Times Union Watch: #3 The Ethics Board Investigation of Joanne Yepsen and the Decision

I need to clarify the time line for these events.  Arthur Gonick’s story and my summary so far describe Ms. Yepsen’s attempts to gain work with Saratoga Hospital and her request for an advisory opinion from the Ethics Board.  Neither the public nor the other members of the City Council were aware of Mayor Yepsen’s dealings with the Hospital nor were they aware of her request of the Ethics Board for an advisory opinion on recusal. Her decision to recuse herself from the Hospital Planned Unit Development vote and thus kill the project was the flare that was to light up the past.

Commissioners Chris Mathiesen, Michele Madigan, and Skip Scirocco immediately requested from Mayor Yepsen, all documents associated with her relationship to the Hospital.  They also asked Saratoga Hospital for any documentation they might have.

The documents they received were the email exchanges between Ms. Yepsen and the Hospital as documented in part one of this series of posts.  These were submitted with a complaint to the Ethics Board by these three commissioners on February 1, 2016.

Complaints to the Ethics Board are handled pretty much completely outside of the public view.  In the case of the Yepsen complaint, we now know that the Ethics Board issued their decision in a letter to Ms. Yepsen on March 24, 2016.  The Ethics Board determined that her solicitation of business for her consulting firm from the Saratoga Hospital Foundation while the Hospital was seeking approval for their Planned Unit Development from the Council constituted a violation of the City’s Ethics Code.

During the deliberations of the Ethics Board Ms. Yepsen chose not to meet with them in her own defense.  Instead she used her authority as Mayor to hire the law firm Howard Beach who submitted a memorandum on her behalf appealing the Ethics Board’s decision.

It is important to note that under the city charter special expenditures for expenses like the hiring of a law firm require prior approval by the City Council.  Ms. Yepsen ignored this policy and hired Howard Beach to represent her without getting the required prior approval for this expenditure. This is a link to the relevant text in the charter: preapprovalForPayment

The law firm’s memorandum to the Ethics Board was dated June 10, 2016.

So even though the Ethics Board rendered their decision on March 24 we are now into early June before the Mayor’s attorneys submit their memorandum. The process has dragged on for over four months.  The Ethics Board has, in the past, moved expeditiously in resolving complaints.  Why did Mayor Yepsen decline to meet with the Ethics Board to address the complaint prior to the Ethics Board rendering its original decision? What went on for the four months prior to the attorneys submitting their memorandum? What kind of interactions occurred that created this delay?  The only people who know are the members of the Ethics Board, Joanne Yepsen, and her attorneys. It would appear that the Ethics Board showed exceptional deference to Mayor Yepsen in this affair.

The Harris Beach appeal is summed up in their conclusion section.  Drawing on the New York State General Municipal Law and other related standards they are critical of the city’s Ethics Code for its strict standard which allows no exceptions.  They point out that the standards for conflict of interest in other New York State laws are far less rigid than the city’s.  The fact is, however,  that the city has the right to establish stricter codes than the state standards. Bear in mind that the city’s ethics codes were amended in 2015. Ms. Yepsen praised the new codes when she voted for them.

Ms. Yepsen’s attorneys argued that the Saratoga Hospital Foundation was not the applicant for the Planned Unit Development, Saratoga Hospital was.  Thus, according to the attorneys, since Ms. Yepsen was dealing with the Foundation and not the Hospital, she had not solicited work from the institution which was actually doing business with the city–that is, the Hospital.

They go on in a lawyerly way to challenge key definitions in the Ethics Board decision by referencing these terms as used in New York State Municipal Law.

They argue that “…as a matter of law the zoning application by the Hospital is not considered a contract with the City.  Therefore, since the application is not a contract as defined by GML [JK: NYS General Municiple Law] §800, the Hospital cannot have a business relationship with the City as a result of such application.”

They then get into the weeds by challenging what “doing business” means.  They assert that “without a business relationship, it is unreasonable for the Board to determine that the application for zoning is ‘doing business’ with the city especially since the Code does not define ‘doing business’.” 

So the issues here were  whether the Hospital and the Hospital Foundation were separate and distinct entities and whether the Hospital’s application for a Planned Unit Development constituted “doing business” with the city. I understand that the term “doing business” is broad and undefined in the city code. I am reminded, though,  of the famous quote by Supreme Court Justice Potter Stewart regarding the problem of defining obscenity. He famously said, “I know it when I see it.”

Link to full text of Howard Beach Conclusion

Link to complete text of Harris Beach Appeal

On July 14, 2016 the Ethics Board responded to the Harris Beach appeal in a letter to Ms. Yepsen.  The letter informed Ms. Yepsen that they did not find the Howard Beach arguments “persuasive” and reaffirmed their March 24, 2016 decision.  The full text of their response to the specifics of the Howard Beach memorandum can can be found here.

So after five and a half months the Ethics Board’s deliberations over this issue finally came to a close.

Paying The Piper

It was at this point that Ms. Yepsen finally came to the Council with the invoice from Howard Beach.  It was $12,300.00.  Commissioners Madigan and Scirocco objected to paying the bill.  They cited the pre-authorization requirement in the city charter which Ms. Yepsen had ignored.

The reality was, however, that Ms. Yepsen had incurred the liability by enlisting the attorneys on her behalf.  The city was vulnerable to being sued by the law firm which undeniably had performed their services. Any attempt to force Ms. Yepsen to take responsibility for the costs would only prolong this ugly episode. John Franck and Chris Mathiesen joined Mayor Yepsen in voting to pay the invoice. It is interesting that Ms. Yepsen did not recuse herself from voting on whether it was appropriate to pay a controversial bill that she had incurred.

The Vote To Censure

At its July 19th meeting, following the release of the Ethics Board’s decision, Commissioners Madigan, Matheisen, and Scirocco voted to censure Ms. Yepsen.   Commissioner Franck indicated that while he had no problem with the substance of the Ethics Board’s decision, he did not believe that Ms. Yepsen’s actions merited censure.  In the end, Commissioner Franck and Ms. Yepsen as Mayor, voted no. The possibility that Mayor Yepsen might have a conflict of interest in participating in this vote was not raised.

Through the course of the discussion on censure Mayor Yepsen was defiant.  She accused Mathiesen, Madigan, and Scirocco of ignoring the law (as interpreted by her attorneys).  She claimed in fact, that by censuring her they were in violation of the law.  She warned them there would be  potential “consequences”  of voting to censure her. She made emphatically clear that she disagreed with the decision of the Ethics Board.

The resolution to censure included language that the matter be referred to the New York State Attorney General’s Public Integrity Bureau and the New York State Joint Commission on  Public Ethics for possible wrong doing.

Commissioner Mathiesen commented that night that he saw no criminality here but that Mayor Yepsen had been guilty of extremely poor judgement which to me seems an accurate assessment of the situation.

The resolution to censure in its “be it resolved” portion had three elements. The first censures Mayor Yepsen specifically for her violation of the city’s Ethics Code. The second and third call for referring the Ethics Board decision to two state agencies that deal with corruption in government. It is important to note especially in light of what we will examine next in the TU’s description of this action that the resolution was to censure the Mayor for her violation of the city’s ethics code not for her recusal in the Hospital PUD vote.

While the Mayor’s actions perhaps did not rise to the level of criminality that would have indicated the need for an investigation by state agencies, the fact that she refused to give an inch regarding her culpability in spite of the fact that her own Ethics Board, made up of people she had appointed, had unanimously found her in violation drove the move to censure.  Her intransigence and inability to acknowledge her mistake demonstrated a deeply disturbing failure of character.

Mayor Yepsen Doubles Down

The night after the censure vote Ms. Yepsen was on Channel 10 and Channel 6 news attacking the Ethics Board’s decision.  Here are links to the news reports:

Here is the link to channel 6: http://cbs6albany.com/news/local/saratoga-springs-mayor-censured

Here is the link to channel 10: http://news10.com/2016/07/20/saratoga-mayor-fires-back-after-board-determines-she-violated-citys-code-of-ethics/


3 thoughts on “Times Union Watch: #3 The Ethics Board Investigation of Joanne Yepsen and the Decision”

  1. “Thus, according to the attorneys, since Ms. Yepsen was dealing with the Foundation and not the Hospital, she had not solicited work from the institution which was actually doing business with the city–that is, the Hospital.”

    I’m not a lawyer yet doesn’t this claim fly directly in the face of Yepsen’s claim of doing business requiring her to recuse herself?


  2. John,

    Thank you for a full review of this terrible incident. This is one glaring example, among others, of why the City is now in better hands with Meg Kelly as Mayor.

    Chris Mathiesen

    Liked by 3 people

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