Historical Commission Agenda and Packet 2012 01 18

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Ethics thics are the tion of good •G Louisville has adopted its own Code of Ethics, which is found in the City Charter and which ap- plies to elected officials, public body members, and eniployees. The Louisville Code of Ethics applies in addition to any higher standards in state law. Louisville's position on ethics is perhaps best suni- niarized in the following statement taken from the City Charter: "Those entrusted with positions in the City govern- ment rnuytcornrnittuodheringtothe/etterumd spirit ofthe Code of Ethics. Only when the people are confldent that those in positions of public responsibil- ity uremmmitted to high ieveis of ethical and nioraL conduct, will they haie faith that their government is acting for the good of the public. This faith in the motives of officers, public body members, ancl empioy- ees employ- ees is critical for a harmonious and trusting relation- ship between the City government and the people it serves." The City's Code of Ethics (Sections 5-6 though 5-17 of the C is summarized in the following paragraphs. While the focus is to provide a general overview of the rules, it is important to note that all persons subject to the Code of Ethics must strive to follow both the Ietter and the spirit of the Code, so as to avoid not only actual violations, but public percep tions of violations. Indeed, perceptions of violations can have the same negative irnpact on public trust as actual violations. Conflicts o/Interest One of the rnost cornrnon ethical rules visited in the local government arena is the "conflict of interest rule." While soine technical aspects of the rule are dis- cussed below, the general rule under the Code of Eth- icoiathati[aCouuci],Doard'orCoouzuioaiooruezuber has an "interest" that will be affected by his or her "offlcial action," then there is a conflict of interest and the member must: • Disclose the conflict, on the record and with particularity; • Not partici ate in the discussion; • Leave the room; and • Not attempt to influence others. An "interest" is a pe property, or commercial benefit, or any other benefit the primary significance of which is econornic gain or the avoidance of eco- noinic loss. However, an "interest" does not include any matter conferring similar benefits on all property or persons similarly situated. (Therefore, a City Coun- cil member is not prohibited from voting on a sales tax increase or decrease if the inember's only interest is that he or she, like other residents, will be subject to the higher or lower tax.) Additionally, an "inter- est" does not include a stock interest of less than one percent of the company's outstanding shares. The Code of Ethics extends the concept of prohib ited interest to persons or entities with whoin the member is associated. In particular, an interest of the foliowing persons and entities is also an interest of the member: relatives (including persons related by blood or rnarriage to certain degrees, and others); a business in which the mernber is an officer, director, employee, partner, principal, member, or owner; and a business in which rnember owns inore than one percent of outstanding shares. The concept of an interest in a business applies to profit and nonprofit corporations, and applies in situ- ations in which the official action would affect a busi- ness competitor. Additionally an interest is deemed to continue for one year after the interest has ceased. Finaily, "official action" for purposes of the conflict of interest rule, includes not only Iegislative actions, but also administrative actions and "quasi-judicial" proceedings where the entity is acting like a judge in applying rules to the specific rights of individuals (such as a variance request or liquor license). Thus, the conflict rules apply essentially to all types of actions a rnember may take. Contracts In addition to its purchasing policies and other rules intended to secure contracts that are in the best in- terest of the City, the Code of Ethics prohibits various actions regarding contracts. For example, no public body mernber who has decision-making authority or influence over a City contract can have an interest in the contract, unless the member has complied with the disclosure and recusal rules. Further, members are not to appear before the City on behalf of other entities that hold a City contract, nor are they to so licit or accept employment from a contracting entity if it is related to the member's action on a contract with that entity.