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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 3 - Case Studies on Conflicts of Interest

Discussion of Situation 1

A partner in a law firm has been appointed to the office of town attorney this month. The law firm was retained two years ago by the town to represent it in a certain legal matter, which is still in litigation. The town’s contract with the firm will continue until the case is resolved. In this town, the town attorney’s functions include the duty to approve vouchers submitted for payment by outside counsel prior to audit by the town board.

Does the town attorney have a prohibited interest in the town’s contract with her law firm? Why or why not? If the town attorney’s interest is not prohibited, are there any other issues that the town should concern itself with?

By referring to the four basic questions discussed earlier in the tutorial, we can see that the town attorney does not have a prohibited interest in her firm’s contract with the town.

  1. There is a "contract" between the town and the law firm because the town and the firm entered into an "agreement" for the rendition of legal services.
  2. The town attorney is deemed to have an "interest" in the contract because she is a partner in the law firm.
  3. In this instance, the town attorney has at least one of the powers and duties that can cause an interest in a contract to be prohibited – the power to approve payment under the contract.
  4. A statutory exception applies because the contract was entered into prior to the town attorney’s appointment to office.

Therefore, even though the town attorney has an interest in the town’s contract with her law firm, and she has Section 801 powers and duties with respect to the contract, her interest in the contract is not prohibited because a statutory exception applies to the contract. The town attorney, however, is required to publicly disclose her interest in writing to her immediate supervisor (if any) and to the town board.

Other Issues to Consider:

The statutory exception that applies in this case applies only to contracts entered into prior to the town attorney’s appointment to office; it does not apply to renewal contracts or to contracts entered into after her appointment. The town’s code of ethics should be reviewed for any pertinent provisions, such as a requirement that the town attorney recuse herself or abstain from acting in relation to vouchers submitted by her law firm. If the town’s code of ethics is silent on the matter, to avoid even the appearance of impropriety, the town attorney should consider whether she can delegate or assign the function of approving her firm’s vouchers to another town official, and the town board should consider excluding from the town attorney’s duties approval of vouchers submitted by her firm.

  Next: Situation 2