Should OlyCap Chairman Greg Brotherton Be Awarding Millions in Taxpayer Funds to OlyCap?
Greg Brotherton as county commissioner has steered millions of dollars to an organization he heads as its chairman. That organization is OlyCap. Brotherton has violated state laws prohibiting such conflicts of interest because he has voted for and actively lobbied the other commissioners to approve the unprecedented large grants and contracts to OlyCap, according to a formal complaint pending with the State Auditor. Rosemary Shurman, a licensed attorney living in Port Ludlow, filed that complaint. Because the State Auditor says they won’t be able to address the complaint until next year, we are publishing Shurman’s explanation of why she alleges that Greg Brotherton has broken state law.
— The Editors
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In an apparent conflict of interest, Jefferson County Commissioner Greg Brotherton has used his elected position to promote spending millions of dollars of county funds to benefit a nonprofit organization that he chairs. Contrary to State law, Brotherton has advocated for and voted to approve funding to Olympic Community Action Program (OlyCap) of over $3.5 million in the form of grant monies and real properties held by the County.
Most of this largesse has been in the form of grants and service contracts. Close to a million dollars was in real estate, including the sale of a county property for a tenth of its assessed value.
Brotherton began his term as County Commissioner in 2019. He is up for re-election this fall and is being challenged by Marcia Kelbon. I decided to explore the legal issues surrounding an alleged ethical violation by Brotherton based upon his dual roles as a County Commissioner and Chair of OlyCap’s Board of Directors. For full disclosure, I support Kelbon based upon her reasonable and practical responses to multiple issues facing our county.
From my reading of the law, I conclude that Brotherton’s actions violate ethics laws. A complaint has therefore been filed with the Washington State Auditor to address this issue. The WA State Auditor’s Office has indicated that they will be considering this issue next year during its regular audit process. The Assistant Director of Local Audits indicated that they lack the resources to conduct an audit at this time.
Contrary to the opinions of Brotherton’s supporters, the complaint is not simply “politicking.” It is a legal issue that deserves an opinion from an unbiased decision maker.
Mr. Brotherton is a Jefferson County Commissioner (a municipal officer) and is a member of the board of directors of a nonprofit – OlyCap. Brotherton has repeatedly advocated for passage of certain funding and land divestment resolutions, at County Commissioner meetings and in his capacity as a County Commissioner. He has showered OlyCap with millions of dollars and acres of land at below market value. Brotherton’s advocacy for resolutions which provide direct financial benefit to OlyCap is the type of “influence” contemplated by the legislature, which elevates what is otherwise a “remote interest,” to that which is prohibited under the Revised Code of Washington (RCW) 42.23.
Jefferson County awarded a total of $2,709,163.70 in grant agreements and service contracts to OlyCap from 2019 through the first quarter of 2022, during which period Brotherton served as both a County Commissioner and as Chair of the Board of OlyCap. (See Exhibits A-E, documents received from Jefferson County in response to a public records request.)
In addition, in September 2019, Jefferson County sold to OlyCap a parcel of land (at 7th and Hendricks streets, Port Townsend) which was assessed at $362,280 for $36,200 — 10% of its market value and a discount of at least $326,080. In 2021, Jefferson County purchased another parcel of land (on Mill Road, Port Townsend) for a price of $602,000, which has been dedicated exclusively for use by OlyCap. In August 2022 the County signed a 42 year lease with OlyCap for this property for rent of ten dollars ($10.00).
The following table summarizes the total contributions by Jefferson County to OlyCap through March 2022:
The amounts awarded to OlyCap from 2019 through the first quarter of 2022 reflect a steady increase from the historic level of payment by Jefferson County to OlyCap. In 2018, for example, $552,808.94 was awarded to OlyCap. Brotherton has routinely voted, as part of a three-member board of county commissioners, in favor of the award of service contracts and grant agreements to OlyCap. It appears that Brotherton has not recused himself from any OlyCap funding votes.
Influencing Officials to Award Contracts to OlyCap
In violation of RCWs, Brotherton routinely Influences or attempts to Influence other County Commissioners to award contracts to the organization he chairs. Below are some examples during 2022 of his efforts to influence the other two commissioners in connection with approving grant agreements or service contracts to OlyCap:
- January 3, 2022 – Workshop between the Jefferson County Commissioners and OlyCap concerning additional funding for the “Caswell Brown” tent shelter being run by OlyCap
As reported by the Port Townsend Leader on January 12 (Jefferson County to spend another $500k on open-air homeless shelter):
“Commissioner Greg Brotherton requested the special workshop around funding for Caswell-Brown Village. He advocated for spending $500,000 more of American Rescue Plan Act funding toward Phase 2, which would provide sewer infrastructure to the site. Phase 3 would see the installation of showers and a kitchen area.
‘There is a groundswell of funding for housing and affordable housing right now,’ Brotherton said. ‘I think we should be willing to spend up to another $500,000 to get the infrastructure squared away… Finishing the first permanent emergency shelter is something that I think we should commit to.'”
- March 28, 2022 – Meeting of the Jefferson County Commissioners (Brotherton’s comments are shown in italics and obvious typographical transcript errors have been corrected. Time stamp 1:50:59)
Commissioner Eisenhour: “So now we’re gonna have a workshop on the Caswell Brown Village and this was an item that Commissioner Brotherton brought to the agenda.”
GB: “You know, I think we’ve all been waiting with baited breath for kind of a budget for what? Phase 2-A and 2-B look like for this kind of audacious and large program, which is critically needed. And I’ll just remind folks of where we were before we started this, which was an unmanaged encampment which was still costing us quite a bit of money at the Jefferson County fairgrounds and the um, that the impacts have been dramatic, both in the quality of life of the, of the residents who really have no other place to go as well as for the surrounding neighborhood and the fairgrounds and this is, I’m still proud of. This is a, as a visionary project which, which steps up and takes responsibility for a problem that doesn’t necessarily fall on our shoulders, but that is part of our community and so does fall on your shoulders. Thank you.
- April 4, 2022 – Meeting of the Jefferson County Commissioners. (Brotherton’s comments are shown in italics and obvious typographical transcript errors have been corrected. Time stamp 1:56:49)
GB: “So can I just restate the ask to understand kind of where we are. The way that I see it, the million dollars that we committed so far is eaten. And we have operations to consider which are right around 30K a month, $875K, say a million dollars to get to the end of the year, and into the RFP process and for recording fees, and housing fund board funds for operations and potentially other funding mechanisms for ongoing operations. And I really like the possibility of a sale to recoup funds to help supplement this. I think we’ve got some other funding mechanisms that are, you know, that could do part of it, you know, I think this would be a really good candidate for 1590 funds, we still have no process yet and its, and we of course committed to a collaborative process with our housing fund board on figuring out that process. But you know projects like this and the Evans Vista work force housing project and habitat’s project, we’ve got some big projects in front of us, that look like. I mean I feel like we could really move the needle on some of these projects with those funds. So that’s just my personal and I have not talked about that with the housing fund board or anything. And as I say, that is a collaborative decision, we might have the final pen on paper but the whole idea is that we make those in partnership with our city and citizen representatives. But, to me, moving this project forward again, is really critical, a $500K lifeline right now to get this going and talking about what we want with the property, I’d be willing to certainly carve out those additional parcels and maybe even the Larry Scott trail piece that has more potential for future development down the line and then selling what’s left for Phase 2A and Phase 3 at the very least to OlyCap would be kind of my starting point for consideration.”
The meeting continued. Following deliberation, in which both other County Commissioners expressed concerns over this additional spending, Greg Brotherton moved for and the Commissioners approved the award of the additional $500K funding to OlyCap.
- April 25, 2022 – Meeting of the Jefferson County Commissioners in which Brotherton argued for use of ARPA funding to further support the Caswell-Brown shelter operated by OlyCap in the face of concerns by the other commissioners. (Obvious typographical transcription errors have been corrected and Brotherton’s comments are in italics. Time stamp 4:53:24)
GB: “We could use that 262 would make a big dent on Caswell Brown.”
County Administrator: “Well, right. I mean when Heidi and I were monkeying with this sheet, I put 18 in there for Mill Road and then we went To -37000 down below. And then Heidi consulted with Kate. Okay. They take out that 300 because we haven’t committed it yet. So that’s the only reason we have the 262 at the bottom.”
Commissioner Eisenhour: “Yeah, this is what’s committed.”
GB: “Well, I mean we don’t have something else to use it will have that money and we need it, it would start the project again. If we could get this…”
Commissioner Dean: “We could also take um, you know, commit a chunk of capital funds to the Hadlock sewer instead of ARPA.”
GB: “Oh right Mhm. I mean if we could get you know, 400 that would turn everything on again. They just finished Phase 2-A.”
Commissioner Eisenhour: “So when is it gonna stop though? I mean we’ve spent, well if we do that we’ll have spent two million of our funds on it and then it was that enough.”
GB: “That’s enough to get Phase 2-A. And they’re looking for housing trust fund and other funds.”
Commissioner Eisenhour: “So that would be other sources of funding that get mobilized for it.”
GB: “Or for any future development. That’s what yeah, that’s what OlyCap has presented to us and that’s the plan. So yeah, that would be the end of the infrastructure investment from us. There’s operations, they think they can get some funds for operations and shift stuff around but if they’re not moving to permanent supportive housing for years, which is what I think will happen. It’s I don’t I’m not sure if this operation funds are actually realistic. Um So but you know, we have other revenue streams, you know, our normal Um you know, recording fees and everything that we have RFPs for already. So they’ll look for it but you know, 400 would finish Phase 2-A. Mhm. Yeah and capital funds could be used for the sewer. Right, that’s not a problem. What do you guys think about that?”
Commissioner Eisenhour: “I don’t know, I would love to see us putting more money into other segments of housing.”
- August 26, 2022 – Commissioner Brotherton made a motion to approve the 42 year term lease with Olycap for $10 a year. The motion was approved. (Time stamp 09:20:02 & Agenda pg.2) Although the county retains the deed for the property, the appearance of impropriety remains, in light of the overwhelming favoritism shown to this organization by an elected official who sits on their board.
Revised Code of Washington – Code of Ethics Laws Prohibit Influencing Officials
The Jefferson County Civil Deputy Prosecutor’s analysis of RCW 42.23.030 and conclusion that Commissioner Brotherton’s conflict of interest is nonexistent — merely because he does not directly receive monetary compensation from OlyCap — completely ignores both the stated purpose of Chapter 42.23 and RCW 42.23.040.
The purpose of Chapter 42.23 is to “prohibit certain instances and areas of conflict,” particularly with respect to “the transaction of business” by elected officials, such as Brotherton. However, the statute also permits certain conflicts of interest which are “deemed to be only remote” (RCW 42.23.010).
RCW 42.23.030 prohibits municipal officers from being “directly or indirectly” “beneficially interested” in a contract. RCW 42.23.040 defines scenarios when a conflict of interest is “remote” and thus the municipal “officer is not interested in a contract within the meaning of RCW 42.23.030.” The scenario where a municipal officer holds a position as a “non-salaried officer of a nonprofit corporation” is explicitly labeled a “remote interest.”
This type of remote interest is considered a conflict of interest, but it is one sanctioned by the legislature when the conflict is disclosed because it qualifies as only a “remote” conflict. However, RCW 42.23.040 also reverses the “remote interest” distinction where the municipal “officer influences or attempts to influence any other officer of the municipality.” Under this scenario, the municipal officer is considered “interested… within the meaning of RCW 42.23.030.”
RCW 42.23.040 can be read as follows:
“A municipal officer is… interested in a contract, within the meaning of RCW 42.23.030, if the officer has only a remote interest in the contract… [and] the officer influences or attempts to influence any other officer of the municipality of which he or she is an officer to enter into the contract.”
Under RCW 42.23.040, the legislature classified this specific scenario: a municipal officer also holding a position as a non-salaried officer of a nonprofit corporation, who exerts influence or attempts to exert influence over other municipal officers when making a decision related to a business transaction involving the same nonprofit, as a prohibited conflict of interest “within the meaning of 42.23.030.”
That is the exact scenario which took place in the examples above.
Jefferson County conveniently ignored RCW 42.23.040 when concluding there is no conflict under RCW 42.23.030, even though .040 expressly addresses an ethics violation for a County Commissioner who is a “nonsalaried officer of a nonprofit corporation.” Furthermore, the argument that there is no ethical violation because there are more than 50 nonprofit organizations that have Jefferson County Commissioner board members and no one has ever been challenged, is illogical.
A practice that has not received judicial review does not mean that the practice is lawful. Nor does the County’s citation to a 1996 Court of Appeals decision resolve the legal issues when the decision does not even address RCW 42.23.040 and its provision which specifically addresses Brotherton’s position as a “nonsalaried officer of a nonprofit corporation.”
Mr. Brotherton advocates for financial awards to OlyCap, as well as votes for such awards, contrary to RCW 42.23. Even the Municipal Research and Services Center of Washington (MRSC) states:
“It is accordingly recommended that the officer with a remote interest should not participate, or even appear to participate, in any manner in the governing body’s action on the contract.” (Knowing the Territory: Basic Legal Guidelines for Washington City, County and Special Purpose Districts, January 2022)
Moreover, if the County is so confident in its legal position with respect to Brotherton’s ethical dilemma, why hasn’t it requested an opinion from the Washington State Attorney General? The Jefferson County prosecutor is one of the few government officials who can make such a request. Private citizens cannot make a request.
In addition to the law which prohibits Brotherton’s conflict of interest, there is an appearance of fairness issue. Deciding to donate almost four million dollars to a nonprofit (primarily for homeless shelters and housing) and then serving as the chair of the nonprofit’s board of directors has the appearance of impropriety.
No one is criticizing the nonprofit. But you would think that Brotherton would follow the MRSC advice and refrain from participating in County decisions that give money to the nonprofit that he is significantly involved with. Brotherton is taking an unnecessary risk. RCW 42.23.050 states that a contract made in violation of the ethics laws “is void” and could be “grounds for forfeiture of his… office.”
Why not take the high road and just refrain from participating in those decisions? The citizens of Jefferson County deserve that.
