0»STATE OF ALABAMA

ETHICS COMMISSION

James T. Pursell. ChainnanHenry B. Gray III, Vice-ChainnanCamille S. Butrus

Helen Shores ue, Esq.H. Dean Buttram. Jr.. Esq.

MAILING ADDRESS

P.O. BOX4840MONTGOMERY,AL

36103-4840

STREET ADDRESS

RSA UNION100 NORTHUNIONSTREET

SUITE 104MONTGOMERY.AL 36104 E. J. (Mac) McArthur

Director

TELEPHONE (334) 242-2997

FAX (334) 242-0248

August 23, 1996

ADVISORY OPINION NO. 96-83Mr. Lewis H. KingOwner-ManagerUnited Management Enterprises648 Center Way, S.W.Birmingham, AL 35211

Conflict Of Interest! Member OfBirmingham Jefferson Civic Center BoardOf Directors Doing Business With HotelOwned By The Civic Center.

A member of the Board of Directors of theBirmingham Jefferson Civic Center may dobusiness with a hotel owned by the CivicCenter; provided, all competitive bid lawsare strictly adhered to, that no confidentialinformation obtained as a result of hisservice on the board of directors be used in amanner that would assist him in obtainingbids, and that no public equipment,facilities, time, materials, labor, or otherpublic property be used to benefit his privateenterprise, and that the board member notuse his influence as a member of the boardto affect the bid process or the contract inany way.

Further, a member of the Board of Directorsof the Birmingham Jefferson Civic Centermay not involve himself in negotiating themanagement contract between themanagement company and the Civic CenterBoard in such a manner as to benefit hisbusiness.

Lewis H. KingAdvisory Opinion No. 96-83Page two

Dear Mr. King:

The Alabama Ethics Commission is in receipt of your request for an Advisory Opinion ofthis Commission, and this opinion is issued pursuant to that request.

QUESTION PRESENTED

Maya member of the Birmingham Jefferson Civic Center Board of Directorsdo business with a hotel owned by the Civic Center?

FACTS AND ANALYSIS

Lewis H. King is the owner and manager of United Management Enterprises. Thebusiness provides services relating to various meetings and conventions being held in theBirmingham area. The services provided are city site inspection, selection of hotel, negotiation ofroom rates, negotiation of food and beverage services, negotiation of meeting space, as well asother items that provide for a good convention.

His procedure in obtaining locations is to submit bid proposals to the various hotels withthe capacity and facilities to handle the groups he intends to bring to the Birmingham area. Hewill provide information such as: the expected number of rooms needed, the expected length oftime the meeting will last, as well as other logistical information.

All contracts between United Management Enterprises and the hotel receiving thecontract are done through competitive bid.

Based on the size of meetings Mr. King generally handles, there are approximately threehotels in the Birmingham area that can handle groups needing up to four hundred rooms. One ofthese hotels is the Sheraton which is owned by the Birmingham Jefferson Civic Center. Whilethe Civic Center owns the Sheraton they do not operate it. An outside company is contracted withon an annual basis, to manage the hotel. The only direct dealing between the Civic Center and thehotel is that the Civic Center will approve the budget submitted by the hotel to the Civic Center.All hiring, contracts, staffing matters, etc. are handled by the independent business operating thehotel. There is no day-to-day contact between the Civic Center and the Sheraton Hotel.

In October 1995,Lewis King was appointed to serve on the Birmingham Jefferson CivicCenter Board of Directors. Based on this fact, he is concerned as to whether or not he maycontinue to do business with the Sheraton while serving on the Board of Directors, without

Lewis H. KingAdvisory Opinion No. 96-83Page three

creating a conflict of interest.

The Alabama Ethics Law, Code of Alabama, 1975, Section 36-25-1 (25) states:

"(25)PUBLIC OFFICIAL. Any person elected topublic office, whether or not thatperson has taken office, by the vote of thepeople at state, county, or municipal level ofgovernment or their instrumentalities, including governmental corporations, and anyperson appointed to aposition at the state, county, or municipal level of government ortheir instrumentalities, including governmental corporations. For purposes of thischapter, a public official includes the chairs and vice-chairs or the equivalent offices ofeach state political party as defined in Section 17-16-2."

Section 36-25-1 (2) states:

"(2)BUSINESS WITH WHICH THE PERSON IS ASSOCIATED. Any business of whichthe person or a member of his or herfamily is an officer, owner, partner, board ofdirector member, employee, or holder of more thanfive percent of thefair market valueof the business."

Section 36-25-1 (8) states:

"(8) CONFLICT OF INTEREST. A conflict on thepart of apublic official orpublicemployee between his or herprivate interests and the official responsibilities inherent inan office of public trust. A conflict of interest involves any action, inaction, or decisionby a public official orpublic employee in the discharge of his or her official duties whichwould materially affect his or herfinancial interest or those of his or herfamily membersor any business with which theperson is associated in a manner differentfrom themanner it affects the other members of the class to which he or she belongs. "

Section 36-25-5(a) states:

"(a)No public official orpublic employee shall use or cause to be used his or her officialposition or office to obtain personal gainfor himself or herself, orfamily member of thepublic employee orfamily member of thepublic official, or any business with which theperson is associated unless the use and gain are otherwise specifically authorized bylaw. Personal gain is achieved when thepublic official,public employee, or a familymember thereof receives, obtains, exerts control over, or otherwise converts topersonaluse the object constituting such personal gain. "

Lewis H. KingAdvisory Opinion No. 96-83Page four

Section 36-25-5( c) states:

"(c)No public official orpublic employee shall use or cause to be used equipment,facilities, time, materials, human labor, or other public property under his or herdiscretion or controlfor theprivate benefit or business benefit of thepublic official,public employee, any otherperson, orprincipal campaign committee as defined inSection 17-22A-2, which would materially affect his or herfinancial interest, except asotherwise provided by law or asprovided pursuant to a lawful employment agreementregulated by agency policy. "

Section 36-25-8 states:

"Nopublic official, public employee,former public official orformer public employee,for a period consistent with the statute of limitations as contained in this chapter, shalluse or disclose confidential informationgained in the course of or by reason of his orher position or employment in any way that could result infinancial gain other than hisor her regular salary as such public official orpublic employeefor himself or herself, afamily member of thepublic employee orfamily member of the public official, orfor anyother person or business. "

Section 36-25-11 states:

"Unless exemptpursuant to Alabama competitive bid laws or otherwise permitted by law,nopublic official orpublic employee, or a member of the household of the publicemployee or thepublic official, and no business with which the person is associatedshall enter into any contract toprovide goods or services which is to bepaid in whole orin part out of state, county, or municipalfunds unless the contract has been awardedthrough a process of competitive bidding and a copy of the contract isfiled with thecommission. All such contract awards shall be made as a result of original bid takings,and no awardsfrom negotiations after bidding shall be allowed. A copy of eachcontract, regardless of the amount, entered into by a public official, public employee, amember of the household of thepublic employee or thepublic official, and any businesswith which theperson is associated shall befiled with the commission within 10 daysafter the contract has been entered into. "

It is important that public officials be allowed to conduct their private businessenterprises; however, it is equally important that they not create a conflict of interestby doing so.

Based upon the facts as presented, it would not be a conflict of interest for a

Lewis H. KingAdvisory Opinion No. 96-83Page five

member of the Birmingham Jefferson Civic Center Board of Directors to do businesswith a hotel owned by the Civic Center; provided,

1. All competitive bid laws are strictly adhered to.

2. That the board member not use any confidential information obtained as aresult of his service on the board in aiding his private enterprise receiving the bids.

3. That no public equipment, facilities, time, materials, labor, or other publicproperty, be used in such a manner as to benefit his private enterprise.

4. That the board member not use his influence as a member of the board toaffect the bid process.

CONCLUSION

A member of the Board of Directors of the Birmingham Jefferson CivicCenter may do business with a hotel owned by the Civic Center; provided, allcompetitive bid laws are strictly adhered to, that no confidential information obtainedas a result of his service on the board of directors be used in a manner that wouldassist him in obtaining bids, and that no public equipment, facilities, time, materials,labor, or other public property be used to benefit his private enterprise, that the boardmember not use his influence as a member of the board to affect the bid process or thecontract in any way.

Further, a member of the Board of Directors of the Birmingham JeffersonCivic Center may not involve himself in negotiating the management contractbetween the management company and the Civic Center Board in such a manner as tobenefit his business.

Lewis H. KingAdvisory Opinion No. 96-83Page six

AUTHORITY

By 4 -0 vote of the Alabama Ethics Commission on August 23, 1996.

. Dean Buttram, Jr.ChairAlabama Ethics Commission