County chief administrative officer apologizes for ‘careless errors in judgment’ in ethics violations

County chief administrative officer apologizes for ‘careless errors in judgment’ in ethics violations

County Council ‘disappointed and troubled’; Kleine to pay $5,000 as part of punishment

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Kleine redone

Chief Administrative Officer Andrew Kleine

File photo

Montgomery County Chief Administrative Officer Andrew Kleine said he “made some careless errors in judgment” in maintaining business relationships with two outside companies and promoting his book “City on the Line,” both before and during his time as a government employee. 

“As a public servant, nothing is more important to me than my integrity,” he wrote in a statement to Bethesda Beat on Monday. “I am embarrassed that I made these mistakes and apologize to the people of Montgomery County and my colleagues in government. I have never taken any action with the intent to use my position for financial gain.”

The county’s Ethics Commission, in a report released last week, found that Kleine violated county ethics law by having conflicts of interest due to his outside business activities and promotion of the book.

The violations were also related to thousands of dollars in county money used to buy copies of the book for county employees and to pay for Kleine’s travel expenses to conferences in which he promoted the book.

In a “proposal to cure,” dated July 1, Kleine agreed to pay $5,000 to the county as part of his punishment. The document is signed by Kleine and Rahul Goel, the chair of the Ethics Commission.

The Ethics Commission report stated that Kleine maintained relationships with Balancing Act, which provides budget simulation software, and Clear Impact, which provides performance management software and training.

Kleine worked with both contractors during his time as Baltimore City’s budget director, the report states.

In 2018, after Kleine stepped down from his position in Baltimore, the report states, he created the company Andrew Kleine Consulting LLC, which entered into formal contracts with Balancing Act and an informal relationship with Clear Impact.

Kleine went on to say in his apology that he has agreed to pay the county $5,000, as well as not to promote his book while he works for the county. Kleine also said that he has given up any previous right he had to do outside consulting work that the Ethics Commission had approved while he is a county employee.

County Council President Sidney Katz said in a statement Tuesday morning that the council was “disappointed and troubled” by Kleine’s actions.

“As one of the highest-ranking employees in Montgomery County, Mr. Kleine has a heightened responsibility to instill trust among the public, employees and government leaders,” Katz wrote. “While we acknowledge that Mr. Kleine has taken responsibility for his actions, we also encourage him to do everything in his power to work on rebuilding the community’s trust.”

Katz added that the council plans to have an oversight meeting this month related to Kleine’s actions.

County Executive Marc Elrich, in a statement to Bethesda Beat on Monday, wrote that Kleine is a “committed public servant” and that the CAO’s agreement with the Ethics Commission “resolves the matter.”

“Andrew has acknowledged that his actions were an error in judgment and has accepted responsibility for his actions,” he wrote. “I appreciate that Andrew has cooperated with the Ethics Commission’s investigation from the very beginning to resolve this situation.”

Inspector general’s office investigates

A Dec. 12, 2019, memo from Inspector General Megan Limarzi to the Ethics Commission states that the commission received several complaints in the summer of 2019 about “apparent conflicts of interest” Kleine had. The commission requested that the office of the inspector general investigate on Sept. 4, and the commission wrote that they agreed two days later.

The inspector general’s office completed its investigation on Dec. 12 and gave a copy of its report to the Ethics Commission.

On July 1, Kleine signed a “proposal to cure,” which mandates that he pay $5,000 to the county within 30 days of acceptance of the proposal by the Ethics Commission. Kleine also must direct the county’s chief procurement officer to make sure the county doesn’t buy more copies of his book.

Kleine’s relationship with Balancing Act continued into 2019

The Ethics Commission’s report states that Kleine entered into two contracts with Balancing Act in June 2018 for consulting services, and the company also sponsored an event in September of that year promoting his book “City on the Line.”

The Balancing Act contracts, which ended in January 2019, would have given Kleine’s consulting company a share of revenue from book sales, the report states. Neither Kleine nor his company ever got any income from the contract.

After Elrich won the county executive race in the November 2018 election, he appointed Kleine chief administrative officer.

The report states that Kleine “believes it was to a substantial degree his vision for a strategic approach to achieving outcomes that resulted in his becoming involved with Marc Elrich’s campaign to become Montgomery County Executive” and later be tapped as CAO.

In December 2018, the county entered into a one-year contract with Balancing Act for $9,880 for the company’s software. Kleine, the report states, helped establish a “relationship” between the county and Balancing Act, although the Office of Management and Budget director was ultimately responsible for purchasing the software.

Balancing Act also helped promote Kleine’s book at a meeting of the Government Financial Officers’ Association in May 2019 in Los Angeles, the report states. Balancing Act purchased 20 copies of the book, which Kleine signed and distributed. Kleine made $42 in royalties from the event, the report states.

Bethesda Beat reported in September 2019 that the county’s Ethics Commission was looking into Kleine’s ties to Balancing Act. Bethesda Beat tried six times since early August to arrange an interview with Kleine. Two county spokesmen said in response to several of those messages that they would try to line up an interview with him. An interview was never arranged.

Kleine later spoke with Bethesda Beat for a different story, but declined to comment when asked about the Ethics Commission’s probe.

Kleine did not respond to a phone message left on Monday.

The Ethics Commission wrote in its report that Kleine “understands” that the county law prohibits him from “participating in any matter with a business that he has a contract with” if there’s a chance it could cause a conflict between “private interests and public duties.” Kleine also acknowledged, according to the report, that an employee with an outside business relationship promoting the business to the county could constitute a “misuse of prestige of office.”

Clear Impact promoted itself on Kleine’s book and helped with transition

Clear Impact’s relationship with Kleine started July 1, 2018, when the company paid Kleine $5,000 for “book promotion expenses,” the IG’s report states. Clear Impact sponsored some of Kleine’s book tour events, and the company’s logo is printed on the back cover of “City on the Line.”

Additionally, the commission’s report states that Former County Executive Ike Leggett’s administration “engaged” Clear Impact in a noncompetitive contract for $10,000 after the election to help with the transition to the Elrich administration. Then, in May 2019, the county entered into a contract with Clear Impact for up to $99,000.

Kleine had no formal contractual relationship with Clear Impact, but states that he realizes the company played a key role in supporting his book, the report states.

County bought 89 copies of the book

According to documents Bethesda Beat obtained through a Maryland Public Information Act request, the county bought 89 copies of “City on the Line” between November 2018 and August 2019.

The county first ordered four copies of the book on Nov. 7 — the day after the election — for the Department of Technology services, according to documents.

The departments with the largest book orders were:

  • The Department of Permitting Services, which ordered 31 copies
  • The Department of Technology Services, which ordered 19 copies
  • The Department of Transportation, which ordered 10 copies

The IG’s office also reported the figure of 89 copies of “City on the Line” that were purchased for about $3,000, and gives the time period as being Oct. 1, 2018, through Sept. 30, 2019.

The report states that Kleine was not aware county money was being used to buy the books at the time. But Kleine said, according to the report, that because of his position, as CAO “many employees had an interest in reading the book to gain insight into the planning and budgeting methods he would bring to Montgomery County government.”

Kleine, the report notes, was invited to multiple conferences in his capacity as CAO to speak about his book. It says he acknowledged that he “failed to draw clear lines” between his personal and professional lives.

Kleine did not seek advice from the Ethics Commission with respect to his relationship with either Balancing Act or Clear Impact prior to August 2019, and no one in county government contacted the commission with concerns about the CAO’s business activities until July of that year, the report states.

Another time when Kleine used county money to help promote the book was the May 2019 Los Angeles conference, when $2,298 was used to cover the attendance fee, hotel charges and airfare. Additionally, the county spent $611 for Kleine to attend the January 2019 Maryland Association of Counties conference in Cambridge, Md., where he also promoted the book.

The IG’s office also found that Kleine “commonly” discussed his book with county employees and encouraged them to read it. There were 10 weekdays between January and July 2019 when Kleine tweeted about discussing or signing “City on the Line.”

Kleine agrees to $5,000 fine and other penalties

Kleine has agreed to pay a $5,000 fine to the county, and to take other actions, which include:

  • A prohibition on promoting “City on the Line” to other county employees or on social media
  • The rescinding of the Ethics Commission’s previous approval for Kleine to do outside consulting while he is a county employee
  • Not having any contact with Balancing Act or Clear Impact, except to have Clear Impact remove his name and book title from its website

If Kleine doesn’t pay the fine or stick to the terms of the agreement, the Ethics Commission may nullify it, the report states.

Kleine is also subject to other possible civil or criminal penalties by “other government authorities” that are not a part of the agreement, the report states.

On Monday, Council Member Andrew Friedson said the council was disappointed and disturbed about the situation.

“We have an Ethics Committee for a reason,” he said. “It’s crucial that we do everything we can to address and protect [public trust]. … We need to make sure that it doesn’t happen again.”

Council Member Evan Glass told Bethesda Beat that he accepted the commission’s decision and Kleine’s “remorse” for the situation.

“We have to make sure that every county official and employee are doing their jobs in a legal and ethical manner,” he said.

Elrich should take responsibility for the situation as well, Council Member Hans Riemer said.

“I’m glad [Kleine] has agreed to abide the restitution. I think it’s unfortunate. I think he understands that the chief administrative officer needs to be the most meticulous and sets the standards for everybody,” he said. “I think we’re all disappointed.”

Dan Schere can be reached at daniel.schere@bethesdamagazine.com

Staff writer Briana Adhikusuma contributed to this story

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