Comments to the Members of the North Dakota Ethics Commission
Here are some close-to-final draft comments I will be sending to the North Dakota Ethics Commission on proposed rules. I think these rules are very poorly written and ill advised. I’m sharing these draft comments on my “blog” because I hope others who read this post will also weigh in with the Ethics Commission and send their own comments and write letters to the editor. This is serious stuff! THE DEADLINE FOR PUBLIC COMMENTS IS FRIDAY, DECEMBER 10: ethicscommission@nd.gov
The letter below will be the first of two comments from me. The next comment will include a deeper dive into the legal errors in the Attorney General’s advice to the Ethics Commission. Believe it or not, the Attorney General has given the Ethics Commission advice that campaign donations should be flat-out exempted from the definition of a “significant financial interest” that would give rise to a finding of a conflict of interest. Stay tuned… and write your own comments, please.
The future of North Dakota’s clean air, clean water, economic democracy, and civic life may depend on our voices.
Dear Members of the Ethics Commission,
I join in the draft rule comments being submitted by the North Dakotans for Public Integrity, of which I am a board member.
I am submitting my separate comments to share my perspectives as a former Assistant Attorney General, as a former Agriculture Commissioner, and as a former member of the Industrial Commission. I also write these comments from the perspective of an attorney in private practice who has sued various state and federal agencies for violations of regulations, laws and constitutional provisions.
First, the intent and clarity of these rules leave much to be desired. Many portions of the regulations are so badly written as to invite confusion, failure to comply, and litigation.
One prominent example of this bad drafting is Section 115-04-01-01(1) which has four subsections, a, b, c, and d.
Turning first to subsection a, it says “A ‘Conflict of Interest’ exists when … A public official … must make a decision, take action or perform a quasi-judicial act in a matter affecting circumstances or persons with whom the public official has received a gift; …” What is a “matter affecting circumstances?” the reader will ask. Circumstances is a very broad word, and its use here creates more questions than it answers. Further, the subsection applies to a “matter affecting … persons with whom the public official has received a gift.” Do at least two people — one of whom is a public official — need to receive a gift? Probably the drafters intended to say “from whom” but given the opaqueness of the entire subsection that would be a guess.
Subsection b of Section 115-04-01-01(1) is written in an equally tortured way. Presumably, it means a “conflict of interest” exists when … Persons or entities or issues with which the public official has a significant financial interest arise as a part of the public official’s duties; “Issues” might arise, but persons or entities don’t “arise” as part of a public official’s duties. It would require speculation to determine the intended meaning of this subsection.
Subsection c adds further chaos and confusion: “Persons to whom the public official has a relationship in a private capacity to that person’s interests are affected or involved in matters on which a public official must act upon as part of the public official’s duties” is filled with ambiguity. I heartily agree with attorney Tory Jackson that this definition is a “grammatical, syntactical and typographical nightmare [that] would earn a failing grade in a middle school English class.” See Bismarck Tribune, editorial page, November 30, 2021.
And that isn’t all. Subsection c is linked by the word “and” to subsections a and b. This use of the word “and” appears to say that all three types of conflicts (a, b, c) must be present to find that a “conflict of interest exists.” Does the Commission intend to require a gift (subsection a), a financial interest (subsection b) and a relationship in a private capacity (subsection c) to co-exist before a conflict of interest is found? If so, categories of conduct that are unethical by fitting into only one category (e.g., receiving large gifts) would be under this definition not unethical.
This issue of “a, b, and c” or “a, b, or c” is not abstract: I was offered a trip to an out of state golf tournament by a contractor of the Industrial Commission when I was Commissioner of Agriculture. Of course, I declined. It would have been unethical for me to take that trip because the offer clearly entailed an expectation of favorable treatment if I had accepted, even though only one of the subsections would apply.
On first reading I thought that the drafters intended a, b, or c to constitute a “conflict of interest” but the use of the word “and” implies all three would be required to find a “conflict of interest”. The muddy grammar and unclear definitions of these three subsections necessitate a return to the drafting table.
As a lawyer sometimes asked to provide advice to persons trying to follow the law, I think these rules will be a very big challenge for lawyers and for lay people. These rules should be clear and plainly written. As they now are written, it will be hard for public officials acting in good faith to determine a clear path forward. And it goes without saying that bad actors will attempt to escape the consequences of unethical behavior by relying on the confusion and obscurity of these poorly written rules. Rules this bad simply invite disrespect and disregard of the law.
Subsection d of Section 115-04-01-01(1) adds even more problems of interpretation and implementation. Why should the rules of the Ethics Commission provide a presumption that a “member” in a “general business” who does not gain more than the benefits accruing to other co-owners does not have a conflict of interest? The vague term “general business” can apply to small firms with a few owners or a publicly traded conglomerate. For example, there have been news stories about public officials entering into partnerships that own buildings that are rented without a competitive bidding process to agencies of the State of North Dakota on terms very favorable to the public officials who own the buildings. No determinations have been made as to whether such contracts are unethical, but some might be. They should not be presumed to be ethical.
Subsection d also exempts conduct where a public official participates in a “general business, profession, occupation, or group.” (None of these terms are further defined.) As written, a conflict of interest does not occur if the public official does not derive “any benefit which is not greater than that accruing to any other member of any … group” affected by the matter. If a Commissioner of Agriculture, Attorney General and Governor belong to a “group” of five investors in a limited liability corporation formed for the purpose of plugging oil wells with funds approved for expenditure by the Industrial Commission, why should they be presumed to have no conflict of interest? Subsection d as currently written should be deleted.
Moving on to the next subsection, the definition of “gift” in Section 115-04-01-01(2) requires a lay reader to reference the Constitution, a chapter of the North Dakota Century Code and previously published regulations to ascertain what it might mean. This definition is so circular as to be useless. The goal of the Ethics Commission should be to have clear and precise definitions, not a definition that requires considerable legal skill and many hours to determine the meaning of “gift”.
Moving on from the problems of badly worded, unclear policies, the draft rule’s worst flaw is the patently erroneous Section 115-04-01-01(5)(a). It states that “campaign donations made in accordance with North Dakota or federal law” are flat-out exempted from the definition of a “significant financial interest” that would give rise to a finding of a conflict of interest.
This is a remarkably broad and ill-advised exemption. Such contributions have drawn scathing criticism from United States District Court Judge Hovland who said the Public Service Commissioners’ acceptance of donations from coal companies that they regulated (a practice that was legal at that time) was “ill-advised, devoid of common sense, and raises legitimate questions as to the appearance of impropriety.” [1] The voters adopted Measure One to end such practices and to create greater confidence in the government of the state.
The voters have spoken in Measure One and Measure One is now an integral part of the Constitution as Article 14. The Ethics Commission has extraordinary status as a constitutionally created agency, but it does not have the authority to override the Constitution.
No agency may promulgate a rule or regulation which exceeds its statutory authority. See, e.g., Hecker v. Stark County Social Service Board, 527 N.W.2d 226, 232 (N.D.1994). Such a rule is void and without force. Id.
I reference here and incorporate by reference the excellent discussion in the Campaign Legal Center’s memorandum to the Ethics Commission which patiently explains why this exemption is in error. I endorse and agree with the criticism of this exemption by Tory Jackson in his editorial in the Bismarck Tribune on November 30, 2021.
As my father, Robert Vogel who then served on the North Dakota Supreme Court, put it in his often-quoted opinion from Southern Valley Grain Dealers Ass’n v. Bd. of County Com’rs, 257 N.W.2d 425, 434 (N.D. 1977), one who raises a constitutional claim “should bring up his heavy artillery or forego the attack entirely.”
The expressed rationale for the Ethics Commission’s exclusion of campaign contributions from the scope of the Ethics Commission’s work is hardly “heavy artillery”. The Ethics Commission has no authority to override the Constitution, nor does the Attorney General. The Attorney General’s job is to uphold and defend the Constitution.
This is a difficult situation because the Attorney General is compromised by virtue of the massive contributions he has received from prior campaign cycles and the potential for contributions he may receive in the future. Further, many actual and potential contributors are or will be involved with issues and matters that are determined by or regulated by the Industrial Commission. I believe it is no accident that the Industrial Commission members have in recent years received significant contributions from oil and gas related contributors and the Industrial Commission adopted a policy of suspending 90% of fines imposed on oil and gas companies. See, minutes of the Industrial Commission, September 20, 2011, pp. 5-6.
However, this is an instance where the Ethics Commission need not rely on legal advice from a compromised source; its members can ask the North Dakota Supreme Court for the exercise of its original jurisdiction to determine whether campaign contributions fall under the jurisdiction of the Ethics Commission.
In the case of State ex rel Kusler et al. v. Sinner, 491 N.W. 2d 382 (1992) (a case involving the timing of an election), Justice Herbert Meshke, on behalf of a unanimous court, described the original jurisdiction process as follows:
N.D. Const., Art. VI, § 2 authorizes this Court to exercise original jurisdiction and to issue original and remedial writs necessary to properly exercise its jurisdiction. Under that constitutional provision, the power vested in this Court to issue original writs is a discretionary power which may not be invoked as a matter of right. State ex rel. Spaeth v. Olson ex rel. Sinner, 359 N.W.2d 876 (N.D. 1985). Compare Municipal Services Corp. v. Kusler, 490 N.W.2d 700 (N.D. 1992). It is well settled that our power to exercise our original jurisdiction extends only to those cases where the questions presented are publici Dec and affect the sovereignty of the state, the franchises or prerogatives of the state, or the liberties of its people. State ex rel. Link v. Olson, 286 N.W.2d 262 (N.D. 1979); NDCC 27-02-04. The interest of the state must be priry, not incidental, and the public must have an interest or right that is affected. State ex rel. Peterson v. Olson, 307 N.W.2d 528 (N.D. 1981). These criteria exist here.
Some of the problems with the current draft conflict-of-interest rules can be corrected by attentive and thoughtful drafting, but the belief that the Ethics Commission lacks authority to regulate (in any fashion) campaign contributions is a very serious problem. This is a good time for the involvement of the Supreme Court. The issues here are publici juris, affect the sovereignty of the state and its franchises and privileges and the liberties of its people.
In closing, I again repeat that I also incorporate by reference the comments of the NDPI. Further, I intend to submit a supplemental comment on or before December 10, criticizing the assertion that campaign contributions must be exempted from the scope of these rules.
Sincerely,
Sarah Vogel