November 2011


DC for Democracy has emailed the Mayor and all members of the DC Council urging respectful treatment of the Occupy encampments at McPherson Square and Freedom Plaza. Click HERE to read the letter.

Expenditures

DC Councilmembers are allowed to receive up to $80,000 per year in contributions to their Constituent Services Funds (CSF’s) per year, and may spend up to that amount per year as well for constituent services. Leftover campaign funds may also be contributed without regard to the $80,000 limit. It is a widely held view among District residents that CSF’s are used primarily to pay for urgent individual or family needs such as rental assistance to avoid eviction, utility bills to prevent cutoff, or help with funeral expenses, etc.

The reality is that councilmembers spend very little from their CSF’s to meet these immediate constituent needs. As shown in Table 1, during 2010, for nine (9) councilmembers the amount spent for these needs represented only between 1% and 12% of their total expenditures. The other four members ranged from 25% to 32%. For all members combined, the amounts spent totaled only $48,271, representing 12% of all expenditures from CSF’s for the year.

TABLE 1
COUNCILMEMBER EXPENDITURES ON ACTUAL CONSTITUENT NEEDS (2010)
Councilmember Total Constituent Svcs Expenditures Amount Actually Spent on Constituent Needs1 % Actually Spent on Constituent Needs
Yvette Alexander $49,939 $1,007 2%
Marion Barry $14,463 $3,607 25%
Muriel Bowser $35,713 $2,336 7%
Kwame Brown $7.354 $816 8%
Michael Brown $49,951 $4,793 10%
David Catania $14,932 $1,855 12%
Mary Cheh $34,686 $476 1%
Jack Evans $85,381 $3,286 4%
Jim Graham $48,713 $11,988 25%
Vince Gray $50,508 $14,235 28%
Phil Mendelson $3,751 $455 12%
Harry Thomas, Jr $6,259 $768 12%
Tommy Wells $8,299 $2,649 32%

1Covers immediate constituent needs, mostly to provide rental assistance to avoid eviction, pay electricity bill to avoid service cutoff, and help pay funeral expenses.

Source: DC Office of Campaign Finance (OCF) quarterly reports submitted by councilmembers.

Thus, despite widespread impressions to the contrary, councilmembers spent the vast majority of their constituent services funds for purposes not related to helping constituents with serious, immediate needs.

What then are most constituent services funds spent for? They fall into two broad categories. The first is to assist community organizations and to sponsor or support community events. In 2010, as shown in Table 2, councilmembers spent far more on community organizations and events than on pressing individual and family needs. The amounts spent in this category by councilmembers ranged from 8% to 48% of their total expenditures, with the exception of one member for whom these kinds of expenditures represented 77% of total expenditures.

The other category of expenditures may primarily benefit the councilmember and staff rather constituents. This includes spending spending on office supplies, computer expenses, printing, local travel and large amounts for catering and refreshments, of which an unknown amount may be for community events. Constituent funds were also used for Council breakfast meetings, for bottled water for their offices, and even to pay for season tickets costing $28,000 to four professional sports teams.

Nine councilmembers spent far more from their constituent services funds on this category of expenditures that they spent on either immediate constituent needs or on community events or organizations, with their expenditures for this category ranging from 40% to 87% of their total CSF expenditures. (See Table 2 for details)

TABLE 2
COUNCILMEMBER EXPENDITURES FOR CONSTITUENT NEEDS AND COMMUNITY EVENTS & ORGANIZATIONS (2010)
Councilmember Total Constituent Svcs Expenditures % Spent on Constituent Needs % Spent on Community Events/Orgs % Spent on Other Kinds of Expenditures1
Yvette Alexander $49,939 2% 11% 87%
Marion Barry $14,463 25% 35% 40%
Muriel Bowser $35,713 7% 14% 79%
Kwame Brown $7,354 11% 8% 81%
Michael Brown $49,951 10% 22% 68%
David Catania $14,932 12% 77% 11%
Mary Cheh $34,686 1% 18% 81%
Jack Evans $85,381 4% 21% 75%
Jim Graham $48,713 25% 20% 55%
Vince Gray $50,508 28% 42% 30%
Phil Mendelson $3,751 12% 48% 40%
Harry Thomas, Jr $6,259 12% 29% 59%
Tommy Wells $8,299 32% 45% 23%

1Includes spending by councilmembers for office supplies, computer expenses, printing, catering & refreshments and local travel; also for breakfast meetings of councilmembers, for Deer Park water and to pay for season tickets to DC professional sports teams.
Note: Catering & refreshments were not broken down and likely include amounts spent in support of community events.

Source: DC Office of Campaign Finance quarterly reports submitted by councilmembers.

Contributions to CSF’s

As noted above, councilmembers are allowed to accept contributions of up to $80,000 per year for their CSF’s, plus leftover campaign contributions. Contributions are limited to $500 per individual or entity.

As can be seen in Table 3, there was great variability among councilmembers in the amounts brought in during the year, ranging from a low of $33 to a high of $81,000. Only four members had contributions in excess of $40,000, while eight brought in less than $15,000. Total contributions to CSF’s were $308,321, and average of $23,717 per member.
The contributions came primarily from those donating the $500 maximum allowed. Many of the $500 maximum donations were from familiar names of individuals and entities that appear prominently in campaign fundraising reports as well. We can only speculate about the motivations behind these contributions. It is worth noting, however, that contributions of $500 over four years ($2,000) vastly exceed the amounts that can be legally contributed to a campaign fund during that time ($500 for ward-level races, $1,000 for at-large races).

TABLE 3
TOTAL CONSTITUENT SERVICES CONTRIBUTIONS TO COUNCILMEMBERS (2010)
Y. Alexander $46,725 J. Evans $81,000
M. Barry $14,000 J. Graham $ 8,461
M. Bowser $50,128 V. Gray $3,142
K. Brown $2,200 P. Mendelson $4,500
M. Brown $57,811 H. Thomas $6,925
D. Catania $ 4,405 T. Wells $ 33
M. Cheh $28,991
TOTAL $308,321

Source: DC Office of Campaign Finance quarterly reports submitted by councilmembers.

Conclusions

DC for Democracy believes that CSF’s should be eliminated. The quite limited amounts spent on hardship cases handled by these funds—less than $50,000 for all councilmembers’ CSF’s—suggests that there must be a better way to handle them, perhaps in the executive branch through a central office with the ability to access city-wide public and private resources to service them.

We are also concerned that the combination of the nature and sources of contributions, the ability to transfer leftover campaign funds into these accounts, and their use to fund community organizations and events, raise the question whether these funds are being seen as an adjunct to political campaign contributions. There are many legitimate expenditures being made by CSF’s, but our belief is that they should be covered by other means and through budget authorizations. Reducing the limits on contributions and expenditures from $80,000 to $40,000, as Councilmember Muriel Bowser proposes, yet not really narrowing the definition of what CSF’s can be spent for, does not, in our view, address the underlying question of why the CSF’s should be continued.

The Mayor and Council Chair are not allowed to have any other employment, but the twelve members of the Council are not so constrained. As a result, they are paid $125,583 per year, a salary that puts them in the top 10% of DC taxpayers, and that is the second highest in the country for council members after Los Angeles, which is a much larger city than Washington. With no limit on outside employment, some members of the Council bring home very large additional salaries: the top four reported $280,000, $250,000, $200,000, and $190,000 in outside income. It should be noted that a majority of the council reported no outside employment income for 2010, indicating that they were apparently able to get by on their Council salary alone.

Despite these figures, a number of arguments are made in favor of allowing outside income for members of the Council. Let’s consider these arguments:

  • The perspectives gained through outside employment enhance a councilmember’s Council service. It is no doubt true that a councilmember’s PRIOR occupation, whether as a lawyer, businessperson, doctor, or educator, provides valuable perspectives for members of the council. That does not mean, however, that it is essential to continue one’s job and draw a salary while serving as an elected member of the Council. There are continuing education programs, seminars, conferences and web-based programming that are readily available to those who want to “keep up”.
  • Earning a living through another job renders the individual more independent from outside influence. This is akin to the argument that voters should prefer wealthy candidates because they don’t “owe anyone anything”. Despite its surface appeal, there is scant evidence to support this proposition. If talking about independent wealth, it may have more plausibility. But in the case of councilmembers receiving outside income, there is much more room for conflict of interest when attempting to serve the interests of both the public and the employer.
  • Dedicated individuals are capable of handling the demands of two or more jobs. This may be true for some, but not for others, and it is doubtful that a meaningful standard can be devised and enforced as to who is sufficiently dedicated or capable to be able to handle the demands successfully. Perhaps this could be left for the voters to decide on an individual case based on their level of satisfaction with a councilmember’s performance. We prefer the position that the potential problems with outside employment outweigh the benefits.
  • Abandoning one’s career to serve the public for a period of years is a huge sacrifice. In one sense this is true. However, the high demand by the private sector for people who have served in public office indicates that the knowledge and relationships developed in the course of being an elected official are considered very valuable. Public service is both a sacrifice and a great investment in one’s career, with the net benefit being on the side of the latter. It should also be said that public service is considered an honor worth some sacrifice.
  • Conflicts of interest do not come only from outside employment. True, there are many sources of conflicts of interest. All of these conflicts should be disclosed and, when they exist, should require recusal. But career ambitions are a particularly important potential source of conflicts of interest. Just as federal officials place their investments in blind trusts to protect themselves from such conflicts, a temporary leave from one’s primary career while serving in public office serves to minimize such conflicts of interest, which can never be entirely eliminated.

We believe our Councilmembers are well compensated at annual salaries of $125,583. We recognize that serving as a Councilmember may be a financial sacrifice for some, but we believe that the intangible benefits it bestows at least offset whatever sacrifice there may be. And we hold strongly to the view that potential conflicts that may arise from outside employment justify a policy of banning such outside sources of income.

The draft bill of the Committee on Government Operations headed by Councilmember Muriel Bowser contains provisions that represent a substantial improvement over the current situation by requiring far greater disclosure of outside employment income than is currently the case. We support these changes, but we think they do not go far enough as regards councilmembers. Among other things, reporting would be required only at the end of each year. While such reports would be audited and made public, there would be a substantial period of time before auditors or the public would be informed of their contents. Finally, there appear to be no penalties in the relevant Chapter for failure to adequately and timely file the disclosure reports.

For the reasons stated above, we feel that the better course of action to simply ban all outside employment income.

We have all been dismayed by the dark cloud of scandal over the John A. Wilson building. Some may want to believe that this cloud rolled in just this past year with the allegations of nepotism, illegal use of campaign funds, misuse of city vehicles and public grant funds, etc. Such scandals make for a perfect storm that has ripped away whatever was left of any naïve faith that our laws are properly enforced. In fact, however, the District—just like the 50 states and the federal government—is threatened by something far more insidious: the pay-to-play culture of crony capitalism that allows the privileged few and the special interests to exert far more influence than their limited numbers would allow in a truly democratic system.

We must address both types of threats referred to above. First, we must prevent future scandals from engulfing the Wilson building by enforcing the laws already on the books. The Office of Campaign Finance (OCF) must be adequately staffed to audit campaign records and to initiate its own investigations. Its current staff of four auditors is clearly not sufficient. More importantly, enforcement of ethics statutes, which are currently scattered across multiple agencies, must be consolidated into a unified Ethics Code, as Ken McGhie of the DC Board of Elections & Ethics (BOEE) eloquently urged at the hearing on October 26. This unified and expanded Ethics Code would then be enforced by an independent Ethics Board consisting of members nominated by the Mayor, Council Chair, and the Attorney General, as well as four members from outside of government nominated by labor, business and community organizations. All would be subject to confirmation by the DC Council.

Only an independent Ethics Board that is adequately staffed and funded would have the authority for broad oversight, could carry out the training of government personnel, including our elected officials, and could enforce ethical behavior by all personnel. Establishing and funding such a body will be an important test of the Council’s seriousness about genuine ethics reform.

As important as it is, the enforcement of existing laws alone will not solve the problem. The pay-to-play culture of crony capitalism is deeply engrained throughout our political system through the power of money. To curb its influence in our local government and politics, our proposals include the following:

    Ban political contributions by lobbyists and entities that do business with the District.

    Ban the bundling of campaign contributions, and reduce contribution limits for Mayoral and Council Chair Campaigns to $1,000.

    Attribute contributions of corporate affiliates and subsidiaries to the parent corporation for purposes of campaign contribution limits.

    Eliminate private donations, using public financing only, for Transition Committees, and limit donations for Inaugural activities to $100 per individual or entity.

    Require reporting to OCF of Independent Expenditures related to political campaigns.

    Eliminate Constituent Services Funds.

    Ban free or discounted legal services for elected officials; ban private donations for official travel (use public financing only); and ban public officials from receiving free or discounted prices not available to the general public for entertainment, sports events, etc.

    Require full reporting to OCF of meetings between lobbyists and councilmembers.

    Closely related to the pay-for-play culture is the potential abuse of power by elected officials in cases where there is a clear conflict of interest. To address this problem, we propose the following:

    Require Councilmembers to state on the record before consideration of legislation whether they have a conflict of interest and, if so, require that they recuse themselves.

    Ban outside employment for councilmembers beginning January, 2014.

Finally, there must be accountability for those who have engaged in corrupt practices. Too often, only public officials pay the price for corruption, while the private parties—without whom such corruption would not exist—escape punishment. To make sure there is accountability on the part of these private parties, we propose the following:

    Prohibit organizations that have been convicted of fraud from doing business with the District government for five years.

    Prohibit contractors or individuals who have misrepresented information in the contract awards process from doing business with the District government for five years.

We believe that a piecemeal approach to ethics reform will not work, and that it will not provide the necessary reassurance to District residents that serious reforms are being adopted. The above proposals will, in our view, go a long way towards clearing that cloud over the Wilson building and restoring public trust in our local government.