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Vermont Lawmakers Enact Sweeping Ethics Regime

By David Frulla | November 3, 2017

On June 14, 2017, Vermont lawmakers enacted (VT SB 8) a sweeping new ethics regime. Among other items, the state established “revolving door” provisions for elected and senior executive branch officials, financial disclosure requirements for legislative candidates and executive officers, enhanced “pay-to-play” contribution limits for recipients of sole source contracts, and a new state ethics commission. The ethics commission is authorized to create a state code of ethics and administer a broad-ranging state ethics enforcement system across all three branches of government. The new ethics code will address a wide range of subjects, including ethics, campaign finance, human rights, and other issues. The ethics commission will also handle municipal ethics until December 15, 2020.

The Vermont Supreme Court, League of Women Voters of Vermont, Vermont Bar Association, Vermont Society of CPAs, and Vermont Human Resource Association are each authorized to appoint one state ethics commission member apiece. They appointed the first members on October 15, 2017. Because of its appointment system, the commission is independent — perhaps more independent than any similar commission.

The Vermont Ethics Commission's selection mechanism might present constitutional difficulties under the federal Appointments Clause (U.S. Const. Article II, § 2) if this were a federal law. Under the federal system of checks and balances, an entity or official exercising an executive branch function must be politically answerable to the president. In October 2016, the U.S. Court of Appeals for the District of Columbia Circuit invalidated the appointment and removal process for the director of the Consumer Financial Protection Bureau (CFPB), which the court found to be unconstitutionally insulated from executive oversight. Congress structured the CFPB as an independent agency headed by a single director who was removable only for cause. To remedy the Appointment Clause violation, the court struck down the for-cause removal provision, making the director removable by the president at will. In February 2017, the full court vacated the decision and decided to rehear the case en banc.

The Vermont Constitution has a provision similar to the federal Appointments Clause, providing that “The Governor . . . shall have power to commission all officers, and also to appoint officers, except where provision is, or shall be, otherwise made by law . . .” (Vt. Const. Ch II, § 20). Although there is no case on point, the term “officers,” as defined by the Vermont Constitution, arguably should be interpreted identically to its federal analogue. Under this interpretation, only the Vermont governor would have authority to appoint ethics commission members. However, one could also argue that the phrase “except where provision is . . . otherwise made by law” — which does not appear in the federal Appointments Clause — frees Vermont’s legislature to structure an agency any way it sees fit.

Vermont legislators appear to have recognized the separation of powers issues and have attempted to address them to a certain extent. For instance, the ethics commission has authority to do “intake” on ethics complaints, determine if they merit further investigation, and refer them to the relevant state agency for enforcement (e.g., the state Professional Responsibility Board for complaints regarding state attorneys, the attorney general for alleged violations of criminal and campaign finance law). The state enforcement agencies must then report back to the ethics commission on how the complaint was resolved. Of course, the commission is still exercising significant independent executive authority.

Whether this novel regime will be copied in other states, struck down in Vermont, or both is unclear. The commission is set to start operating on January 1, 2018, so stay tuned.

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