1. Ethics in the Treasury Securing and Maintaining the Public Trust
California Municipal Treasurers Association
September 21, 2012 Cal Poly Pomona
Kellogg West Conference Center
Presented By: Michael D. Martello
Interim City Attorney, Sunnyvale, CA
Special Counsel, Ethics Project
Institute for Local Government

2. ILG Mission: Promote good government
CMTA Code #2

3. Session Objectives Provide tools for analyzing ethical dilemmas
Identify steps to take to promote good government in your office and beyond
Share resources (and get your input)

4. Ultimate Objectives Your success & happiness as a public servant
Prevent missteps
Public trust

5. What to Do? Sources of guidance Other examples
CMTA Code
Law
Other examples
Long-term versus short-term thinking

6. Thomas Jefferson
“Honesty is the first chapter in the book of wisdom”

7. A Framework: Ethics Versus Ethics Laws

8. Ethics Versus Ethics Laws
Ethics = what we ought
to do
Laws = what we must do
Penalties—Sometimes severe
Minimum standards
Legal ≠ ethical

9. The Political Reform Act
Called You Out!!
All the heavy-duty State officials. . .and then:
“. . .city managers, city attorneys, city treasurers, city councils and other public officials who manage public investments “
. . . not the police chief or city clerk

10. What Would You Do? Vacation accounting irregularities
Agency credit card misuse
Agency supplies & equipment
Double-dipping on expenses
Extravagant expenses
This refers to the Sacramento water district scandal scenario that led to the adoption of AB 1234—the finance director was the whistle-blower in that situation.

11. What Would You Do? Laundering Money Shifting Expenses—indoor sports
Reimbursement for Losses – theft/damage
Gifts from Brokers
The question in the group meeting: “Does anyone see a problem with this?”

12. Thomas Jefferson
“In matters of style, swim with the current; in matters of principle, stand like a rock.”

13. Resources on Ethics Laws
No personal financial gain
No perks
Transparency
Fair process
Rest of Story: AB 1234 13

14. Short Term Strategies Remind people about audits
Encourage colleagues to consult with your agency attorneys
Recognize that people often make decisions in the own self interest

15. Long Term Goals Help create an ethical environment
Work on a code of conduct
Incorporate standards into you written investment policy
Keep track of the questionable gymnastics
Put together a presentation for the broader audience

16. Ethics in the Treasury: Hard Choices
Right versus right
Personal cost
Loss of job
Long-term thinking

17. Promoting Public Service Ethics
The Three Strategies

18. The Three Strategies
Good Practices
Your Education
Educate Others

19. Good Practices
Checks and balances: Minimize likelihood wrongdoing goes undetected
Internal controls
Audits
Transparency
Hiring for ethics
CMTA Code #4: Observe profession’s technical (and legal) standards

20. Educate Yourself CMTA Code #4: Continuous improvement
CMTA Code #2: Promote good government
AB 1234: Take the training
Understand and promote ethics

21. Educate Others Decision-makers The Public
Tool: Financial Management for Elected Officials
Oversight is a form of check and balance
The Public
Website/transparency
What does the public need to know to
Participate in democratic processes?
Prevent corruption? (Most important political office . . .)
Know that there’s “Ethics in the Treasury”

22. Resource to Help
Includes GFOA recommendations on financial transparency
Sent to finance directors in early January
Available online at without charge

23. Thomas Jefferson
“I have the consolation of having added nothing to my private fortune during my public service, and of retiring with hands clean as they are empty.”

24. Questions, Sharing & Feedback