Conflict of Interest


Let’s turn our attention for today to conflicts of interest. You will find below the state law which applies to conflicts of interest by a public officer followed by a list of the exceptions to this law which may apply to our area, preceded by an excerpt from a League of Minnesota Cities memo. Take a look at this information, it’s not very long, and think about whether or not you have seen any activities in our area which might be in violation of this statute. If you know of anything questionable, let us know in a comment or a message so we can look into it and provide the facts to all of our readers.

Excerpt from League of Minnesota Cities Information Memo:Official Conflict of Interest, dated 10/4/2012, page 6, second paragraph:

The attorney general has advised that the conflict of interest law applies to any councilmember ‘who is authorized to take part in any manner’ in the making of the contract. Simply abstaining from voting on the contract is not sufficient. The attorney general reasoned that if the Legislature had only wanted to prohibit interested officers from voting on the contract, it would not have used the word ‘authorized.'”

magglass1471.87 PUBLIC OFFICERS, INTEREST IN CONTRACT; PENALTY.

Except as authorized in section 471.88, a public officer who is authorized to take part in any manner in making any sale, lease, or contract in official capacity shall not voluntarily have a personal financial interest in that sale, lease, or contract or personally benefit financially therefrom. Every public officer who violates this provision is guilty of a gross misdemeanor.
– See more at: http://statutes.laws.com/minnesota/471-472B/471/471_87#sthash.8HNtfwIz.dpuf

471.88 MS 1957 [Repealed, 1961 c 651 s 2]

471.88 EXCEPTIONS.

Subdivision 1.Coverage.

The governing body of any port authority, seaway port authority, economic development authority, watershed district, soil and water conservation district, town, school district, hospital district, county, or city, by unanimous vote, may contract for goods or services with an interested officer of the governmental unit in any of the following cases.

Subd. 2.Bank or savings association.

In the designation of a bank or savings association in which the officer is interested as an authorized depository for public funds and as a source of borrowing, no restriction shall apply to the deposit or borrowing of any funds or the designation of a depository by such authority or governmental unit in any bank or savings association in which a member of an authority or officer of a governmental unit shall have an interest if such deposited funds are protected in accordance with chapter 118A; provided, however, that any member or officer having such an interest shall disclose that the member is a director or employee of the bank or savings association, which disclosure shall be entered upon the minutes of the authority or governmental unit, such disclosure shall be made when such bank or savings association is first designated as a depository or as a source of borrowing, or when such member or officer is elected whichever is later, and such disclosure shall serve as notice of such interest and need not be made with each successive transaction.

Subd. 5.Contract with no bids required.

A contract for which competitive bids are not required by law.

Subd. 11.Bank loans or trust services.

When a commissioner of any public housing, port authority, or economic development authority is employed by a bank engaged in making loans or performing trust services involving real or personal property affected by any plan or such housing or port authority, no restriction shall apply to any such loans made or trust services performed by said bank if the commissioner shall disclose the nature of such loans or trust services of which the commissioner has personal knowledge, which disclosure shall be entered upon the minutes of such authority.

Subd. 13.Rent.

A public officer may rent space in a public facility at a rate commensurate with that paid by other members of the public.

Subd. 14.Local development organization.

(a) For the purposes of this subdivision:

(1) “local development organization” means a housing and redevelopment authority, economic development authority, community action program, port authority, or private consultant; and

(2) “government unit” has the meaning given in section 471.59, subdivision 1.

(b) When a local development organization administers a loan or grant program for individual property owners within the geographical boundaries of a government unit by an agreement entered into by the government unit and the local development organization, an officer of the government unit may apply for a loan or grant from the local development organization. If an officer applies for a loan or grant, the officer must disclose as part of the official minutes of a public meeting of the governmental unit that the officer has applied for a loan or grant.

Subd. 15.Franchise agreement.

When a home rule charter or statutory city and a utility enter into a franchise agreement or a contract for the provision of utility services to the city, a city council member who is an employee of the utility is not precluded from continuing to serve as a city council member during the term of the franchise agreement or contract if the council member abstains from voting on any official action relating to the franchise agreement or contract and discloses the member’s reason for the abstention in the official minutes of the council meeting.

Subd. 17.Federal or state grant programs.

The governing body may apply for and accept a state or federal grant for housing, community, or economic development in which a public officer may benefit, if the public officer abstains from voting on measures related to the grant.

2 thoughts on “Conflict of Interest

  1. Rob Ward

    It would appear that with the large sums of city reserves held at the Grand Rapids State bank, “shown on this page,” it has all the appearance of conflict as Councilmember Zabinski is a bank director and Mayor Adam’s wife respectiively is a bank employee. I would think just to avoid any appearance of impropriaty they would avoid this by miles.

    Like

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