Our selectmen and county commissioners, among all other government officials, are fiduciaries and have fiduciary duties to us, the voters and taxpayers. If they fail to honor their fiduciary duties to us, they must and should be removed from office. In other words, throw the bums out!
Sometimes easy to do with typical 2-year terms, but many of them in towns, cities, and county government in Belknap County (and undoubtedly elsewhere in NH) have terms longer than 2 years.
And in New Hampshire, it is unfortunate that we do not (yet) have a law allowing the citizenry to recall public officials, as may be done in many other states.
Public officials, as fiduciaries, have a unique set of duties they owe to the public that they serve. A fiduciary is a person to whom property or power is entrusted for the benefit of another.
There at least four factors that identify a relationship as a fiduciary one:
1. The beneficiary has delegated authority to the fiduciary to act on its behalf;
2. The fiduciary has discretionary powers over the beneficiary’s assets or interests;
3. The fiduciary is in a position superior to that of the beneficiary due to specialized access, knowledge or ability; and
4. The beneficiary trusts that the fiduciary will act in the beneficiary’s best interest.
The elected officials are the fiduciaries, and we, the hapless sheep, are the “beneficiaries” in our system of government. But we are owed significant duties.
A fiduciary owes to the person or persons for whom they act the duties of good faith and trust. The highest legal duty of one party to another, being a fiduciary, requires being bound ethically to act in the other’s best interests. A fiduciary’s responsibilities or duties are both ethical and legal. When a party knowingly accepts the fiduciary duty on behalf of another party, they are required to act in the best interest of the principal, the party whose affairs they are managing.
The public delegates governing authority to public officials to exercise discretion over the public treasury and to create laws that will impact their lives. The public official, once elected, appointed, or hired, is in a superior position to that of the individual citizen due to specialized governmental knowledge and the ability to advise, deliberate, and participate in the representative process. And finally, the public trusts that the public official will act in the public’s best interest.
Turning to present day government, what duties flow from the public fiduciary relationship? Because fiduciaries are difficult to monitor and have wide access to power over beneficiary resources and assets, fiduciaries are under rigorous obligations that ensure compliance with their role responsibilities. So, what are those obligations in the government context?
The Duty of Care: The duty care requires that the public official competently and faithfully execute the duties of the office. Under duty of care fall such obligations as the duty to manage assets competently and be good stewards of the public treasury, to use due diligence in the selection and supervision of staff, to follow the rules and to uphold the constitution and laws of the jurisdiction. Examples of breach of this duty include failure to attend meetings, failure to investigate, failure to engage in the deliberative process, and failure to vote.
The Duty of Loyalty: Public fiduciaries have an absolute obligation to put the public’s interest before their own direct or indirect personal interests. The public fiduciary breaches this obligation when he or she benefits at the public expense. Prohibited benefits can be financial (such as engaging in pay to play politics- or participating in decisions that favorably impact an official’s business, property, or investments), career related (such as using public office and/or public resources to obtain future employment or political position), or personal such as benefits to family members or close associates. Note that when general ethical duties to family or friends conflict with duty to the public, the public duty must prevail.
The Duty of Impartiality: Public officials have a duty to represent all of their constituents fairly. This means that the public fiduciary cannot favor those of his or her own party over other constituents or let the fact that someone voted against him or her impact the ability to act fairly. They must overcome any inherent bias that they possess.
The Duty of Accountability: Without a duty of accountability, the public’s ability to monitor the behavior of public fiduciaries would be severely limited. From the duty of accountability flow the duty of transparency and the concepts of disclosure, open meetings, and accessibility of public records.
The Duty to Maintain Public Trust in Government: Without public trust, government doesn’t work. The public is willing to delegate authority and sacrifice some freedoms in exchange for an orderly and civilized society, but only if it believes that government is acting in the public’s best interest. When the public loses trust in government, public cooperation suffers, compliance with laws fail, and investors and consumers lose confidence. If the people cannot trust their government to do the job for which it exists – to protect them and to promote their common welfare – all else is lost.”
Some questions arising from events over the recent past in the Lakes Region (this writer being reasonably certain that there are many more examples throughout our state):
If a town selectman entrusted with reviewing and signing authorizations for payments of taxpayer monies to various vendors admits that his review consisted only of casually “glancing at” the payment requests and documentation before giving his approval, has he fulfilled his fiduciary duties to the citizenry?
If a town selectman makes or approves appointments of persons related to the employer of the child of that selectman, has he fulfilled or breached his fiduciary duties?
If town selectmen allow a town administrator, whom they have hired and/or kept in his position, to repeatedly underestimate the ultimate cost to taxpayers of various facilities to be constructed and to maintain excessive administrative staff whose duties could easily be performed by others, but keep his position, have they fulfilled their fiduciary duties?
If county commissioners allow a county administrator, whom they have kept in her position for which she did not initially meet the publicly-announced minimum qualifications, to stay in office despite repeated accounting missteps and misrepresentations and marked incompetence, have they fulfilled their fiduciary duties?
Query: Does mere incompetence rise to the level of a breach of fiduciary duties? This writer believes that it does, but at the end of the day, you must decide.
