CN 1996-369
Created By: Tobie Ronkartz on 08/05/1998 at 11:36 AM
Category: Ethics Rulings
Caption:


LOUISIANA BOARD OF ETHICS

DATED: July 27, 1998 OPINION NO.: CN 96-369

RE: In the matter of Sharon Stephens and Computer Applications Etc., Inc.

The Board of Ethics (the “Board”) pursuant to the authority contained in LSA-R.S. 42:1141, conducted a private investigation concerning information that Sharon Stephens, an employee of Southern University at New Orleans (“SUNO”) may have violated Section 1111C(2)(d) of the Louisiana Code of Governmental Ethics (LSA-R.S. 42:1101 et seq.) (the “Code”) by performing compensated services for Computer Applications Etc., Inc., a company which had a business relationship with her agency and may have violated Section 1112B(3) of the Code by participating in purchases on behalf of SUNO from Computer Applications Etc., Inc. Additionally, the Board considered information that Computer Applications Etc., Inc., a company owned 50% by Ms. Stephens, may have violated Section 1113A of the Code by entering into transactions with Ms. Stephens agency and may have violated Section 1117 by paying Ms. Stephens compensation which she was prohibited by Section 1111C(2)(d) of the Code from receiving.
On the basis of information obtained by the Board during the course of this investigation, and with the concurrence of Sharon Stephens and Computer Applications Etc., the Board now makes the following essential:
I.
FINDINGS OF FACT
1.
Sharon Stephens was employed as a part-time employee of SUNO at all times pertinent to this opinion. During that time, she served as the director of a SUNO subcontract on a grant awarded to Prairieview A&M University. Her duties involved administering the Network Resources and Training Site. This involved traveling, installation of computer equipment, and all technical activities associated with establishing the site. Ms. Stephens determined what computer equipment was needed to fulfill the subcontract.
2.
Ms. Stephens owns 50% of Computer Applications, Etc., Inc. Ms. Stephens also serves as the Chief Executive Officer of the corporation.
3.
In 1996, Ms. Stephens purchased $5434.95 in computer equipment on behalf of SUNO from Computer Applications, Etc., Inc. in connection with the grant awarded to Prairieview A&M University. Ms. Stephens initiated the orders with the assistance of the Director of the SUNO Office of Grants. Computer Applications Etc., Inc. is on the state vendors list.
4.
In 1996, Ms. Stephens received compensation, in the form of a salary, for services rendered to Computer Applications, Etc., Inc.
5.
Ms. Stephens is no longer an employee of SUNO.
II.
APPLICABLE LAW
At issue in this case is Section 1111C(2)(d), Section 1112B(3), Section 1113A and Section 1117 of the Code of Governmental Ethics.
Section 1111C(2)(d) of the Code prohibits a public servant from receiving compensation for services rendered to certain prohibited sources contained in Section 1115 of the Code. Section 1111C(2)(d) states:
The pertinent portion of Section 1115 provides: Section 1112B(3) prohibits a public servant from participating in governmental transactions in which certain classes of people have a substantial economic interest. Section 1112B(3) provides that:
Section 1113A provides in pertinent part as follows:
A. No public servant . . . or legal entity in which he has a controlling interest shall bid on or enter into any contract, subcontract, or other transaction that is under the supervision or jurisdiction of the agency of such public servant.

Section 1113A imposes a restriction on contracts, subcontracts and transactions which may be entered into by a legal entity in which a public servant owns a “controlling interest.” The Code defines “controlling interest” as “ownership by an individual or his spouse, either individually or collectively, of an interest which exceeds twenty-five percent of any legal entity.” LSA-R.S. 42:1102(8).
Section 1117 prohibits a private source from making a payment to a public servant which the public servant is prohibited by the Code from receiving and states:
III.
OPINION
It is the opinion of the Board that Sharon Stephens violated Section 1111C(2)(d) of the Louisiana Code of Governmental Ethics by receiving compensation for services rendered to Computer Applications Etc., Inc. at a time when the corporation had a business relationship with her agency. Additionally, it is the opinion of the Board that Computer Applications Etc., Inc. violated Section 1117 of the Code by making payments to Ms. Stephens as compensation for services rendered to the corporation at a time when Ms. Stephens was prohibited by the Code from receiving such payments.
Further, it is the opinion of the Board that Sharon Stephens violated Section 1112B(3) of the Code by participating in purchases on behalf of SUNO from her private employer, Computer Applications Etc., Inc., and in which the corporation had a substantial economic interest.
Further, it is the opinion of the Board that Computer Applications Etc., Inc., a corporation owned 50% by Sharon Stephens, violated Section 1113A of the Louisiana Code of Governmental Ethics by entering into transactions to sell computer equipment and supplies to SUNO at a time when Sharon Stephens was employed by SUNO.
The Board is authorized to impose fines upon finding that a violation of the Code has occurred. In this particular situation, given the facts outlined above, along with the fact that Sharon Stephens and Computer Applications Etc., Inc. fully cooperated with the Board during the course of the investigation, it is the conclusion of the Board that the interest of the public would be served by the imposition of a joint $500 fine.
IV.
DECREE AND ORDER
For the foregoing reasons:
IT IS ORDERED, ADJUDGED AND DECREED that the Board finds as a matter of fact and as a conclusion of law that Sharon Stephens violated Section 1111C(2)(d) of the Louisiana Code of Governmental Ethics by receiving compensation for services rendered to Computer Applications Etc., Inc. at a time when the corporation had a business relationship with her agency.
IT IS ORDERED, ADJUDGED AND DECREED that the Board finds as a matter of fact and as a conclusion of law that Computer Applications Etc., Inc. violated Section 1117 of the Louisiana Code of Governmental Ethics by making payments to Sharon Stephens, an employee of SUNO, as compensation for services rendered to the corporation at a time when Sharon Stephens was prohibited by the Code from receiving such payments.
IT IS ORDERED, ADJUDGED AND DECREED that the Board finds as a matter of fact and as a conclusion of law that Sharon Stephens violated Section 1112B(3) of the Louisiana Code of Governmental Ethics by participating in purchases on behalf of SUNO from her private employer, Computer Applications Etc., Inc., and in which the corporation had a substantial economic interest.
IT IS ORDERED, ADJUDGED AND DECREED that the Board finds as a matter of fact and as a conclusion of law that Computer Applications Etc., Inc., a corporation owned 50% by Sharon Stephens, violated Section 1113A of the Louisiana Code of Governmental Ethics by entering into transactions to sell computer equipment and supplies to SUNO at a time when Ms. Stephens was employed by SUNO.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that a joint fine of $500 be and is hereby imposed upon Sharon Stephens and Computer Applications Etc., Inc.
BY ORDER OF THE BOARD this 27th day of July , 1998.


s/Robert L. Roland s/T.O. Perry, Jr.
Robert Roland, Chairman T.O. Perry, Jr., Member


s/Harry Blumenthal s/Ronald L. Sawyer
Harry Blumenthal, Jr., Vice-Chairman Ronald L. Sawyer, Member


s/Robert Bareikis Absent and did not participate
Dr. Robert Bareikis, Member Nathan J. Thornton, Jr.,Member


s/E.L. Guidry s/Edwin O. Ware
Judge E. L. Guidry, Member Edwin O. Ware, III, Member


s/Virgil Orr s/Carole Cotton Winn
Dr. Virgil Orr, Member Rev. Carole Cotton Winn, Member


Absent and did not participate
Justice Revius Ortique, Jr., Member


CONSENT
The undersigned (a) stipulates to the facts found by the Board; (b) waives the procedural requirements contained in Section 1141 of the Code; (c) admits that her conduct, as described above, violated Sections 1111C(2)(d) and Section 1112B(3) of the Code; (d) consents to the publication of this opinion; (e) agrees to comply with the conditions and orders set forth in this opinion; and (f) agrees not to seek judicial review of the findings and actions taken in this opinion.



CONSENT
The undersigned (a) stipulates to the facts found by the Board; (b) waives the procedural requirements contained in Section 1141 of the Code; (c) admits that its conduct, as described above, violated Sections 1113A and 1117 of the Code; (d) consents to the publication of this opinion; (e) agrees to comply with the conditions and orders set forth in this opinion; and (f) agrees not to seek judicial review of the findings and actions taken in this opinion.

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