Lynn Board, attorney for the City of Gaithersburg, acknowledged, “The optics are not good.”

The city went before the state legislature three years in a row, asking for changes to the Maryland Public Ethics Law (as amended by Senate Bill 315 in 2010). The city passed its own ethics ordinance in August 2015 that did not satisfy the state law as interpreted by the State Ethics Commission. The city received a public notice from the State Ethics Commission in January 2016 for noncompliance with the state law. And the city currently has no plans to comply with the State Ethics Commission’s guidance.

But looks can be deceiving.

This story has unfolded over many years. It all began in 2010 when legislation introduced by then-state Senator Jamie Raskin to strengthen the financial disclosure and conflict of interest requirements for local elected officials passed. “In 2010, the state said that local elected officials will be held to the same standard as state officials,” explained Mike Lord, State Ethics Commission executive director.

This strengthening of the state ethics law in 2010, Board speculated, may have been inspired by the scandal surrounding Baltimore Mayor Sheila Dixon and her conviction for stealing gift cards meant for poor residents and a large political corruption scandal in Prince George’s County that involved then-County Executive Jack Johnson.

Interestingly, in 2010 before the state law passed, then-City Councilmember Jud Ashman had asked Board and staff to look at strengthening the city’s ethics ordinance. As a result, “we beefed up the conflict-of-interest provisions,” Board explained, and also clarified the ordinance’s purpose statement and definitions.

Admitting that when it passed the new state ethics law took the city and many other municipalities and counties a bit by surprise, Board said that Gaithersburg quickly reached out to the state through the Maryland Municipal Attorneys’ Association, offering to assist in the creation of a model ethics ordinance for municipalities. “The state didn’t really take us up on it,” Board said.

Instead, the state created two model ordinances—A and B—to assist Maryland local governments and school boards and bring them into compliance with the new state law, Board said.

The State Ethics Commission, Lord explained, helps municipalities to craft their law. Draft ethics legislation is submitted to the State Ethics Commission, and the commission provides guidance on whether or not the draft satisfies the Maryland Public Ethics Law before a municipality, county or school board enacts its legislation.

Gaithersburg submitted at least four drafts through the years, Board explained, but the State Ethics Commission only approved one that closely followed Model A. This draft, however, was not approved by the Gaithersburg Mayor and City Council.

The state, Board said, wants municipalities, counties and school boards to strictly adhere to Model A or B, despite language in the Maryland Public Ethics Law that does allow for modifications in some circumstances.

In 2014, the city went to the state seeking modifications to the financial disclosure provisions for elected officials, and the state would not grant the city’s modifications. “We believe that’s in violation of the state law,” Board said.

According to the Maryland Public Ethics Law, financial disclosure provisions for elected local officials “may be modified to the extent necessary to make the provisions relevant to the prevention of conflicts of interest in that jurisdiction.” (Md. General Provisions Code Ann. §5-809 (2) (ii))

In August 2015, the city adopted an ethics ordinance “that we believe to be in accordance with the state law,” Board said. This was not reviewed by the state prior to its passage.

In September 2015, the state reviewed a copy of the city’s new ethics ordinance, pulled from the city website, and found it not in compliance with the Maryland Public Ethics Law. Primarily at issue is the city’s financial disclosure requirements for elected officials; they are not as broad as the state requirements.

A State Ethics Commission January 2016 public notice states that Gaithersburg “has not complied with and has not made good faith efforts toward compliance with the requirements of Subtitle 8 (Local Government Provisions) of the Public Ethics Law.”

“There has been no response (from the city),” Lord said.

But the city, Board said, is aware of the State Ethics Commission objections.

The state law asks for disclosure of all interests in real property; any interest in any corporation, partnership, limited liability partnership or limited liability corporation; all earned income sources of the elected official and his or her immediate family; and any interests held by a business entity in which the elected official has a 30 percent or greater interest, any interest held by a trust or an estate in which the elected official holds a reversionary interest or was a beneficiary or if in the case of a revocable trust, the elected official was a settlor.

“Local elected officials are not the same as state (elected officials),” Board said. The city does not believe that the broad nature of the state’s financial disclosure provisions prevents conflict of interest at the local level.

Gaithersburg narrowed its financial disclosure provisions to mainly pertain to the elected official and real property and financial interests in the City of Gaithersburg or businesses seeking to work with the city.

“Some of this (state financial disclosure provisions) is an invasion of privacy,” Board said, referring to financial disclosure provisions for immediate family members. The increased burden, she added, may negatively impact the number of qualified candidates who run for elected office.

In fact, shortly after passage of the new Maryland State Ethics Law, Gaithersburg had its first uncontested election. Some of the people Board spoke to at the time said that the increased financial disclosure requirements discouraged them from running.

In St. Michaels, where the town council passed the state’s new ethics ordinance three to two, one of the councilmembers resigned in protest, Board said. He supported a referendum and the town’s citizens voted the state ethics law down. The state then moved to exempt St. Michaels from the Maryland Public Ethics Law.

According to the State Ethics Commission website, a number of other municipalities and one county have been issued public notices for non-compliance—Hampstead, Mount Airy, Westminster and Carroll County. A number of governments receiving public notice asked to post a rebuttal letter on the State Ethics Commission website, Board said. The commission refused.

Montgomery County complied less than a year ago, Board noted.

Sally Marchessault, chair of the City of Gaithersburg Ethics Commission, said that her commission reviews elected officials’ financial disclosures once a year and is called upon whenever an elected official is concerned about a potential conflict of interest. In her eight years with the commission, elected officials have come before the commission only five times, she said.

Elected officials and staff go through ethics training, Board explained, and she advises them on conflict-of-interest questions from time to time. When an issue is complicated, that’s when the city’s Ethics Commission would get involved, she added.

“We have a strong ethics law that addresses ethics here,” Board said, noting that the city has had only one ethics complaint in 35 years.

“The state ethics law goes a long way past due diligence,” Marchessault said.

Still, the state “can file a complaint within the circuit court in the jurisdiction, asking the court to impose complying law,” Lord said. But “it is not our preference to be suing local governments. … We continue to be optimistic that Gaithersburg will comply.”