Eminent Domain: Viewing N.J.'s ethical landscape

“In a state where news of public corruption seems to be never ending, can we ever make real the promise of ethics reform?” – Paula A. Franzese, Chair of the State Ethics Commission

Ethics issues involving eminent domain in municipal redevelopment projects undertaken under the Local Redevelopment Housing Law, N.J.S.A. 40A-12-1 et seq., are front and center in several cases contesting the right to take property in New Jersey. Paula Franzese’s article in the op-ed pages of yesterday’s Star-Ledger calls for a uniform code of ethics, a top-to-bottom ethics program building an ethical culture that “honors not only the letter, but also the spirit of the laws.”

But at the same time Professor Franzese tells us that A Plain Language Ethics Guide clarifies a “bewildering array of rules,” a disturbing development arrived on the front page of yesterday’s New Jersey Law Journal. In ‘Developer Rule’ May Near Repeal, we read that an unnamed municipal attorney has made inquiry to the Advisory Committee on Professional Ethics for an opinion regarding municipal attorneys representing developers in another town, where the developer does business in the town which employs the attorney. The result is Opinion 702.

The Advisory Committee on Professional Ethics, which is appointed by the New Jersey Supreme Court under Rule 1:19-1, consists of fifteen members of the New Jersey bar and three lay members. The Court designates a member to serve as Chairperson (currently Melville Miller, Jr) and another to serve as Vice Chairperson. The Administrative Director of the Courts serves as secretary of the committee. The form of the inquiry (1:19-3) is as follows:

All inquiries shall be addressed to the secretary who shall transmit them to the committee. They shall be in writing, shall set out the factual situation in detail, shall be accompanied by a short brief or memorandum citing the rules of court of cannons of ethics involved and any other pertinent authorities, and shall contain a certificate that any opinion of the committee will not affect the interest of the parties to any pending action.

The committee wants to do away with the “Developer Rule” enunciated in In Re A & B, 44 N.J. 331 (1965), which the committee believes was grounded on the so-called “appearance of impropriety,” a section which was taken out of RPC 1.7 in 2003. Opinion 702 was prompted by an anonymous inquiry by a municipal attorney who suggests that “with the abrogation of the appearance doctrine, the developer’s rule is no longer viable.” Download Opinion 702

Now is not the time for the Supreme Court to soften ethics rules regarding conflicts of interest, especially in redevelopment projects which are rife with conflicts and insider dealing. Again, we refer to the words of Justice Kennedy in the Kelo case:

“A court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit.”

If the New Jersey Supreme Court goes along with Opinion 702 of the Advisory Committee, it will become easier for ethically challenged attorneys who represent multiple conflicting interests to game the system. We hope the Supreme Court will take a hard look at this issue in the interest of the public and their faith in the integrity of the redevelopment process. We have previously criticized two New Jersey law firms for conflicts of interest involving the large oceanfront projects undertaken in Long Branch (Beachfront North Phase I and II) and Asbury Park. See previous blog entries:
Eminent Domain in Long Branch, N.J.: The time of their lives and
The Right to Take by Eminent Domain: "Follow the money..."

Opinion 702, if approved, would be contrary to Governor Corzine’s commitment to restore ethics in government. It is anticipated that New Jersey will issue a uniform ethics code which will streamline the existing ethics regulations into a unitary and more rigorous statute by September. The New Jersey Supreme Court should fully support this effort. Opinion 702 should be given close scrutiny by the court in light of the statewide effort underway to restore the public’s faith in its elected officials.

In her editorial, Professor Franzese calls for a bi-partisan effort to:
 Rein in local government. New Jersey's counties and municipalities should be within the jurisdiction of the State Ethics Commission and bound by the Uniform Ethics Code. The State Ethics Commission should be armed with the resources to oversee mandatory ethics training at the county and municipal levels.
 Merge the Joint Legislative Committee on Ethical Standards, a toothless enterprise responsible for investigating allegations of misconduct within the Legislative Branch, into the State Ethics Commission.
 Eliminate dual office-holding. Tighten the state's pension laws to end double-dipping and pension-padding, and cancel pension benefits for public officials convicted of serious wrongdoing.
 Ban "pay-to-play" meaningfully at all levels of government.
 Make real the promise of the Open Public Records Act and the Open Public Meetings Act at all levels of government. Too often, citizens are met with closed doors and "studied inaction" in response to requests for access and information. The Government Records Council must do its job.
 Create a joint task force to coordinate the effort to fight fraud, waste and ethical misconduct in government.

Franzese tells us we have a choice, “to use the power that comes with influence, access and opportunity as a tool to inspire or to humiliate, to transcend or to add injury." This is the challenge for each of us, as citizens of New Jersey.

The Ethics Commission's toll free confidential hot line for state employees and private citizens is 1-888-223-1355.

For further information about conflicts of interest and government, visit this link: New Jersey Conflicts of Interest Law

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