City of San Antonio, Texas
Ethics Advisory Opinion No. 89
June 28, 2004
Issued By: City Attorney’s Office
May a city employee seek a contract with the City of San Antonio
to sell products and services from his home-based business?
II. Factual Background
A city employee has a home-based business in which he sells goods and training services. He has inquired whether the Ethics Code would prohibit or limit him in seeking business with the city.
III. The Ethics Code Provisions
A. Conflicting Outside Employment
The Ethics Code Section 2-48 states that a city employee cannot solicit, accept or engage in concurrent outside employment which could impair or interfere with the employee’s official duties. From the employee’s description of his business and his work for the city, it does not appear that his business would impair or undermine his work for this city. Assuming that his business would not interfere with his work for the city, there would be no violation of this provision of the Ethics code.
In addition, under Personnel Rule XXIV, the employee must obtain written approval from his department before engaging in the outside employment. Assuming that the outside employment will not interfere with the employee’s work for the city and assuming the department head has approved the additional employment in writing, the employee may participate in the home-based business. The next issue, then, is whether the employee may seek contracts with the city.
B. Prohibited Interest in Contracts
Section 141 of the City Charter and Section 2-52 of the Ethics Code bar a city officer or employee from having a financial interest in a contract with the city or its agencies. In general, a city employee is anyone on the city payroll. Ethics Code Section 2-42(o). However, for purposes of Section 141 of the City Charter, the definition of employee is limited to only employees who are required to file a financial disclosure statement pursuant to Section 2-73. Ethics Code Section 2-52(e)(1). An employee who files a financial disclosure statement may not have any interest, direct or indirect, in a contract with the city. Such an employee would also have a prohibited financial interest if he owned 10% or more of a business that had a contract with the city. Ethics Code Section 2-52(a) and (b).
The employee in this inquiry is not required to file the financial disclosure statement. The contract prohibition under Section 141 of the City Charter and Section 2-52 of the Ethics Code, therefore, would not apply to him or preclude him from seeking contracts with the city. If he should seek a contract with the city, though, he must avoid taking any action in his capacity as a city employee that could affect the financial interests of himself or his business.
C. Prohibition against Improper Economic Benefit
Section 2-43 of the Ethics Code addresses conflicts presented when action by city officials or employees may affect personal financial interests. Subsection (a) states in relevant part:
General Rule. To avoid the appearance and risk of impropriety, a city official or employee shall not take any official action that he or she knows is likely to affect the economic interests of:
(1) the official or employee;
(3) his or her outside client;
(5) the outside employer of the official or employee or of his or her parent, child (unless the child is a minor), or spouse;
(6) a business entity in which the official or employee knows that any of the persons listed in Subsections (a)(1) or (a)(2) holds an economic interest;
(7) a business entity which the official or employee knows is an affiliated business or partner of a business entity in which any of the persons listed in Subsections (a)(1) or (a)(2) holds an economic interest;
(8) a or nonprofit entity for which the city official or employee serves as an officer or director or in any other policy making position; or
Subsection (b) addresses the requirement of recusal:
(b) Recusal and Disclosure. A city official or employee whose conduct would otherwise violate Subsection (a) must recuse himself or herself. From the time that the conflict is, or should have been recognized, he or she shall:
(1) immediately refrain from further participation in the matter, including discussions with any persons likely to consider the matter; and
(2) promptly file with the City Clerk the appropriate form for disclosing the nature and extent of the prohibited conduct.
(3) a supervised employee shall promptly bring the conflict to the attention of his or her supervisor, who will then, if necessary, reassign responsibility for handling the matter to another person; and
(4) a member of a board shall promptly disclose the conflict to other members of the board and shall not be present during the board’s discussion of, or voting on, the matter.
Under this subsection, the employee would be required to recuse himself from participation of any kind on any matter he knows could affect his personal financial interests or the financial interests of his business. If he were to seek a contract with the city, he could have no involvement in the decision to award the contract in his capacity as a city employee.
D. Unfair Advancement of Private Interests
Section 2-44 prohibits the use of a city employee’s position to unfairly advance or impede the private interests of another or to grant or secure for any person, including the employee himself, any form of special consideration beyond that which is lawfully available to other persons. Again, should some issue regarding the employee’s business come up for consideration before the city, he could not participate in any related action, nor use his position to influence others who work for the city.
E. Public Property and Resources
A city official or employee cannot use, request or permit the use of city facilities, personnel, equipment or supplies for private purposes except to the extent and according to the terms that those resources are lawfully available to the public. Ethics Code Section 2-49. The employee, therefore, cannot use any city resource, including the time for which he is scheduled to work for the city, for a private purpose, including attending to his home business.
F. Representation of Private Interests
Section 2-47 states:
A city official or employee shall not represent for compensation any person, group, or entity, other than himself or herself, or his or her spouse or minor children, before the city. For purposes of this subsection, the term compensation means money or any other thing of value that is received, or is to be received, in return for or in connection with such representation.
Representation or appearance “before the city” means representation before the City Council; before a board, commission, or other city entity or before a city official or employee. Section 2-42(d). “Representation” is a presentation of fact – either by words or by conduct – made to induce someone to act. Representation does not include appearance as a witness in litigation or other official proceedings.
Pursuant to these standards, the individual may not represent an incorporated entity or other separate legal entity for compensation before the city. He may represent himself before the city and his business if it is a sole proprietorship that does not have a separate legal existence from the individual. See Ethics Advisory Opinion No. 65 (2002).
The Ethics Code would not preclude the employee from having a home-based business, so long as his outside employment does not interfere or undermine his work for the city. In addition, the employee may seek contracts with the city in the future since the “prohibited interests in contracts” provisions apply only to officials or employee required to file a financial disclosure statement. Because this employee is not in this category, the prohibition would not apply. The employee, however, should remain cognizant of the other obligations and responsibilities imposed upon him by the Ethics Code.