Anti-Nepotism Law to Be Considered by East Lansing’s Council Would Allow for Exceptions (UPDATED)

SEE UPDATE AT END OF ARTICLE.

Original article from January 24, 2022:

East Lansing’s City Council is set to take up a new “anti-nepotism” law tomorrow night, Jan. 25, at its regularly scheduled meeting. While the law would officially outlaw the awarding of City employment to some relations of Council members and the City Manager, the drafted legislation provides for certain exceptions.

This anti-nepotism law was actually supposed to be created a long time ago. Twenty-five years ago, in 1997, East Lansing’s City Charter was amended by the voters to add this language:

“The Council shall provide by ordinance for laws to secure ethics in government and to prohibit nepotism, which ordinance shall provide at a minimum, that no relatives of the City Manager or any Council member shall be hired by the City for any purpose during the term for which any Council member was elected, or during the tenure of the City Manager. The section shall not affect the employment rights of any person already employed by the City at the time of election or appointment. Any person hired in violation of the provisions of this Section shall forfeit all rights to employment while the prohibited relationship exists.”

Even though the Council has, since 1997, passed ethics laws (more on that below), it apparently never got around to passing an anti-nepotism law, as no such law is contained in the City’s published Code of Ordinances. And apparently no one, including the City Attorneys, noticed this failure to follow the Charter – until now.

Last week, ELi asked the current City Council why it has come up now.

Answering by email, Council member Dana Watson explained the introduction of the draft legislation this way: “Our attorneys submitted it, it’s legally sound. Something should have been in our charter, now it is.” (The law called for in the Charter won’t exist unless the Council passes it.)

Mayor Pro Tem Jessy Gregg responded by email, “We’re adopting this because it was brought to our attention that the city charter requires one. I believe it was Tedda Hughes who let us know that we were out of compliance with the charter.” Hughes holds a law degree from MSU’s College of Law and is set to be reappointed to the East Lansing Art Selection Panel at tomorrow’s Council meeting.

Council members Ron Bacon (the Mayor), Lisa Babcock, and George Brookover did not respond to questions about why the ordinance is only being considered now.

For the most part, the drafted legislation being considered follows what the voters approved for amending the Charter. But it includes an exception not reflecting the Charter amendment.

That exception reads: “This subsection does not apply to employees of the City Library or employees of the District Court.”

When asked why this exception is proposed, Gregg responded, writing by email, “The Council and City Manager have no input on the hiring or firing of Library and Court staff which is the reason that they weren’t included in this ordinance.”

Gregg is technically right about the limits of Council’s power. A Board of Trustees oversees the library, and a judge, elected by voters, directs the District 54B court.  

But the fact is that the Council has no direct input on the hiring and firing of any staff in the City of East Lansing with the exception of two positions specified by the Charter: the City Manager and City Attorney.

Additionally, the Trustees who oversee the library are appointed by Council, in effect making Council the bosses of the bosses of the library. Council also approves budgets and other matters that involve the library and the court, and the City Manager makes significant decisions involving those branches of East Lansing’s governmental structure.

And, as a reminder, the Charter language approved by voters specifically spoke to persons “hired by the City for any purpose” (emphasis added). That would seem to include those hired under the auspices of the City to work in the library or the court.

What about contractors hired by the City for some specific purpose?

Since the “library and courts” exception in the draft legislation focuses on employees on the City’s regular payroll, the draft language would also seem to suggest that being “hired” by the City does not refer to contractors hired by the City. So, the anti-nepotism law would not refer to contractors.

But again, the way the Charter from 1997 is worded – “no relatives of the City Manager or any Council member shall be hired by the City for any purpose” – would seem to suggest that the voters approving this Charter change might have intended the anti-nepotism law to refer to any sort of “hiring” by the City, including hiring by special contract.

Voters in favor of this addition to the Charter might have expected that it would prohibit the City from hiring by contract, for example, a landscaping service, a mural painter, a lawyer, or a road construction company, if that hiring involved nepotism as defined.

With regard to contract hires, parts of the City’s “Code of Ethics” appear already to require disclosure of potential financial conflicts of interest in contract hiring involving relatives of the Council members or City Manager. But the existing City laws do not appear to prohibit nepotism in contract awards.

Who counts as a “relative” for the proposed legislation?

Here, the drafted legislation again matches the Charter, which says: “For purposes of this Section, the Term ‘relatives’ shall mean the spouse, brother, sister, parents, children, stepchildren, grandchildren, father-in-law, mother-in-law, sister-in-law, brother-in-law, daughter-in-law, and son-in-law.”

ELi asked Council why the definition doesn’t include romantic partners/significant others (including living-together domestic partners) to whom one is not legally married.

Gregg answered by email, “A domestic partner registered as a beneficiary would qualify as family, in my understanding. A casual boyfriend or girlfriend would not.”

But the City law as drafted doesn’t refer to beneficiaries per se, and specifically prohibits the hiring of “spouses,” not domestic partners. The definition of “spouse” in law is typically an individual who is lawfully married to another individual. So, the way the law is drafted, the City could presumably legally hire the live-in romantic partner of an unmarried Council member or City Manager and that wouldn’t count as nepotism.

Watson agreed with the way this part of the draft is written: “My additional pondering is I’ve seen work places make inquiries/checks about relatives and legal partners, but, I agree that inquiries/checks about lovers is that person’s business not the businesses’ business.”

Bacon, Babcock, and Brookover did not respond to questions about this issue.

East Lansing has some other ethics laws already on the books, including some covering certain conflicts of interest.

East Lansing’s existing law states, for example, that “No city official or employee of the city shall suppress any public city report, document, or other information available to the general public because it might tend to affect unfavorably their private financial or political interest.”

The existing law also states that City officials and employees and their relatives are not allowed “to make use of city property of any kind or city personnel resources for purely personal gain or economic benefit.” So, for example, the spouse of a Council member is not allowed to use the Council member’s free-parking pass in the downtown garages. (The City gives all Council members free parking, in addition to offering them free cell phones and tablets, currently an issue in a public records lawsuit.)

And, in 2015, East Lansing’s City Council passed a law aimed at making more transparent the possible influence-buying through campaign contributions. That law says that if, in the last five years, a member of Council received a campaign contribution of $100 or more in a single election cycle from “a named party in a matter before council” or from “the owner, employee, manager, officer or representative of a named party” with business before Council, then the Council member has to disclose that contribution “at the council meeting(s) during which the named party is discussed and/or decided.”

ELi has found that this has rarely happened when it is supposed to have.

For example, now-Mayor Bacon accepted a campaign contribution of $500 from attorney David Mittleman on Aug. 17, 2021. Mittleman is the attorney representing the City of East Lansing in a large national suit over opioids. Bacon voted in favor of Mittleman’s recommended settlement for that suit on Sept. 14, less than a month after receiving the $500 campaign contribution from Mittleman.

When asked why he didn’t disclose this, Bacon said Mittleman was not a “named party” under the law. Mittleman was, however, personally named in the add-on agenda item as recommending the settlement. Mittleman also presented the proposed settlement to Council, and because Mittleman took the suit on contingency, he will be paid for his work specifically because of the settlement for which Council voted. (Disclosure: Mittleman and his wife donated $1,000 to ELi in Oct. 2021.)

On his campaign disclosure form, Bacon also incorrectly listed Mittleman as “retired” on his campaign finance disclosure form. Asked about this, Bacon responded by email, “If Attorney Mittleman is mislabeled likely administrative and I will amend thanks for your help.”

Babcock and Gregg also received $500 donations from Mittleman during their 2019 campaigns. Babcock tells ELi, “My apologies for not realizing this earlier and disclosing it at the time of the vote.” She says she simply forgot and that, “Regardless of the donation, I would have voted in favor of the settlement.”

Gregg explained, “Honestly I had completely forgotten about it! Thank you for reminding me. I’ll have to print out that spreadsheet and refresh my memory of the campaign contributions.”

In practice, Bacon’s, Babcock’s, and Gregg’s lack of disclosure of this campaign contribution is hardly unusual. East Lansing’s campaign contribution disclosure law has been violated starting from just after it was passed. The typical explanation is that Council members didn’t think the law applied in a particular case, or they simply forgot. They often make the disclosure retroactively after ELi has pointed it out.

Paradoxically, the campaign contribution disclosure law may encourage Council members to pay more attention to who gave their campaigns money than they otherwise would.

And the campaign contribution law certainly does leave room for interpretation, as Bacon’s response shows. It also allows Council members to take large PAC (political action committee) contributions and not be required to disclose those when voting on matters that directly financially impact the PAC’s constituents. (See ELi’s special report on PAC contributions in the most recent Council race.)

The anti-nepotism law will have specific consequences if it passes as written and is clearly violated: the relative of the Council member or City Manager who was improperly hired will lose the employment. Action could also, in theory, be taken against a Council member or City  Manager who knowingly violated ethics laws.

Correction, Jan. 24, 7 pm: When originally published, this article neglected to note that Babcock and Gregg also received campaign contributions from Mittleman. After reading the article, Babcock recalled the contributions and contacted ELi. We amended the article to include the information and Babcock’s and Gregg’s explanations. ELi regrets the error.

UPDATE, Jan. 25, 2022, 10 pm:

At the Jan. 25 meeting, with Council member Dana Watson absent, City Council voted 4-0 in favor of the drafted anti-nepotism legislation with one amendment. 

Mayor Pro Tem Jessy Gregg proposed the successful amendment which added “domestic partners” to the list of “relatives” who would be prohibited from being hired under the new law.

Before the vote on the law, Council member Lisa Babcock moved to include the East Lansing Public Library and 54B District Court among the branches of government in which nepotism would be prohibited, but no one seconded her proposed amendment.

City Manager George Lahanas defended keeping the court and library out of the law’s purview, saying he doesn’t have direct input on hiring and firing in those branches of government. (In a separate part of the meeting, Lahanas informed Council he is, as City Manager, approving bonus pay out of the General Fund for contingent workers, including library personnel.)

Council member George Brookover said the law could always be revisited later to add in the court and library.