Pension System Should Ban Gifts : Board Should Copy Supervisors’ Tougher Standards
When the Orange County Board of Supervisors in 1993 enacted a ban on gifts to most top county employees, the law’s preamble aptly cited the reason it was needed: “to stem the erosion of public confidence in the integrity of county government caused by what was perceived to be undue influence . . . .”
Those words should be required reading for the board members and employees of the Orange County Retirement System. The board, which is covered by state law and not county regulations, should emulate the supervisors and ban gifts.
The retirement system manages investments for about 20,000 current and retired county workers. From a $750-million fund eight years ago, it has soared to nearly $3 billion. With that much money available for deposit in mutual funds or real estate, it is not surprising that investment advisors want to get a piece of the action.
Under state law, the investment advisors each can give gifts of up to $280 a year to system employees and board members. If more is given, the recipient must refrain from acting on any matter involving the donor. Records show that the system’s administrator, Mary-Jean Hackwood, her deputy and two board members received more than the limit from individual donors in a 12-month period in 1993 and 1994. No problem under the statute: The donors did not have business before the board.
But it is reasonable to expect that donors would have business before the retirement system sometime in the future. Why give gifts otherwise? It is true that the gifts might not influence anyone’s vote. But outsiders understandably could wonder about influence-peddling. That perception indeed undermines confidence in government.
Hackwood since has been demoted over allegations she did a bad job running her office. There do not appear to be any violations of law in the acceptance of the gifts, which have totaled thousands of dollars a year in free meals, concert tickets, golf games and other presents for Hackwood and other pension system officials, according to pension system records.
It was only after Supervisor Don R. Roth pleaded guilty to criminal ethics violations and resigned three years ago that the supervisors enacted their gift ban. The pension board should follow suit and institute its own tougher regulations, rather than following the more lax state rules.
The bankruptcy has done enough to shatter public confidence in government, including elected officials and rank-and-file workers. Erasing the perceptions that individuals or corporations can buy influence could help stop further erosion of that confidence.