The BOARD OF ETHICS OF the CITY OF MOUNT VERNON, Petitioner, v. Mayor Richard THOMAS, Defendant.
Petitioner The Board of Ethics of the City of Mount Vernon (“Petitioner” or the “Board”) brings this Petition to, in essence, compel the Respondent Mayor Richard Thomas, the Mayor of the City of Mount Vernon (“Respondent” or the “Mayor”) to pay a civil penalty of $5,000. The Board voted to impose such penalty upon Respondent in a meeting held on December 3, 2018 as a result of Respondent's failure to cure what the Board had previously determined to be deficiencies in the 2017 Financial Disclosure Statement submitted by him to the Board.
Factual and Procedural Background
The pertinent facts as set forth by the Board in its Petition are straightforward and, in the main, not disputed. The Board was created pursuant to the Mount Vernon City Charter (the “City Charter”) and Section 808, et seq. of the New York State General Municipal Law. (The “GML”). Under the City Charter, one of the responsibilities of the Board is to “[r]eview completed financial disclosure statements” (City Charter § 24-7 G(1)) required to be annually filed by several Mt. Vernon officials, including the Mayor. (See Charter § 24-11(A) (1).
On July 30, 2018, Respondent submitted his 2017 Financial Disclosure Statement (the “2017 Disclosure Statement”) through his then attorney, Randall W. Jackson, Esq. The Board proceeded to review the Disclosure Statement and determined that it was deficient in several respects. The Board then sent a letter to Mr. Jackson, dated September 14, 2018, in which the Board described the several alleged deficiencies in the Disclosure Statement, including the absence of any details concerning gifts and a loan Respondent listed as having received, rental income he had realized and the source of funds for a real estate purchase. The Board requested that additional information be provided within 15 days, and advised Mr. Jackson that “[t]he Mayor's failure to fully disclose the requested information will constitute a violation of Sections 24-7 (H) and (J) [of the City Charter] and subject him to a civil penalty not to exceed $10,000 or he may be referred to the appropriate prosecutor for prosecution.” (The “September 14 Letter”, Pet. Exh. 2). Respondent's attorneys - - first Mr. Jackson then his successor as counsel to the Mayor, Benedict Kuehne, Esq. - - each requested and received extensions of the Board's deadline up to November 30, 2018. However, no amendment of or addition to the 2017 Disclosure Statement was ever submitted. Indeed, other than the request for extensions, no response to the September 14 Letter was ever made.
On December 3, 2018, the Board met and “voted unanimously that Mayor Thomas had willfully refused to respond to the Board's September 14, 2018 letter to correct the deficiencies in his 2017 Financial Disclosure Statement and imposed a civil penalty of $5,000 pursuant to City Charter Section 24-7(J).” (Pet. ¶ 19). By letter to Mr. Koehne dated December 17, 2018, the Board notified Respondent's counsel of its action and advised him that Respondent “has thirty days to pay the penalty” imposed by the Board (the “Dec. 17 Letter”, Pet. Exh. 4). The penalty was not paid and has not been paid to date. On January 28, 2019, the Board voted to “seek the Court's assistance in enforcing its civil penalty.” (Pet. ¶ 22). This Order to Show Cause and Petition followed. Respondent opposes the Petition by his Answer In Opposition to Petition, dated February 19, 2019 submitted by his attorney Douglas J. Martino, Esq. acting of counsel to another attorney of the Mayor's, Michael J. Prizzi, Esq. The Answer indicates that Mr. Prizzi is seeking pro hoc vice status. In any event, Mr. Martino is, as far as the Court is aware, a member in good standing of the New York State bar and has appeared for Respondent.
Respondent argues, in essence, that the language of the penalty section of the Charter (§ 24-7(J)) authorizes the imposition of a civil penalty only if there has been a complete and utter failure to file, or if a filing that was made contains a knowing and wilfully false statement. (Res. Ans., ¶¶ 5-6, 10-16). That is, the submission of any financial statement, even one with what the Board deems severe omissions or deficiencies, would avoid § 24-7(J)'s penalties as long as the statement was not wilfully false.
Petitioner on the other hand, maintains that such a narrow reading § 24-7(J) would, in the situation that obtains here, essentially eviscerate the reporting requirements of the Charter and statute on which it is predicated by allowing any disclosure statement, however incomplete, to pass muster. The Board thereby maintains that once it reviews a statement, finds deficiencies, and notifies the reporting person of them, that person ignores the Board's request for a corrected complete statement at his or her peril. In the Board's view, the penalties authorized under § 24-7(J) of the Charter apply with equal force to submitted statements rife with deficiencies as they do to a failure to submit any statement at all.
As discussed below, the Court finds Petitioner's reading of the Charter persuasive for each of two reasons: the language of the relevant Charter provisions, when read together, so indicates, and a contrary interpretation would subvert the underlying purpose of Charter's and the Statute's financial disclosure requirements - - to expose and prevent illicit conflicts of interest.
Discussion and Conclusion
The Petitioner's position is succinctly stated: Petitioner contends that the submission of a deficient financial statement the inadequanicies of which are not cured by the reporting individual despite the Board's direction that he or she do so is tantamount to a knowing and wilful failure to file a financial statement at all and subjects the reporting individual to the same penalties as one who totally fails to file, or who intentionally files a false statement. The language of the City Charter, specifically § 24-7(H), supports this position.
Section 24-7(H) provides that if a reporting person files a financial statement which the Board determines to be deficient, then the Board is required to notify such person of the deficiencies, provide a period of time by which they may be cured, and advise the official of the potential penalty for failure to do so. As § 24-7(H) prescribes:
“H. If a person required to file a financial disclosure statement with the Board has failed to file a disclosure statement or has filed a deficient statement, the Board shall notify the reporting person in writing, state the failure to file or detail the deficiency, provide the person with a fifteen-day period to cure the deficiency, and advise the person of the penalties for failure to comply with the reporting requirements. Such notice shall be confidential. If the person fails to make such filing or fails to cure the deficiency within the specified time period, the Board shall send a notice of delinquency to the reporting person and to the appointing authority for such person.” (Emphasis added).
Significantly, the only section of the Charter that sets forth a “penalty” as referred to in Section 24-7(H) with respect to the financial statements is § 24-7(J) - - the section relied upon by the Board in imposing the civil fine upon Respondent. Thus, § 24-7(H) clearly indicates that the penalties referred to in § 24-7(J) apply to a reporting person's failure to cure deficiencies in a financial statement for which a notice of deficiency has been served by the Board.
Indeed, to otherwise interpret Section 24-7(H) might well render the financial reporting requirements a dead letter by depriving the Board of its principal enforcement mechanism.Absent the threat of penalty, a reporting person could simply file a purported financial statement replete with omissions and yet remain immune from penalty as long as some filing, any filing - - however uninformative and deficient - - was made. The statute would thus be undermined and its salutary purpose to expose present conflicts of interest, and the resulting in terrorem effect of avoiding future “conflicts of interest”, compromised. (See Charter, § 24-1; GML § 808, et seq.).
Respondent's related suggestion that the Board lacks the authority to impose the fine directed here is contradicted by the language of both the statute and the Charter. The State Legislative, in adopting the financial disclosure regimen for, inter alia, cities such as Mt. Vernon, made clear that the body responsible for overseeing the submission and review of financial disclosure statements has the authority to enforce such a requirement. As § 811(1)(c) of the General Municipal Law provides:
“(c) The governing body of a political subdivision or any other county, city, town or village which requires any local or municipal officer or employee or any local elected official or any local political party official to complete and file either of such annual statements of financial disclosure shall have, possess, exercise and enjoy all the rights, powers and privileges attendant thereto which are necessary and proper to the enforcement of such requirement, including but not limited to, the promulgation of rules and regulations pursuant to local law, ordinance or resolution, which rules or regulations may provide for the public availability of items of information to be contained on such form of statement of financial disclosure, the determination of penalties for violation of such rules or regulations, and such other powers as are warranted under the circumstances existing in its county, city, town or village.” (Emphasis added).
And where, as here, a board of ethics is delegated that responsibility, GML § 811(d) perforce confers upon that board the power to “enforce such filing requirement.” As § 811 (d) states, in pertinent part:
“(d) The local law, ordinance or resolution, if and when adopted, shall provide for the annual filing of completed statements with the board of ethics of the political subdivision or other municipality and shall contain the procedure for filing such statements and the date by which such filing shall be required. If the board of ethics is designated as the appropriate body, then such local law, ordinance or resolution shall confer upon the board appropriate authority to enforce such filing requirement, including the authority to promulgate rules and regulations.” (Emphasis added).
In the instant situation, the City Charter plainly bestows upon the Mt. Vernon Board of Ethics the responsibility and the right to pass on the bona fides of financial statements submitted for its review and to impose a penalty prescribed by the Charter if warranted. (See § 24-7 (J): “Assessment of a civil penalty hereunder shall be made by the Board with respect to persons subject to its jurisdiction.”).
Respondent's argument that he was not afforded the opportunity to contest the deficiency finding of the Board is inapposite in the instant case since Respondent never sought to avail himself of such an opportunity. When advised by the Board that it believed that his 2017 Disclosure Statement was deficient in several respects, rather than respond to the Board to argue his position, Respondent instead did nothing. He cannot now be heard to complain. In any event, Respondent always had the recourse of seeking judicial intervention if he believed that the Board was acting outside of its authority,
Respondent's additional contention that the Board needed to obtain the approval of the Corporation Counsel in order to bring this proceeding is similarly meritless. Nothing in the City Charter or the General Municipal Law contains such a precondition and, as discussed above, both the Charter and the GML make plain that the Board of Ethics is authorized to enforce the filing requirement. (See GML § 811(d); Charter § 24-7 (J)).
Composition of the Board
After the papers in this proceeding were fully submitted, Respondent brought to the Court's attention a Preliminary Report by Charles Knapp, the Inspector General of the City of Mount Vernon (the “Report”). The Report concluded that the Board of Ethics was improperly constituted since it did not include among its members a municipal employee or official, as prescribed by GML § 803(3) and was therefore without legal authority. (Martino Affirm. dated April 15, 2019). The Court directed that the parties submit additional papers to address this issue, and each of them did so.
Upon review of the parties' supplemental submissions and the applicable law, the Court concludes that the absence of a municipal employee or official from the Board is not a violation of state law and that for purposes of this proceeding, the Board was properly constituted.
As discussed above, the Board was created pursuant to the City Charter and Section 808 et. seq. of the New York State Municipal Law. The City Charter sets forth the composition of the Board, and expressly prohibits officers or employees of the City from sitting on it. However, as Respondent points out, this City Charter provision appears to conflict with GML § 808(3) which provides that “the members of a local board ․ shall include at least one member who is an elected or appointed municipal officer or employee”. The question is whether the failure to comply with this GML provision renders the Board unlawfully constituted and its actions a nullity, as Respondent contends. The resolution of this issue turns upon whether § 808(3) of the GML is a “general law” under the New York State Constitution by whose precise provisions all municipalities must abide, or whether a municipality may permissibly deviate from its provisions. Put another way, did the legislature in enacting § 808(3), which authorized municipalities to create there own ethics boards, intend to preempt the ability of municipalities to determine, for themselves, the membership composition such boards shall have. Because the Court concludes that § 808(3) is not a “general law” by which municipalities which choose to create a board of ethics are compelled to adhere with exactitude, Mt. Vernon's decision not to include a municipal officer or employee in the ranks of the Board membership does not render the Board's composition unlawful. Attorney General opinions and case law support this conclusion.
Article IX, Section 2(c) of the New York State Constitution guarantees to every local government the “power to adopt and amend local laws not inconsistent with the provisions of this constitution or any general law relating to its property, affairs or government ․” A “general law” is defined as “[a] law which in terms and in effect applies alike to all counties, all counties other than those wholly included within a city, all cities, all towns or all villages.” (NY Const. Art IX, Sec. 3(d)(1)).
Even a cursory examination of GML § 808(3) reveals that it does not fall into the category of a “general law” by virtue of the fact that it does not mandate that all municipalities adopt a board of ethics. Rather, each municipality is given the option of whether it will establish and constitute its own local board of ethics. As § 808(3) states, “[t]he governing body of a municipality other than a county may establish a local board of ethics and, where such governing body is so authorized, appropriate monies for maintenance and personal services in connection therewith.” (Emphasis added). Clearly, as the statute provides, a municipality may elect - - as many surely have - - not to form any board of ethics; nothing in the statute compels them to do so. Since GML § 808(3) is thus not a law of uniform application to all municipalities, it is not a “general law” to which all municipalities are constitutionally compelled to adher.
This was the conclusion reached by the New York State Attorney General when asked in 1986 by the City of Mt. Vernon itself for an opinion on the very issue presented herein - - whether the Board must include a city officer or employee in its ranks. As the Informal Opinion 86-44 of the Office of the Attorney General states, the Mt. Vernon City Council asked for an opinion as to the propriety of a proposal to “eliminate the requirement [set forth in GML § 808(3)] that a city officer or employee be a member of the board, in order to establish the local board of ethics as a truly independent body and so that persons will not be reluctant to request advice from the board.” After reviewing the GML as well as the pertinent provisions of the Municipal Home Rule Law, the Attorney General's Office concluded that GML Section 808(3) was not a “general law” and was therefore “not, in our opinion, an obstacle to the enactment of the proposed local law” inconsistent with the provisions of GML 808(3). As the Opinion stated:
“Section 808(3) of the General Municipal Law is not, in our opinion, an obstacle to the enactment of the proposed local law. Local laws need only be consistent with general State laws (NY Const, Art IX, § 2[c]; Municipal Home Rule Law, § 10). For home rule purposes, a general law is defined as “[a] law which in terms and in effect applies alike to all counties, all counties other than those wholly included within a city, all cities, all towns and villages” (id. Art IX, § 3[d] ). Section 808(3) is not, under this definition, a general law (Johnson v. Etkin, 279 NY 1 ). Section 808(3) gives cities the option to establish a board of ethics. It does not in terms and in effect apply alike to all cities (ibid). It applies only to those cities opting to come under it (ibid). Thus, a local government may enact a local law establishing the composition of a local board of ethics that is inconsistent with the provisions of section 808(3) of the General Municipal Law.
We conclude that a city may enact a local law establishing the composition of a local board of ethics that is inconsistent with section 808(3) of the General Municipal Law.“ 1986 NY Op. Att. Gen (Inf) 100, Informal Opinion No. 86-44, July 7, 1986 at p. 2 (Exh. 1 to Petitioner's Supp. Submission). (Emphasis added).
Subsequent opinions of the Attorney General have reinforced the conclusion that GML § 808 is not a general law and municipalities may permissibly enact provisions deviating from or adding to its precise terms. See, e.g., October 25, 1991 N.Y.Op. Att. Gen. (Inf) 1135 (N.Y.A.G.), 1991 WL 537272, Informal Op. No. 91). (In responding to an inquiry from the City of White Plains as to whether a city could permissibly “grant its ethics commission the authority to conduct investigations, subpoena power and enforcement power,” the Attorney General opined that it may do so since “[GML] section 808 is not a general law within the home rule definition ․ because section 808 gives cities (and other municipalities) the option to establish a board of ethics, it does not in terms and in effect apply alike to all cities ․ [i]t applies only to those cities opting to come under it.”); Attorney General Informal Opinion No. 2007-7, November 19, 2007. (Concluding that a county's deviation from GML § 806 with respect to the composition of its county board of ethics was permissible); Suffolk County Ethics Comm. v. Neppell, 307 A.D.2d 961, 762 N.Y.S.2d 915 (2d Dept. 2003) (“[N]othing in General Municipal Law § 800 et seq indicates that the State intended to occupy the field of financial disclosure to the exclusion of local law.”); cf. Bracker v. Cohen, 204 A.D.2d 115, 116, 612 N.Y.S.2d 113 (1st Dept. 1994).
The Court concurs with the opinions of the Attorney General that GML § 808(3) is not a “general law” and therefore the City, by § 24-7 of its Charter, permissibly excluded city officers and employees from Board membership. Accordingly, the Board was, at all relevant times, properly constituted and as discussed above, was within its power to impose the aforementioned civil penalty upon Respondent.
The Court thus finds that the Board has the authority to impose the civil penalty of $5,000 upon the Mayor; his failure to even respond to or attempt to cure the deficiencies in his 2017 Disclosure Statement outlined in the Board's letter notice of deficiency amounted to a wilful failure to file, triggering the penalties prescribed under § 24-7(J).
The Court has considered the additional contentions of the parties not specifically addressed herein and finds them to be without merit and not worthy of further comment. Respondent is hereby ordered to pay such $5,000 civil penalty imposed by Petitioner on or before August 30, 2019.
The foregoing constitutes the Decision and Order of this Court.
John P. Colangelo, J.