Ethics Advisory Opinion No. 2009-04
May 11, 2009
Issued By: City Attorney’s Office
May the employee of a city contractor be appointed to serve on a more-than-advisory city board?
If appointed, would that employee’s service on the more-than-advisory board preclude the employer from seeking or holding contracts with the city?
This office has been asked whether an employee of a firm that has a contract with the city may be appointed to a city board that is more than advisory in nature. Further, it has been asked whether the employee’s appointment would create a prohibited interest that would preclude the employer from continuing its business relationship with the city. The potential appointee has no ownership interest in the firm for which she works.
III. The City Charter and the City Ethics Code
A. Prohibited Contracts with the City
Section 141 of the City Charter 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.
This prohibition is reiterated and interpreted in Section 2-52 of the city’s Ethics Code.
Section 2-52(e)(2)(A) of the Ethics Code defines a city “officer” to include “a member of any board or commission which is more than advisory in nature.” Since the board to which the applicant would be appointed is more than advisory in nature, the applicant would become a city “officer” for purposes of Section 141 of the City Charter.
As a city “officer,” this person could not enter into contracts or business relationships with the city. Under Section 2-52(b), an officer is presumed to have a prohibited interest in a city contract if any of the following individuals is a party to the contract:
(1) the officer;
(2) the officer’s spouse, sibling, parent, child or other family member within the first degree of consanguinity or affinity;
(3) a business entity in which the officer, or the officer’s parent, child or spouse directly or indirectly owns 10% or more of the voting stock or fair market value of the entity; or
(4) a business entity of which any of these individuals is a subcontractor, a partner, or a parent or subsidiary business entity.
In this inquiry, the potential appointee is not a party to any contract with the city, nor are any of her immediate family members or the businesses they own. She is a mere employee of a city contractor, and so she has no presumed prohibited interest under the Ethics Code.
Accordingly, the contract between the potential appointee’s employer and the city does not create a prohibited interest for her under the charter or the ethics code. The City Council, may, if it chooses, appoint her to the more-than-advisory board. Further, because the appointment of this individual to the more-than-advisory board would not create a prohibited interest, the employer firm would not be precluded from continuing to hold its contract with the city, or to seek contracts with the city.
The appointee, however, will be subject to the conflicts-of-interests provisions of the Ethics Code.
B. Conflicts of Interest
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 might affect the official’s financial interests or these other interests come before the official’s board, the Ethics Code requires that the official recuse himself or herself.
Because of her employment with the city contractor, this appointee would have a conflict of interest for any matter that could affect the company’s financial interest that might come before the board on which she serves. In the event of such a conflict, this individual would be required to recuse herself from any participation or vote on that matter, and must file a recusal form with the Office of the City Clerk.
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.
An employee of a city contractor may be appointed to serve on a more-than-advisory city board without violating the prohibited contracts provision set forth in Section 141 of the City Charter and Section 2-52 of the Ethics Code. Further, her employer would not be prohibited from continuing to hold its contract and to seek future contracts with the city under these provisions.
The appointee, however, is subject to the other provisions of the Ethics Code, particularly the conflicts-of-interest rule under Section 2-43 and 2-44. In the event of a conflict, the appointee must file a recusal form with the Office of the City Clerk and not participate in the consideration, discussion or vote regarding the matter in conflict.