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NYS Comptroller

THOMAS P. DiNAPOLI

The Academy for New York State's Local Officials

Protecting the Public’s Interest: A Tutorial on Local Government Ethics and Transparency in New York State

Module 1 - Conflict of Interest of Municipal Officers and Employees

Text for Video - What Is an Interest?

The second question when dealing with a potential conflict of interest is whether or not the municipal officer or employee has an interest in the contract. The definition of interest can be found in Section 800 Subdivision 3 of the General Municipal Law and is defined as either a direct or indirect pecuniary or material benefit accruing to a municipal officer or employee as a result of a contract with that municipality for which he or she serves. Now usually this is a question of fact in which you have to look for is whether or not the municipal officer or employee is receiving a benefit as a result of the contract. Examples of this could be if the municipal officer or employee is receiving goods, money, or property as a result of the contract.

Now in addition Section 800 Subdivision 3 establishes a series of presumptions in which a municipal officer or employee is deemed to have an interest in the contracts of certain individuals and organizations. For example, a municipal officer or employee is deemed to have an interest in the contracts of their spouse, minor children, or dependents, except an employment contract. Now a municipal officer or employee is not deemed to have an interest in any other relative other than their spouse, minor children, or dependents. Also, the municipal officer or employee may have to look and see whether or not their spouse, minor children, or dependent is an employee of the municipality or an independent contractor with the municipality, as it may change the analysis of whether or not they have a deemed interest. Now, in addition, the municipal officer or employee is deemed to have an interest in the contracts of a firm, partnership or association of which they are a member or employee.

Finally, a municipal officer or employee is deemed to have an interest the contracts of corporations of which they are either an officer, director, employee, or, directly or indirectly, control or own stock in the corporation. Now an example of this may be a municipal officer or employee may own one share of stock in a large corporation which is doing business with a municipality, they would be deemed to have an interest in that situation. However, please keep watching because we will discuss an exception later on in the presentation that may apply.

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