Ethics Advisory Opinion No. 2009-01
January 6, 2009
Issued By: City Attorney’s Office
Does the City Charter or Ethics Code prohibit an executive officer of a business that contracts with the city from serving on a more-than-advisory board?
A city official has expressed interest in appointing an individual to a more-than-advisory city board. The potential appointee is an executive officer for a company that has a significant contract with the city, and may from time to time need to interact with city officials and staff regarding that contract. The company also on occasion appears before the board. The official has inquired whether the City Charter or Ethics Code would prohibit or restrict this individual’s appointment or service on this board.
III. The Ethics Code and Personnel Rules
A. Prohibited Contracts under the City Charter and Ethics Code
The “prohibited interests in contracts” provision is found in Section 141 of the City Charter and is restated and interpreted in Section 2-52 of the City Code (Ethics Code). Section 2-52(a) states:
Charter Provision. The Charter of the City of San Antonio, in Section 141, states “No officer or employee of the City shall have a financial interest, direct or indirect, in any contract with the City, or shall be financially interested, directly or indirectly, in the sale to the City of any land, materials, supplies, or service, except on behalf of the City as an officer or employee. Any willful violation of this Section shall constitute malfeasance in office, and any officer or employee guilty thereof shall thereby forfeit his office or position. Any violation of this Section, with the knowledge, expressed or implied, of the person or corporation contracting with the Council shall render the contract involved voidable by the City Manager or the Council.”
Ethics Section 2-52(e)(2) defines “city officers” to include
(A) the Mayor or any Council member;
(B) a Municipal Court Judge or Magistrate;
(C) a member of any board or commission which is more than advisory in nature. The term does not include members of the board of another governmental entity even if some or all of these members are appointed by the city.
Because the board is more than advisory in nature, the members of this board are subject to the provisions Ethics Code and Section 141 of the City Charter. In essence, Section 141 prohibits officers or the businesses that they or their immediate families own from contracting with the city. According to the inquiry, the potential appointee is an executive with contracting company but is not an owner. Because he is not an owner of the company, nor does he appear to have any direct contractual relationship with the city himself, Section 141 of the Charter would not preclude him from serving on this board. He must remain cognizant, however, of the conflicts-of-interest provisions of the city’s Ethics Code, which apply to members of all city boards and commissions.
B. Conflicts of Interest under the Ethics Code
The City’s Ethics Code has two “conflicts-of-interest” provisions. The first states that a city official, including a board member, cannot take any official action that is likely to affect the economic interests of the
2) the official’s family within the 2nd degree, and members of the official’s household;
3) businesses in which the official or his or her family members hold an ownership interest;
4) employers of the official or the official’s family members;
5) business entities or non-profit organizations for which the official serves in an executive or decision-making capacity;
6) individuals or businesses with whom the official is engaged in business or employment negotiations; and
7) any outside client of the official.
Ethics Code, Section 2-43. Should a matter that could affect these interests come before the official’s board, the Ethics Code would require that the official recuse himself.
Therefore, should a matter come before the board that could affect the financial interests of the member’s employer or any of the other interests described in Section 2-43, he must recuse himself from participating in any related action or discussion. This would include any recommendation by the board, which adopted or rejected, could affect the company’s financial interests.
The second conflict-of-interest provision states that a city official cannot use his or her position with the city to unfairly advance or impede private interests or to secure for any person any form of special consideration, treatment, exemption or advantage beyond that which is lawfully available to other persons. Ethics Code, Section 2-44. This provision can be more subjective than Section 2-43. It requires that decisions or actions of city officials be made on their merits and not on personal considerations. Where action by a board may result in some effect on the official’s non-city interests, the official must examine his or her basis for supporting or not supporting that action.
Many members of the city’s boards and commissions are appointed because they have personal knowledge or experience relevant to the work and objectives of those entities. Given this, there is the potential for overlap between the official’s work with the board and the official’s non-city interests. When board action may directly affect the official’s financial interests as described in Section 2-43, the official must recuse himself or herself from that matter. When the overlap of interests is more general in nature, officials may still be required to recuse themselves if their personal interest will impede their ability to make fair decisions based on the merits. Recusal under Section 2-43 or 2-44 must be filed with the Office of the City Clerk as soon as possible after the official becomes aware of the conflict.
Because the potential appointee is not an owner of contracting company, nor does he appear to have any direct contractual relationship with the city, neither Section 141 of the City Charter nor the Ethics Code would preclude him from serving on the more-than-advisory board. However, as a board member, he should be cognizant of the city’s conflicts of interest rules and recuse himself when required.