This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
CONFLICTS OF INTEREST -- Contracts (planning board review of shopping center expansion) -- Interest in Contract (planning board review of shopping center expansion)
PUBLIC OFFICERS AND EMPLOYEES -- Ethics (applicant before planning board represented by board member's personal attorney)
ZONING AND PLANNING -- Planning Boards (board member participating in review of project when applicant represented by board member's personal attorney)
GENERAL MUNICIPAL LAW, §§800(2),(3), 806, 809: When a planning board member's personal attorney appears before the board on behalf of another client, the board member should disclose his or her attorney-client relationship and, depending on the nature of that relationship, consider not participating in the proceedings.
You ask whether a town planning board member would have a conflict of interest if he were to participate in the board's review of a major shopping center expansion. You state that, in his private capacity, the board member is a client of the attorney representing the shopping center developer, but has no other involvement in, or relationship to the project.
Article 18 of the General Municipal Law (§800, et seq.) contains the provisions of law which relate to conflicts of interest of municipal officers and employees. Pursuant to General Municipal Law, §800(3), a municipal officer or employee has an interest in any contract with his or her municipality if he or she receives a direct or indirect pecuniary or material benefit as a result of that contract. That interest is prohibited if the officer or employee, individually or as a member of a board, has the power or duty to: (a) negotiate, prepare, authorize or approve the contract or approve payments thereunder; (b) audit bills or claims under the contract; or (c) appoint an officer or employee who has any such powers or duties (General Municipal Law, §801), and none of the exceptions contained in article 18 are applicable (see General Municipal Law, §802). If an interest in a contract is not prohibited, General Municipal Law, §803 requires, with certain exceptions, that the interest be disclosed in writing and included in the official record of the governing board's proceedings.
A "contract", for purposes of article 18, is defined in General Municipal Law, §800(2) as any "claim, account or demand against or agreement with a municipality, express or implied". It is not clear whether applications for and granting of building permits, licenses, zoning charges, variances, site plan or subdivision approvals constitute contracts as defined in that statute. It has been the position of this Office thatsuch applications do not result in a section 800(2) contract with a municipality (see, e.g., 1988 Opns St Comp No. 88-68, p 135; 1985 Opns St Comp No. 85-60, p 84; 1983 Opns St Comp No. 83-108, p 133; see also Keller v Morgan, 149 AD2d 801, 539 NYS2d 589; Cahn v Planning Board of the Town of Gardener, 157 AD2d 252, 557 NYS2d 488). Therefore, it is our opinion that an application to the planning board is not a contract within the meaning of article 18 and, as a result, that section 801 is not applicable.
At least one lower court, however, has held that an application for a building permit and subsequent issuance thereof constitutes a "contract" for conflict of interest purposes (People v Pinto, 88 Misc 2d 303, 387 NYS2d 385). Nonetheless, because you state that the board member has no involvement in the project and, presumably, would not receive a direct or indirect pecuniary or material benefit as a result of any action taken by the board, it would appear that planning board member would not have an interest in that application even if it were deemed a contract within the meaning of article 18.
We also note that General Municipal Law, §809 contains a disclosure requirement in connection with certain planning board matters. Section 809 provides, in pertinent part, that every application, petition or request submitted for a variance, amendment, change of zoning, approval of a plat, exemption form a plat or official map, license or permit must state the name, residence and the nature and extent of the interest of any officer or employee of the municipality, in the person, partnership or association making such application, petition or request, to the extent known to the applicant. Although a municipal officer or employee is deemed to have an interest in certain applicants, section 809 does not provide that a municipal officer or employee is deemed to have an interest in an applicant solely because his or her personal attorney represents the applicant. Thus, the disclosure requirements of section 809 also would appear to be inapplicable in this instance.
Even though article 18 does not prohibit the board member's participation in this matter or require disclosure of his or her relationship with the developer's attorney, the town's code of ethics should be reviewed to determine whether it contains any pertinent provisions. General Municipal Law, §806 requires a town to adopt a code of ethics setting forth for the guidance of its officers and employees the standards of conduct reasonably expected of them. A code of ethics may regulate or prescribe conduct which is not expressly prohibited by article 18, and may provide for the prohibition of conduct.
Apart from article 18 of the General Municipal Law and codes of ethics promulgated thereunder, we note that the courts of this State have held public officials to a high standard of conduct and, on occasion, have negated certain actions which, although not violating the literal provisions of article 18 of the General Municipal Law or a municipality's code of ethics, violate the spirit and intent of the statute, are inconsistent with public policy, or suggest self-interest, partiality or economic impropriety (see, e.g., Zagoreos v Conklin, 109 AD2d 281, 491 NYS2d 358; Matter of Tuxedo Conservation and Taxpayers Ass'n v Town Board of the Town of Tuxedo, 69 AD2d 320, 418 NYS2d 638; Conrad v Hinman, 122 Misc 2d 531, 471 NYS2d 521). The courts, however, have refrained from invalidating the actions of a municipal board on the basis of allegations that a board member has an interest in a matter before the board which is not prohibited by either article 18 or the municipality's code of ethics, where the individual disclosed the interest and did not participate in the proceedings (see, e.g., Cahn, supra).
Not every private business relationship between a municipal board member and a person appearing before the board is sufficient to require disclosure and recusal. In Ahearn v Zoning Board of Appeals of the Town of Shawangunk, Ulster County, 158 AD2d 801, 551 NYS2d 392, lv den 76 NY2d 706, 560 NYS2d 988, one board member purchased insurance from an applicant before the board and a second board member's spouse taught piano to the applicant's daughter and received a gift for doing so, but the court held claims of common law conflict of interest based on these transactions to be speculative and without merit. The court reasoned that these claims of conflict of interest "do not rise above the type of speculation that would effectively make all but a handful of citizens ineligible to sit on the [b]oard" (158 AD2d at 802, 551 NYS2d at 394; see also Town of North Hempstead v Village of North Hills, 38 NY2d 334, 379 NYS2d 792).
In other cases, however, the courts have held that the existence of a business relationship between a municipal board member and a person appearing before the board requires disclosure and recusal. In Zagoreos, supra, the court held that board members who were employees of an applicant were required to disqualify themselves because "the likelihood that their employment ... could have influenced their judgement is simply too great to ignore" (109 AD2d at 288, 491 NYS2d at 364). Further, in Tuxedo, supra, the court held that a board member should have disqualified himself from voting to approve an application made by a subsidiary of a client of his firm. The court reached this conclusion because of the possibility that the board member's vote was influenced by the likelihood of his firm receiving a contract from the applicant if the application was approved.
As to a situation where a board member's personal attorney appears before the board on behalf of another client, we note that in Matter of Intemann, 73 NY2d 580, 542 NYS2d 160, the court upheld the removal from office of a judge who, among other things, heard matters brought by an attorney who was his close friend, business associate and personal attorney. In this regard, the court noted that "[t]he nature of the relationship was such that to avoid the appearance of impropriety and the potential for a conflict of interest, [the judge] should have disqualified himself from those cases" (73 NYS2d at 582, 542 NYS2d at 161).
Although planning board members are not subject to the standards of judicial conduct (see 22 NYCRR 100), they are held to a high standard of conduct (see Zagoreos, supra; Tuxedo, supra), and are required to make reasoned judgements that are discretionary or quasi-judicial in nature (see, e.g., Lujan Home Builders v Orangetown, ___ AD2d ___, 568 NYS2d 850). Thus, as in the case of a judge, the personal nature of a longstanding or ongoing attorney-client relationship between a planning board member and an attorney who also represents an applicant before the board could raise a question of bias and, hence, result in an appearance of impropriety or potential common law conflict of interest. Accordingly, it is our opinion that when a planning board member's personal attorney appears before the board on behalf of another client, the board member should disclose his or her attorney-client relationship and, depending on the nature of that relationship, consider not participating in the proceedings.
November 13, 1991
Thomas J. Egan, Esq., Town Attorney
Town of Woodbury