What’s going on here? It’s simple, really. The city attorney is opining that because the chairman of the Southeastern Economic Development Corp. has a financial interest in a development firm, not only is he prohibited from participating in any contracts the SEDC might approve for the company, but so is the entire board.
He has to either lose the conflict or the board has to lose him in order to do business with his partners. And they’ve tried to do a lot of business with them. The controversial Valencia Business Park development, for example, was sold to the chairman’s partners, who then dramatically changed the vision for it — most importantly from an industrial park to a commercial area. This may or may not have been a good move, but by doing it, they made the land far more valuable. Yet the chairman’s partners were never asked to put any more money into it.
When all this was brought up, SEDC pulled back on the deal — only to quietly re-award it to the same team for substantially less than before. Yes, they tried to give them an even better deal.
What the city attorney is saying now is that none of those deals is valid.
Why?
You might remember several weeks ago a similar issue came up with regard to Councilwoman Toni Atkins. Eager to plan her post-politician life set to begin in December, Atkins applied for the highly coveted job of CEO of the city’s Housing Commission. But who gets to decide who gets that job? The City Council, of course. Atkins thought that she could just recuse herself from the process. At first she just didn’t show up to meetings where the council convened as the housing authority.
Later she withdrew her application after the city attorney and Ethics Commission made it clear: She had a direct financial interest in the contract the City Council was going to build for the new head of the Housing Commission. Even if she recused herself, her conflict meant the entire council was conflicted.
Why couldn’t the board you are on simply work out a deal with a company or partner of yours as long as you stayed out of it? I think the answer is that your influence on a board is more powerful than just the official acts you may take or the on-the-record statements you may make. If your colleagues know of your interest in a deal, they may be tempted to help you for many reasons.
Perhaps you lawyers out there can provide perspective on this.