06/17/2016
On June 9, 2016, Claude Millman participated in a panel on “TRADE TIPS: Navigating Through Operations to Create a Successful Nonprofit” at New York Nonprofit Media’s 2nd Annual Nonprofit OpCon.
Mr. Millman provided Six Tips for Organizations that Do Business with New York City and State:
1) Adopt a Code of Conduct & Whistleblower Policy. The Code should be broad enough to prohibit a wide variety of illegal and unethical conduct. The Code and Policy should be distributed to all employees of the organization. The organization should consider posting it on the organization’s website and training the organization’s staff on the Code and Policy. The organization should also consider retaining a service that provides a hotline telephone and/or e-mail service that can be used by employees and others to report, anonymously, suspected violations of the Code.
2) Consider the Lobby Laws. If the organization interacts with the City or State government in connection with contracts or potential contracts, the organization should consider whether it is a “lobbyist” and/or “lobbying client” under City and State law. If the organization is not registered for “lobbying” with the City and State, the organization should consider whether it should apply for amnesty. The amnesty window will close on June 30, 2016, and AMNESTY APPLICATIONS BUST BE SUBMITTED BY JUNE 30, 2016. Organizations that are registered should develop systems to monitor activities to ensure accurate reporting.
3) Take Government Disclosures Seriously. The organization should develop systems to completely and accurately disclose information on forms such as the City’s VENDEX questionnaires. The organization should be cognizant that some disclosures will automatically trigger VENDEX “cautions,” negative information stored in the City’s government contracting database. In answering automatic-caution questions, such as VENDEX Questions 15 and 16, the organization should recognize that it is writing its own “caution,” and include any mitigating information.
4) Know the Government Ethics Rules. While ethics rules, such as the City’s Conflict of Interest Laws, generally do not apply to contractors, it is advisable for organizations to understand those laws and avoid involvement in breaches by government employees. An investigation into a government employee’s potential ethics violation could include burdensome scrutiny of the contractor that dealt with that government employee, and may lead to unwanted media attention for the organization. The organization should be aware of whether any of its government contracts include provisions prohibiting the contractor from inducing violations of the ethics laws. The organization should consider training its employees regarding how to avoid triggering violations of ethics rules.
5) Only Perform at Risk with Eyes Open. Organizations that are asked to perform services for a government agency before a contract with that agency is registered or approved should understand that, while late-registered or approved contracts are common, the organization that provides such services does so “at risk.” Such organizations should consider disclosure of at-risk performance to board members and auditors. While it is sometimes possible to be paid for at-risk work even when the contract is not registered or approved, such as through the City’s “illegal but equitable claim” process, claims for reimbursement will be stronger if the organization has maintained excellent documentation of such at-risk work.
6) Take Complaints Seriously. When complaints about the organization are raised – through an in-house whistleblower or an outsider – the organization should act deliberately and swiftly. The organization’s response to such a matter should involve no retaliation and should be accurate and truthful. The organization should consider engaging outside investigators, ideally lawyers who can investigate the matter and provide legal advice under the protections of the attorney-client privilege. The organization should also consider whether it is appropriate to report the complaint to its board, to auditors, and government agencies. The organization should be aware of whether any of its government contracts specifically require the disclosure of certain types of complaints.
