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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 9

A town board member is a sales representative employed by a corporation that holds a State contract to provide certain materials. The terms of the State contract have been extended to local governments. The town purchases materials from the corporation under the terms of State contract for an amount exceeding $750. The town board member’s private duties as a salesman directly involve the procurement of contracts with the town.

Does the town board member have a prohibited interest in a contract? Why or why not? Are there any other issues with which the town should be concerned?

Let’s revisit the basic issues as they pertain to this situation:

  1. Each of the town’s purchases from the corporation would result in a "contract" with the town because: (a) each purchase would involve an "agreement" with the town, and (b) each invoice submitted to the town by the corporation would constitute a "claim" or "demand" against the town.
  2. The town board member would be deemed to have an "interest" in the town’s contracts with the corporation because he is an employee of the corporation.
  3. The town board member’s official powers and duties include the power to approve contracts and the power to audit claims under the contract or to appoint an officer or employee to do so.
  4. None of the statutory exceptions apply. There is no exception in Article 18 for purchases made under the terms of a State contract.

Therefore, because the town board member has an interest in the town’s contracts with his corporation, and he has Section 801 powers with respect to those contracts, and no statutory exception applies, the board member’s interest in the contracts is prohibited.

  Next: Situation 10