City of San Antonio, Texas

Ethics Advisory Opinion No. 66

September 9, 2002

Issued By: City Attorney’s Office

 

Issue: May a director of the Small Business Economic Development

Advocacy Advisory Committee (SBEDA) obtain a loan from

San Antonio Local Development Company (SALDC)?

I. Factual Background

            The San Antonio Local Development Company, Inc. (SALDC) received an application for financing from a member of the Small Business Economic Development Advocacy Advisory Committee (SBEDA). SALDC asks whether the City of San Antonio Code of Ethics would preclude it from making a loan to a City board member.

            SALDC was created in 1978 as a non-profit corporation to carry out the Small Business Association’s (SBA) loan programs. Projects financed through SALDC must create or preserve jobs and promote the economic development of the City. An individual or small company, defined by the SBA as having a net worth under $6 million or net profits after taxes under $2 million, may apply to SALDC for various loan programs depending on the needs and objectives of the business.

            SBEDA is a committee appointed by City Council to review programs concerning minority and women’s participation in business in San Antonio. SBEDA acts as an advisory group making policy recommendations to the Council and the City Manager. A member of this board is seeking financing from SALDC.

II. The Ethics Code

            Part A, Section 2[1] of the City of San Antonio Code of Ethics defines a City official to include any member of a board appointed by City Council even if the committee is only advisory in nature. As a City official, the board member is required to follow the standards of conduct set out in the Code. The provisions relevant to this inquiry are discussed below:

            A. Improper Economic Benefit

A City official may not take any official action that is likely to have an effect on his or her economic interest or the economic interest of someone in the official’s immediate family, household or business entity with whom the individual is closely connected. Ethics Code Part B, Section 1[2].

            Part A, Section 2(o)[3] defines "official action" as

1. any affirmative act (including the making of a recommendation) within the scope of, or in violation of, an official or employee’s duties, and

2. any failure to act, if the official or employee is under a duty to act and knows that inaction is likely to affect substantially an economic interest of the official or employee or other closely related person or entity.

            Nothing indicates that the issue of the member’s loan from SALDC has come before or will come before SBEDA. However, given the board’s purpose of advising City Council on minority and women’s participation in business in San Antonio, it is theoretically possible that the member’s loan might become a subject of discussion. In this event, the member must disclose the potential conflict to the City Clerk in writing and recuse herself from any participation in the matter. Ethics Code Part B, Section 1[4]

            B. Unfair Advancement of Private Interests

Part B, Section 2[5] prohibits the use of City official’s position to unfairly advance or impede the private interests of another or to grant or secure for any person, including the official herself, any form of special consideration or advantage beyond that which is lawfully available to other persons.

           

            The official, just as any other member of the general public, may make any application and receive financing if qualified under SALDC’s criteria. She may not, though, use her official position to obtain any special consideration from SALDC. She should also take care to ensure that there is no appearance or suggestion of unusual or special treatment of her application.

            Again, should the issue of her application come before SBEDA, she must disclose the potential conflict in writing to the City Clerk and recuse herself from any discussion related to the matter.

 

 

C. Confidential Information

As a City official serving on a board, the member may have access to confidential information not available to the general public. Under Part B, Section 4[6], an official cannot obtain or disclose confidential information for any purpose other than the performance of her official duties. Although the facts available do not indicate that the use of confidential information is at issue, the member should be cognizant of the prohibition as part of the required standard of conduct.

            D. Representation of Private Interests

Part B, Section 5[7] precludes a board member from representing any person or entity before the board on which she sits or before City Council, if the issue concerns her official duties. It also prohibits any representation before city staff providing support to the board, unless the board is an advisory board. Since SBEDA is advisory in nature, the latter provision would not apply.

            This section expressly states that the official cannot use her position to advance any private interest, nor can she state or imply that she is able to "influence city action on any basis other than the merits." As with the prohibition against the unfair advancement of private interests, the member should take care to avoid even the appearance of special treatment.

Again, although the facts available do not indicate that the restrictions of this section would apply, the member should bear them in mind as part of the required standard of conduct.

            E. Prohibited Financial Interest in Contract

Part B, Section 10[8] bars a City officer or employee from having a financial interest in a contract with the City or its agencies. For purposes of Section 10[9], "employee" is defined as any City employee who is required to file a financial disclosure statement pursuant to Part G, Section 1(currently codified in Section 2-73). An "officer" is the mayor, a member of the Council, a municipal judge or magistrate or a member of any board or commission that is more than advisory in nature.

            Because SBEDA acts only as an advisory body, the members of that board are not City officers for purposes of this section and therefore are not precluded from having a financial interest in a contract with the City.

III. Summary

            The SBEDA board member may apply to SALDC for a loan in accordance with its normal and customary procedures. Because the board member is a City official, she should remain mindful of the Code’s restrictions and standards of conduct, including, but not limited to, using her position to facilitate the application for the loan.

 

 

Andrew Martin

City Attorney



[1]   Currently codified in Section 2-42

[2]   Currently codified in Section 2-43

[3]   Currently codified in Section 2-42(v)

[4]   Currently codified in Section 2-43

[5]   Currently codified in Section 2-44

[6]   Currently codified in Section 2-46

[7]   Currently codified in Section 2-47

[8]   Currently Section 2-52

[9]   Currently Section 2-52