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2/8/19 – Documents contained in emails released by the City of Bainbridge Island, WA show that newly hired Banning City Manager Doug Schulze has been under investigation by an international body (International City/County Managers Association – ICMA) for alleged ethics violations committed while at Bainbridge Island.

Two separate complaints were filed against Schulze by Bainbridge City councilmember Ron Peltier.

Among the reasons for his complaints, Peltier cites unethical tactics used by Schulze, including not being “upfront” with the public, creating division in the community, and underhandedly initiating his departure with that of Bainbridge’s Police Chief Matthew Hamner to Banning, despite the fact that Schulze had just given Hamner a new contract in Bainbridge a few months earlier (view first complaint here and second complaint here).

Already Schulze has  been off to a controversial start in Banning, when he pushed for hiring his friend Hamner as Banning’s Police Chief, a move that has been regarded by many as a textbook example of cronyism.

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FAILURE TO DISCLOSE

The first complaint against Schulze was filed on August 27th, 2018, at a time when he was in negotiations to become Banning’s new City Manager. The ICMA has confirmed that Schulze was informed of the first ethics complaint against him on September 10, 2018 (see screenshot of email).

But Schulze did not sign his employment agreement until 4 weeks later, on October 8, 2018. This means that Schulze was aware of an ethics probe against him at the time he signed the contract, but decided not to inform the Banning City council nor the City attorney of this fact.

It is beyond the scope of this article to determine if the complaints brought against Schulze have merit. They may or they may not. Schulze will most certainly claim the complaints are meritless and no big deal. What matters to Banning, however, is the fact that Schulze failed to disclose the existence of a pending ethics complaint against him. This is a huge red flag.

When seeking employment, Schulze likely had an obligation to disclose any material facts about his persona which may be relevant to his employment. This certainly would include any ethics challenges before an international body, like the ICMA. After all, it would not benefit Banning to hire a CM who may eventually be found to have acted unethically.

Schulze failed to inform the Banning City council – and the public – about the pending charges against him. By doing so, he may have concealed a material fact relevant to his employment.

By this lack of disclosure, Schulze deprived the council of being able to make a fully informed decision, which likely would have resulted in his contract being put on hold pending the outcome of the ICMA’s investigation.

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BREACH OF CONTRACT

Beyond having failed to disclose an ongoing ethics probe at the time of signing his employment agreement, Schulze subsequently may also have breached his contract with the City of Banning when he failed to disclose a second pending ethics complaint, which was filed against him on January 19, 2019.

Ironically, it is said to have been Schulze’s idea to incorporate the ICMA’s code of ethics into his contract. Consequently, any violation of the ICMA’s tenets by Schulze will now also constitute a breach of his contract.

A failure to disclose an ethics complaint appears to violate the following tenets of the ICMA’ s code of ethics :

Tenet 3. Demonstrate by word and action the highest standards of ethical conduct and integrity in all public, professional, and personal relationships in order that the member may merit the trust and respect of the elected and appointed officials, employees, and the public.

Tenet 4. Serve the best interests of the people.

It goes without saying that it does not serve the best interest of the people, if an ethics complaint against a public official is covered up. And like with any coverup, such action is never a reflection of integrity or ethical conduct on the official in question.

Everyone will agree that secrecy and coverup activity are not what the people of Banning have bargained for when they hired Doug Schulze.

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LACK OF DISCLOSURE – YET ANOTHER ETHICS VIOLATION ?

As stated above, any violation of the ICMA’s code of ethics will also constitute a breach of Schulze’s contract. But beyond a breach of contract, the lack of disclosure itself now becomes actionable before the ICMA as a separate ethics violation.

Schulze had a clear duty to provide full disclosure, not only as a City Manager of Banning, but also as a member of the ICMA.

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OPTIONS FOR THE CITY COUNCIL

Schulze’s questionable conduct poses yet another challenge for a City that, over the years, has had enormous difficulty retaining a qualified City manager.

In the past, unethical conduct, like that of former City manager Michael Rock, was met with public reprimand and with an ethics complaint to the ICMA, all initiated by an unanimous decision of the City council.

In the case of Doug Schulze, the council cannot afford to look the other way. A clear message should be sent that Banning does not tolerate deception and coverups. Therefore, the council should carefully weigh all of their options :

Option 1 : Place Schulze on administrative leave, pending the outcome of all ethics investigations against him

Option 2 : Publicly reprimand Schulze for failing to disclose either ethics investigations, particularly for deceiving the previous City council and depriving them of making a fully informed decision when they hired him.

Option 3 : Terminate Schulze for cause due to breach of contract

Option 4 : File a separate ethics complaint with the ICMA against Schulze for covering up two pending ethics investigations

Option 5 : Pretend that Schulze’s behavior falls well within the norm for Banning, and therefore do nothing.

With a convicted criminal “serving” on the Banning City council, and a Mayor faulted by a Grand Jury for numerous backdoor deals and malfeasance, will Option 5 be the favorite course of action taken by the Banning City council? Let’s hope not.

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CONCLUSION

It seems that Banning just can’t catch a break. One City manager after another has turned out to be an epic fail.

Now another new City manager is already off to a bad start – seemingly following into the footsteps of his countless failed predecessors. If history is a guide, we predict that Doug Schulze won’t last either.

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