Careful NOT to Pierce Your City’s Corporate Veil

Careful NOT to Pierce Your City’s Corporate Veil

In corporate governance, “piercing the corporate veil” results in “personal liability” for Directors and management of the commercial corporation when these ignore the formalities of corporate governance and the state laws that are in place to limit their liability. Basically, the shareholders in the corporation are held legally responsible for the “actions” of the “corporation.”

In City governance, I use the term “piercing the political veil,” which results in “political liability” for City Managers and Directors of the municipal corporation, when these ignore the formalities of City governance and the resulting political accountability, putting in jeopardy the liability protection they now enjoy. Essentially, a bureaucratic figure in government (theoretically a neutral office) will be held personally responsible for stepping outside the bounds of his or her position to take a political stance.

POLITICS

Politics has held a pejorative connotation for a long time, and for obvious reasons.  No matter the age of the adult you ask, unless they are public-sector professionals, the surveys will show a continual decline in the public sentiments towards politics.  “Politics” has become beyond distasteful. The media feasts on the daily fodder created by the political debates and battles that today exists as a 24/7, all-you-can-eat buffet for the news agencies that cover the political organizations at the local, state, and federal level.

Sadly, it is typically not issues of actual policy that get covered. Media deals in scandal and corruption.

Thus, as City Managers and Directors, we sometimes hold back from publicly admitting that we are involved in politics, but the truth is that we are.  In grad school, we may have studied former President Woodrow Wilson’s dichotomy of “politics vs administration,” and thus, we made it our over-riding constitution to stay OUT of the politics when doing our public jobs.  However, our City organizations are political organizations.  There is no denying that.  Rather than discussing our political careers with alternative euphemistic terms and phrases, we should embrace the fact that we work for political organizations under well-defined boundaries within the politics vs administration dichotomy.

The reality is that even if we make every reasonable attempt to avoid taking on a political agenda, noting that “politics” belongs only to the realm of elected officials, we may still find ourselves falling under another negative, but slightly less pejorative term: Bureaucrat.  Yet we consider the term bureaucrat acceptable because we are the professional technicians who carry out the procedural aspects of the more substantive direction of the elected officials whom we assist; we work in the bureaucracy.

BUREAUCRAT

The difference: while we are professionals working for political organizations, we are in fact not politicians.

We take great pride in serving our City organization.  We acknowledge that our City is a political organization, with its mission statement and organizational structure placing all of the citizens of the community at the highest place in the City organization.

Bottom Line:  We public administrators are obligated to work “in” the governance of our political organizations, not “on” them.  We need to work to help the “inside” our City organizations function, not work on fixing the structures or systems from a “political” position.  It would be inappropriate and risky behavior for a professional public administrator to dabble in politics in the realm that belongs solely to the elected officials of our City.  This would result in “piercing the political veil” that protects, defines, and separates the role of elected officials from the appointed officials.

Today we are paid well by the City organizations that employ us.  Thus we need to remember that the City organization pay us to work for the people of our community; we serve as “helpers” to the Governing Body which was “elected” by the people of our community.  It is only the elected officials who work “on” the governance of our political organizations. If we as professional public administrators forget our place, we could pierce the political veil and end up in a political rip current without any life jacket or personal flotation device.  Scary!

TAKE HUMBLE PRIDE WORKING IN POLITICAL ORGANIZATION

While we do take pride in our work “in” the political arena, we recognize that we do NOT have the same “status” or “authority” as the elected officials. Instead, we are humbled, knowing that we hold a unique, privileged position, with access and influence over policy recommendations and the actions of the Governing Body.

Our humility comes with the knowledge of the fundamental dictum in our code of professional conduct as public administrators to refrain for engaging in the political arena that solely belongs to the Governing Body as elected representatives.

The ICMA’s Code of Ethics states the following: “The mission of ICMA is to create excellence in local governance by developing and fostering professional local government management worldwide. To further this mission, certain principles, as enforced by the Rules of Procedure, shall govern the conduct of every member of ICMA…”  The ICMA Code of Ethics embraces 12 tenets, with Tenet 7 stating that its members shall “Refrain from all political activities which undermine public confidence in professional administrators. Refrain from participation in the election of the members of the employing legislative body.”

Because public administrators hold the power to influence the political process, membership in the ICMA and other professional public management organizations requires a clear understanding of the role of politics vs. administration.  In fact, the entire body of Graduate studies in a Master of Public Administration university program contributes to the preservation of the checks and balances in municipal public administration.  The fundamental adherence to professional public management requires that we uphold the highest commitment to ethics, honesty, and professional prudence to ensure that we never abuse the privileges and trust granted us by the Governing Body.

WE WORK IN A DEMOCRACY, NOT A TECHNOCRACY

Regardless of the existence of meanness, mud-slinging, and extremes in the wielding of political power in some City organizations, we professional administrators work hard to stay out of that seemingly inevitable state of affairs.  We focus on and take pride in providing the best technical solutions and professional expertise to facilitate the governance of our City or other community organization.

And we do not get offended that our technical recommendations are not always approved by our Governing Body.  It is not our place to decide what is best for our community; that is the responsibility of the Governing Body.  And that is democracy…allowing elected officials to decide the development and redevelopment of their community as elected representatives of the thousands of people in their community.

Even if we feel that “we know best” because we have the college degrees and technical expertise, we do NOT have the power nor the status to decide the will of the people of our community.  If we were to appoint the best college-educated technical and professional administrators deciding the fate of their City, we would be a Technocracy, not a Democracy.  As the first real democracy in world history, The United States, including all of its smaller parts, will not abide a technocracy.

As bureaucrats, we know we make our greatest change from the inside out. In the end, positive change will come from a joint effort of the Governing Body and their helpers, within the confines of the democratic process.  Yes, we public administrators have the power to influence the City organization for much good (from the inside); however, this will all be for naught if it does not follow the democratic process.

POLITICS IS NOT FOR THE FAINT OF HEART

Politics can be pretty scary.  Those of you with any time working in City government know exactly what I mean.  However, if we are going to serve our City organizations professionally, we will need a strong stomach and a good education on the do’s and don’ts when navigating the political process without piercing the political veil of our Cities.

And it takes courage to maintain your political integrity, especially when you are asked, in public, “What do you think John?”  Do not take the bait!  It is NOT your job to give your opinion when the question is politically loaded, especially one that is polarizing to the community.

CAREER RISKS FOR PUBLIC ADMINISTRATORS WHO DABBLE IN POLITICS

During my 29 years as public administrator in local government, I have seen many careers ruined, or at the very least sidetracked, due to Directors or City Managers who forgot their code of ethics as professional public managers.  These ended up in what I call a “political rip current”.

No matter how innocent or harmless you may think your involvement in the political process, if that belongs to the elected officials, do not take the bait!  If you do not have a vote at the dais, you do not speak out of turn, and definitely never get ahead of the City Manager or the Council.  If you are a public administrator who was carried away, especially during a public meeting, you will be like the tiny human who was caught up in the middle of a fight between King Kong and a T-Rex.  You won’t survive!

To make it easy for you, simply stay out of politics!

I wish you success as you serve your City Council, or other Governing Body, as you work your craft as a public administrator in today’s increasingly complex political and legal environment.

John Herrera, CPA, MPA

President / CEO & Municipal Finance Officer

MuniTemps – Municipal Staffing Solutions

 Newsletter Issue: 2018 No. 3

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