October 2010 Blue Line Article by Hank Hernandez

Just the Facts About Financial Disclosure – Not Myths or Rumors

We have evaluated Chief Beck’s article about financial disclosure and offer the below counter-comments as to whether or not the financial disclosure policy contained in Special Order No. 20 implemented by the City and the Police Department will be effective in the prevention and detection of financial and/or other corruption within our gang enforcement details and our narcotics field enforcement sections of the Los Angeles Police Department (LAPD).

Based upon our collective education and experience with LAPD management and the opinions of our independent experts, we continue to opine that the police management’s financial disclosure policy will provide no authentic deterrence, will not be effective in the prevention and detection of financial and/or other corruption and does not provide sufficient fraud- or corruptiondetection benefits to outweigh its potential harm to the privacy and safety interests of our sworn members.

In an effort to promise unachievable privacy for applicants, management frequently states that the financial disclosure process is “fairly easy.” This is a myth. Their process requires that the applicant fill out disclosure forms, gather numerous supporting information and documents and present the material during an interview with a “confidential financial disclosure administrator.” What they overlook is that not only will an officer be required to disclose his/ her own confidential personal financial information, but also financial assets jointly owned with a spouse, children, relatives, friends and others.

The sensitive and personal financial material will then be reviewed and approved by the commanding officer of Internal Audits and Inspections Division, who will then pass the material on to the civilian special assistant for constitutional policing for his/her review and approval. No mention is made anywhere as to what skills these reviewing authorities must possess to competently perform financial audits and analyses affecting many officers, their future careers and their families.

While Special Order No. 20 does not specify the range of acceptable incometo-asset ratios, we doubt that management can, or will, properly consider that such ratios are legitimately affected by a multitude of causes. Spending habits, savings practices, well-paid spouses, non-working spouses, family size, child support, parent support, divorce, illness, catastrophe and inheritance, among many other causes, can all affect the accumulation of wealth, and thus an officer’s income-to-asset ratio.

In sum, the convoluted and confusing procedures of financial disclosure will eventually cause administrative chaos that will be bureaucratically dysfunctional. It will, in the end, fail. The lack of success will leave the LAPD open to violation-of-privacy charges that will inevitably lead to lawsuits from within and the eventual exposure of the City’s general fund to additional money judgments.

The assertion that an officer’s financial disclosure information will not be discoverable via a Pitchess motion is also a myth. Disclosure of an officer’s personal financial information outside the LAPD is potentially as imminent as the next federal, state or county court order; lawsuit; Pitchess motion; or legislative, executive or administrative decree. The League has been waiting for years now for a formal advisement by the City attorney that it will object to any such disclosure.

Identity theft is pervasive and devastating to its victims. As more and more financial disclosures are submitted by officers to be electronically stored and accessed by the LAPD, the likelihood of identity theft increases. Even with the most well-intentioned but seriously lacking safeguards in place, inadvertent individual and mass releases and thefts of personal financial information will occur. Even when the financial information is stored in electronic form, it will be subject to inadvertent or intentional disclosure.

We continue to conclude that the LAPD’s financial disclosure policy and procedures are fraught with career hazards for officers. Omissions or errors will without a doubt result in grave career and personal consequences for officers who comply and their families.

We at the League recognize that while carrying out our duty of fair representation of our bargaining unit members, on occasion we will take a position that may be offensive to police management, City officials, the courts and others. Legislation and court decisions, however, have traditionally granted broad latitude to the lawful activities of unions in American society. The League’s continued protests over the financial disclosure policy falls well within legal past practices of labor organizations attempting to protect their members from perceived losses of rights resulting from significant unilateral changes by management such as the policies and procedures related to the LAPD’s financial disclosure.

It is wise to keep in mind that our society requires the same officers who are subject to financial disclosure to protect even the rights of free speech that are most objectionable in the course of their duties. Having said that, we repeat our views that the value system of officers condemning corruption, and the positive culture of a police agency with high morale among its troops, are the most effective alternatives to prevent and detect corruption.

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