The Common Council already unanimously approved a $2.5 million Tax Incremental Financing loan for Exact Sciences to build a laboratory and warehouse in Ald. Mark Clear’s west-side district. Nevertheless, Clear requested the council take the vote again at its Oct. 17 meeting. This time, he recused himself from voting.
“I wanted to make sure there was no question [about a conflict of interest],” Clear says. “I wanted to ensure there was no grounds for an ethics complaint that would simply cost the city money.”
As Isthmus reported on Oct. 13, Clear was threatened with an ethics complaint from former Ald. Brenda Konkel after forgetting to disclose his stock ownership in Exact Sciences when the city first approved the loan on Oct. 3. Konkel contends that the city’s ethics code requires council members to disclose any financial interest in a company with business before the city.
Clear said he “probably” should have disclosed his financial interest in Exact Sciences. But the alder initially told Isthmus that he "didn’t think any action was needed” since his stock ownership — valued at about $2,000 — was minuscule. Clear owns 48 of Exact Sciences 119 million shares. The company makes a colorectal cancer screening test called Cologuard.
“It’s a de minimis amount,” Clear told Isthmus. “I don’t think it makes any difference in the world.”
Despite Clear’s recusal, Konkel still intends to file an ethics complaint.
“I'm exploring options to get the ethics committee to review the ordinance and its ambiguities,” Konkel says. “It appears the only mechanism to get people’s attention on this is to file a complaint.”
When asked about Clear’s concern of costing taxpayers with an ethics complaint, Konkel says “I don’t think spending time on ethics is ever a waste of money.”
“Plus, since the ethics board only meets when a complaint is filed, there’s no other way to have the board address these issues,” Konkel says. “I have no other option but to file a complaint. If I don’t, it could be months, years before [the ethics board] meets again.”
Once a complaint is filed, the ethics board will decide whether to hold a hearing on it. If it does, it could recommend actions to the council, including “sanctioning, censuring, reprimanding or expelling the elected official.”
Ald. Denise DeMarb also recused herself on the revote. She did not disclose or recuse herself when the council voted on the matter on Oct. 3. In an email, DeMarb says "I recused myself when I learned my husband and I had invested $500 in Exact Science stock. The city attorney told me I could have disclosed the fact and vote or simply recused myself. Since Alder Clear decided to recuse himself I simply felt doing the same was cleaner."
Konkel worries that the failure to recuse on matters like these is a bad sign.
“I think this underscores how lax the council has gotten in keeping ethics at the forefront of their minds, and that is bad for the public,” Konkel says. “We need to know if they are voting in the interest of the city or their pocketbook.”
Madison’s ethics code states that officials must disqualify themselves from voting if they are “associated” with a company that has business before the city. The law defines associated as an official with a company or a stockholder with “2 percent of outstanding equity.” In a 2015 presentation on “Ethics Rules for Public Officials,” City Attorney Michael May wrote if there is a conflict of interest, an elected official “must disclose [the] ‘nature and extent’ unless [they] recuse” and encourages officials to “err on the side of disclosure.”
Madison Mayor Paul Soglin owned 1,000 shares in Exact Science a few years ago. But he sold the stock when the company expressed interest in being part of the Judge Doyle Square development.
Isthmus initially noted that Soglin shares might have been worth as much as $30,000, because it peaked at $30 a share in 2015. The mayor has since looked up the date he sold his Exact Sciences stock and it was earlier than he originally said. Soglin tells Isthmus he sold his shares on July 20, 2014 for a net profit of $1,281.
“I heard rumors that they might get involved [in the Judge Doyle Square development] a lot earlier than it became public,” Soglin says. “Soon as I heard, I arranged for the sale that very day, so I wouldn’t be compromised in terms of any conflict of interest.”
A week after the project won approval, Exact Sciences’ stock dropped more than 50 percent when the U.S. Preventive Services Task Force issued a draft recommendation statement characterizing the Cologuard test as an “alternative screening test,” rather than a “recommended” one. The company then pulled out of Judge Doyle Square.
Had the mayor kept the stock, it would be worth $46,000 today. Soglin says of the lost windfall “that’s life.”
This article was updated to include a comment from Ald. Denise DeMarb.
