City of Brookhaven, Brookhaven Innovation Academy Ethics Investigation

7/24/2019 City of Brookhaven, Brookhaven Innovation Academy Ethics Investigation

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EY, JR

M P. H

TE AT T

November 16,

2015, the firm

was retained

y the City o

Brookhaven t

o advise as to

certain e

thical consider

ations involvi

ng Councilma

n Bates Mattis

on who accep

ted a full tim

position

as Executive

Director o

e Brookhaven

Innovation A

cademy (BIA

), while servin

contem

poraneously

on the City C

ouncil. The

following m

emorandum is

based upon

in formati

on that we h av

e been provide

d and obtaine

d to date.

CTUA L BAC

K G R OU N D

N ovember

2012, Bates

Mattiso n was

elected and

sworn in as a

m e m ber o

rookhaven Ci

ty Council.

t April 24, 20

13, Bates Mat

tison was app

ointed as a Co

uncil liaison o

Brookhaven

Development

Authority. See generall y

okhaven Deve

lopment Autho

ri ty M inutes

n or about May

7, 2014, the B

rookhaven Inn

ovation Acade

my was incorp

orated w ith the

M ayor a

nd City Counc

il as the origin

al board mem

orandum date

d November 1

2015 [Tab

At the

13, 2014 City Council Meeting, Council M ember Mattison recognized Mr.

Gareth Genne

Edevate w

ho provided in

formation abo

ut Edevate' s e

ducation progr

am for the

proposed

Brookhaven I

nnovation Aca

demy. [Tab CJ

rookhaven 's 2

014 budget co

ntained a $30

,000.00 expend

iture for a st

feasibil

a Brookhaven

City School S

ystem.

o v ember 20,

2014 City Cou

ncil Minutes [

Tab DJ.

Council M emb er M attison indicated $30,000 for 2015 was an appropriate amount for the 2015

budget. Id. See a

lso, E

devate consul

ting retainer e

xecuted on Ma

rch 16, 2015.

[Tab E].

W h e n

concerns were

raised at that N

o v ember 20,

2014 meeting r

egarding the C

ity Council

acting as th

e governing bo

the Cha

rter School, M

r. Mattison n

oted that whe

n the effort

rted, h had no

t envisioned t

he council bein

g the governin

g board. He c

ontended his p

ersonal

vision

was that the c

ouncil would h

ave designees

In early 201

5, Bates Ma tt is

on was appoin

ted chair of he

Brookhaven I

nnovative Aca

A) Explorator

y Committee.

Th e B IA is

listed as a dom

estic nonprof

it corporation

on the

Secretary

of State' website

. [Tab F].

T he July 1

0, 2015 minut

th e Broo

khaven City C

ouncil state:

Council Me

Matt ison rep

orted that h

ad spoken to

some people e

arly on wh en

h was in the

process of

starting the

Brookhaven In

novatio n Acad

emy (BIA) and

looking for sp

ace. A t this

meeting, Mr.

Matt i

son voted in fa

he purc

yland Drive pr

operty. [Tab G

O n July 17

, 2015, City M

anager Mar i

e Garrett, duri

ng executive s

ession

Brookhaven

Development

Authority, w

hich Bates M

attison is also

a member, d

isclosed the

purchase of

he Skyland D

rive P roperty

as the propose

d future site of

he BIA or

s a future city

office bui

lding. There i

s no reference

to Bates Matti

son participatio

n in th e meeti

ng and no vote

re taken. [Tab

On A ugust 1

3, 2015, the B

I Regular Me

eting M inutes

states that B

ates will take

roposed by-law

s changes req

uired to the pe

ers on city cou

ncil. [Tab I].

ugust 21, 2015

, Bates Mattiso

n was absent f

rom the Devel

opment Autho

rity meeting

ere the propert

y purchase for

the Skyline D

rive Property w

as discussed.

[Tab J].

On August 2

3, 2015, City A

ttorney Chris

Balch issued

an opinion reg

arding conflic

terest regardin

g the Skyland

property pur

chase. [Tab

K]. Mr. Balc

h wrote that

ecommendatio

n that Mr. Ge

bbia and Mr.

Mattison recu

se them selves

from the cons

ideration,

ussion or votin

g on such issu

es. f his reco

mmendation is

accepted, then

Mr. Gebbia a

nd Mr.

Mattiso

n should leav

e Council Ch

ambers during

any such di

scussion and

should avoid ny

cussion off he

record with an

heir colle

agues on these

topics. Id

r. Balch furthe

r stated

I propose we

solve this issu

e y utilizing

the 2 Counci

l appointed sea

ts for private

citizens,

appointed

e Mayor and

confirmed

he Council,

s permitted und

er the Charter.

This will

require the re

signations of

Mr. Mattison a

nd Mr. Gebbia

from the Boa

eptem ber 8, 2

015, Developm

ent A ttorney

Wen d y Butler

advised Mem

ber Mattison

ember Gebbia

, who also has

some involvem

ent in the BIA

, that there w

as no legal con

and felt ther

e was no need

to recuse. M

e m b er Gebb

ia participated

n th e vote a

nd Member

ttison recused

h imse lf from t

he vote. Bates

Mattison recu

sed him self fro

m a City Coun

cil vote

on the b ond resolution for the purchase

th e property. [Tab L]. (While we u n derstand that the

bond has not b

een issued, ca

reful ethical co

nsideration sh

made a

s to w hether t

he type

party lease co

ntemplated

y the bond reso

lution is viable

and direct the

council's atten

tion to

e County Deve

lo pment Autho

rity v State o

Georgia 2

96 Ga. 725 (20

15)). [Tab M

September 2

4, 2015, the B

IA Regular M

eeting Minute

s state Facili

ty update - C ity

w asn 't wi

lliug to fmance

Skyland loca

tion. Skyland

renovations ar

e intense and

wo n ' t m eet the

timeline. [T

ab N].

On Octob

er 16, 2015, B

ates Mattison, B

I Board Cha

ir, recuses him

self from discu

ssions

at the B

IA Board Reg

ular M eeting re

garding his ap

pointm entto th

e position ofE

xecutive Direc

BIA through S

eptem ber 30,

2016. [Tab O]

O n Octobe

r 23, 2015, B

ates M attison

excused him

self from Dev

elopm ent Au

thority

m eeting during discussion on property purchase. [Tab P].

O n N o v emb

er 5, 2015, Bat

es Mattison w

as reported as

Executive Dire

ctor on the BIA

rd Regular Me

eting M inutes

. [Tab Q]. Th

e BIA Executi

ve Director Co

ntract was exe

n that date as li

sted the follow

ing as one of he

Executive Dir

ector's duties:

Serve as the

liaison between BIA and the State Charter School Commission and other governmental agencies

See Section One

(l)(f)

[Tab R]. In addition to a base retainer of$60,000.00 per year, the

Contract also contained a provision under Section Two whereby BIA will pay Contractor a 10%

commission for all sponsorship revenue earned.

Mr. Mattison has asked the BIA to remove

10% commission provision from the contract.

In a Memorandum dated November 18, 2015, Mr. Mattison outlines the steps

took to

ensure that there was no confl ict

interest issue. He contacted Andrew Lewis, Executive

Director, Georgia Charter School Association; Gregg Stevens, General Council, State Charter

School Commission and consulted with City Attorney Chris Balch and Development Authority

Attorney Wendy Butler. [Tab B].

On November 20, 2015, Brookhaven Innovation Academy prepared a

Confidential-

Draft press release announcing Mr. Mattison as the Interim Executive Director. The press

release addresses conflict

interest as follows:

Mr. Mattison and

have also taken affirmative steps

assuring that there will

no conflict

interest for Mr. Mattison

his role as

Interim Executive

Director and as a

member

the Brookhaven City Council.

Mr. Mattison's

request, the Board appointed an executive compensation committee to look into

best practices for compensation within the non-profit-sector, and ensure

compliance with

Association ofFundraising Professionals (AFP) ethics policy

which discourages against percentage-based compensation based on contributions

raised. Additionally, the BIA Board and Mr. Bates acted swiftly to ensure that both

contributors to BIA and Mr. Bates constituents have full confidence in his

respective roles as the

Interim Executive Director and Brookhaven City

Councilman

removing the commission based part of his fee structure at their

special called Board meeting on November 19, 2015. [Tab S].

LEGAL AUTHORITY

CITY COUNCIL

The basic underlying premise is that it is impermissible for members

the city council

to vote on any matter where the member has an interest. O.C.G.A.

36-30-6 states: It is

Therefore,

under G eorgia

case law, eac

h potential co

nflict m ust

analyzed to d

etermine the

th e interes

t involved. W

here a financi

al interest is in

volved, a coun

cil mem ber sh

ain from partic

ipation in any

discussions o

ctions taken

y the council re

lating to the co

nflict.

n ick v Wi

lliams 21 5

Ga.App. 629

(1994), the Ge

orgia Court of

appeals strupk

down a

zoning dec

ision y county

commissione

rs where a com

missioner's so

n was a part of

he legal team

handling the m

atter. [Tab X

]. There the C

ourt held that

we believe tha

t state law prov

ides a floor

and no

t a ceiling for

the boundaries

ethical cond

uct y governm

ent officials.

Local county a

m unicipal

governments a

re free to imp

ose higher stan

dards, and ind

ividuals who s

eek and retain

office in

local jurisdict

ions are bound

y the standar

ds of th e gover

nment they se

rve. Id . Ther

county ethics

code provided

that: public

interest requir

es that Cobb C

ounty protect

against

im proper

influence or th

e appearance of

impro per inf

luence y esta

blishing appro

priate ethical

standards with

respect to co n

public

officials. Id.

Th e C

Brookha

ven has also a

dopted a code

of ethics for its

member s

ollow. The

Code of C i

Brookha

ven, Chapter

2, Article XI,

am ended

y O rd inance

2014-05-07,

encompasses the Code

Ethics. Section 2.401 ( e)

he Code states that financial interest means

following: (i)

funds receive

d y th e M e m

ber from the

other person or

entity durin

previou

s 12 months ei

ther equal to or

in excess of

(a) $5,000.00 i

n salary, bonus

es, com missio

or professio

nal fees, or $5

,000.00 in pay

ment for good

s, products or s

ervices,

ten percent of

h e Mem ber ' s g

ross income d

uring that peri

od, whichever

is less; or (ii) t

he Mem ber is

a creditor,

guara TJ tor of

he other p

enti t

y in an amount

of $5,000.00 or

more. [Tab

Section 2

.401(h)

Code states tha

t substantial

interest means

the following:

(i) the

t or indirect o

wnership

he assets

the own

ership interest

s in any busine

property

; (ii) the holde

any eviden

ndebted

ness of any bu

siness for borr

owed money;

(iii) any director, manager, trustee, officer

employee of any business (other than employees

a business registered as a publicly traded company under the Securities Act

1934). Id

Chairman

the Board of Directors

BIA and now as the Executive DireCtor, Mr. Mattison had

and has a substantial interest

the BIA.

Section 2.402(d)

the ethics code states

part that:

ill Members and family members shall not solicit or accept directly or indirectly

anything of value from

person, corporation or group which:

is seeking to obtain, contractual

other business

financial

relationships with the City,

unless

a Member's or family member's contractual

relationship with such person, corporation,

group existed prior to the City's

contractual relationship

prior to the Member's election or appointment to office;

the. Member, if

office at ·the time the contractual, business or financial

relationship came before the City for consideration, disclosed such relationship or,

if not in office at such time, has immediately disclosed the relationship to the City

after being elected

appointed to office and becoming aware

the City's

relationship with such person, corporation

group; the Member abstained from

discussion

City s

consideration

entering a contract with such person,

corporation or

competing vendor; the Member abstained from voting

any matter related to the relationship between such person, corporation, or group or

the subject contract or services; and the Member did not make personal use

official non-public information, as prohibited by Section (k) hereof;

(2) · In exchange for the thing ofvalue, seeks to have a Member exercise

a matter

discretion

her favor;

(3) In exchange

forthe

value, seeks to have interests which

be affected

the performance or nonperformance of the official duty

Member.

(ii) Members and family members shall not directly

indirectly request, exact,

receive,

agree to receive a gift, loan, favor, promise, benefit

value for

him/herself or another person if:

1) It could reasonably

considered to influence the Member in the

future, and the Member is involved in any official act

action which results in a

pecuniary benefit for the donor

lender which is not available to the public at

large; or

could reasonably

considered to influence, benefit or reward the

Member, and the

Member

recently has been,

is now or within six

months in

the future, involved

in any

official act or action which results

a pecuniary benefit

for the donor or lender which is not available to the public at large.

(iii) [Not applicable].

Section 2.402(e regarding Conflict ofinterest states that:

(i) A Member may not participate in a vote or decision on a matter affecting a

family member or any person, entitv, or property in which the Member or family

member has a financial interest or substantial interest.

(ii) A Member who serves as a corporate officer or member

the board

directors

a nonprofit entity must disclose their interest in said entity to the Mayor

and council prior to participating in a vote or decision regarding funding

entity by or through the city.

(iii) Where the interest

a Member in the subject matter

a vote

decision

is remote or incidental, the Member m y participate in the vote or decision but

should disclose the interest. I d ~

Pursuant to the Code of Brookhaven, Members shall not solicit or accept directly

or indirectly anything

value from any person, corporation

group which has,

seeking to obtain, contractual or other business or financial relationships with the City,

unless:

(1) the Member, if in office at the time the contractual, business or financial

relationship came before the City for consideration, disclosed such relationship;

(2) the Member abstained from discussion of he City 's consideration

entering a

contract with such person, corporation

competing vendor;

(3) the Member abstained from voting on any matter related to the relationship

between such person, corporation,

group or the subiect contract

services; and

(4) the Member did not m ke personal use of any official non-public information.

DEVELOPMENT AUTHORITY

Development Authorities were created

O.C.G.A. § 36-62-4. [Tab Z]. O.C.G.A.

62-5 sets forth certain restrictions on development authority directors and states:

(a) The directors shall be taxpayers residing in the county

municipal corporation

for which the authority is created, and their successors shall

appointed as

provided by the resolution provided for in Code Section 36-62-4. The governing

authority

a county

municipality

appoint no more than one member

governing authority as a director.

(b) The directors shall elect one

their members as chairman and another

chairman and shall also elect a secretary and a treasurer or a secretary-treasurer,

either

whom may,

need not,

a director.

The directors shall receive no compensation for their services but shall

reimbursed for their actual expenses incurred in the performance

their duties;

provided, however, the directors of he development authority activated

counties

having a population

550,000

more according to the United States decennial

census

any future such census shall

paid a per diem allowance to

determined

the governing authority

such counties for each day,

part thereof,

the performance

their duties.

(d) The authority

make bylaws and regulations for its governance and

delegate to one

its officers, agents, and employees such powers and

duties as

be deemed necessary and proper.

( e)(l )(A) The provisions

Code Section 45-10-3 shall apply to all directors

authority, and a director

of the

authority shall not engage

n any transaction

the authority

(B) The provisions

paragraph (9)

Code Section 45-10-3 and subparagraph (A)

this paragraph shall

deemed to have been complied with and the authority

purchase from, sell to, borrow from, loan to, contract with,

otherwise deal

with any director or

organization

person with which any director

authority is

interested or involved, provided

that any interest

involvement

such director is disclosed

advance to the directors

he authority

and is recorded

the minutes

of he.

authority, (2) that any interest or involvement

by such director with a value

excess

of$200.00

per calendar quarter is published

the authority one time in the legal organ

which notices

sheriffs' sales are

published

each county affected

such interest, at least 30 days

advance of

consummating such transaction, (3) that no director having a substantial interest

involvement

present at that portion of an authority meeting during which

discussion

any matter is conducted involving any such organization

person,

and (4) that no director having a substantial interest

involvement

participate

any decision

the authority relating to

matter involving such organization

person. As used

this subsection, a substantial interest or involvement means

any interest or involvement which reasonably

may be

expected to result in a direct

financial benefit to such director as determined

the authority, which

determination shall

final and not subject to review.

(2) Nothing contained

in paragraph( ) of

his subsection or in Code Section 45-10-

deemed to prohibit any director who is present at any meeting or who

participates

any decision of the authority from providing legal services

connection with any

undertakings

he authority

from being paid for such

services.

Each development authority shall provide to its respective county or municipal

fiscal officer, as the case

be, an audited financial statement

such audit has

been required

the respective county

municipality within six months

he end

the previous fiscal year. [Tab AA].

.G .A.

§ 45 -1 0

-3 sta t

es in p

art tha t

: N ot

withst a

nding a

ny pro

visions

f la w

to th e

ntrary ,

each m

em ber of

al l b o

ard s, c

om mis

sions, a

nd auth

orities c

reated b

y gene

ral sta t

ute sha

(9) Never take any official action with regard to any m atter under cir cum sta nces in whic h

w s or

should

know t

hat he h

as a d

irect or

indire c

t m one

tary int

erest in

the su

bject m

atter of

m atter

or in t

he outc

of such of

ficial a

ction.

[Tab B

Pursua

nt to 0 .C

.G .A .

§ 36-6

2-5, (e

)(l)(A ),

a dire

ctor of

the aut

hority s

hall n o

t engag

ny tran

sactio n

the aut

hority .

eve r,

O.C.G.A

. § 3

6-62-5 ,

(e)(l)(

B ) se t

s fo rth

cepti o

n w here

the au

th ority

urchase

sell to,

borrow

from, l

oan to,

contrac

t w ith,

otherw i

se deal

w ith a

ny dir e

ctor or

rganiz a

tion or

person

w ith w

hic h a

ny dir e

ctor of

hority i

s in any

way in

tereste

d or in v

olv ed

the fol l

owing c

onditio

) that

a ny in t

erest o

r invo lv

em ent

by suc

h direct

or is di

sclose d

in adv

ance to

th e dir

ectors of

th e a

uthority

and is

record

ed in th

e m in u

tes of th

e auth o

(2) th

at any i

nterest

or invo

lvem en

t in ex

cess of

$200.0

0 is pub

lished

at least

30 da y

s in a d

th e t ra

nsactio

(3) tha

t n o d i

rector h

aving a

substa

ntial in

terest o

r involv

em ent

may be

pre sen

t at th a

t porti o

n auth

ority m

eeting

during

w hich

discus

sion of

atter is

cted in

volvin g

org ani

zation o

r pers

on; an

that no

directo

r havin

g a sub

stanti a

l intere

st or in

volvem

ent m a

y partic

ipate in

ecision

the aut

hority r

elating

to any

mat te r

involv i

ng such

organi

zation o

r perso

CO N CLUSIO N

er Geo

rgia s ta

tutory

law, it

is im pro

per an

d illega

l for a c

ouncil

m em be

r to vot

e upon

uestion

before

the c o

in w hic h

e is p

ersonal

ly intere

sted. G

eorgia

case l a

w goe s

furthe

r. W hen

a fin a

ncial in

terest o

r su bst

antial in

terest i

s invol

ved bet

w een a

council

m em be

r and a

n entity

, a City

s ac tio

ns rega

rding t

hat enti

ty may

e vo id

Code of

Brookh

aven w

ould al

low a c

ouncil m

r to h av

e an in t

erest in

an e nt

ity in w

hich it

contrac

if he in

terest is

fully d

isclose

d y th e

cou nc

il mem

ber, the

coun ci

l mem b

er abst

ains fro

scussio

ns on t

he cont

ract, the

cou nc

il mem

ber abs

tains fro

m vote

s on th

e matte

r, and t

ouncil

m em be

r has n

ot used

nonp ub

lic info

rmatio

n for pe

rsonal

ere we

have th

e uniq u

e situa

tion wh

ere the

M ay or

and Ci

ty Coun

cil act

ed as th

e initia

board of

di rec

tors fo

r the BI

A. A s

a direct

or, eac

h mem b

er had

a subst

antial in

terest i

n the B

rsuant t

o the C

ode of

Brookh

There a

ppears

to be no

que st

ion that

the M a

yor and

Council s inv olvement, including Mr. Matti son s , w

as fully

disc lo

sed to t

he gov

erning b

A s req

uested

Matt is

on, it is

stro ng

ly recom

ed that

the con

tractual

arrange

ment b

etween

the B IA

and Mr.

ttison n

ot inclu

de a pe

rcentag

e bonu

s comp

onent or

ny bon

us stru

cture th

at allow

s incen

tives f

or the r

eceipt of

c funds.

t is f

urther

comm e

nded t

hat Mr.

M atti s

on com

ply w it

h all di

sclosur

e and pu

blicati

on requ

iremen

ts as se

fo rth

und er

state la

w, the

City s C

ode of

Ordina

nces an

d as se

t forth

above.

s wort h

entioni

ng that it

ap pea

rs that

the B IA

is n o

longer i

nterest

ccupyi

ng the

Skyland

Driv e

prop er

ty whic

h was t

he subj

ect of a

prop os

ed bon

d issue

lease s

avings

migh t h

ave be

en cons

trued a

s such

an ince

ntive.

n the ad

vice of

appe ar

s that Mr.

tison re

cused a

nd excu

sed h i

mse l f

all BIA

m at te r

s broug

ht befo

re the C

ounci l

evelopm

ent Au

thority

after A

ugust 2

2015. Mr. Mattison became the Executive D ir ector

the BI

A on or

ab out

Nove m

ber 5, 2

ow, as

an emp

loyee of

IA, M r.

M atti s

on sho

uld recu

se him

self from

al l m

atters,

includin

discuss

ions an

d votes

, broug

ht befor

e the M

ayor a

nd Cou

ncil and

the De

velopm

ent Au

thority

egardin

g the B

IA. Th

e best p

ractice

w ou ld

t Mr. M

attison

leav e t

he dais

and e x

it any

meeting conference or forum t which any matter regarding the BIA is before the Council or

Development Authority.

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