Ethics Commission withdraws opinion critical of Gov. Scott

Phil Scott
Gov. Phil Scott. VTDigger photo by Mark Johnson.

The Vermont State Ethics Commission has taken back a controversial advisory opinion that was critical of Gov. Phil Scott’s financial relationship with his former company.

The withdrawal comes after the commission concluded the “process used at the time was incorrect.” The reversal, the commission said, was "the right thing to do."

In October 2018, a month before the general election, the commission ruled that Scott had violated the state’s Code of Ethics because the company he had co-owned, Dubois Construction, also did business with the state. Scott had sold his half of Dubois back to the company, but was being paid over time, which the commission determined amounted to a continued financial stake in the Middlesex firm. The commission ruled Scott had an ongoing conflict of interest being paid by the company while it also did state work.

The 2018 ruling, its first, came after a request for an opinion by the Vermont Public Interest Research Group. The commission’s ruling was criticized by Scott and others for being politically motivated -- the commission’s first executive director resigned afterward because he said the ruling went beyond the commission’s authority. The chairs of the two committees in the Legislature that created the commission also said the advisory opinion went too far.

Scott, a Republican, easily defeated Democrat Christine Hallquist in the November election. His spokesperson, Rebecca Kelley, called the advisory opinion “disappointing” and “a weaponization” of the ethics commission process. VPIRG called it a “strong rebuke” of the governor.

In withdrawing the opinion, the commission said Wednesday that it erred when it allowed an outside party to file a request for an advisory opinion. Under a new policy, adopted in May after months of review, the commission’s executive director will issue an advisory opinion only when a state official or employee requests clarity on their own status.

“No longer will the commission accept requests from third parties asking it to use an advisory opinion to pass ethical judgement on the conduct of others,” according to a statement issued by the commission on Wednesday.

Paul Burns, the executive director of VPIRG, blasted the move by the commission to withdraw the opinion.

"They are rewriting history to benefit the powerful and keep the public in the dark," Burns said in an interview Thursday. "They're erasing an opinion that was rendered that the commission does not dispute the validity of the merits" of the claim.

"The public is not well served by that kind of lack of transparency from of all things, the state ethics commission," Burns said, adding the move would make the commission "less relevant and less useful." Many, including the current executive director, have questioned whether the commission, with no investigatory or enforcement powers, was toothless.

Commission chair Julie Hulburd said the new policy is what the Legislature intended when it created the commission, which began in January of 2018. The purpose of advisory opinions should be to educate and inform, not to punish, she said. 

Hulburd also noted the commission was still in its infancy and was still learning its role.

“We are now in our second full year of existence,” Hulburd said in a statement. “The Ethics Commission is dedicated to the role it can play in assuring ethical government in Vermont. Providing ethics education and training is fundamental to our mission.

“Advisory opinions should be used to educate. A primary tenet of ethics education is knowing the difference between what one has the right to do and what is the right thing to do. As the commission proceeds, our own education continues. In line with what we have learned, withdrawing the advisory opinion is the right thing to do.”

Hulburd took over as chair of the commission in March. Madeline Motta was the original chair when the opinion was issued. Motta stepped down in February after being elected an assistant judge in Lamoille County.

In addition to who can request an advisory opinion, the new policy makes clear that the executive director can consult “other interested persons” to determine if an ethical violation has occurred. Scott complained that he was never interviewed by the commission before it issued its 2018 opinion.

In the 2018 opinion, the commission said Scott’s conflict of interest arose when Dubois won a two-year contract for $250,000 in 2017, which the commission said “provides significant income to the company, and directly assists the company in meeting its financial obligation to the public official.”

Scott insisted no conflict existed because he had no role in the day to day operations of the company.

Scott sold his half-interest in Dubois after being sworn into office in 2017. He received no cash at the time of the transaction, is being paid over 25 years, and is still owed $2.5 million by the Middlesex company. He said the company could not financially handle paying the full amount he was owed at the time.

The commission said its new policy on advisory opinions came after it reviewed the deliberations of the Legislature to determine its intent and consulted other state ethics commissions and experts.

At a news conference Thursday, Scott applauded the commission's decision.

"Obviously it was something that I thought was unfair from the very start," Scott said, adding he was happy to see the commission evolving and reassessing their role "to prevent any political posturing, maneuvering, that could be used in the future and prevent that from happening."  

"I want to make sure that we prevent any political mischief. We have elections every two years. It's pretty easy to utilize something of this nature, and somebody did, to try and alter an election," Scott said. 

The commission emphasized that it would still accept complaints about alleged misconduct by government officials and would continue to refer them to the appropriate agency for review, including the Vermont Attorney General’s Office or state Human Resources officials, depending on the allegation.

The commission also said it was reviewing the Code of Ethics it drafted in 2018 and would be recommending changes that it would present next year to the Legislature.

Editor's note: This story was updated at 8:50 a.m. Thursday with comments from VPIRG's Paul Burns and at 1 p.m. with comments from Gov. Scott. Xander Landen contributed reporting.

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