A flap over free speech, employee performance and banking policy has erupted at Montpelier City Hall.
City Planning and Community Development Director Gwen Hallsmith took vacation time in October to help coordinate a statewide series of events dubbed New Economy Week. The sponsoring group’s centerpiece grassroots action was to mobilize popular support for placing a discussion of “public banking” on town meeting agendas.
Public banking refers to the concept of a state managing its own money in its own bank, rather than keeping deposits in private financial institutions. Hallsmith is an ardent advocate of public banking, as well as a published author on topics related to sustainability and local economies.
Formation of a state bank could consolidate several Vermont state agencies, including the Vermont Economic Development Authority and the Vermont Housing Finance Agency, both of which have offices in Montpelier.
Montpelier Mayor John Hollar and City Manager Bill Fraser have been uneasy about Hallsmith’s public stance on the state bank proposal for several months. Matters came to a head in September. Hollar questions why Hallsmith, who he says serves as the city economic development officer, would advocate for a plan that could result in a loss of jobs in the city.
In an email exchange with Fraser, Hollar also acknowledged larger political ramifications.
“Why in the world would the city want to take a position in support of consolidating the agencies below (and antagonizing some of the most senior development officials in the state)?” Hollar wrote. “More importantly, this is something the council has never discussed. Gwen obviously can pursue interests on her own time, but as the city’s chief economic development officer her position on these issues can’t be distinguished from her official position with the city.”
Hollar is employed by the law firm Downs Rachlin Martin, and is registered as a lobbyist whose client list includes at least two commercial banks. In an interview, the mayor said he recognized he has a conflict of interest and for that reason, he asked the city manager to talk with Hallsmith about the issue.
Fraser said in a letter sent to the Times Argus on Friday that issues regarding Hallsmith’s advocacy have persisted over several years, and he has issued several directives to rein her in.
“My concerns have not arisen because she has spoken her mind but the blurring of lines between her personal views and her city role,” Fraser wrote. “She is in charge of Economic Development for the City. She is taking positions on economic development in Vermont and people are often not clear whether she is speaking for herself or the city.
“In this particular case, Ms. Hallsmith was supporting a proposal to merge 4 state agencies,” Fraser continued. “She did not know or seek to know what, if any, position the city had on this issue nor was it clear to those at the state whether she was representing the city. The issue of public banking was not involved despite the allegation. The Mayor does not have any role in personnel management nor has he ever attempted to dictate or steer my decisions on personnel issues.
Hallsmith claims his directives stepped on her rights to free speech and undermined her ability to perform her job. “If I’m very clearly stating that I’m speaking as a private citizen and not the city planning director, that’s all that can be expected of me,” she said in an interview.
An Oct. 23 article in the Barre-Montpelier Times Argus detailed her concerns.
She questions how her personal advocacy for public banking could be be contrary to the city’s policy, when the city has claimed no position on the matter.
“Maybe the city would vote on it, and that way we’d have a policy supporting or not,” he said. “But because we don’t, our city is silent on the issue.”
Editor’s note: This story was updated at 10:19 a.m. and 1:39 p.m. Oct. 25.
