Conflicting interests 

Local Government Study Commission bites backs

Conflict of interest claims make for interesting disagreements. And an unofficial complaint about a suspected conflict of interest on the Missoula City Government Study Commission, already fraught with discord, is certainly no exception.

Two members of the commission, Jane Rectenwald and Alan Ault, believe fellow commissioner Bob Oaks hasn’t disclosed a conflict of interest created by his role as director of the North Missoula Community Development Corporation (NMCDC). The nonprofit group that’s spent the last decade spearheading a variety of neighborhood projects, including development of affordable housing, receives federal grant funds through the city. Thus, according to Rectenwald’s and Ault’s logic, Oaks has a vested interest in not seeing Missoula’s form of government change, since a shake-up could potentially impact NMCDC down the road.

Oaks says the claim, recently made overt for the first time to the Independent, displays a fundamental misunderstanding of how local government and the grant process works, and roundly denies the existence of any conflict.

“It’s absolutely too far of a stretch for me to understand how that’s a conflict of interest. It doesn’t compute,” Oaks says.

Officials—including City Attorney Jim Nugent, Montana Commissioner of Political Practices Gordy Higgins and County Attorney Fred Van Valkenburg—weigh in on Oaks’ side, to varying degrees.

“This is so remote it’s nothing but a theory. There’s no substantial, financial link—it’s all a hypothetical what-if,” Nugent says. “Hypothetical what-ifs do not constitute a conflict of interest.”

Though Rectenwald’s and Ault’s comments haven’t been publicly voiced until now, the issue has surfaced in thinly veiled fashion during recent commission meetings and seems unlikely to die. Ultimately, the alleged conflict of interest issue is merely one symptom of a troubled commission that has splintered into a five-member majority (Oaks, Chairwoman Sue Malek, Sarah Van de Wetering, Susie Reber Orr and Pam Walzer) and a two-member minority (Rectenwald and Ault). The commission, charged with evaluating local government and producing a report with recommendations for change that will appear on November’s ballot, has examined and continues to formulate recommendations on a variety of issues.

But the most polarizing issue has been the notion of replacing Missoula’s mayor, who has wide-ranging authority, with a city manager who would work at the discretion of City Council. Rectenwald has persistently promoted a city manager-style city government, saying more “professional” leadership would solve myriad problems; she also maintains that a city manager could impact distribution of grants like those sought by the NMCDC. Rectenwald cites as evidence of Oaks’ conflict his disinterest in recommending a city manager, though other commission members say they’ve rejected the possibility of a city manager as well, after months of careful consideration. Chairwoman Malek says Rectenwald is targeting Oaks’ integrity because she simply won’t acknowledge that her stumping for city manager has failed for other reasons.

“I honestly feel like Jane and Alan are trying to find fault either with the process or with us as individuals because they can’t defend their point of view on what’s going on in government and how it should be changed,” Malek says.

But Rectenwald and Ault maintain that the commission has been compromised, and that even the appearance of a conflict merits disclosure.

“[Oaks] does have a conflict because it’s a business and professional relationship. He’s getting paid by an organization that gets money from the city and a change in government could jeopardize that,” Rectenwald says.

“It appears to me that it’s in his best interest to keep the status quo and not rock the boat,” Ault seconds.

Nancy Harte, grants administrator for the city-county Office of Planning and Grants, says the federally regulated and City Council-approved awarding of Community Development Block Grants (CDBG) and Home Investment Partnerships (HOME) monies wouldn’t be affected by a switch from mayor to city manager.

“What we use the federal money for is dictated by the federal government,” Harte says. “[Local officials] may decide to pick one organization over another, but City Council can do that now, and if we went to another system, that would be true too.”

The two annual grant programs—applied to housing, economic development and public services for low- and moderate-income citizens—are governed by federally required plans. Each year, OPG advertises and conducts public workshops to determine eligibility for the grants; staff evaluates applications; then Council’s Administration and Finance Committee reviews applications and decides which projects to fund before giving the full Council the final word. From 2003 to 2006, the competitive programs have awarded about $2.5 million for HOME and $2.9 million for CDBG; NMCDC has received about $740,000 from HOME and $270,000 from CDBG during that time.

Political Practices Commissioner Higgins says state ethics rules recognize that blending of private life and public service inevitably occurs to some extent, but beyond decisions with direct, personal, financial implications, the ethical line in the sand is fuzzy.

Van Valkenburg, the local official charged with accepting and investigating official complaints of ethics code violations, says the situation sounds more like a political issue than a legal conflict of interest.

“If it’s just a political conflict of interest—I mean, that’s what politics are all about. People vote their political biases and opinions. And there’s nothing wrong with that and there’s nothing wrong with someone pointing out their differences…but if somebody really wants to frame it as a legal conflict of interest, they need to follow the procedure the law provides for,” Van Valkenburg says.

The closest the commission has come to addressing the issue formally was during a March meeting when Rectenwald inquired whether members had “a business or financial interest that would benefit by maintaining the status quo.” Commissioner Van de Wetering asked Rectenwald to further define her query, and Rectenwald responded that she was “just asking.” In February, meeting attendee Freddi Thompson read a letter referring to “influences too obvious to point out” on the commission but stopping short of naming names; Thompson, too, says her comments were directed in part at Oaks.

Van de Wetering says her major contention is the roundabout manner in which it’s being addressed.

“We’re responding to shadows, and that’s not how issues need to be aired for a public body,” she says. “I’m really sorry that people are putting their energy into this because that’s not what the voters elected us to do.”

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