H.875 strengthens Vermont's ethics laws by creating enforcement over disclosure requirements and independent oversight over state officials by giving the State Ethics Commission investigatory powers for the first time. A new Municipal Code of Ethics will also be created to provide a baseline code of conduct for local officials across the state.

The Details:

The bill adds county-level and municipal officials to the existing disclosure requirements for public officials. However, it also strengthens those requirements by requiring the disclosure of the names of any business clients who are regulated by the government entity a public servant is part of. A couple of new items were also added for disclosure, including loans received with special terms as well as large investments held by the public official or their domestic partner, including virtual currencies and trusts. A candidate for public office must file a disclosure form with their consent form as well as annually by January 15 of each year, or within 10 days of being appointed. 

In response to some political candidates who have skirted the existing law, it also creates penalties for failure to meet disclosure requirements. Six working days after notification from the Ethics commission that their required disclosures are missing, candidates for State office, county office, or legislature shall start incurring a $10.00 penalty each day (up to $1k).

Existing ethics laws include oversight of bribery, neglect of duty, taking illegal fees, false claims against government, owning or being financially interested in an entity subject to a department's supervision, engaging in retaliatory action against a whistleblower, and creating unlawful employment. The statewide Code of Ethics previously applied to all individuals elected or appointed to serve as officers of the State, all members of the Legislature, all State employees, all individuals appointed to serve on State boards and commissions, and all individuals who in any other way are authorized to act or speak on behalf of the State. When confronted with a conflict of interest, a public servant is required to recuse themselves from the matter and not take further action, unless the conflict of interest is not greater than that of other individuals generally affected by the outcome of a matter (think of a legislator voting on a tax bill).

The State Ethics Commission would have expanded oversight under the bill. They may investigate public servants for alleged unethical conduct following a  vote to proceed. The Executive Director shall notify the complainant and public servant in writing of any complaint being investigated, and shall conclude the investigation within six months of either the date of the complaint received or, in the event no complaint was received, the date of the investigation's initiation by the Executive Director. If the Executive Director determines that an evidentiary hearing is warranted, the Commission may hold a hearing to gather evidence and testimony, and to make determinations. The hearing may be held at any time, but not earlier than 30 days after service of the charge upon the public servant.

A person subject to the statewide Code of Ethics may be warned, reprimanded, or be provided with recommended actions in a way that protects their confidentiality. If the Commission does not find that the public servant committed unethical conduct, it shall issue a statement that the allegations were not proved. The Commission may enter into a resolution agreement with a public servant who is the subject of a complaint or investigation, if the resolution agreement includes an agreed course of remedial action to be taken by the public servant, and is in writing and executed by both the public servant and Executive Director. This is a method of resolving the conflict without the Commission issuing a finding (similar to a plea deal in the legal system).

The Commission, the Executive Director, the Commission's legal counsel and investigators are given the power in this bill to issue subpoenas and administer oaths in connection with any investigation or hearing, and may take depositions as needed in any investigation or hearing.

Documents related to the investigation of alleged unethical conduct and related reports are exempt from inspection under the Public Records Act. However, documents and evidence produced during the public portions of the Commission's hearings are open to public inspection as well as any resolution agreements that are executed.

A two-year statute of limitations is also put in place to make sure that any complaints are timely and generally fall within an elected officials current term of office.

The Commission is tasked with creating statewide Municipal Code of Ethics that shall apply when a municipality when a municipality either has none of their own or one that is insufficient. Nothing in the bill prevents a municipality from having a code of ethics that is stricter than the statewide code.

If the complaint was in reference to a municipal official, the Executive Director would conduct a preliminary review of complaints made to the Commission, and  refer any complaints alleging a violation of the Municipal Code of Ethics to the designated ethics liaison of the appropriate municipality. If a complaint is referred, the entity receiving the complaint is required to consult with the Commission regarding the application of the State Code of Ethics to facts presented in the complaint (in order to ensure consistent application of the municipal Code of Ethics).

Municipal officials covered by the Code of Ethics includes a mayor, council members, auditors, building inspectors, cemetery commissioners, clerks, collectors of delinquent taxes, first constables, moderators, planning commission members, road commissioners, treasurers, trustees of public funds, and water commissioners. Municipal officers may continue to act in a matter involving the officer's conflict of interest if the officer first determines there is good cause for them to proceed, if the matter is purely ministerial and does not involve substantive decision-making, and if the officer submits a written non-recusal statement. Each municipality shall post on its website its Municipal Code of Ethics and procedures for the investigation and enforcement of complaints that allege a municipal officer has violated the Municipal Code of Ethics. Each municipality is required to select an ethics liaison to the State Ethics Commission who is responsible for compliance with the Municipal Code of Ethics.

All managers at the municipal level are required complete ethics training, which may be in person or online, as approved by the State Ethics Commission. The training must be designed to achieve improved competency in the subject matter rather than rely on fixed hours of training as a measure of completed training. Upon completion of initial ethics training, a municipal officer shall complete additional ethics training, as determined by the State Ethics Commission, every three years.

All municipal employees are protected from retaliation, so long as they:

1. Provide a good faith report of an illegal order and refuse to comply with such order
2. Provide such a report to a designated complaint recipient, or the State Ethics Commission.

Analysis:

Applying a uniform code of ethics to municipalities that vary in size and complexity should not be taken lightly. There exist today a wide range of municipal ethics policies that guide the conduct of our local public officials and any complaints are ultimately referred back to the municipality for resolution. Some municipalities have a very strong process, with their own ethics policies and ethics commission, and others are non-existent. 

While the vast majority of public officials are honest hard-working servants to the public good, ethical violations can and do occur. Vermont is not immune to conflicts of interest, nepotism, self-dealing, and host of other objectionable activities. This is why independent oversight is needed. Vermonters deserve to have a neutral third party they can go to when they have a concern about the conduct of a public official. They need to be able to trust the outcome of that process and that their issue has been taken seriously. The routing of complaints back to the very public body that you are complaining about does not inspire confidence or public trust in the conduct of our municipal officials. 

Recognizing that many of Vermont’s municipalities are tiny, we would encourage any legislation that balances the two goals above, uniform ethical standards and independent oversight, with the need to not overwhelm municipalities and to inspire them to be an active partner in addressing these concerns.

The provisions strengthening oversight of disclosure requirements and adding investigation powers to the Ethics Commission are also welcome changes and are the clear next step in the evolution of our state's ethics framework. Both elements provide improved confidence in the outcomes of complaints and the conduct of our public officials.

Current Status:

The bill became law on June 10, 2024 without the Governor's signature.

Last updated: 6/11/2024

DISCLAIMER: Generative AI used to assist in the production of this report.