Codifying fiduciary duty may be key to real ethics reform

Having served in New York state government for a long time, I stand second to none in my abhorrence and utter disappointment over the criminal convictions and public corruption tribulations of recent years. The sense of betrayal by a few crooks is worse when you have served with public officials who are overwhelmingly honest and hardworking.

But the paucity of ideas and tone of the ongoing conversation about public corruption is disconcerting, as is the disconnect between the problem and proposed remedies. Exasperation and sneer may be understandable reactions, but they don't provide a blueprint for change.

Let's try to think our way through this.

What's public corruption? Per the American Bar Association, “Public corruption is the misuse of a public or government office for private gain.” Sounds right. The convictions of Dean Skelos, Sheldon Silver, Malcolm Smith, Carl Kruger, Anthony Seminerio, Pedro Espada and Vincent Leibell, among others, fit right in. Even the sexual misconduct of Vito Lopez and other officials fits the definition. There are laws against these actions sufficient to prosecute and convict a lot of people.

What's left out? The most obvious loophole is the perfectly legal system of public officials taking huge amounts of money for political purposes. It's corruption, by the American Bar Association definition, but it's legal. And, compared with real criminality, it is far more damaging. Big decisions about tax laws, environmental laws, education laws, you name it, are distorted by which interest groups gave how many millions to which public officials.

Do we need new laws? Put aside the question of campaign finance reform. Here the conversation begins to fracture. The criminal laws seem to work well in punishing wrongdoing. Laws governing bribery, extortion and sexual assault aren't perfect, but they're pretty good. What many reformers want are new laws designed to prevent public corruption, usually by enhanced disclosure of private and public activity. Restrict some forms of outside income, make budget slush funds public and make lawyers disclose clients. There's almost no evidence that such disclosure reduces corruption. They're not bad ideas, but they're at best marginal improvements if what you want to do is stop crooks or the power of big money.

There are loud and insistent demands for Gov. Andrew Cuomo and the Legislature to take immediate action on these issues. But a careful review reveals the limits of punitive and disclosure legislation. And legal, big-money political contributions are protected by political division and the U.S. Supreme Court’s Citizens United decision.

There's an alternative. The remedy isn't in enhanced laws of the kind we already have. It's in elevating and clarifying the relationship between elected officials and the people they govern. Most people assume that in a democracy, those entrusted with power have a reciprocal duty to act in the public interest. Public officials have an obligation to do the right thing, to protect the public, and not to use public office to enrich themselves.

This is not an uncommon relationship. It's called a fiduciary duty, and it applies right now to private-sector corporate officers, directors of nonprofits and, by law in New York, to those in charge of public authorities. It's also described as the duty of loyalty, the duty of care and the duty of good faith. It's not rocket science, and most people take for granted that their officials have these obligations.

New York imposed these duties on the directors of its myriad public authorities, like the MTA, the Power Authority, and the Thruway Authority, enforced by an Authorities Budget Office. It seems to have worked, although governors and mayors don't always like it.

Can we impose similar obligations on all state officials? Yes we can, at least insofar as ethics and self-dealing is concerned.

We should add to the section of the Public Officers Law dealing with ethics the following fiduciary language:

“In complying with the provisions of the Section, every person subject to its terms shall perform each obligation in good faith and with that degree of diligence, care, loyalty and skill, which an ordinarily prudent person in like position would use under similar circumstances, applying independent judgment.”

It isn't easy to legislate what seems to be intangible, and it's impossible to legislate virtue. It is possible to set down in law the fundamental relationship between officials and those they serve. Laws that reduce criminality are fine, but we ought to aspire to an ethic of public service that goes beyond staying out of jail.

There are limits to what laws can accomplish in improving ethical behavior. The focus on enhancing criminal laws and disclosure laws is especially fraught with raising expectations without doing much. Laws that elevate our common aspirations have not been part of the Albany debate. This proposal can start that conversation.

The ancient concept of fiduciary duty provides an opportunity to reconstruct the ethical basis for state government in ways that jailing people never will. It has the potential to get to the heart of our problem and actually improve behavior, which is what really matters in the end.

Richard Brodsky is a former assemblyman who is in the private practice of law and serves as a senior fellow at both Demos and NYU's Wagner School. He is a regular columnist for the Albany Times Union and The Huffington Post.