Earlier this week, the Seattle Ethics and Elections Commission (SEEC) held its monthly meeting (video). Top of the agenda: taking up once again the proposed change to the city’s conflict of interest rule for elected officials in light of the change to district-based Council positions.
Two weeks ago, the Council’s Government, Equity and Technology Committee discussed reviving a bill that had been shelved nearly two years ago. At issue was the rule that required officials to recuse themselves from participating in matters in which they have a financial interest unless that interest was shared with a “substantial portion” of the city’s population. It had been argued that with seven district-wide Council positions now, forcing a Council member to be recused would deny that district’s constituents equal representation to the rest of Seattle’s residents. The SEEC proposed an alternate rule that would require disclosure, but not recusal, in such circumstances, but the Council members didn’t like that approach and sent it back to the SEEC for another look — and to evaluate whether a version of the “substantial portion” rule could be crafted to apply just to a district’s residents rather than the whole city’s population.
The issue has an urgency now because the Council is about to start its legislative process on defining a Local Improvement District for the downtown waterfront; that’s Council member Bagshaw’s district, and because she owns a condo that would be subject to the LID taxation authority (and its benefits), the SEEC has ruled that she must recuse herself. The area covered by the LID doesn’t implicate a substantial portion of Seattle’s residents.
But when the SEEC convened this week, they struggled to make sense of the Council’s request to re-examine the proposal. Executive Director Wayne Barnett, who had been present for the Council’s discussion, seemed to be at a loss to explain the dissatisfaction with their earlier proposal, other than to cite the scandal-ridden Trump administration. He said that modifying the ethics law is “radioactive” with the Council at the moment, and suggested that because of that his ideal approach would be to adjust the law so that further modifications could be done by an SEEC rulemaking process rather than requiring changes to the Seattle Municipal Code that need to run the Council’s legislative gauntlet.
Fortunately, a representative from Bagshaw’s staff and another from the Council’s central staff were also present and could complete the picture. They noted that the state legislature’s recent botched attempt to exempt itself from public records disclosure laws tainted any other body’s approach to loosen ethics laws, that Bagshaw’s constituents have been communicating to her that they elected her knowing she lives in the district (and that a LID was in the works) and don’t want her to recuse herself. They also pointed out that the Council members objected to a flaw with the SEEC’s proposed rewrite: that it theoretically allows a Council member to participate in a legislative matter that narrowly affected only his or her own property (such as a contract rezone approval).
The commission, for its part, continued to be most concerned about a recusal taking away representation from a district’s constituents. They weren’t swayed by the argument that the two city-wide Council members could adequately represent that district. They also rejected the notion of refining the current rule to include an exemption for when a substantial portion of a district’s residents shared the financial interest. They pointed out that under such a rule if a district-based Council member and a city-wide Council member shared the identical financial interest in a matter, one might be exempted while the other isn’t — a strange outcome when the rules ought to apply uniformly.
Fortunately, a third option was presented. courtesy of the California Fair Political Practices Commission. In their rule on officials’ conflicts of interest, the threshold is whether an official’s interest is “indistinguishable from its effect on the public generally.” As a general rule, this is true when ” a significant segment of the public is affected and the effect on his or her financial interest is not unique compared to the effect on the significant segment.” That’s nearly identical to Seattle’s rule, though California’s suggests a “significant segment” is 25%, while Seattle’s is intentionally silent in order to allow varying interpretations for different contexts. However, the California rule also calls out some special cases where an official’s interest is automatically deemed indistinguishable. Among those special cases is when:
The decision establishes or adjusts assessments, taxes, fees, or rates for water, utility, or other broadly provided public services or facilities that are applied equally, proportionally, or by the same percentage to the official’s interest and other businesses, properties, or individuals subject to the assessment, tax, fee, or rate.
Since a waterfront LID would assess a tax, such an exemption would cover Bagshaw’s situation and allow her to participate in the legislative process.
The SEEC settled on this as the best option in front of them, and agreed to work with the City Attorney’s Office to draft up a new proposal based on the California rule’s language. Their hope is to bring something back to the Council by May 1, in time for the Council to pass it and Bagshaw to get her exemption. The SEEC isn’t scheduled to meet again until the first week of May, so they will likely be scheduling a special meeting later this month to finish this up.