rise to ethics legislation across the country. Several panels — like those in Tennessee and North Carolina — have been established just in recent years, almost always in response to specific government scandals. Only nine states do not have any sort of government agency overseeing and enforcing state ethics laws. Those states — Arizona, Idaho, New Hampshire, New Mexico, North Dakota, South Dakota, Vermont, Virginia and Wyoming — implement ethics rules through various government agencies, like the attorney general’s office or the secretary of state’s.

Among those states that do have ethics panels, some are clearly making an honest go of it. The Texas Ethics Commission, charged with
overseeing campaign finance and lobbying reports, is one of the larger agencies of its kind, with an annual budget of approximately $2 million and 32 full-time employees. According to its latest biennial report covering 2009 and 2010, the commission issued 13 advisory opinions for the two-year period. It assessed more than 2,000 civil penalties for late filings of financial disclosure statements or campaign finance reports but then waived more than half of those.

But it’s not perfect. On the State Integrity Investigation, the commission received a 77 percent — a grade of C+ — for ethics enforcement. The scorecard cited its notorious lack of teeth and a complaint-driven process that discourages robust, independent investigations. On a question about the commission’s ability to initiate investigations, the state received zero points.

Robert Smith, chair of the political science department at Kennesaw State University and a leading researcher on the subject, asserts that “the simple existence of ethics commissions is rather important.” The way Smith sees it, merely having an ethics commission sends a message. “We have an office with the right to police, protect and preserve the notion of integrity,” he says. “We have a public integrity mechanism in place.”

Smith noted that the panels are able to take definitive action — issue fines, write advisory opinions, subpoena documents — that may deter politicians from abusing power. Indeed, ethics commissions in 36 states have the ability to independently initiate investigations. In 37 states, commissions can impose penalties for violations. Twenty-eight states boast commissions that have jurisdiction over all three branches of government, rather than fragmenting enforcement power in separate agencies.

But many of the panels seem hesitant to exercise those powers. Twenty-two states received failing grades from the State Integrity Investigation for their ethics commission — or lack of one. Only two states, New Jersey and Connecticut, earned A grades in this category.

If ethics commissions "had more funding, more tools, more enforcement power, or just provided more education,” Smith said, “I think these bodies would be more effective than maybe they are being portrayed.”

Maintaining independence
In Alaska, members of the Personnel Board, which investigates complaints against the governor, are all appointed by the governor. In Michigan, members of the state’s Board of Ethics typically include former elected officials; a former assistant attorney general and two former legislators sit on the seven-member panel.

In Indiana, members of the ethics commission are appointed by the governor, who also appoints the state’s inspector general. According to the State Integrity Investigation, this creates inevitable “blind spots.” In 2010, the commission waived the state’s revolving door statute to allow the Indiana Utility Regulatory Commission’s general counsel to join Duke Energy, soon after he made several rulings at IURC that would benefit the energy company. The waiver drew immediate criticism and questions about whether the commission is too lenient.

“No way in hell that should have been given a pass,” said Julia Vaughn, policy director of the Indiana chapter of Common Cause, referring to the Duke Energy scandal. She said it has become common practice for government officials to go before the ethics commission to seek waivers from a certain ethics rule, which the commission tends to “rubber stamp.” A 2010 review by the Indiana Business Journal found that the commission had not once — out of 27 post-employment ethics rulings — prohibited a state official from taking a private-sector job and only three times required a one-year “cooling-off” period.

There's a tendency for ethics commissions to want to avoid controversy, Vaughn said. “You don’t want to bring the glare of an ethics scandal to the chief executive who appointed you.”

The question of political independence is one that has plagued most ethics commissions, and few states have found solutions. In the State Integrity Investigation, only eight states achieved perfect 100 scores for having a commission that maintains protection from political interference.

“The best type is one that can work without fear of entanglement of political influence,” said Smith of Kennesaw State, who noted that most enforcement agencies have a commission or board in place appointed by government officials. “Why should politics be even part of that process in the first place if you really want a mechanism that is going to make objective opinions?”

The Wisconsin Government Accountability Board, for example, is comprised of six former judges appointed by the governor and confirmed by the Senate. The governor must choose from a list of candidates developed by a separate nomination panel made up of retired judges.

In Pennylvania, former Rep. Curt Schroder (R-Chester County) sponsored a bill last year to establish a Public Integrity Commission, an independent agency that would have the ability to uncover and investigate cases of corruption at all levels of government. And, to promote political independence, the commissioners would be nominated by a committee made up of law school deans, district attorneys and good government advocates. The governor would select seven members from that list, who then would be approved by the Senate. No more than three commissioners would be from the same political party.

The bill never made it out of committee.

The legislature “didn’t want anything to do with this,” said Tim Potts, president of the good government organization Democracy Rising PA , who noted that the current Pennsylvania Ethics Commission is controlled by the governor and legislative leaders. The board consists of seven members: three appointed by the governor, and one each by the president pro tempore of the Senate, the Senate majority leader, the Senate minority leader, and the House speaker.

“They are not eager to have independent people investigating them,” Potts said.

John Contino, executive director of Pennsylvania’s current State Ethics Commission, which would be replaced by the Public Integrity Commission under Schroder’s plan, said the proposed structure is unnecessary.

“There’s never been an op-ed piece, an allegation or any reason to say" that the ethics commission "is not independent,“ he said. “It’s been nonpartisan all these years.”

But Barry Kauffman, executive director of Common Cause Pennsylvania, said the concerns of partisanship with the ethics commission are “valid.” He supported Schroder’s bill, in hopes that, besides establishing independence, it would “put a little more teeth in the state ethics law.”

Policing the powerful: no teeth, no bite
The Texas Ethics Commission consists of eight board members: four appointed by the governor, two by the lieutenant governor and two by the House speaker. In order for the agency to pursue an investigation, six out of the eight board members must agree, which, according to Texas attorney and good government advocate Fred Lewis, makes for a dysfunctional body that is rarely proactive about investigations.

Instead, the commission is completely driven by outside complaints, which must be filed by a Texas resident and cannot be anonymous. Executive director David Reisman said the commission must investigate every sworn complaint — and it gets plenty. Last year, more than 370 complaints were filed with the commission.

“The commission must consider each complaint and make a fair and consistent assessment of whether a violation occurred and a fair and consistent penalty if there is a finding of a violation,” Reisman said.

But Lewis contends that the commission rarely goes after serious violations, focusing almost exclusively on minor errors — a criticism echoed by others. The Austin American-Statesman, referring to the commission as a “toothless tiger,” editorialized in April that the agency mostly levies small fines for late filings and called for “more robust enforcement of ethics laws.”

Many state commissions are unable to actively investigate alleged violations, either because the panel simply does not have the authority to do so in law — like in Florida — or the law requires a lofty standard for launching a probe. In North Carolina, the ethics commission can only pursue investigations if it finds “probable cause” of an ethics violation, a stronger requirement than law enforcement agencies that need only “reasonable suspicion” to pursue a case.

The Colorado Independent Ethics Commission receives between 20 and 25 written complaints each year. Many turn out to be frivolous or out of date (the incident must have occurred within the preceding 12 months). But it falls on the commission’s sole employee, executive director Feldman, to determine whether the complaint is valid.

“It’s hard for me as one person to do what I would consider a thorough investigation,” said Feldman, a former assistant district attorney. “I know what a good investigation looks like, and I just can’t do that.”

The Colorado commission came into being in 2008, when the state was hit by a faltering economy, so it did not start out with adequate resources. But even in the years since, Feldman said the General Assembly has never been especially supportive of the commission, which regulates gifts and travel from lobbyists to lawmakers.

“They find it insulting that somebody would say just because I accepted two Rockies tickets, it would affect my vote,” she said.

Attorney Fred Lewis said that the Texas Ethics Commission often finds itself in a tight spot, as the legislature ultimately controls its funding, resources and staff position. “They realize it’s the hand that feeds them,” he said.

Texas Ethics Commissioner Paul Hobby, who was appointed by the House speaker in December, said the commission has been involved in high-profile ethics cases.

Like this one: in 2010 Rep. Kino Flores (D-Palmview) failed to disclose income on his financial disclosure reports, which are filed with the Texas Ethics Commission, prompting an investigation by the county district attorney. Flores was convicted by a jury and sentenced to five years probation. The Ethics Commission did not act until months later when it issued a $700 fine.

Hobby concedes that the commissioners and staff must work within certain limits. “Look at the budget, look at the statute,” he said, “and tell me how it can be anything but an ankle biter.”

Increasing workload, inadequate resources
The Delaware Public Integrity Commission — a two-person operation — enforces ethics rules for 48,000 people on the state level. It also oversees 50 local governments in the state. With an annual operating budget of $30,600, Janet Wright, the commission’s counsel, said that works out to “less than a penny a person.”

“I do not know any state agency that is doing their job at that amount,” she said.

The Public Integrity Commission’s responsibilities include regulating the ethics code for the executive branch, overseeing financial disclosure filings and lobbying reports, and enforcing the anti-double dipping law, which prevents state and local government employees who also hold elected positions from receiving double compensation from the state.

This year, the Delaware Legislature passed legislation that requires the creation of a new lobbyist database. It also requires lobbyists to disclose the bill number on which they are lobbying. It’s an improvement for lobbying disclosure — but Wright said it will likely create additional work, suchas training some 400 lobbyists on how to use the new system, for an already strained agency.

“They did ask me, ‘Would it help if you had more people?’ It certainly would,” she said. “But we didn’t get that.”

Wright said the commission has experienced an increase in responsibility and jurisdiction every year since its creation in 1991; meanwhile, the budget has been cut repeatedly. In 2008, which was economically a bad year for the state, the panel suffered a 17 percent decrease in its operating budget, leaving it with $32,100.

Ethics commissions, like many state agencies, have in recent years often found themselves strapped for cash due to tough economic times. For smaller commissions that are already understaffed and underfunded, the cuts are especially damaging. In South Carolina, the State Ethics Commission had a budget of $725,000 in 1999; now, it’s at less than $284,000. The Oklahoma Ethics Commission only has one investigator and one attorney among its five-person staff, which, according to executive director Marilyn Hughes, is not enough. The commission has requested funding for a 10-person staff every year since 1991, but has never been larger than seven people.

“Historically, the legislature just hasn’t funded it,” Hughes said. Although the commission’s current budget is about $680,000, which is the largest it’s been in three years, that amount is still down from its highest point of $750,000 before 2008.

Hughes said there is “a lot of fear” associated with the commission’s ability to levy fines and penalties, but since it is a constitutionally established agency, legislators can’t eliminate it entirely; instead, she said, they low-ball it.

In Colorado, critics say, the lack of resources creates a chilling effect on the complaint process itself. Feldman said when citizens file a complaint, they have to pursue it on their own, as the commission does not have a large enough staff to provide the legal support. She said she did not know of any state that places such a burden on the complainant.

The Pennsylvania Commission, admittedly a much larger agency than its counterparts in Colorado and Oklahoma, suffered a 25 percent decrease in its funding, from $2.1 million in 2007 to about $1.7 million this year. Its staff has been reduced from 25 to 18 employees.

“There are things we are doing differently,” Contino said of the budget constraints. “We can’t invest in every case anymore.” For example, he said, the commission must now take geographical location into account. If investigating an allegation requires a four-hour drive to a distant corner of the state, they may choose not to pursue the case.

Carol Carson, executive director of Connecticut’s Office of State Ethics, said it is always a challenge to maintain the resources necessary to carry out its mandate.

“A lot of that is driven by the economy,” Carson said. “But in addition to that, watchdog agencies tend to get money when there is a scandal. When things go smoothly, it looks like they have a lot of money," so governments say, "llet’s take it away from them.”

Last year, Connecticut Gov. Daniel Molloy consolidated nine agencies, including Carson’s office, into one umbrella organization — the Office of Governmental Accountability. The restructuring was billed as a way to streamline state government and save the state money. It also reduced Carson’s staff from 18 to 13 members; she lost one of two investigators and its only auditor.

The Office of State Ethics, created in 2005, is one of the stronger enforcement bodies in the country, responsible for the disclosure of lobbying activity and personal finances, investigating potential violations, and enforcing the ethics code. It can — and does — initiate investigations, impose penalties, and audit reports. On the State Integrity Investigation, Connecticut scored a 90 percent in the category of ethics enforcement.

But as a result of the merger, Carson said, there were statute-mandated tasks that simply did not get done. The office reduced the number of audits of lobbying reports by 75 percent — it typically performs at least 40, but this year will only conduct 10.

The sun sets on reform
In Texas, attorney Fred Lewis acknowledged that the weakness of the state’s ethics commission stems in part from budget problems — but, ultimately, he said, the agency has to make substantial changes to its structure to be truly effective. “If they had all the money in the world, it wouldn’t matter,” Lewis said, “unless they had the structure — an enforcement division — to do proper investigations.” Earlier this year, the Texas Ethics Commission went through “sunset review,” a process that modifies or weeds out inefficient government agencies. In a May 2012 report, Sunset Advisory Commission staff wrote that the agency “unnecessarily focuses on minor reporting infractions” and recommended an overhaul of enforcement structure.

But when it came time for the Sunset Commission, a 12-member board that consists of 10 state lawmakers and two civilians, to approve those recommendations, good government advocates claim it didn’t go far enough. The Commission adopted several of the report’s suggestions, but other demands — like finding new sources of funding, putting disclosures online, or creating an enforcement arm — were ignored.

“The failure to enact bolder reforms leaves the Ethics Commission a largely toothless observer of a political system awash in cash and flush with potential conflicts of interest,” said The San Antonio Express-News in an editorial.

The sunset recommendations  will be turned into legislation for the 2013 session. But Texans for Public Justice’s McDonald said he is not optimistic that any substantial changes to the Ethics Commission will be made. “The mood in the legislature is that they don’t like the Ethics Commission,” McDonald said. “They want it to go away.”