Ethics chief blasts aldermen for pushing ‘unhealthy secrecy’

The chairman of Chicago’s reinvigorated Board of Ethics on Tuesday accused aldermen of injecting a “very unhealthy secrecy into government for a privileged few” by changing the definition of “city employees” to exclude independent contractors.

At the behest of Ald. Leslie Hairston (5th), the City Council’s Committee on Rules and Ethics approved the change and made it retroactive to Jan. 1.

That will excuse roughly 45 independent contractors employed by aldermen from filing ethics statements disclosing their clients, what business they or their spouses have with other units of local government or companies doing business with local government.

They also won’t have to disclose other sensitive information that includes debts, capital gains and real estate holdings. nor will they have to abide by the ban on gifts valued at more than $250.

Ethics Board Chairman William Conlon condemned the move as a step backward at a time when the public is demanding more transparency — not less.

“It injects a very unhealthy secrecy into government for a privileged few,” Conlon said.

“They’re getting paid, either in whole or at least in part, by taxpayer funds. I don’t understand why they should be excluded. If they have other jobs and represent other individuals doing business with the city, that ought to be brought to light.”

Conlon said the annual “statement of financial interests” that must be filed by June 1 is tailor-made to expose conflicts.

But if the full City Council approves the Hairston-sponsored amendment, taxpayers won’t have that vital information.

“Part of the disclosure is so people have to put out there if they have had income from an entity doing business with the city and if someone in their household got an income through somebody doing business with the city,” Conlon said.

“If they’re employed by the city, people ought to know about that. That’s the whole purpose of the disclosure. To disclose any inappropriate relationships. If people disclose relationships and they’re not inappropriate, it’s not a problem. If it is inappropriate, we should know about it. There shouldn’t be this secrecy surrounding service to the city of Chicago for which they’re being compensated.”

Hairston acknowledged Tuesday that aldermen inadvertently caused the confusion when the ethics ordinance was rewritten in March 2016.

That ordinance defined the terms “city employee” and “City Council employee” as “including an individual retained as an independent contractor by any of them.”

That’s why the definition needs to be changed, she said.

“Truly independent contractors [are] people who have separate offices. People who do not respond to the city. People who are not under the guidance of the city. People who set their own hours,” Hairston said.

Ald. Brian Hopkins (2nd) went along with the new definition. But he was a bit uncomfortable about it. He pointed to conflicts with the “very elaborate distinction” included in the IRS code between an independent contractor and “one who is really an employee but may not necessarily be on the standard payroll.”

“That was designed to close the loophole where you would have someone who actually did work for you, even though they looked on paper like they were an independent contractor. But they’d come to your office every day and you direct them. They’re really not independent in any other way except the paperwork that has a contract,” Hopkins said.

“You might actually work for an aldermanic office as an independent contractor and you’re directed by the alderman in that case. How do we handle that when there’s a conflict with what we’re doing here and what the IRS would say to that person when they go to pay their taxes? It raises a larger issue that we should look for greater clarity on. This highlights the fact that we have some ambiguity … and that’s not acceptable.”

Ald. Carlos Ramirez-Rosa (35th) said that’s an issue which must be “dealt with at the federal level.”

He noted that millions of workers across the nation are “mis-classified every single year. They’re treated as independent contractors “when we know they are employees and should be receiving the benefits” of an employee.

“It’s incumbent on each one of us as aldermen to ensure that we, in our offices, are following the law and that we are not misclassifying people,” Ramirez-Rosa said.

Rules Committee Chairman Michelle Harris (8th) offered a simple solution: Treat everybody the same.

“Anybody … that works for me full-time — whether they are an independent contractor or not — is held in my office to the same standards. And they must do everything that the other employees do. It’s a way of keeping things transparent,” Harris said.

Under Conlon’s leadership, the revamped Board of Ethics has been shedding its longtime image as a paper tiger.

Earlier this year, the board slapped former Uber executive David Plouffe with a record $90,000 fine for emailing Mayor Rahm Emanuel on a private account the mayor used to conduct city business without registering as a lobbyist.

On Wednesday, the board will consider 25 more cases involving clout-heavy lobbyists who emailed the mayor, and either failed to register as lobbyists or failed to report the lobbying activity.