Originally Posted by
gorja
Does this sound like the mayor and Special events coordinator?
Conflicts of Interest: Municipal Officers and Employees
The Fundamentals of Article 18 of the General Municipal Law
Conflict of Interest -
Prohibition on Interests in Contracts
Under certain circumstances, article 18 prohibits municipal officers and employees from having
interests in contracts with the municipality for which they serve. More specifically, unless a
statutory exception applies, a municipal officer or employee is prohibited from having an interest
in a contract with the municipality for which he or she serves when the person has the power or
duty – either individually or as a member of a board – to negotiate, prepare, authorize, or
approve the contract; to authorize or approve payment under the contract; to audit bills or claims
under the contract; or to appoint an officer or employee with any of those powers or duties
What is an “Interest” in a Contract?
The second factor that must be present in order for a municipal officer or employee to have a
prohibited interest in a contract is that the individual must have an “interest” in the contract.
Article 18 defines the term “interest” as “a direct or indirect pecuniary or material benefit
accruing to a municipal officer or employee as the result of a contract with the municipality
which such officer or employee serves.”
Whether a municipal officer or employee receives a benefit “as a result of” a municipal contract
is a factual determination. For example, ordinarily, a municipal officer or employee who
receives payment under a contract with his or her municipality would have an interest in the
contract because the payment is a direct financial benefit resulting from the contract.
A municipal officer or employee, however, does not have to be a party to a contract in order to
have an interest in the contract. To illustrate, when a municipality contracts with a person who
resides with a municipal officer or employee, and the proceeds from the contract are used to
defray common household expenses, the municipal officer or employee would have an interest in
the contract because he or she receives an indirect financial benefit as a result of the municipal
contract.
Under article 18, a municipal officer or employee is also “deemed” to have an interest in the
contracts of certain individuals and business entities with which he or she has a relationship. In
these instances, the law presumes that a municipal officer or employee receives a benefit as a
result of the contract. In other words, once it is established that there is a municipal contract with
one of these individuals or business entities, the municipal officer or employee is considered to
have an interest in the contract, without any separate or additional factual showing that the
municipal officer or employee receives a benefit as a result of the contract.
What Powers and Duties Can Give Rise to a Prohibited Interest?
It is also important to understand that if a municipal officer or employee has one or more of the
powers or duties that can give rise to a prohibited interest in a contract, it is the existence of these
powers and duties, not whether they are exercised, that causes an interest in a contract to be
prohibited. As a result, recusal or abstention does not cure a prohibited interest in a contract.