City of San Antonio, Texas
Ethics Advisory Opinion No. 2011-01
January 3, 2011
Issued By: City Attorney’s Office
May a city employee evaluate a proposal submitted by a firm that employs the child of the employee?
A city department released a solicitation for a contract which resulted in the submission of 14 bids. The department would like to assign two employees to review the bids and provide recommendations for award of the contract. One of the employees has a child who is a summer employee of one of the bidders. The department has asked if the employee would be prohibited from reviewing the one bid package, or all bid packages because of their child’s employment with one of the bidders.
III. The Ethics Code:
A. Conflicts of Interests Provisions
The Ethics Code has two “conflicts-of-interest” provisions applicable to all city officials and employees. First, a city official 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. The award of the contract is a matter that could affect the financial interests of the employee’s child. Therefore, the Ethics Code requires that she recuse herself from participation in the matter.
B. Prohibition against the Unfair Advancement of Private 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 requires officials and employees to render decisions based on the merits and not on personal considerations or relationships.
In its “Statement of Purpose,” the Ethics Code offers this guidance:
Public service is a public trust…To ensure and enhance public confidence in city government, each city official must not only adhere to the principles of ethical conduct set forth in this cose and technical compliance therewith, but they must scrupulously avoid the appearance of impropriety at all times.
Section 2-44 of the Ethics Code prohibits a city official or employee from using their official position to unfairly advance or impede private interests. There is nothing to indicate that the employee would provide the bidder which employs their child with favorable treatment or consideration. However, the code urges employees to avoid even “the appearance of impropriety.”
In this instance, the bidder is actively involved in matters pending before the city including the employee’s department and the employee herself. The employee may find herself in a position in which she will be required to exercise her discretion in a way that affects the interests of the entity. It is possible that the evaluation of the bids the employee reviews are lower than the evaluations of the firm her child works for - even with due scrubbing and assessment. In that case, one of the firms that did not prevail could allege that the employee influenced the evaluations and the outcome of the award of the contract in favor of her child’s employer.
C. Prohibited Interests in Contracts Provisions
Section 141 of the City Charter prohibits city officers and higher-level city staff members from having an interest in a contract with the city. 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.”
Section 2-52 of the Ethics Code restates and interprets this prohibition as well and defines a financial interest in a contract as follows:
2-52 (b) Financial Interest. An officer or employee is presumed to have a prohibited “financial interest” in a contract with the city, or in the sale to the city of land, materials, supplies, or service, if any of the following individuals or entities is a party to the contract or sale:
(1) the officer or employee;
(2) his or her 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 employee, or his or her parent, child or spouse, directly or indirectly owns:
(A) ten (10) percent or more of the voting stock or shares of the business entity, or
(B) ten (10) percent or more of the fair market value of the business entity; or
(4) a business entity of which any individual or entity listed in Subsection (1), (2) or (3) is:
(A) a subcontractor on a city contract;
(B) a partner; or
(C) a parent or subsidiary business entity.
For purposes of applying Section 141 of the Charter under this Section, the City Code limits the applicability of Section 2-52 to only those individuals required to file a Financial Disclosure Report pursuant to Section 2-73(a) of the City Ethics Code.
Due to the employment relationship the employee’s child has with one of the bidding companies, the city employee must recuse herself from participation in the evaluation of all of the proposals, including discussions of the proposals, and file a disclosure form with the Office of the City Clerk stating the reasons for the recusal. The employee must also inform her supervisor, who shall reassign the duties to another person without those conflicts.