Ethics Advisory Opinion No. 3
February 8, 1999
Issued By: City Attorney’s Office
Under what circumstances is a City Councilmember required to abstain from a matter involving a client of his/her client?
City Councilmember Tim Bannwolf, District 9, has asked under what
circumstances must he abstain from a matter involving a client of his outside
client under the Ethics Code of the City of
Mr. Bannwolf is a member of the San Antonio City Council and an attorney whose clients include Strausburger & Price, L.L.P. Strausburger & Price represents, among others, the San Antonio Spurs. In December 1998, Councilmember Bannwolf abstained from voting on the tax increment finance ("TIF") issue involving the Spurs as any action taken would have an effect on his client that was distinguishable from its effect on members of the public.
The issue is under what circumstance is Councilmember Bannwolf required to abstain from matters involving a client of his client. Part B. Section 1 of the Code of Ethics states that "a city official . . . shall not take any official action that he . . . knows is likely to affect substantially the economic interest of, [among other things], his . . . outside client." Such action is defined as action "likely to have an effect on interest that is distinguishable from its effect on members of the public in general or a substantial segment thereof," and must be determined on a case by case basis.
Council Member Bannwolf poses four (4) scenarios:
A vote on the TIF involving the San Antonio Spurs;
A zoning case involving a developer client of Strausburger & Price;
An exemption from the City’s portion of the state sales tax for all local car dealers, of which Strausburger & Price represents a few car dealerships; and
An action imposing higher impact fees on developers, of which Strausburger & Price represents a few real estate development companies.
Under scenario one (1), any action taken by Councilmember Bannwolf would have a direct economic impact on a client of his outside client, the effect being a loss of a client. Such effect has an impact separate and apart from the impact on the public or a segment thereof. Therefore, Councilmember Bannwolf correctly abstained from voting on the tax increment finance ("TIF") issue involving the Spurs.
Scenarios three (3) and four (4), on the other hand, have substantially the same effect on all those in similarly situated businesses. Therefore, Councilmember Bannwolf may participate in any action as long as the effect remains the same for the public or a substantial segment thereof. Once an effect can be distinguished between an individual client and the public in general, Councilmember Bannwolf must recuse and disclose himself.
Finally, scenario two (2) must be evaluated on a case by case basis. For example, a real estate development project contingent on the outcome of a zoning hearing may have an economic impact on Councilmember Bannwolf’s client should Strausburger and Price represent the project, the effect being the fees paid to his client or the lack thereof. In such instance, Councilmember Bannwolf would be required to recuse himself and disclose the conflict.
Moreover, property considered for rezoning must be approved by the councilmember in whose district the property lays. Should a property fall within Councilmember Bannwolf’s district, District 9, and should his client, Strausburger and Price represent the owner of such property, the effect of any action taken by Councilmember Bannwolf may be distinguishable from the effect on the public at large, and he would be required to recuse and disclose himself. As is evident in the two (2) examples presented, issues involving the zoning of property must be evaluated on a particular set of facts in determining whether recusal and disclosure are required.
City officials are required to recuse themselves and disclose the nature of any prohibited contact in any official action that they know is likely to affect the economic interests of, among other things, their client. The economic impact on the client, however, must be distinguishable from the economic impact on the public, or a segment thereof, and must be evaluated on a case by case basis.
FRANK J. GARZA
 Currently codified in Ethics Code Section 2-43