If a city council member's employer is also the city's biggest taxpayer and contracting partner, do they have to recuse themselves when matters involving the employer come up for a vote?

Plain-English summary

Oswego's city attorney described a tangled situation. Niagara Mohawk Power Corporation was the city's largest employer, paid over 70% of the real-property taxes in the city (mostly on its fossil-fuel steam plant), and ran the city-owned High Dam Hydro Facility under an operation-and-maintenance agreement, selling the resulting power back to itself under a separate purchase contract. Two members of the city council worked for Niagara Mohawk. With matters affecting the company likely to come before the council, including whether to set up a reserve fund tied to the hydro facility, the city wanted guidance.

The AG provided general guidance only. A specific provision of the General Municipal Law need not be violated to find an improper conflict of interests. Courts have set aside decisions of local boards and officials based on judicial findings of conflict. The AG's office had repeatedly emphasized that public officials should avoid circumstances that compromise their ability to make impartial judgments solely in the public interest, and that even the appearance of impropriety undermines public confidence in government.

Applied to the Oswego facts, that meant the two council members employed by Niagara Mohawk should recuse themselves from matters where their employer's interests are affected. The AG would not analyze the specifics of any particular vote. Cases of this kind should go to a local board of ethics, which is the appropriate fact finder. Every local government is required by General Municipal Law § 806 to enact a code of ethics. Section 808 authorizes a local board of ethics (or, if the city has none, the county board of ethics) to render advisory opinions on compliance.

The opinion underscored that the conflict need not be statutory to be real. In Taxpayers' Association v Town Board, a town board member who worked for an advertising agency competing for contracts from an applicant before the board faced a disqualifying conflict. The opinion described the "subtle but powerful psychological pressures" placed on employees in those situations, where judgment, knowingly or subconsciously, can be affected.

Currency note

This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Does it matter that the council member's employer relationship was widely known?

Yes, and no. Transparency does not cure the conflict. A council member voting on a matter affecting their employer faces the same impartiality problem whether or not voters know about the employment. The AG framed recusal as protective both of the member (against the appearance of impropriety) and of public confidence in the body.

Is recusal automatic once the employer is involved, or is there a threshold?

The opinion frames it as appropriate "if the interests of his or her employer are affected by matters before the council." That sweeps in direct contract votes, tax matters concerning the employer, and probably reserve-fund decisions tied to operations the employer runs. Tangential matters, like a general budget vote where the employer might benefit alongside everyone else, are closer to the line, which is why the AG sent specific cases to local ethics boards.

What is the role of a local board of ethics here?

Under General Municipal Law § 808, the local board of ethics renders advisory opinions on compliance with the code of ethics. Where a council member doubts whether they have a conflict requiring recusal, the matter should be brought to the board for a determination. If the city has not established a board, the question can be brought to the county board of ethics.

What if there is no local code of ethics?

General Municipal Law § 806 requires every local government to enact one. The required content includes standards defining when private employment or other activity conflicts with official duties. The code may, but is not required to, include penalties for violations.

Does this opinion suggest the council members had to step down from the council entirely?

No. Recusal is the remedy, not resignation. The members can continue to serve on matters that do not affect their employer's interests. The opinion never suggests the entire council seat is incompatible with private employment at a major local company.

Background and statutory framework

General Municipal Law § 806 requires every county, city, town, village, school district, and fire district to enact a code of ethics. The code must include standards on private employment in conflict with official duties, gifts, representation before the local government, disclosure of confidential information, and investments in conflict with official duties. The code may prohibit conduct in violation of the standards.

General Municipal Law § 808 authorizes the local legislative body to establish a board of ethics. The board may render advisory opinions on compliance with the code, on its own initiative or on request. If the local government has not established a board of ethics, questions may be brought before the county board of ethics, provided one has been established.

The AG's prior informal opinions (Op Atty Gen (Inf) Nos. 84-11, 84-58, 86-54) consistently took the position that conflicts of interest need not violate a specific statute to be disqualifying, that public officials should avoid circumstances compromising impartiality, and that even the appearance of impropriety should be avoided.

In Taxpayers' Association v Town Board, 69 AD2d 320 (2d Dept 1979), a town board member who served as an officer of an advertising agency competing for advertising contracts from an applicant before the board faced a disqualifying conflict. The court recognized that employees face subtle but powerful pressure, knowing or subconscious, in those situations.

Citations

• General Municipal Law § 806 (code of ethics required); § 808 (board of ethics, advisory opinions).
• Op Atty Gen (Inf) No. 86-54 (conflict need not violate specific statute); Op Atty Gen (Inf) Nos. 84-11, 84-58 (avoid even the appearance of impropriety).
• Taxpayers' Association v Town Board, 69 AD2d 320 (2d Dept 1979) (disqualifying conflict where board member's employer competing for contracts from applicant before the board).

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/I_97-5_pw.pdf

Original opinion text

OPINIONS OF THE ATTORNEY GENERAL

Page 1 of 2

Opn. No. 97-5
GENERAL MUNICIPAL LAW §§ 806, 808.
A member of a city council must avoid circumstances which compromise his or her ability to make
decisions solely in the public interest. Therefore, if the interests of his or her employer are affected by
matters before the council, recusal is the appropriate course of action.
February 27, 1997
Gay H. Williams, Esq. Informal Opinion
City Attorney No. 97-5
City of Oswego
Oswego City Hall
23 West Oneida Street
Oswego, NY 13126
Dear Ms. Williams:
You have asked whether two members of the City of Oswego's city council should participate in certain
matters which affect their employer, the Niagara Mohawk Power Corporation.
You have informed us that the Niagara Mohawk Power Corporation is the City of Oswego's largest
employer and pays more than 70% of real property taxes levied in the city. Most of these taxes are
levied on Niagara Mohawk's fossil fuel steam plant. Additionally, the city owns the High Dam Hydro
Facility, which is operated by Niagara Mohawk under an operation and maintenance agreement. The
electricity produced at this facility is sold to Niagara Mohawk through an existing power purchase
agreement.
You indicate it is likely that matters will come before the common council that directly affect the city's
relationship with Niagara Mohawk. You have asked whether it is proper for the two members of the city
council employed by Niagara Mohawk to vote on these matters.
In addition to the above general inquiry, you have asked whether a conflict of interests would arise out
of consideration by the council whether to establish a reserve fund to protect the city's interests in the
High Dam Hydro Facility. In a subsequent letter, you raised another specific question. We can provide
only broad guidance on these questions.
The city should first review its code of ethics to determine whether participation by the two members of
the council in any particular matter is a violation of established ethics standards. Every local government
is required to enact a code of ethics. General Municipal Law § 806. Codes of ethics are required to
include standards defining when private employment or other activity is in conflict with official duties.
A code of ethics may provide for the prohibition of conduct in violation of ethics standards. Id.
Also, we note that local governments are authorized to establish a board of ethics, which may render
advisory opinions concerning compliance by local officers and employees with standards established by
the code of ethics. Id., § 808. In the event that a city does not have a board of ethics, questions may be
brought before the county board of ethics, provided one has been established. Id.
Generally speaking, a specific provision of the General Municipal Law need not be violated in order to

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OPINIONS OF THE ATTORNEY GENERAL

Page 2 of 2

find an improper conflict of interests. Op Atty Gen (Inf) No. 86-54. The decisions of local boards and
local officers have been set aside based upon judicial findings of conflicts. Id.We have emphasized that
public officials should avoid circumstances that compromise their ability to make impartial judgments
solely in the public interest. Op Atty Gen (Inf) Nos. 84-11, 84-58. Even the appearance of impropriety
should be avoided in order to maintain public confidence in government. Id.
Beyond this general guidance, we cannot determine whether the facts and circumstances of the specific
actions by the city as outlined in your letters create a conflict of interests for the two councilpersons. Nor
is it appropriate for us to do so. Specific transactions of this nature should be brought before the local
board of ethics which can determine all of the facts and circumstances and define the precise interests of
the city and the power company. If necessary, you can establish a board to consider these matters. This
determination is best left with local residents who can determine the facts as members of the ethics
board. Where an officer or employee has any doubt concerning whether he or she has a conflict of
interests requiring recusal, the matter should be brought before the board of ethics for a determination.
In that many of these matters are questions of judgment, a body of individuals, namely the board of
ethics, is the appropriate fact finder and provider of guidance.
The courts have found, under certain circumstances, that a local board member's employment with a
private company can create a disqualifying conflict of interests. For example, a board member's
employment with a firm likely to receive business if an application before the board is approved led to
such a determination. Taxpayers' Association v Town Board, 69 AD2d 320 (2d Dept 1979). In
Taxpayers' Association, a member of the town board was an officer of an advertising agency which was
a strong contender to obtain advertising contracts from an applicant before the town board for approval
of a planned residential unit. There are subtle but powerful psychological pressures that are placed on an
employee in these situations. Op Atty Gen (Inf) No. 86-54.
There is a possibility that his [or her] judgment, whether knowingly or subconsciously may
be affected by these pressures. Id.
As an overall matter, we conclude that a member of a city council must avoid circumstances which
compromise his or her ability to make decisions solely in the public interest. Therefore, if the interests of
his or her employer are affected by matters before the council, recusal is the appropriate course of
action.
The Attorney General renders formal opinions only to officers and departments of State government.
This perforce is an informal and unofficial expression of the views of this office.
Very truly yours,
JAMES D. COLE
Assistant Attorney General
in Charge of Opinions

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4/20/2006