Differing Goals of Limiting Autonomy: Legislatures, Governors, and State Ethics Commissions

Abstract

Ethics commissions address policies that are external to the policy maker, the enforcement of which may be damaging to the policymaker. Given this potential for harm it is likely that delegation to commissions is transactional with elected officials controlling autonomy based on a set of specific goals. The author tests this argument by examining how executive and legislative control of a commission’s autonomy impacts the effectiveness of a commission’s oversight. Findings suggest that elected officials attempt to influence commissions in a strategic manner based upon whether they want to direct attention away from themselves or toward the other branch of government.

Introduction

Almost every state in the country provides external oversight of elected officials through the use of ethics commissions. The responsibility of these commissions is ensuring that the entities under their jurisdiction follow state ethics laws and comply with ethics regulations promulgated by the commission. A key goal of any ethics commission is enhancing public trust and serve to reassure the public that their leaders are doing their business in the open and, when they are not, that they are brought back in line. Ethics commissions serve an enforcement role, unlike ethics committees that tend to be standing bodies internal to an organization, and are primarily advisory in nature. Ethics commissions are in a unique position though since they are responsible for monitoring the very individuals that empower them.

This manuscript makes the case that these commissions are less aligned with the formal models of delegation often seen in public agencies but instead are more aligned with the transactional authority perspective discussed by Carpenter and Krause (2012). Rather than relying on formal control of bureaucrats, this perspective is based on bureaucrats’ sanctioned acceptance of political authority in concert with political authorities’ sanctioned acceptance of a bureaucrat’s legitimacy. As argued here, this perspective better explains how elected officials seek their goals with regards to ethics policy. This argument stems from recent work by Rauh (2015) who examined how elected officials seek to influence the financial capacity of ethics commissions and use their appointment authority to these commissions as a means of indirect control. If this argument is correct then such influence over commissions yields what Lessig (2013) categorizes as a corrupt institution: systematically influenced through legal means in a manner that undermines their effectiveness. None of this is to say that when commissions do engage in tasks such as reviewing reports, pre-clearance of actions, and so on (Menzel 2012) that they are not thorough. Rather it claims that these tasks are check-lists which catch low level functionaries while the oversight of elected officials remains lax because of their political influence.

Political influence over commissions is readily cited as a reason why those who are convicted of ethics violations are either low-level functionaries who cannot afford a reasonable defense, or individuals against whom a case is airtight (Lewis and Gilman 2012). One should not think that a desire to influence commissions away from potentially damaging investigations is purely a public sector phenomenon. Instead, the notion of allowing those who are overseen to appoint their overseers is a flawed from the start. By way of comparison with the private sector, ethics and compliance programs in the largest Wall Street firms were generally found to be instrumentalist toward the ends of the firms (Grove and Patelli 2013; Wilmarth 2013).

In examining influence over these commissions this manuscript explores whether elected officials’ control of commissions is directional, for example, whether legislative influence and executive influence manifest themselves in different ways. Given that there is variation in the control mechanisms available to elected officials and given that even the risks of impropriety are different for governors than legislators, it seems logical that each would seek to influence commissions toward different ends. This research is novel because the majority of studies in the delegation literature examine delegation for policy provisions that do not have the capacity to directly harm elected officials. Additionally, few if any of the existing studies of which the author is aware examine the influence of political forces on the effectiveness of ethics commissions (e.g., Lewis and Gilman 2012).

Ethics commissions do not function like other regulatory or managerial bodies. They do not deal with policies that are external to the policy maker as in the case of education or insurance regulation. Instead they deal with issues that are focused on the very people responsible for their existence (Mackenzie 2002). Given this, some of the assumptions used in traditional models of discretion need to be set aside when discussing ethics commissions. Assuming that deals between political principals and their bureaucratic subordinates are possible because the principal wants the subordinate to work hard (Bendor, Glazer, and Hammond 2001) seems inappropriate since a hard-working ethics commission can lead to both political and economic damage to elected officials. Rather elected officials’ desired policy outcomes for ethics policies is that the policies are simply not enforced or that a box is simply checked, or are enforced to their benefit such as going after rivals or deflecting attention to the “other” branch.

It is not enough to simply say that elected officials will seek to influence ethics commissions away from investigations. It is known that elected officials will seek to influence the independence of commissions (Rauh 2015), and it is known that there is competition between the branches when it comes to oversight (Rosenson 2003; Newmark 2005). As Peters (2002: 304) states, “the difference in politics [versus bureaucratic actions] appears to be the difference in institutionalizing and enforcing controls versus the politics of relaxing existing regulation.” The direction of this enforcement is what is at issue. It may be the case then that ethics commissions are used as a tool for political competition. Niemi, Stanley, and Vogel (1995) and Hale (2013) showed that the public tends to view the executive as the locus of control in state government even in weak executive states. Therefore, executives may simply try to influence commissions toward less oversight. The legislature on the other hand may try to influence commissions toward investigating their rivals, or to push attention toward the executive. All of this may be mediated though by the fact that too much bad press on ethics, or one big scandal, can lead to calls for more ethics laws and then all political actors may be worse off—so there is also a risk in trying to use the commissions as a tool.

This study confines its measure of effectiveness to the perceived effectiveness of ethics oversight for the legislative and executive branches, arguing that levels of political influence explain variation in the perceived effectiveness of oversight. This data drawn from the (2012) State Integrity Investigation. Both the executive and legislature show variation in the degree to which they influence ethics commissions (Rauh 2015), and there is variation in the perceptions of effective oversight. Findings indicate that although state executives and state legislatures seek to influence ethics commissions through political means, the directions of their influence vary with executives seeking to avoid scrutiny and legislatures engaging in political competition. This study is confined to US states meaning that the results must be parsed in terms of US federalism, that is, in more centralized systems such as Europe where governmental subunits generally lack the same level of autonomy as in the United States these findings may not hold.

This manuscript proceeds with a discussion of ethics commissions and their activities, and is followed by a more in depth description of the possible directions of political influence. This is followed by hypotheses, a description variables used and specifying a model for testing the alternative theories. This is followed by findings, conclusions, and discussion.

Ethics Commissions

Ethics commissions in the United States largely have their origin in the years just following the Watergate scandal (Rosenson 2003). The popular view is that ethics commissions reinforce public confidence in both public and political institutions (Comlossy 2011). Commissions are supposed to highlight potential violations of ethics laws, shine a bright light on conflicts of interest, and allow citizens to verify the integrity of officials and their actions. Of course this ideal is seldom met. In reality ethics commissions tend to follow a compliance checklist of requirements and prohibited behaviors. Even then, disclosures are left unexamined, conflicts of interest are not resolved (or disclosed) and public information may not be available (Lewis and Gilman 2012).

As examples of the above, the Center for Public Integrity (2012) found that since Tennessee established an ethics commission in 2006 it has yet to investigate a single claim. In 2011, North Carolina State Representative Stephen LaRoque pushed for loosening of billboard regulations despite the fact that the company he owned, LaRoque Management Group, had connections to the billboard industry.¹ There are structural and budgetary arguments for these failings. While structure shapes the formal powers of elected officials over ethics commissions, this formal power in turn shapes the effectiveness of the commissions and their exercising of oversight power. Anderson and Potoski’s (2016) study of federal agencies shows that agencies with greater structural independence have a broader range of policy implementation options (measured via spending distribution) but are not less responsive than more constricted agencies. Rauh’s (2015) study included structural independence as a predictor of freedom from political interference and found that while structural controls had some effect on state ethics commissions, control of financial capacity had a larger effect.

Ethics commissions tend to take on similar institutional structures and rules but they show variation in their de facto levels of autonomy (Rauh 2015). They have similar powers because the public has similar expectations about what constitutes ethical behavior but not well formed expectations. Given this, arguments about public expectation only go so far in explaining why commissions take the actions they do, or why some are perceived as more (less) effective than others. The public does not appoint commissioners on an ethics commission; nor do they have any role in determining an ethics commission’s oversight powers. These activities are typically the purview of elected officials who empower ethics commissions through laws, appoint the commissioners, can remove commissioners, and control the commissions’ budgets. This relationship makes elected officials more akin to stakeholders, while the public is typically inattentive, absent some focusing event such as a scandal (Newmark and Vaughn 2014; Rosenson 2003).

Cases such as that of Stepehen LaRoque, or the now defunct Moreland Commission in New York,² or Bob McDonnell in Virginia³ are not unique to American politics or even in American history. White (2011) lays out in great detail the corruption associated with building the Trans-Pacific Railroad and makes the case that individual financial interests are often intertwined with political interests. Although the type of corruption against which ethics commissions are supposed to safeguard typically does not reach the level of the 19th century robber barons, the appointment of friendly individuals to commissions that are supposed to be formally independent and the use of ex ante threats or ex post punishments as a means to control these commissions has a long history in America.

Ethics Commissions Present Risks to Elected Officials

Ethics commissioners are primarily appointed positions. Even in the cases when a commissioner is not appointed by an elected official they are still selected by people who are appointed by elected officials, for example, Colorado the commission has five members, four of whom are appointed and the fifth that is selected by those four. This is as opposed to South Carolina where the governor appoints nine commissioners, all without a confirmation process.

States vary in how much appointment authority any branch, or any single actor has in appointing commissioners. This appointment authority is in turn correlated with variation in an ethics commission’s autonomy (Rauh 2015). When the legislature has more control over who sits on the commission there is a stronger perception of political influence over appointments. This is less true when there is greater influence in the executive over who sits on a commission. This is arguably because the executive is seen as the “locus of control” in state government (Hale 2013; Niemi, Stanley, and Vogel 1995) because the attempts by a unitary executive to overtly control who sits on the ethics commission is more easily traced. Since governors do not want to be seen as corrupt they likely do not appoint overtly biased individuals to sit on commissions.

Ethics commissions are generally tasked with addressing and investigating conflicts of interest and indicators of corruption (failure to register as a lobbyist, failure to file financial disclosures, etc.), this does not mean though that commissions do this equally well⁴ given that they are not equally (de facto) independent. This is a point that was well made by Anechiarico and Jacobs (1996)—most corruption is exposed via federal investigations rather than by ethics commissions. Additionally, Rose-Ackerman (2010) cites criminal law rather than regulation as a key deterrent or corruption. For example, the events leading New York Senate GOP Majority leader Joe Bruno’s indictment were initially uncovered during federal investigation despite the fact that the state’s legislative ethics commission had requirements that individuals file campaign finance disclosures, income statements, and so on. In turn, these investigations tend to be sparked by whistleblowers as opposed to statements from ethics commission’s recommendations to a state’s attorney general (O’Leary 2005; Rothwell and Baldwin 2006).

Ordinarily such findings would lead one to question why these organizations should continue to exist and even promulgate given their inability to accomplish their goals. Such results should not be surprising though (Lawton 2008), and may be indicative or a larger cognitive dissonance on the part of the public. For example, Morgan and Campbell (2011) argue that the public wants both strong social programs but also less government, two concepts that are fundamentally at odds. In the case of commissions, the public wants accountable officials but also maintenance of democratic authority—arguments that work well for politicians who want to appeal to the public call for ethics oversight while at the same time not giving up so much authority that the commissions become dangerous. When South Carolina was debating updates to their ethics laws in 2016 the discussion in the Senate revolved around maintaining democratic control and not giving up oversight authority to unelected bureaucrats (Scoppe 2016). Given such examples the arrangements of ethics commissions as entities that are formally separate but over which elected officials maintain a large degree of de facto control should lead one to believe that these organizations would not function in a manner that would be overly critical of elected officials.

This is indicative of a corrupt institution (Lessig 2013; Thompson 2013), not in the sense that individuals in the institution are corrupt but that the institution is systematically influenced to undermine the intent of the institution. This is because it presents a situation in which either (A) commissioners systematically maintain their positions by not conducting robust investigations; or (B) elected officials systematically influence commissioners and staff from conducting robust investigations by means of political influence. Of course with ethics commissions this may be expected given that they are oversight bodies tasked with overseeing the very individuals responsible for their appointments and resources.

Performance of Ethics Commissions in Light of Political Relationships

While commissions are public organizations and subject to many of the same internal constraints as other organizations, for example, staff size, budget constraints, and so on because of their unique mission they are also distinct from other traditional public organizations. The public generally believes a commission’s formal independence necessarily equates to de facto independence because of our notion of what commissions should be—symbols of integrity (Smith 2003). Such beliefs are belied by evidence from Rauh (2015) and Smith (2003) that commissions are really just compliance organizations enforcing an externally given set of standards. Additionally, there are findings from Anechiarico and Jacobs (1996) and Rose-Ackerman (2008) that commissions lack either the will, resources, or both to catch corruption prior to a federal investigation. While commissions may be independent in name, the fact that commissioners are appointed by elected officials and have budgets controlled by elected officials (the legislature) seems to question their de facto independence.

Delegation and the (Non) Preference for Ethics Policies

Ethics commissions occupy an interesting place in the delegation literature since the most preferred position of elected officials seems to be that commissions not function well. The delegation literature over the past 20 years has seen a struggle between two different camps. There are those such as Spence (1997) who claim an agency’s autonomy is an inherent byproduct of delegation. Specifically, that the empirical models used to examine delegation issues make assumptions that do not align with policy realities, for example, assumptions that a politician’s goals with regards to a policy has limited influence on later decisions to influence agencies. Then there are those who argue that politicians exert significant amounts of control over agency autonomy. Spence’s (1999) argument, reiterated by Volden (2000) and Bendor, Glazer and Hammond (2001), that elected officials delegate strategically is a necessary assumption for the authority delegated to ethics commissions. It does not mean though that elected officials do not seek significant controls over these commissions. It is necessary to think of politicians strategically delegating to ethics commissions because it is known that both in terms of creating commissions and empowering commissions (Rauh 2015; Rosenson 2003) politicians seek their own self-interest given the harm that an ethics investigation can cause.

Rauh’s (2015) analysis, as well Selin (2014) and Epstein and O’Halloran (1999) showed that limitations on an elected official’s appointment abilities is a key means of controlling political influence. The benefits of delegating to agencies, or in this case ethics commissions, is constrained by the expertise of the commissioners and the autonomy enjoyed by the commissions (e.g., Bawn 1995; Bendor and Meirowtiz 2004; Gailmard 2002; Huber and Shipan 2002; Morgan and Campbell 2011). Given incomplete delegation though, it is often not possible though to enjoy the full benefits of a bureaucrat’s expertise (Callendar 2008). While any rational and informed principal will desire to transfer authority to an informed agent (Bendor and Meirowtiz 2004) they also dislike uncertainty in policy outcomes (Epstein and O’Halloran 1999). This risk aversion is likely increased when delegating to commissions given that the risks to elected officials are personal and immediate (Rosenson 2006, 2014).

Elected officials desire control over the enforcement capacity of ethics commissions and so their delegation is strategic (Smith 2003). A central tenant of delegation is that delegaated authority is revocable (Callendar 2008) and elected officials rarely provide a full range of delegated authority to a public agency, in part because of legal requirements against over delegation, for example, Whitman v. American Trucking Association (2001) and in part because they still want to maintain control of the policy implantation strategies of the organization. The inability of elected officials to fully commit to delegating authority to a commission (or any organization) implies that agencies (or commissions) cannot fully act on their expertise. This presents a dilemma that has policy consequences for most traditional agencies but may be beneficial for elected officials when dealing with ethics commissions. This is seen in Gilligan and Kreihbiel’s (1987) work showing the policy uncertainty affects the delegation of authority to agencies. If elected officials are unsure of whether an ethics commission will conduct robust investigations (which can be harmful to elected officials) then they will not likely delegate much authority to them.

Although politicians tend to lack the expertise to discern whether administrative actions in traditional agencies are in line with their policy desires (Clinton, Lewis, and Selin 2014; West and Raso 2013), they do have some sense around what their desires are when it comes to ethics policies (Flavin 2014; Newmark 2005; Rosenson 2003, 2009). As aforementioned though there may be divergence in the goals of elected officials’ control over an ethics commission (Rosenson 2006, 2014). It is not enough to say that the only preference an elected official has is to not be investigated—it may be primary but it is certainly not the only one and it is certainly one for which the politician recognizes the implementation requirements. A stickier question is if, and how, elected officials recognize a policy preference of using the commission as a tool against political rivals. This is because there may also be institutional costs associated with using the commission as a tool. Bad press and major scandals can lead to calls for new ethics laws so if politicians go too far in using commissions against rivals they too could be made worse off by the resulting calls for new legislation.

Reputations, Independence, and the Credibility of Commissions

Commissions exist as symbols of integrity—they serve to reassure the public that their business is being conducted in the open and that elected officials are not putting their own interests above those of the public. Given this the commitments of elected officials to cede some of their own oversight power to unelected bureaucrats must be viewed as credible. To bulwark this credibility elected officials ensure that the commissions are formally (de jure) independent; to maintain control though, they limit de facto independence via appointment and budgets (Rauh 2015).

Formal independence means that an agency is placed as a separate legal entity outside the political-bureaucratic hierarchy and are thus not bound by the directive of elected officials (Ennser-Jedenastik 2015; Maggetti 2007). Formal independence has been measured by examining rules and statutes for appointments and dismissal, accountability requirements, independence of budget, and so on (Anderson and Potoski 2016; Ennser-Jedenastik 2015; Hanretty and Koop 2013). Using such measures Rauh (2015) showed that control over financing, rather than appointment power, was the largest predictor of a commission’s independence. An irony that is not lost on those who study public sector ethics (Menzel 1996, 2005; Rauh 2015; Rosenson 2009, 2014) is that while weakening formal delegation also weakens the link between voters, politicians, and bureaucrats (Christensen and Lægreid 2007; Gilardi and Maggetti 2014) such formal linkages for ethics commissions would be largely self-defeating because these commissions are supposed to be seen as above politics.

The study of public organizations vis-à-vis a departure from these formal arrangements has been developed in the literature over the past 20 years. This transactional authority perspective (Carpenter and Krause 2015) is not based on a reliance on formal control of bureaucrats but instead on the sanctioned acceptance of both political authority in concert with sanctioned acceptance of a bureaucrat’s legitimacy. Carpenter and Krause (2012, 27) state, “[...] what audiences see is not the perfectly tuned or visible reality of the agency.” Commissions, like almost all agencies, are complicated entities that are not fully understood by the public in terms of either function or performance. “Complex public organizations are seen ‘through a glass but dimly’ by their manifold audiences.” To make up for this lack of knowledge the public tends to assume that commissions are more unified in both purpose and scope than is actually the case—this true with almost all public organizations.

For these reasons as well as other “stylized facts” (see Carpenter and Krause 2012) it is also necessary to think of commissions in terms of their reputational characteristics. Elected officials may perceive commissions on a spectrum from robust investigatory organizations to feckless organizations that exist only as a palliative to public outcry. MacDonald and Franko (2007) and MacDonald (2010) provide strong evidence that an agency’s reputation is inversely related to its limitations on discretion. Of course, these perceptions can be manifested dependent upon the level of control a politician can exert on a commission. If a commission has a reputation for strong investigations or large fines then elected officials will be less likely to delegate authority to them (notwithstanding the fact that commissions’ authority tends to be expanded following a scandal).

These reputational arguments may provide an underpinning for why elected officials would seek to influence commissions toward different goals. Krause and Douglas (2005) and Krause and Corder (2007) showed that different agencies with similar missions (OMB and CBO) experienced similar reputational costs for being inconsistent with each other. If commissions want to be seen as credible then they cannot be perceived as being harsher on one political institution than another without good cause. Despite this, the differential impacts of an ethics investigation is likely more damaging to a governor than to the legislature. This is because the executive is seen as unitary and is often ascribed more power than it actually has (Hale 2013; Niemi, Stanley, and Vogel 1995). Additionally, individual legislators may be harmed by ethics investigations but their individual harm does not equate to institutional harm in the same way it may for the executive. Therefore, executives may be incentivized to influence commissions away from investigations while this may be less likely in the legislature. Additionally, it is more difficult for the legislature to act as a cohesive unit in its influence over commissions outside of budgetary authority (Rauh 2015).

The Direction of Political Influence

In considering the delegation literature coupled with the risks of ethics oversight for elected officials, it is fairly straightforward why elected officials would seek to control formally independent ethics commissions. Elected officials want to provide a symbol of integrity and provide the public with reassurances of oversight but robust investigations can be dangerous because even the hint of impropriety (even if cleared) can be politically harmful. Coupling this with the political realities of the different branches—unitary control and a perceived locus of control in the executive, versus diffuse control in the legislature—one can get a sense of the directions in which elected officials would seek to influence commissions. In considering the effects of political influence there are several possible paths for how political influence affects a commission’s performance. These paths depend on the motivations of those seeking influence.

Evading Scrutiny

First, it is possible that elected officials use their appointment authority to the commission to gain favors or direct attention away from their own activities. Appointees may be friendly to, or easily influenced by, the appointer and will exercise little oversight over the appointer. This may include pre-clearance of specific activities, a lack of investigations, and so on. In any case, it should be clear that the effectiveness of a commission’s efforts to regulate the executive or the legislature should be related to the political influence that body holds over the commission. This is not a new proposition by itself, but an extension of more general work on the use of appointment authority to control the bureaucracy, for example, Abney and Lauth (1983), Bowling and Wright (1998), and McCarty (2004).

If this sort of relationship exists then it should manifest itself in how effectively a commission checks a particular branch. That is if the governor has more control over who sits on the commission then the governor has the most appointment authority over the commission and there should be less perceived effectiveness of oversight over the governor’s office. The same would be true for the legislature should the legislature have more appointment authority, and thereby more influence.

Political Competition

Rosenson (2003, 2005, 2009) shows that the legislature is more willing to check the governor than themselves. Additionally, the different branches may see value in going after one another, or may be more prevalent in divided government, that is, the party in the branch with the most appointment authority may be unified against another branch. For example, if the legislature has more influence over a commission then it may see value both in drawing attention away from itself and in directing attention toward the governor. Such relationships have been described as the legislature seeking to use the governor as a symbol and the checking of the governor as a signal that they are serious about combatting corruption (Rosenson 2009; Smith 2011). Furthermore, such a relationship is in keeping with the idea of the governor as the “locus of control” in state politics (Niemi, Stanley, and Vogel 1995). The actual power of the governor is unimportant in this since the public perceives the governor as a unitary authority figure with more authority than is actually the case.

This type of relationship is about more than using the commission to avoid scrutiny. In this case, the commission is used as a tool to go after the other branch. Of course evading scrutiny is not incompatible with an adversarial relationship. There is nothing about using the commission to go after the other branch that precludes one from directing its attention away from one’s own branch—in fact it would seem to be an easier scenario given that commissions have limited resources. From Rosenson’s aforementioned work it seems that this is a possibility especially with the legislature, but it may not be out of the question for governors to influence commissions toward oversight of the legislature given their lack of formal means to control the legislature.

On the one hand, it is possible that governors would be loath to use their appointment authority to influence the commission toward the legislature. The legislature has more checks over the governor than the governor over the legislature so it may not be worth the risk. Knowing the public’s perception of gubernatorial authority though, there may be an incentive for the governor to appear tough on curbing corruption, and so he/she may empower the commission with more means to go after the legislature. Doing this though would likely also provide a means of increasing oversight of his/her own office and so the governor may not wish to take this risk.

Given that commissions have the potential to do harm to elected officials both financially and economically (Flavin 2014; Rosenson 2003); there is a definite incentive for elected officials to maintain control over commissions. As Rosenson (2003, 2005, 2009) demonstrated, elected officials empower commissions when they perceive that they will not be a threat. It makes sense that these same elected officials would want to ensure that the commissions do not become a threat in the future. In the previous chapter, I demonstrated that elected officials will use their appointment authority as a means of political influence over a commission; left unanswered is whether this influence matters with regards to a commission’s effectiveness.

Witch Hunts

There is one final possibility that is most likely the case in the legislature. It is possible that, in the legislature specifically, legislators are self-interested and use the commission as a tool against political rivals. Under this relationship, members of the legislature go after other members of the legislature. This creates a collective action problem where individual legislators are acting based on their own interests. In this case, the commission goes after other legislators; this in turn prevents the legislature from using its influence to direct attention away from itself. Therefore, one would not expect the legislature to act as a unitary branch, but rather to act as individuals within a branch.

Support for this position comes from the literature on legislative delegation at the state level, for example, McGrath (2013), Krause and Woods (2012), and Krause (2013). Arguments in this literature require that the bureaucracy be able to perceive the preferences of the legislature in order to be responsive to legislative influence. Because there is not normally a single appointment from “the legislature” considering legislative influence as a single unitary form of influence does not really make sense. Arguing such would assume there is a single voice within the legislature to appoint commissioners, speak for the legislature as a whole, and so on. The reason for this is that while “the legislature” as a body may desire to avoid oversight, individual legislators may seek to expose rivals—for example, it reveals the ambiguity of legislative control since there are different motivations within the legislature.

Hypotheses

From the above, I propose three separate hypotheses to test the theories of a scrutiny evasion relationship, an inter-branch adversarial relationship (while noting that the two are theoretically not mutually exclusive), a relationship categorized by using the commission as tools against political rivals:

h₁ : Evading scrutiny: As a branch’s appointment authority over the ethics commission increases, the perceived effectiveness of regulations overseeing that branch decreases.

Under this hypothesis, elected officials seek to influence the commission to benefit themselves but do not use the commission as a tool against another branch. Appointment authority serves primarily as a gatekeeping function to the commission. As a gatekeeping function though it allows elected officials to screen out individuals who would be outright hostile to them and in turn appoint friendly or easily influenced individuals. Given the above, I expect that as a branch’s appointment authority increases the perceived effectiveness of a commission monitoring that branch will decrease.

h₂ : Inter-branch adversarial: As a branch’s appointment authority as a means increases, the perceived effectiveness of oversight over another branch also increases.

Under this hypothesis, elected officials do not seek direct benefits for themselves. Rather the branch with more appointment power over the commission uses the commission as a tool against the other branch. Again the assumed mechanism at work is the gatekeeper function—elected officials appoint commissioners who are friendly and/or easily influenced. However, under this hypothesis the goal of appointing these types of individuals is not to shield one’s-self but to deflect attention and redirect it at the “other” branch.

h₃ : Witch Hunts: As political influence from the legislature increases the perceived effectiveness of regulations overseeing the executive also increases.

Under this hypothesis, members of the legislature specifically seek to use the commission as tool against other members of the legislature. Therefore, one would expect to see appointment authority positively associated with perceived effectiveness because more activity would be getting exposed. Bear in mind this is premised on the notion that effectiveness is equated with exposure rather than on preventing ethical lapses.

Research Design

This section describes the data, models, and robustness checks used in conduction this analysis. The data set is unique in that it represents the first large scale analysis of ethics oversight across the states. Further the findings of the project associated with the data set—the State Integrity Investigation—has led to state level discussions of ethics policies. In several cases, the results of this study led to states changing their ethics laws given their perceptions of poor performance in ethics oversight (see Rauh 2016 for a discussion).

Data and Methods

The data come from the (2012) State Integrity Investigation. The purpose of this survey was to assess the risk of corruption in each state. The respondents were political reporters from across the United States who responded to 330 separate questions ranging from the openness of the budget process and the effectiveness of legislative/executive oversight, the independence of the state insurance commission. All responses were blind reviewed by a separate political reporter in that state whose job it was to indicate whether responses were accurate or “appeared inaccurate, inconsistent, biased, or otherwise deserving of correction” (SII 2012). In each case, both initial response and review, the respondents were required to cite multiple sources justifying their responses, that is, interviews with a knowledgeable individual, a relevant public report, a specific law or institution, journal articles, and so on.

The survey contained four questions regarding the effectiveness of oversight of the Executive and six addressing the oversight of the Legislature (which are a key function of ethics commissions). Each of these questions were rated on a 5-point scale from strongly disagree to strongly agree (0, 25, 50, 75, 100) with specific indicators of what a 0, 25, 50, and so on meant, for example, A 100 score is earned if there are no documented cases of state legislators officials taking jobs in the private sector that entail directly lobbying or seeking to influence their former government colleagues, without an adequate cooling-off period.

• Are the regulations governing conflicts of interest by the executive branch (defined here as governors and/or cabinet-level officials) effective? (Score is average of questions 1–4):

  1. In practice, executive branch asset disclosures are independently audited.

  2. In practice, members of the executive branch adhere to the law governing gifts and hospitality.

  3. In practice, executive branch actions (e.g., hiring, firing, promotions) are not based on nepotism, cronyism, or patronage.

  4. In practice, the governor and state cabinet-level officials adhere to the law governing private sector employment after leaving office.

• Are regulations governing conflicts of interest by members of the state legislature effective? (Score is average of questions 1–6):

  1. In practice, state legislature asset disclosures are independently audited.

  2. In practice, state legislators adhere to the law governing gifts and hospitality.

  3. In practice, legislative branch actions (e.g., hiring, firing, promotions) are not based on nepotism, cronyism, or patronage.

  4. In practice, state legislators adhere to the law governing private sector employment after leaving office.

  5. In practice, state legislators recuse themselves from actions in which they may have a conflict of interest.

To obtain scores for the above the author averaged the responses across the subquestions. While averaging ordinal data points is typically frowned upon and, the author initially attempted the standard, albeit more complex method (polychoric factor analysis), factor analyzing each category however the VSS criterion indicated severe over-factoring (7 factors from 12 questions). Because of this, the manuscript resorts to using an aggregate index which is simply the average of the responses from each question. Grice (2001) and DiSteffano, Zhu, and Mindrilla (2009) both suggest this approach when over-factoring is present and in practice this is just the subcategory score from the survey.⁵ The scores for the executive are on average higher. This is consistent with Rosenson’s (2003) previous findings that elected officials are more likely to empower commissions when they perceive that they will not be a threat to them.

Explanatory and Control Variables

The explanatory and control variables used here are those that have previously been identified by Rauh (2015) and Rosenson (2003) as influencing ethics commissions. Additionally, variables such as partisanship are used given its importance in explaining political competition.

Political Influence

The key explanatory variable is a commission’s freedom from political interference. This variable is drawn from the SII (2012) and is a response to the survey question: “In practice, members of the agency or set of agencies tasked with enforcing state ethics rules are protected from political interference.” This variable was rated on an ordinal scale from strongly disagree (0) to strongly agree (5).

As an additional test, and to examine if there is structural dependence on the factors influencing independence, the analysis also ran a two-stage model using Rauh’s (2015) predictors as endogenous to freedom from political interference and then using the a second stage generalized least squares for the remaining variables (Freedman 1984; Henningsen and Hamann 2007; Kelejian 1971). Comparing the log likelihoods of the two models though, the more complex model does not explain any more variance than the more parsimonious model, for example, the more parsimonious model is preferred (Ray 2003) (Supplementary Table A1).

A variety of controls were used based on the reviewed literature. These controls are designed to account for both organizational capacity including staffing capacity and financial capacity. I also control for spatial factors that predict state-level corruption and the interest in politics from state to state.

Internal Constraints

It is often possible that elected officials can use their ability to control the internal processes of these commissions via their command of budgetary and staffing authority. Budgets for commissions can exist either as separate line items or as part of the budget of a legislative branch—the latter case representing less formal independence. Budget and staffing are connected though and their use as mechanisms of control is tied both to what a commission is statutorily required to accomplish (reviewing financial disclosures, conducting trainings, etc.) and the number of individuals for whom they must accomplish these tasks. Rauh (2015) already showed that the ratio of a commission’s log budget to its mandated activities affected the commission’s autonomy. To avoid autocorrelation given that this model uses Rauh’s dependent variable as an explanatory variable, and to assess how the scale of activities affects control this model uses a different functional form of the budget measure.

Budgets

The size of a state is not reflected in the size of its state government. For example, Georgia has 236 legislators, whereas Minnesota has 201, South Carolina has 170, and New York only has 213. However, the size of the commission’s budget is tied to the size of the state, hence it is necessary to use log(Budget) otherwise the data would skew more toward more populous states. Knowing that the ratio of log(Budget) per number activities affects perceived independence from political interference (the explanatory variable) it is necessary to measure financial capacity using a different functional form than that used by Rauh (2015) both to avoid autocorrelation and because the question here is different. The question here is about the direction of political influence rather than the existence of political influence. Therefore, the question of resources is about the utility of resources rather than the capacity of resources. A commission typically does not have individual line items appropriated per activity but instead allocates funds based on what it must accomplish. In this case, what it must accomplish is monitoring the activity of individuals within the political branches log Budget / n Monitored. Note that this functional form was not shown to be a significant predictor of autonomy in Rauh’s (2015) article and so autocorrelation should not be an issue with using his dependent variable as an explanatory variable in this model.

Lack of Budget Independence

Budgets can be either a flow-thru from a political branch or a separate line item. When the budget is a line item there is greater formal independence because the dollars allocate are not directly dependent upon the elected officials from whose branch they flow. Given this, and the work of Ennser-Jedenastik (2015) it is reasonable to assume that if a budget is a line item that the commission would have greater control over that budget and would therefore be more effective. Note that this functional form was tested in Rauh (2015) and shown to be independent of political influence. This measure is coded as (0) if the budget is a line item and (1) if the budget is a flow through from a political branch.

Staff

Monetary resources are one constraint on a commission’s effectiveness, but another is staffing. Although budget and staffing are obviously linked they are not perfect predictors of one another. For example, a smaller staff with more lawyers may cost about as much as a larger staff with more educators. Additionally staff size, like budgets, can be an indicator of how seriously certain activities are taken (Boyne, Poole, and Jenkins 1999). Therefore, staff size should be considered as another marker of resources available to commissions. An improved measure would be to count the number of lawyers or regulators versus the number of educators or administrative staff in a commission. However, reliable staffing counts were unavailable.

Rauh (2015) found that the capacity of staff as a function of the budget helped explained a commission’s autonomy. Again though, this model uses his dependent variable as an explanatory variable so a different functional form is necessary to avoid autocorrelation. Additionally, given that the question is about effectiveness rather than control (one of which is about the allocation of resources and the other a question of the utility of those resources) the functional form of Staff size / n Monitored seems appropriate. As with the budget measure this was not shown to be independent of political influence in Rauh (2015).

Promulgation of Regulations

Ethics commissions are empowered by elected officials to oversee elected officials. Thus, the empowering statutes of ethics commissions are the result of the lawmaking process. Commissions as regulatory bodies have the capacity to propose regulations though in lieu of new laws being passed. Allowing such regulations to be promulgated would obviously be a sign that the political branches in question allow these commissions greater independence and the commissions are therefore, potentially, more effective. Note that this says nothing of the stringency of the regulations in question, and simply assesses whether the commission has promulgated regulations outside of its empowering statutes to oversee the legislature or executive. This is simply a binomial variable (1) if formal regulations exist governing conflicts of interest for the branch in question; and (0) if they do not.

Fulltime Commissions

As discussed earlier different states have different commission structures. Ethics commissions exist as separate entities within state government but the position of commissioners in some states may be akin to that of a board member or a commissioner may be a fulltime position. Because fulltime leadership is indicative a greater professionalization commissions with fulltime commissions may show greater effectiveness than those whose role is more akin to a board member (Squire 2007). An alternative is keeping with Ennser-Jedenastik (2015) is that in establishing as independent bodies, if the commissioners are fulltime elected officials may be more likely to place friendly or otherwise easily influence people on the commission.

State Level Controls

An issue when using surveys that ask about things like conflicts of interest the fact that what constitutes a conflict of interest may differ from state-to-state. What is considered a conflict of interest in South Carolina may be considered standard procedure in New Jersey. To account for this difference in views, I use state level variables designed to capture some (obviously not all) political and value differences between states. Additionally, Lau and Redawsk (2001) showed that interparty competition predicts how partisans view the activities of the “other party.” In other words, if a Republican and Democratic politician are engaging in the same sorts of behaviors then Democrats are more likely to call the Republican’s actions corrupt but call the Democrat’s action “just politics,” and vice versa.

Controls are drawn from the 2011 update to the 2010 census and from an examination of the 2011 make-up of state legislatures based on whether the states show a single party controlling both houses and the governor’s office. This manuscript uses the 2011 update because the SII was conducted in 2011 and published in 2012. These include the percentage identifying as Democrats or Strong Democrats as a control for partisan make-up and a spatial measure for the distance of the state capitol to major population centers.

Democratic Versus Republican States

To measure partisanship, I use the percentage identifying as democrats or strong democrats. Redlawsk and McCann (2005) found that Republicans and Democrats had different ideas about what constitutes corruption. Neither party was significantly different from one another on whether or not corruption constituted criminal behavior, but were diametrically opposed (reversed signs) when it came to whether or not favoritism constituted corruption. Recall that the respondents are political reporters and are subject to the media markets in which they operate. It is possible then that state level partisanship tempers their responses. There may also be an effect if the state is more heavily Democratic or Republican but the make-up of the state government does not reflect this (Meier and Holbrook 1992)—hence the measure for unified state governments below.

Unified State Government

Unity of state government is measured based on party control of state government, that is, the degree to which a single party controls all branches. If one party controls the executive and the other party controls both houses in the general assembly the variable is coded as (0) because there is not unified government. If one party controls the executive and the other controls only one house then this is coded as (1). If the same party controls all branches it is coded as (2). Because the south has a tradition of single party government which may reduce indicators for inter-branch competition. A model with an interaction term for partisanship and the South is included in the appendix but it did not perform as well as the more parsimonious model (Supplementary Table A2).

Spatial Controls

Spatial characteristics may be associated with different responses, especially since the respondents are reporters. Closer proximity of urban centers to state capitols implies a larger media market for stories concerning the government (Campante and Do 2014). Respondents in in states with larger populations in proximity to state capitals may be more sensitive to conflicts of interest since their share of the market for government stories is larger. Standard spatial indices such as the Herfindhal index capture concentration over a uniform space but not around multiple points such as state capitals. Therefore, this manuscript uses a gravity centered spatial index to measure the proximity of state populations to state capitals (Campante and Do 2014).

Modeling

This analysis uses an OLS regression with standard errors estimated using a bias-corrected and accelerated bootstrap. The basic idea is behind the bootstrap is drawing random samples from the data to calculate the standard errors from repeated estimation based on the resampling. Bootstrapping data is not a panacea for small sample sizes though, only a tool to examine standard errors under assumed conditions of a larger dataset. This work relies on the fairly common bias-corrected and accelerated (BCa) bootstrap (Efron 1987). This works well to deal with data that may be skewed (table 1). Efron (1987), Efron and Tibshirani (1993), and Lei and Smith (2003) showed that for both Gaussian and non-normal population distributions, with sample sizes of 20 or above, BCa intervals yield small coverage errors for means, medians, and variances. The BCa method can be outperformed in particular circumstances with multivariate effects, that is, MANOVA, MANCOVA, various forms of factor analysis, canonical correlation, and so on—interval inversion and percentile methods are recommended in these scenarios (Hess et al. 2007). The relative performance of the BCa method is typically quite good for regression analysis, and it is recommended for general use by Carpenter and Bithell (2000) and Kirby and Gerlanc (2013). Neither the Bruesch-Pagan test nor the Durbin–Watson test were significant indicating that multicollinearity and autocorrelation are not issues.

Findings and Discussion

Findings

The purpose of this manuscript was to examine whether elected officials’ control of commissions is directional, for example, whether legislative influence and executive influence manifest themselves in different ways. The findings for both the executive and legislature suggest that this is the case. In doing so, this manuscript sought to examine whether the authority delegated to formally independent commissions was mitigated toward de facto control for different purposes: evading scrutiny, political competition, or witch hunts against rivals. It appears that the legislature seeks to direct attention toward the executive but does not influence oversight over itself, for example, this finding support the hypothesis of political competition. Executives on the other hand seek to avoid scrutiny as well as direct attention toward the legislature.

Findings for the Legislature

There is no effect for legislative oversight based upon freedom from legislative influence (table 2), however, as freedom from executive influence increases there is a small but significant corresponding effect of −0.024. This is consistent with the inter-branch adversarial hypothesis. This suggests that the legislature does not have the capacity to wield influence as a body to direct attention away from itself, but that respondents perceive that when an executive cannot wield influence (toward the legislature) that the commission is less effective at monitoring the legislature. Such arrangements are seen in Krause and Woods (2012)—if the legislature cannot exert influence in a situation where the capacity of an agency (in this case a commission) is already limited then we wind up with a situation of executive dominance. If the executive cannot be dominant and neither the commission nor the legislature have high levels of capacity then the commission has little incentive to act. Party has an effect regardless of where the source of influence thus suggesting that partisans try to influence the effectiveness of commissions to protect their own members.

Findings for the Executive

As freedom from legislative interference increases there is a corresponding decrease (−0.041) in the perceived effectiveness of executive oversight (Model 3). As freedom from executive influence increases though there is a corresponding increase (0.062) in perceived effectiveness of executive oversight (Model 4). The finding in Model 3 is consistent with earlier work from Rosenson (2003) and Rauh (2015). The effect size in Model 4 is notable since it is almost three times the size of the effect in Model 2. This indicates that when the executive can exert control she will and she will do so in a way that deflects attention away from themselves. This is consistent with the evading scrutiny hypothesis. This also follows from predictions expected from Niemi, Stanley, and Vogel (1995) and Hale (2013) regarding the governor’s being perceived as a locus of control. Again unified state government matters with unified state governments showing a decrease in perceived effectiveness regardless of influence, again implying that partisans, regardless of branch of government or influence, attempt to protect their own.

General Findings

In general, when budgets are a flow through from a political branch commissions are seen as being less effective. This is consistent with Smith (2003) and Rosenson (2003, 2009) who argued that elected officials can price the activities of commissions and provide just enough to meet their mandated activities but not enough to conduct meaningful oversight. States in which there are a majority of individuals identifying as Democrat or Strong Democrat show, on average, a higher level of effectiveness for oversight over all branches. This is in and of itself an interesting finding since Democrats tend to argue for more government programs and with an increasing number of programs there is additional opportunity for unethical activity. While this finding cannot speak to the prevalence of unethical activity in a state, it does appear that states with a larger share of registered Democrats show greater belief in the oversight of their elected officials.

Another small but significant effect is seen in staffing per number of individuals monitored. As the ratio of commission staff per number of individuals monitored increases there is a corresponding increase in all models except for Model 4 (executive oversight | legislative influence). The finding suggests that resource dependence is an issue for commission effectiveness. However, the lack of a result for Model 4 may suggest that legislative influence outweighs staffing concerns, particularly given the larger relative effect size for freedom from legislative interference in this model and the smaller relative effect size for staffing per monitored.

The existence of authority to promulgate regulations was only significant for the models predicting effectiveness of executive oversight, consistent with Rosenson (2003). Fulltime commissions though were seen as being marginally less effective at regulating the activity of the legislature with no effect for executive oversight. Although the legislature lacks the ability to exert influence as the legislature the appointment and approval of commissioners in many states requires legislative approval. Rauh (2015) already showed small but significant negative effects for control of commission structure and a commission’s independence. This finding is consistent with those previous findings and suggests consistency with Ennser-Jedenastik (2015).

Discussion

In this manuscript, the aim was to examine whether the oversight activity of an ethics commission over the legislature and executive differs based on the level of influence exerted by each branch. The ability of each branch to influence a commission varies and and the effects in the perceived effectiveness of oversight based on the source of that influence vary accordingly. This is indicative that the political branches do indeed seek to use their influence over commissions toward different ends. Legislators do not have the capability, in general, to use their influence as individual legislators to act as “the legislature” when trying to influence ethics commissions. Their inability to do this is partly based on numbers and partly based on political realities. Individual rivalries within the legislature will prevent cohesive action and legislators will not willingly seek to influence to commissions to take a closer look at them (the legislature). By this same token governors seek to use their influence to avoid scrutiny. This is because governors are already seen as the locus of control and already ascribed more responsibility (by the public) than they actually have. Since it is known that legislatures more willingly go after executives, there is an incentive for executives to avoid additional scrutiny.

Several of the assumptions in the literature dealing with formal models of political control revolve around elected officials’ policy desires and work/shirk incentives for bureaucrats (Bendor, Glazer, and Hammond 2001). The transactional approach of Carpenter and Krause (2012) and Carpenter and Krause (2015) seems more appropriate for explaining how elected officials seek policy goals on ethics commissions. The policy desires of elected officials seem to belie the very existence of commissions (Rosenson 2003) but commissions are nonetheless granted authority because of public outcry given prior scandals. The apparent desire of both branches to direct influence towards the other branch (and away from themselves in the case of governors) implies acceptance of the commissions as legitimate. Given this, it is difficult to claim that elected officials use commissions as vehicle for satisfying legitimate policy desires though, since their true preferences tend to be antithetical to the purpose of the commission. Bendor and Meirowitz (2004) identify few cases in which risk aversion drives delegation. The case of ethics commission is interesting then because delegation is necessary to satisfy public demands for oversight but politicians seek de facto control given the potential dangers of ethics enforcement.

The effects of appointment authority on freedom from political influence seen in Rauh (2015) and the corresponding effects of freedom from political influence on perceived effectiveness reinforce arguments from Epstein and O’Hallaran (1999) regarding the use of appointments as a means political control. Given the formal (de jure) independence of these commissions these findings bulwark arguments made by Ennser-Jedenastik (2015), that elected officials will use appointments as a means of control when the law requires formal independence. At the level of most agencies this would simply be a story about not wanting to fully delegate which would thus result in the inability of bureaucrats to fully act upon their expertise (e.g., Callendar 2008; Gilligan and Kreihbiel 1987). With ethics commissions though this appears to be the intent as opposed to a byproduct of such control which as a case questions the findings of Spence (1997).

The risk of a stalwart commission, combined with the fact that even the hint of an ethics investigation is potentially damaging, and a competitive political environment provides a great incentive for elected officials to influence commissions. In this manuscript, though the findings suggest that legislators use their influence to direct attention toward the governor but cannot direct attention away from the legislature as a branch. The governor, as the results imply, has an incentive to both direct attention away from himself and toward the legislature.

Although one cannot claim that elected officials seek to influence the activity of commissions because they are corrupt, one can claim that they have systematically sought to influence these commissions using legal means and undermining the effectiveness of the commission’s enforcement. This is definition of what Lessig (2013) and Thompson (2013) define as institutional corruption. Ethics commissions have been established in such a way as to incentivize elected officials to seek influence over them. Perhaps the public expects too much of commissions or perhaps their roles as compliance organizations have placed them into a sphere and role they were not intended to operate in. Nonetheless, if they are to serve as a symbol of integrity then a necessary condition for this is limiting the capacity for political influence if not the incentive.

Supplementary Material

Supplementary data is available at the Journal of Public Administration Research and Theory online.

References

Author notes