Ethics in Politics Keith S Balla CPA PSA
Ethics in Politics Keith S. Balla, CPA, PSA, ABV, CFF, CGMA November 20, 2019
Table of Contents ØExperience ØPresenter’s Contact Information ØEthics in Politics ØElected Officials ØGovernment Employees ØVendors ØTransparency and Honesty ØCases
Experience § 30 Years experience in Forensic Accounting, expert testimony and economic damages in litigation and fraud investigations with specialization in government: • Saving in elimination of wasteful spending , millions for Government entities • Developing systems for efficiency and controls • Implementing fraud prevention and awareness programs • Conducting Fraud investigations and obtaining recoveries • Critique campaign contributions • Critique vendor contracts • Transparency and disclosures
Ethic in Politics Presented by: Keith S. Balla, CPA, PSA, ABV, CFF, CGMA Partner in Charge, Forensic, Litigation & Valuation Services Group kballa@pkfod. com 201 -341 -0678 www. pkfod. com
Ethic in Politics • New Jersey Uniform Ethics Code • No Conflicts of Interest with direct or indirect business transactions • Notice if engaging in a NJ licensed activity • No act which is impairment of independence or objectivity • No use of position for privileges • No disclosure of information not available to public • No gifts or favors • Attendance and costs to attend events • No employment or compensation which impairs objectivity or independence
Ethic in Politics • Local Government Ethics Law • N. J. S. A. 40 A: 9 -22. 1 • Responsible to the Public and no use of Office for personal gain • No Conflicts of Interest • No Gifts • Business ownership • Compensation • Annual Financial Disclosure statement • No Related parties assistance
Ethic in Politics • Transparency • Public Meetings • Open Public Records Act • Writings, meeting notes, computer files • Texts • Emails • Phone recordings • Facebook • Twitter • Snap Chat
Ethic in Politics • Pay to Play • Restrictions on Individuals or Entities making political contributions to receive contracts • Reporting of Contracts and political contributions • Business Entity Annual Statement requirement for government contracts over $50, 000 • Contracts over $17, 500 • Reportable contributions over $300 • Prohibitions on entering into contracts
Elected Officials • Corruption • Quid pro Quo • Bribes • Real Estate Transactions below market between municipality and developer • Real Estate Transactions bribe including elected official in deal • No show jobs • Use of government employees for personal matters • Use of election contributions for personal benefits
Elected Officials • Soft Corruption- Legal? Unethical absolutely • Mission for political power and personal benefits • Campaign contributions made for influence • Grants to not for profits with a connection to the politician • Jobs for relatives • Lax record keeping to inflate unused sick and vacation pay • Hiring Elected officials in another municipalities as a favor • Use of government employees for personal matters • Use of election contributions for personal benefits
Government Employees • Ethics Policy and Ordinance at Municipality Underlying ethical principles for government employees are two core concepts: 1) employees shall not use public office for private gain 2) employees shall act impartially and not give preferential treatment to any private organization or individual
Government Employees • Ethics Policy and Ordinance at Municipality • Annual Disclosure of all business interests owned • Annual Related parties disclosure • Annual Ethics training course • Conflict of Interest Policy • No gifts policy • Mandatory annual vacation time off policy • Monitoring, tracking and annual certification of unused sick and vacation and approvals
Vendors • Ethics Policy and Ordinances at Municipality • Disclosure of all business interests and ownership • Disclosure of Related parties • Disclosure of political contributions • Contracts to include provisions for audit and inspection of all books and records of the contracting entity by the government agency • Contract provision prohibiting gifts • Contract provision prohibiting Conflict of Interest
Transparency and Honesty • Laws used to prosecute Elected Officials, Government Employees and Vendors • Hobbs Act-prohibits actual or attempted robbery or extortion affecting interstate or foreign commerce "in any way or degree. " Section 1951 also proscribes conspiracy to commit robbery or extortion without reference to the conspiracy statute at 18 U. S. C. § 371 • The extortion offense reaches both the obtaining of property "under color of official right" by public officials and the obtaining of property by private actors with the victim's "consent, induced by wrongful use of actual or threatened force, violence, or fear, " including fear of economic harm. • Some courts have also held that private individuals who make payments to a public official can be charged under the Hobbs Act, either as an aider and abettor or co-conspirator, if he or she is truly the instigator of the transaction
Transparency and Honesty • Laws used to prosecute Elected Officials, Government Employees and Vendors Travel Act. Whoever travels in interstate or foreign commerce or uses the mail or any facility in interstate or foreign commerce, with intent to— (1) distribute the proceeds of any unlawful activity; or (2) commit any crime of violence to further any unlawful activity; or (3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity
Transparency and Honesty • Laws used to prosecute Elected Officials, Government Employees and Vendors Honest Services- Mail and Wire Fraud Someone pays a bribe; someone accepts the bribe; someone is harmed by the transaction and deprived of the duty Intent to defraud and personal benefit Reasonably foreseeable economic harm Materiality
Transparency and Honesty • Laws used to prosecute Elected Officials, Government Employees and Vendors Honest Services- Mail and Wire Fraud Devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, . . . for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon
Points to consider You only have your name- Protect it You are a public servant NOT a private business in the public domain Avoid unscrupulous people Meet in public locations Include other Parties in meetings Listen and be cautious in discussions in meetings Accept no meals or gifts Refuse favors No phone calls and no written communications Obtain Legal opinions
Cases Bergen County Democratic Chair Joseph Ferreiro- Not an elected official Newark Mayor Sharpe James Hoboken Mayor Peter Cammarano Paterson Mayor Martin Barnes Atlantic City Mayor Frank Gilliam New Brunswick Mayor John Lynch Jersey City Mayor Gerald Mc. Cann Paterson Mayor Joey Torres Union City Mayor William Musto Perth Amboy Mayor Joseph Vas Trenton Mayor Tony Mack Orange Mayor Mims Hackett
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