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Letter: Self dealing with state money is not OK

Vogel writes, "I find it disturbing that the executive director of the Ethics Commission and members of the Industrial Commission are giving unethical behavior a green light, not a stop light. There should be no tolerance within state government for discussions in the room and voting where there is a conflict of interest, especially when millions of taxpayer dollars are at stake."

Sarah Vogel.jpg
Sarah Vogel served as North Dakota's ag commissioner from 1989 to 1997.
Submitted photo
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After reading the recent story in the Fargo Forum by Adam Willis “ Group calls out energy board ,” I doubt I am alone in my disappointment with the tolerance of conflicts of interest at a new state agency, the Clean Sustainable Energy Authority, whose appointed members are drawn from the oil, gas and coal industries.

At the Dec. 15 meeting, the members of the CSEA declared conflicts of interest, but then proceeded to participate in discussions and to vote on grants and loans to entities with which they were connected. Even more disappointing is the behavior of the elected Industrial Commission members: Gov. Doug Burgum, Attorney General Wayne Stenehjem,and Agriculture Commissioner Doug Goehring. They were aware of the CSEA’s members’ conflicts but they took no corrective action, and promptly approved the recommended grants.

This isn’t right. Self dealing with state money is not OK despite the acquiescence of the CSEA and the North Dakota Industrial Commission.

I’ve been on many boards of directors and members of commissions at the local, state, regional and federal level. I’ve worked with very small nonprofit charities as a board member and adviser, and also with big institutions such as the Federal Reserve Bank of Minneapolis and the US Department of Agriculture. I’ve worked with teams to distribute millions of dollars and select worthy grant recipients. I’ve been counsel to private organizations that routinely dealt with conflicts of interest by board members. The general practice in all of those settings has been that if a matter comes up for a vote and one of the members has a conflict of interest, that member declares the conflict, leaves the meeting room and goes into the hallway (nowadays they might leave the “zoom room”) and is not called back to the meeting until the discussion about that matter has ended and the vote has been taken in his or her absence. This is the way hundreds of private and public boards are run. In fact, the Council of Nonprofits advises all boards to have conflicts of interest policies that require disclosure and recusal. Lastly, nonprofits are also required to disclose to the IRS information regarding their conflict of interest policies in tax filings. It is not hard. People do it all the time. State agencies should do the same.

I find it disturbing that the executive director of the Ethics Commission and members of the Industrial Commission are giving unethical behavior a green light, not a stop light. There should be no tolerance within state government for discussions in the room and voting where there is a conflict of interest, especially when millions of taxpayer dollars are at stake.

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Confidence of the taxpayers and citizens of North Dakota in the ethics and rectitude of state leaders and state institutions is certain to falter when people acting on behalf of the state recommend the disbursement of state money in self-serving ways. For example, the members of a small town cooperative feed and fuel store would recall the board if they voted to give themselves free chicken feed. But, here, it isn’t chicken feed. It was $28 million in outright grants (no repayment expected) and $135 million in low cost (no more than 2% interest) loans. The total on this tranche of money from CSEA is $163 million dollars, and more is expected to be disbursed at later Industrial Commission meetings. How much is $163 million? For comparison purposes, $163 million is more than the combined budgets of Burleigh County ($30 million), Cass County ($40 million) , Grand Forks County ($27 million), and Ward County ($54 million).

For generations, North Dakotans have applied the basic ethical principle that agents of the state shouldn’t be self-serving in their dealings with the people’s money. This principle was forgotten at the recent CSEA and Industrial Commission meetings. One person in The Forum story who stands out, however, is the unnamed representative of UND’s Energy and Environmental Resource Center who recused himself from voting for an application submitted by his own organization. Good for him and for UND EERC.

Sarah Vogel, an attorney and author of "The Farmer's Lawyer," served as North Dakota's agriculture commissioner from 1989 to 1997.

This letter does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.

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