Knowledgebase-Conflict of Interest Where a Water System Operator Owns a Private Business Operating Boring Equipment


Information Product

Title:Conflict of Interest Where a Water System Operator Owns a Private Business Operating Boring Equipment
Summary:MTAS was asked whether there was a conflict of interest where a city water system operator also owns a private business operating boring equipment and contracts with water system customers to provide extensions for water connections.
Original Author:Jones, Josh
Co-Author:
Product Create Date:06/17/2011
Last Reviewed on::07/08/2011
Subject:Conflict of interests; Water--Personnel
Type:Legal Opinion
Legal Opinion: Conflict of Interest.docx

Reference Documents:

Text of Document: FROM: Josh Jones, Legal Consultant
DATE: Friday, June 17, 2011
RE: Conflict of Interest

Recently you asked whether a conflict of interest exists where a City water system operator also owns a private business operating boring equipment. In this private enterprise the employee contracts with water system customers to provide extensions for water connections. It is my understanding that this employee has no authority to make contracts for the city.

In my opinion there is no illegal conflict of interest here. However, if the employee is found to misuse his authority as an operator to foster his private business then he is subject to discipline under the applicable city law.

The state’s conflict of interest laws dealing with contracts apply only to elected officials, officers and persons with authority to make or oversee contracts. T.C.A. 12-4-101 – 102. Hence this would not be applicable to the operator.

The employee is, however, subject to T.C.A. 39-16-402 which defines the offense of official misconduct. Under this statute a government employee commits a felony by committing an unauthorized act or refraining from a duty imposed by law or inherent to the job. Hence, if the employee used his capacity as an operator to steer work towards his private company that would have been performed by the city or that was unnecessary a claim of official misconduct could be levied.

JDJ

Please remember that these legal opinions were written based on the facts of a given city at a certain time. The laws referenced in any opinion may have changed or may not be applicable to your city or circumstances.

Always consult with your city attorney or an MTAS consultant before taking any action based on information contained in this database.