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<br />overview of the rules, it is important to note that all
<br />persons subject to the Code of Ethics must strive to
<br />follow both the letter and the spirit of the Code, so as
<br />to avoid not only actual violations, but public percep-
<br />tions of violations. Indeed, perceptions of violations
<br />can have the same negative impact on public trust
<br />as actual violations.
<br />Conflicts of Interest
<br />One of the most common ethical rules visited in
<br />the local government arena is the "conflict of interest
<br />rule." While some technical aspects of the rule are
<br />discussed below, the general rule under the Code
<br />of Ethics is that if a Council, Board, or Commission
<br />member has an "interest" that will be affected by his
<br />or her "official action," then there is a conflict of inter-
<br />est and the member must:
<br />• Disclose the conflict, on the record and
<br />with particularity;
<br />• Not participate in the discussion;
<br />• Leave the room; and
<br />• Not attempt to influence others.
<br />An "interest" is a pecuniary, property, or commer-
<br />cial benefit, or any other benefit the primary signifi-
<br />cance of which is economic gain or the avoidance
<br />of economic loss. However, an "interest" does not
<br />include any matter conferring similar benefits on all
<br />property or persons similarly situated. (Therefore, a
<br />City Council member is not prohibited from voting
<br />on a sales tax increase or decrease if the member's
<br />only interest is that he or she, like other residents, will
<br />be subject to the higher or lower tax.) Additionally, an
<br />"interest" does not include a stock interest of less than
<br />one percent of the company's outstanding shares.
<br />The Code of Ethics extends the concept of pro-
<br />hibited interest to persons or entities with whom the
<br />member is associated. In particular, an interest of
<br />the following persons and entities is also an interest of
<br />the member: relatives (including persons related by
<br />blood or marriage to certain degrees, and others); a
<br />business in which the member is an officer, director,
<br />employee, partner, principal, member, or owner; and
<br />a business in which member owns more than one
<br />percent of outstanding shares.
<br />The concept of an interest in a business applies
<br />to profit and nonprofit corporations, and applies in
<br />situations in which the official action would affect
<br />a business competitor. Additionally, an interest is
<br />deemed to continue for one year affer the interest
<br />has ceased. Finally, "official action" for purposes of
<br />the conflict of interest rule, includes not only legisla-
<br />tive actions, but also administrative actions and
<br />"quasi- judicial" proceedings where the entity is act-
<br />ing like a judge in applying rules to the specific rights
<br />of individuals (such as a variance request or liquor
<br />license). Thus, the conflict rules apply essentially to all
<br />types of actions a member may take.
<br />Contracts
<br />In addition to its purchasing policies and other rules
<br />intended to secure contracts that are in the best in-
<br />terest of the City, the Code of Ethics prohibits various
<br />actions regarding contracts For example, no public
<br />body member who has decision - making authority or
<br />influence over a City contract can have an interest in
<br />the contract, unless the member has complied with
<br />the disclosure and recusal rules. Further, members
<br />are not to appear before the City on behalf of other
<br />entities that hold a City contract, nor are they to solicit
<br />or accept employment from a contracting entity if it
<br />is related to the member's action on a contract with
<br />that entity.
<br />The Code of Ethics, as well as state law, regulates
<br />the receipt of gills. City officials and employees may
<br />not solicit or accept a present or future gift, favor,
<br />discount, service or other thing of value from a party
<br />to a City contract, or from a person seeking to influ-
<br />ence an official action. There is an exception for the
<br />"occasional nonpecuniary gill" of $15 or less, but this
<br />exception does not apply if the giff, no maffer how
<br />small, may be associated with the official's or em-
<br />ployee's official action, whether concerning a con-
<br />tract or some other matter. The gill ban also extends
<br />to independent contractors who may exercise official
<br />actions on behalf of the City.
<br />The Code of Ethics also prohibits common forms
<br />of nepotism. For example, no officer, public body
<br />member, or employee shall be responsible for em-
<br />ployment matters concerning a relative. Nor can
<br />he or she influence compensation paid to a rela-
<br />tive, and a relative of a current officer, public body
<br />member or employee cannot be hired unless certain
<br />personnel rules are followed.
<br />Other Ethics Rules of Interest
<br />Like state law, Louisville's Code of Ethics prohibits
<br />the use of non - public information for personal or
<br />private gain. It also prohibits acts of advantage or fa-
<br />voritism and, in that regard, prohibits special consid-
<br />erations, use of employee time for personal or private
<br />reasons, and use of City vehicles or equipment, ex-
<br />cept in same manner as available to any other per-
<br />son (or in manner that will substantially benefit City).
<br />The City also has a "revolving door" rule that prohibits
<br />elected officials from becoming City employees
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