I've written on this subject twice - first, when I thought the resolution should have been publicly available, and second, when I'd had a chance to read it and form some thoughts. I now find myself in the unusual position of writing on the subject - again - when there hasn't been any public progress on the story, but needing to clarify a few things. A few suggestions have been made to me (in bold, below) about what is important and what is not, and it seems appropriate to tease those out.
The resolution acknowledges that Commissioner David Pickler has disclaimed any financial benefit related to the TSBA trust for which he may have otherwise been eligible. Here's the resolution and accompanying documents. In fact, a close reading shows that in the eighth paragraph of the resolution, Commissioner Pickler acknowledged being the "broker of record" but "disclaimed any financial interest or benefit from this arrangement." We should take Commissioner Pickler's statement at face value. His statement about not personally gaining any financial benefit, is different from the question about whether the company that bears his name, or any of his employees (whether in W-2 or 1099 status) directly financially benefitted from the trust being housed by Pickler Wealth Advisors. There is also a distinction between a direct financial benefit like fees related to an account, and an indirect benefit such as those related to financial advisor's position with a particular mutual fund company (more money in more accounts can result in a preferred status). So we still need to know what exactly Commissioner Pickler means when he says that he has not gained any financial benefit related to the $12 million investment.
The important part is that Commissioner David Pickler did not disclose his business relationship with the TSBA trust immediately prior to the June 26, 2012 vote. The way that this argument goes is that even if Commissioner Pickler has gained no benefit, financial or otherwise, from holding the TSBA trust account, he had an affirmative obligation to disclose the business relationship prior to the vote. I happen to strongly agree with this argument. I suspect that we'll continue to hear the argument that Commissioner Pickler made the appropriate disclosure to the old iteration of the Shelby County School Board (as made by Commissioner Mike Wissman at the December meeting where the resolution was presented). It will be important to understand when the disclosure was made, if, in fact, it was made. But I would also argue that whenever a vote related to a TSBA trust that either is or could be managed by Pickler Wealth Advisors, Commissioner Pickler should make the disclosure in advance of every vote. He should also take the extra step of recusing himself from the vote itself. Business relationships, when they are engaged in by elected officials, cannot remain confidential (or undisclosed) when the elected office can benefit or in any way affect - positively or negatively - the business relationship. Even if Commissioner Pickler disclosed this relationship to the old Board prior to the constitution of the current Board, or to a Committee in the near past, Commissioner Pickler should have made the disclosure again when the possibility of another trust with school money that could be managed by his firm arose. He should make the disclosure every time, and recuse himself from the vote. We'll have to wait for the Ethics Committee to make its findings about when Commissioner Pickler's previous disclosures were made, and whether the current Board would have had any reason to know of the business relationship in light of any previous disclosures. Here in Memphis and Shelby County, we are used to opaque, undisclosed business relationships - but we shouldn't be.
The business relationship between Commissioner Pickler's firm's employee, Teresa Bailey, and the TSBA trust should be disclosed. Commissioner Pickler does not appear to be running a law firm. In a law firm, if Commissioner Pickler was "conflicted out" of a case, everyone in his firm would be "conflicted out" and the firm would be unable to work on the case. Clearly, the rules must be different for financial advisors. All of that said, Commissioner Pickler is an attorney and an elected public official. Even if he makes no money and receives no benefit from his firm's management of the TSBA trust, Commissioner Pickler should have disclosed that his firm's employee would have a business relationship related to the $12 million investment. Now that he has not made the disclosure - at least immediately prior to the June 26 vote by the full Board - in order to straighten this out, he should disclose all accounts with public school money that are under Ms. Bailey's purview, along with any fees or other financial arrangements that may have been made. If Ms. Bailey receives any compensation, salary or commission, related to any TSBA trust accounts - directly from the funds, or indirectly through the firm - this compensation should be disclosed. Though it should go without being said, if Commissioner Pickler receives any compensation, commission or otherwise, related to these trust accounts, this should also be disclosed.
Tangentially, I'll comment on one of the side stories of the Shelby County School Board's consideration of this matter. Shortly after the resolution was mentioned at the December meeting, Commissioner Chris Caldwell stated that he "would not do this to his worst enemy." My read on Commissioner Caldwell is that he views himself as above the petty political in-fighting and a voice of reason in these petty squabbles. I've complained before about his problem-solving skills. He must view Commissioner Jones' resolution as either ill-timed, or perhaps not the appropriate vehicle to address the allegations. I might (depending on my mood) argue about a resolution asking for an immediate resignation, versus something like a resolution requesting an investigation. Perhaps Commissioner Caldwell found distasteful the "splash" that occurred when the bomb of a resolution landed. However, I'm sure that Commissioner Caldwell would agree that if any generic school board commissioner became aware of another commissioner's alleged undisclosed conflict of interest related to any amount of money, much less $12 million, that generic school board commissioner would have an affirmative obligation to address the allegations. The failure to affirmatively address the allegation would be an ethical violation in and of itself. Commissioner Caldwell might quibble with the method, but I don't think he should dispute the necessity of Commissioner Jones having raised the issue once it came to his attention.
And so we sit, waiting for word from the hastily composed Ethics Committee. Perhaps they will meet this month . . .