Taxpayers footed bill for McIver's ethics fine

City Councilmember Richard McIver's insistence on paying a $1,000 ethics fine with taxpayer money is likely to set up another political feud between McIver and the Seattle Ethics and Elections Commission.

The commission ruled last month that McIver violated the city's ethics code when he awarded a no-bid contract to a company after vacationing at the Virgin Islands condominium of one of the company's owners.

After fighting that charge, McIver paid the fine with city money under a little-known law that says the city will indemnify employees facing financial penalties for misconduct.

The city's top ethics watchdog said Tuesday he is sending the money back because it undermines the punitive and deterrent purpose of the fines.

Wayne Barnett, executive director of the ethics commission, said in a letter to McIver that the councilman's decision to use public money is "plainly contrary to the public interest" and makes the commission's authority "meaningless." The commission's ruling last month stated that McIver "should pay from his personal funds" for the ethics violations.

Barnett said the commission will explore ways to enforce its order in King County Superior Court. It might also urge the council to amend the law, Barnett said, but he isn't sure how far the commission is willing to go in its latest battle with McIver.

"That's a discussion we'll be having next week," he said, referring to next Wednesday's commission meeting.

McIver has denied any wrongdoing, and did so again Tuesday. In a written statement, he said Barnett and the commission are "threatening to waste even more taxpayer dollars in their attempt to establish a totally undefined and subjective standard for city contracting."

He noted that city law allows him to pay the fine with public money because he awarded the contract as part of his city duties. "It is regrettable that I am now caught in the middle of a disagreement over the interpretation of law," he concluded.

McIver has expressed simmering frustration toward the commission since 2004, when he agreed to pay a $200 ethics fine for accepting a $6 lunch paid for by former Gov. Al Rosellini, who was lobbying on behalf of a zoning change sought by a Lake City strip club.

At the time, McIver called the fine "bogus" but said it would be less expensive to settle the case than fight it in court.

McIver declined to elaborate Tuesday on his two-paragraph written statement. But Councilman Bruce Harrell, a friend and neighbor, said McIver cares more about fairness than the political fallout that might come from spending city money on his ethics fine.

"The issue has become very personal for Councilman McIver and I don't think he cares about the appearance at this point," Harrell said. "I think he cares about being treated fairly, and because of that he will use the letter of the law to his benefit without concern about political appearance."

McIver, 67, has been a council member since 1997. He's up for re-election next year but has not said whether he will seek another term.

Barnett said he did not know the obscure law allowing the city to pay for employee misconduct existed until McIver's lawyer, a city attorney, brought it to his attention. Barnett does not know how many city employees might have paid past fines with taxpayer money. He was not aware of any during his four-year tenure.

The law says the city will not indemnify an employee engaged in dishonest, fraudulent, criminal or malicious acts.

The commission's ruling said McIver did not intend to violate the code and he did not receive any private benefit for awarding the contract.

McIver was fined a total of $1,000 for two violations: one for signing the $37,000 contract and another for expanding it to $42,000. The commission could have fined him up to $10,000.

McIver awarded the $37,000 no-bid contract early last year to Griffin, Hill & Associates (GHA), a firm that his longtime friend Joann Francis had joined months earlier, according to ethics charges brought by Barnett.

The contract called for GHA to evaluate the performance of the city auditor's office.

McIver said from the outset he wanted to hire a minority- or woman-owned small business, and Griffin, Hill was the only prequalified firm with the skills for that contract. Francis joined Griffin, Hill in 2006, eventually becoming a 10-percent owner.

McIver vacationed at Francis' condominium in the Virgin Islands three times. McIver's wife also joined them on at least one trip. Francis and her husband have vacationed at the McIvers' property in Mexico twice, according to testimony in the ethics case.

Barnett said that while GHA was qualified to do that work, McIver should have refrained from participating in the contract award. Seattle's ethics law forbids public officials from taking any action that creates even the appearance of a conflict of interest.

McIver had called the charges "frivolous" and "without merit." He said he followed the council's contracting rules and the contract was approved by then-Council President Nick Licata.

Harrell said Barnett should try to amend the city's law rather than continue fighting McIver at taxpayer expense. However, Harrell said he would not be in favor of changes.

"We make a lot of judgment calls and as long as we're acting transparently and without unlawful intent it seems we should be indemnified," said Harrell, a lawyer.

This is the latest in a string of problems for McIver in recent years.

He was charged with assault last year after police said that, during a profane tirade, he grabbed his wife by the throat. The charges were dropped after she declined to cooperate with authorities.

McIver checked out of the hospital two weeks ago after he underwent surgery on July 21 to remove part of his colon. McIver was home Tuesday recovering from the surgery and subsequent complications, said his aide Paul Elliott.

Information from The Seattle Times archives is included in this report.

Bob Young: 206-464-2174 or byoung@seattletimes.com