THE HUNTER REPORT
CONFLICT OF INTEREST, ETHICS & NEPOTISM
BY: PAT HUNTER
JAN 21, 2011
President Obama just named General Electric (GE) CEO Jeffrey Immelt as head of a key advisory economic advisory council. Already there is criticism about his role and influence. Will Immelt's new advisory position constitute a potential conflict of interest? According to the New York Times, ..."The appointment of Mr. Immelt, who will retain his posts at G.E., is not without complications for Mr. Obama. G.E., one of the nation’s largest companies, routinely has a wide variety of regulatory, trade, contracting and other issues before the federal government, on matters as varied as television mergers, military hardware and environmental cleanup." As Immelt looks for job strategies, its interesting to note that GE outsourced thousands of Americans jobs.
Local officials routinely vote on many issues and matters including setting the property tax rate, filling vacancies, policies and procedures, operating budgets, school budgets, vehicles, wages and salaries, insurance and benefits, etc. but what happens when a person may have a potential conflict of interest regarding a vote on a certain matter or issue; what then? Is that person obligated to disclose or avoid a conflict of interest?
On December 6, 2010, Commission voted to increase the Sheriff's Budget by $250,000 and buy 10 more new cars for the Loudon County Sheriff's Department. But the vote of two commissioners has raised questions and concerns. Commissioners Steve Harrelson and Earlena Maples voted to buy 10 new cars for the Sheriff's Office; should both commissioners have declared a conflict of interest (real or perceived) prior to the vote? Interestingly, this appears to be the second only motion made by new Commissioner Steve Harrelson since elected as 6th District Commissioner. His first motion was for a board appointment and his second motion was for the Sheriff's Dept's cars. Commissioner Harrelson is employed by Lenoir City as the Recreation Director and Commissioner Earlena Maples is employed by Lenoir City's Utility Board. Tony Aikens is Lenoir City's Mayor and Chairman of LCUB. He is also employed as the Chief Deputy for the Loudon County Sheriff's Office.
At the Nov. 8, 2010 Ethics Open Government meeting, Sheriff Guider asked, if I was to have discussions with a county commissioner, is that improper? As long as its just one; if its two and you're talking about county business it would be a problem replied the county attorney. How hard is it to separate the two roles just ask two professionals who seemed to have the same problem. At the Nov 8th Open Government meeting, Tony Aikens also posed a question but when the County Attorney replied and called him "Chief" Aikens replied that he was wearing his Mayor's hat. And at the Nov. 22, 2010 Lenoir City Council meeting after a brief Executive Session about a civil service matter, Lenoir City Attorney Scott, not once but twice referred to Tony Aikens as "Chief" but Aikens interjected and said "Mayor." Excuse me I apologize, I am not the only one, it's contagious, commented City Attorney Scott. Commission soundly approved an increase to the Sheriff's Budget for the purchase of the cars by a 9 yes and 1 no margin.
TENNESSEE STATE LAW -
CONFLICT OF INTEREST
State law states "Any member of a local governing body of a county or a municipality who is also an employee of such county or municipality may vote on matters in which such member has a conflict of interest if the member informs the governing body immediately prior to the vote as follows. Because I am an employee of (name of governmental unit), I have a conflict of interest in the proposal about to be voted. However, I declare that my argument and my vote answer only to my conscience and to my obligation to my constituents and the citizens this body represents..." See below T.C.A. 5-5-102.
Although State law states "...The vote of any person having a conflict of interest who does not inform the governing body of such conflict as provided in subdivision (c)(4)(A) shall be void if challenged in a timely manner. As used in this section, “timely manner” means during the same meeting at which the vote was cast and prior to the transaction of any further business by the body" seldom do local government officials challenge a vote or declare their conflict of interest before a vote.
Do you think stronger laws are needed when conflict of interest issues arise?
Conflict of Interest
Examples, Issues & Concerns:
The Loudon County Board of Education adopted a nepotism policy and conflict of interest policy but enforcement was yet another issue. It was not unusual for former School Board member Larry Proaps to vote on budget and grant issues and for him not to read his conflict of interest while his wife was employed by the Loudon County Board of Education. Some school board members would complain after the meetings but nothing was ever done.
It became a hot topic of discussion at a Lenoir City Council meeting involving the issue of Recorder-Treasurer and his councilman dad. Bobby Johnson Sr. serves on Lenoir City Council and Lenoir City School Board, and his son Bobby Johnson JR served as Treasurer Recorder, and currently serves as District 2 Loudon County Board of Education. On one such occasion a motion and vote involved the father and son and then Councilman Tony Aikens. Councilman Aikens objected to the motion and he gave the reasons for his objection regarding the conflict of interest. The exchange became quite heated over the Judge Vann issue and Johnson and Johnson. At that specific meeting, Johnson Sr. did not vote on the issue regarding his son JR.
Another purported conflict of interest, perceived or real, involved a husband and wife. In 2008, Nancy Marcus served as District 1 Loudon County Commissioner and her spouse Bill Marcus served as District 1 Loudon County Board of Education member. At the Nov. 3, 2008 Commission meeting, Commissioner Nancy Marcus made a motion and seconded by Comm. Meers, which involved a BOE Budget Amendment matter. Some questioned why Commissioner Marcus did not declare a conflict of interest given that her school board member spouse had voted in the affirmative for public funds from the BOE Maintenance/Repairs budget be moved to another line item for a meeting at a resort hotel ($10,000 budget amendment for board travel). Approximately six of ten school board members including Bill Marcus attended the TSBA meeting held at the Opryland Resort. (NOTE: Excerpts from the Oct. 16, 2008 meeting minutes include a "Motion was made to attend the TSBA Conference in Nashville by Scott Newman 2nd by Bill Marcus. After discussion by the Board Tate requested a roll call vote Ayes – Scott Newman, Gary Ubben, Leroy Tate, Larry Proaps, Bill Marcus. No – Lisa Russell, Steve Harrelson, Van Shaver. A motion to pass Budget Amendment to move $20,000.00 from Maintenance to Travel Budget was made by Gary Ubben, 2nd by Bill Marcus but the motion failed by a tie vote. Ayes – Scott Newman, Gary Ubben, Leroy Tate, Larry Proaps, Bill Marcus. No – Lisa Russell, Bobby Johnson, Craig Simon, Steve Harrelson, Van Shaver. But a motion to move $10,000.00 instead of the original $20,000.00 from the Maintenance budget to Board travel was proposed. Motion made by Bobby Johnson, Jr., 2nd by Craig Simon. Voting Aye: Tate, Bobby Johnson, Jr., Proaps, Bill Marcus, Simon, Ubben, Newman. No – Russell, Harrelson, Shaver.)
At a recent Lenoir City Council meeting another conflict of interest issue arose. New Councilman Harry Wampler abstained when Council voted to change insurance companies from Humana to Cigna Insurance. Chris Wampler is the insurance representative for Loudon County and Lenoir City and he is the son of Councilman Harry Wampler.
Is Blood thinker than water?
Nepotism in Government
"OF THE FAMILY, BY THE FAMILY, FOR THE FAMILY"
Is blood thicker than water? How do politicians gain the public's trust?
People are skeptical about the influence that one person may have over another especially if we are talking about officials who make decisions that affect the public. Can a politician remain unbiased and not influenced by others in their roles?
Nepotism in government is one topic that is rarely discussed in public. Could it be because some officials may feel uncomfortable about discussing family, business, or other ties of their own? Do these family or work relationships and/or connections influence a person's decision making; I don't know but you do have to wonder sometimes?
Loudon County officials did not adopt a Nepotism Policy even though the POLICY AND PROCEDURE HANDBOOK FOR LOUDON COUNTY GOVERNMENT was revised and adopted by Loudon County Government on December 2007.
For years, certain elected officials hired and supervised relatives at the workplace, which is unheard of in the private sector. Case in point, the former County Clerk employed his wife and other relative while in office.
Several years ago, a developer asked to see a list of all blood relatives of the LCUB Board of directors. The list was interesting and it showed the names of employees who were related to the board of directors of this public utility.
People in Government
Here's a partial list of people (present and past) who serve and/or served on local government (county, city, school board, or utility) some with family, work and/or other governmental ties:
Lenoir City School Board member/ Lenoir City Council member / LCUB Board member Bobby Johnson Sr.; son Bobby Johnson JR former Lenoir City Recreation Dept. employee, former Lenoir City Treasurer-Recorder, and now Johnson JR is purportedly, once again, employed at the Lenoir City Recreation Dept. employee. Bobby Johnson JR also serves as 2nd District Loudon County Board of Education member.
Lenoir City Recreation Director Steve Harrelson serves as 6th District Commissioner. He is a former 6th District Loudon County Board of Education member.
Lenoir City Recreation dept employee William Jenkins serves as 2nd District Loudon County School Board member.
Lenoir City Councilman Buddy Hines. His daughter serves on the Lenoir City School Board member Rosemary Hines Quillen. Lenoir City is the funding body for schools.
Lenoir City School Board member Rick Chadwick is also employed by the Lenoir City Recreation Dept.
Newly elected Lenoir City Mayor Tony Aikens. Aikens also serves as LCUB Chair. He is employed as Chief Deputy of the Loudon County Sheriff's Office.
*Lenoir City Councilman/LCUB Board member Jim Shields. Leon Shields and Frankie Shields appear as part-time employees of the Loudon County Sheriff Dept (FY 10-11). Leon Shields also appears to work for LCUB. Frankie Shields served on the Loudon County Sheriff Merit Board.
Businessman/developer Eddie Simpson is the newly elected Loudon County Highway Road Supervisor. He is a Lenoir City Council member/ Lenoir City Utility Board member, and Lenoir City Regional Planning Commission. At the September 2010 board meeting, Eddie Simpson new Chairman of the Loudon County Economic Development Agency (LCEDA). Since elected to office Simpson has already hired two relatives in the county road department.
*Loudon County Mayor Estelle Herron. Mayor Herron - Loudon County Budget Committee Chairperson, Loudon County Economic Development Agency (LCEDA) Board member. Her daughter Shelly Herron works for Lenoir City Hall Treasurer-Recorder.
Husband and wife, Loudon County Board of Education member Vice Chairman Gary Ubben and spouse Loudon County Commissioner Sharon Yarbrough District 5 Seat B. Another husband and wife, former Commissioner District 1 Nancy Marcus and spouse Bill Marcus, Loudon County Board of Education, District 1.
Loudon County Commissioner District 2 Earlena Maples. She in employed by Lenoir City Utilities Board. Lenoir City Council and Lenoir City Mayor sit on the LCUB Board. Her sister is employed by Loudon County.
Loudon County Board of Education member D-5 Van Shaver; his son Austin Shaver serves as D-2 Loudon County Commissioner.
Brian Jenkins serves as District 1 Commissioner. Jenkins works for the Loudon City Police.
Scott Newman is the District 1 Loudon County Board of Education. He works for the Loudon City Police department. His brother works for the Loudon City Police Dept. and he ran unsuccessfully for District 4 Commissioner.
5th District Commissioner Harold Duff is a Contract part-time employee for the Loudon County Juvenile Center. At times, Commissioner Duff has read his conflict of interest statement before a budget vote regarding the Juvenile Department but sometimes he has not. He is also a former Lenoir City School Superintendent and former Loudon County (BOE) employee before going to the County Juvenile Dept.
At one time, Commissioner David Meers was employed as Principal of Highland Park School. He served on the Budget Committee and he too voted on school budgets, sometimes declaring his conflict of interest and sometimes not.
Newly elected District 6 Highland Park Board of Education member Rick Best; his spouse is employed by the Loudon County Board of Education as a teacher at Highland Park School.
Michael Cartwright serves on Loudon City Council. Cartwright is also employed by Loudon County.
(*NOTE: OTHER NAMES HAVE BEEN ADDED TO THE ORIGINAL LIST. )
Tennessee Code Annotated - Legislative - Commission
5-5-102. Membership. —
(a) (1) The county legislative body shall be composed of not less than nine (9) nor more than twenty-five (25) members.
(2) There shall be at least nine (9) districts in the county legislative body in any county designated as a Class 2 county before January 1, 1999, as established by § 8-24-101.
(b) Members shall reside within and be qualified voters of the districts that they represent.
(c) (1) Notwithstanding any provision of the law to the contrary, any county employee, otherwise qualified to serve as a member of the county legislative body, shall not be disqualified from such legislative office by reason of being a county employee.
(2) No person elected or appointed to fill the office of county mayor, sheriff, trustee, register, county clerk, assessor of property, or any other county-wide office filled by vote of the people or the county legislative body, shall also be nominated for or elected to membership in the county legislative body. After June 18, 2005, a director of schools shall not be qualified to serve as a member of the county legislative body.
(3) [Deleted by 2008 amendment.]
(4) (A) Any member of a local governing body of a county or a municipality who is also an employee of such county or municipality may vote on matters in which such member has a conflict of interest if the member informs the governing body immediately prior to the vote as follows:
Because I am an employee of (name of governmental unit), I have a conflict of interest in the proposal about to be voted. However, I declare that my argument and my vote answer only to my conscience and to my obligation to my constituents and the citizens this body represents.
(B) In the event a member of a local governing body of a county or a municipality has a conflict of interest in a matter to be voted upon by the body, such member may abstain for cause by announcing such to the presiding officer. Any member of a local governing body of a county or municipality who abstains from voting for cause on any issue coming to a vote before the body shall not be counted for the purpose of determining a majority vote.
(C) The vote of any person having a conflict of interest who does not inform the governing body of such conflict as provided in subdivision (c)(4)(A) shall be void if challenged in a timely manner. As used in this section, “timely manner” means during the same meeting at which the vote was cast and prior to the transaction of any further business by the body.
(D) Nothing in this subdivision (c)(4) shall be construed as altering, amending or otherwise affecting the provisions of § 12-4-101(a). In the event of any conflict between this subdivision (c)(4) and § 12-4-101(a), the provisions of § 12-4-101(a) shall prevail.
(d) No more than three (3) members shall be elected from any one (1) district.
(e) (1) Members shall serve terms of four (4) years or until their successors are elected and qualified.
(2) Members of the county legislative body shall be elected in the regular August election in 1978 and every four (4) years thereafter.
(f) The members of the county legislative body shall be known individually as county commissioners and collectively as the board of county commissioners.
(g) The term of office for members of the county legislative body shall begin on September 1 next succeeding their election.
(h) (1) The county legislative body shall have discretionary authority to determine whether each office in multi-member districts will be separately designated on the ballot, with candidates required to run and to be elected on the basis of such separately designated offices within the district.
(2) No candidate shall qualify for more than one (1) such separately designated office within a multi-member district.
(3) In any county designated as a Class 2 county before January 1, 1999, as established by § 8-24-101, each office in multi-member districts shall be separately designated on the ballot, and candidates shall run and be elected on the basis of such separately designated offices within the district.
(i) If a vacancy shall occur in the office of a member of the county legislative body, the vacancy shall be filled as provided for in § 5-1-104(b).
[Acts 1978, ch. 934, §§ 8, 10; 1979, ch. 175, § 1; T.C.A., § 5-502; Acts 1980, ch. 658, § 1; 1980, ch. 785, § 1; 1981, ch. 143, § 1; 1981, ch. 219, § 1; 1981, ch. 293, § 1; 1981, ch. 318, § 2; 1986, ch. 765, §§ 1-3; 2001, ch. 86, §§ 1, 2; 2003, ch. 90, § 2; 2005, ch. 471, § 1; 2008, ch. 871, § 2.]
LENOIR CITY CHARTER
THE OFFICE OF MAYOR
1. Duties and powers of the mayor.
Section 1. Duties and powers of the mayor. The duties and powers of the mayor shall be as follows:
He shall, from time to time, give the City Council information relative to the condition of the corporation, and shall, by written message, recommend such measures as he may deem for the best interest of the city;
The Mayor shall have power to appoint one or more persons to examine into the affairs of any department of the city government whenever he shall deem it necessary;
The Mayor shall approve, sign, and return all ordinances passed by the City Council before the next regular meeting thereof; unless he vetoes same, which he has the power to do; and if he vetoes any ordinance, he shall return same to the City Council at its next regular meeting, with his reason, or reasons, therefor, in writing, and such ordinance shall not become valid unless passed over his veto by the affirmative vote of four of the Aldermen; but if he fails to
return an ordinance, with his approval or disapproval, to the next regular meeting of the City Council after its passage, it shall be valid without his signature.
He may call special sessions of the City Council when he deems expedient; he shall preside at all meetings of the City Council, and in case of a tie vote between the Aldermen, he shall vote, but not otherwise.
The Mayor shall have the authority to terminate employment under policies approved by the Council.
The Mayor shall sign all contracts and agreements entered into by the city and shall receive legal claims against the city.
He shall be ex officio, a member of all the committees and boards herein provided for, including the school board.
The Mayor shall appoint an advisory charter review commission at least every four years to review the city charter and make recommendations to the city council for proposed amendments.
1. Utilities board.
2. Powers and duties.
Section 1. Utilities board. There is hereby created a body to be known as "The Lenoir City Utilities Board" which shall be composed of the six (6) members of the City Council of the City of Lenoir City, Tennessee, together with the Mayor, who shall be ex officio chairman of said board and who shall have the power to vote only in case of a tie vote of the members. Five members of the board shall constitute a quorum. Chapter 205 of the State Private Acts is
hereby retained and reaffirmed as a part of this charter section by reference, as if copied herein.
Section 2. Powers and duties. The utilities board shall have the following powers and duties:
1. To fix the dates for their regular meetings at the offices of the board and to keep a record of all their actions and proceedings.
2. To have the management, control, supervision, and operation of all utilities services provided by the City of Lenoir City.
3. To hire all employees, which in their judgment, are necessary for the efficient management and operation of the utility systems, and to fix the compensation and salaries of such employees.
4. To insure that all customers of the utilities systems are billed promptly and accurately for services furnished, and to take all proper steps for the collection of accounts.
5. To prescribe uniform rules and regulations applicable to all customers alike for the operation of the utility systems.
6. They shall have the right to discharge any employee for failure to perform his or her duties efficiently, or to terminate employment of any employee whose services the board deems no longer to be necessary.
7. To elect a manager or superintendent to serve at the pleasure of the board.
8. The board shall have power to issue warrants upon the City Treasury for all lawful and proper expenditures of the board and/or to maintain all necessary banking accounts for the efficient
operation of the utilities systems. All warrants or checks shall be signed by the manager or superintendent and countersigned by the Mayor.
9. The board shall keep the City Council informed at all times of the financial condition of the utilities systems.
10. The board shall have the right and power to make any and all necessary repairs and extensions of the systems when the board deems appropriate and feasible, either inside or outside the municipal boundaries.
11. The board shall have power to make any and all necessary purchases of equipment and supplies for the efficient operation of the utilities systems.
12. All funds collected by the board from whatever source shall be handled and accounted for in accordance with law and detailed accountings shall be kept in accordance with accepted accounting practices.
13. The compensation for each of the members of the board and the chairman, together with the necessary expenses for each shall be set by the board, provided that City Council may by resolution or ordinances fix the maximum compensation which may be received by them.
14. The board shall not lease, sell or encumber any property belonging to the city except in the ordinary course of its business operations except upon approval of the City Council.
15. The board shall have all other powers incidental to the operation of a utilities system, not in conflict with applicable law or directives of the City Council.
16. The City of Lenoir City shall have full power and authority to construct, maintain and operate a municipal utility system both inside or outside the corporation, including electric, water, sewer, gas, telecommunications and other utilities.