2001-695
Created By: Sylvia Scott on 09/17/2002 at 02:10 PM
Category: Ethics Rulings
Caption:


LOUISIANA BOARD OF ETHICS

DATED: September 12, 2002 OPINION NO: 2001-695

RE: In the matter of Gary Lala and IWG, L.L.C.

The Board of Ethics (the “Board”) pursuant to the authority contained in LSA-R.S. 42:1141, conducted a private investigation concerning information that Gary Lala, a former member of the Jefferson Parish Housing Authority Board of Commissioners, may have violated Section 1121A(2) of the Code of Governmental Ethics (LSA-R.S. 42:1101 et seq.) (the “Code”) by entering into a contract with the housing authority through his wholly owned company, IWG, L.L.C., to provide financial services within two years following the termination of his service on the board for the housing authority.
On the basis of information obtained during the investigation, and with the concurrence of Gary Lala, the Board now makes the following essential:
I.
FINDINGS OF FACT
1.
Gary Lala served as a commissioner on the Jefferson Parish Housing Authority Board [hereinafter the Authority] from July 10, 1985 to May 21, 1998.
2.
Thirteen months after his resignation from the authority Gary Lala was approached by the chairman of the Authority to inquire whether IWG, L.L.C. was interested in bidding on an investment services contract with the Authority.
3.
Gary Lala owns 100% of IWG, L.L.C.
4.
IWG, L.L.C. did submit a bid for the investment services contract and was informed by the authority that its was the lowest bid.
5.
If called to testify, Mr. Lala would explain that many individuals who are associated with local housing authorities operate under the mistaken impression that former employees and commissioners may legitimately contract with such authorities after the expiration of a period of one year from their last date of service. The misconception is rooted in provisions of federal statutory law and federal regulations which, although not in conflict with the law of Louisiana, do provide for a lesser period than the latter state law. As a result, the one year federal provision has been recited in a wide variety of documents including, but not limited to: b. Requests for proposal forms employed by most local Housing Authorities in Louisiana;

c. Procurement policies for the Jefferson Parish Housing Authority; and
d. Standards of conduct of the Jefferson Parish Housing Authority;
6.
If called to testify at a public hearing, Mr. Lala would state that before I.W.G., L.L.C. entered the financial services contract with the Authority, Mr. Lala met with the attorney for the authority, Larry Pieno, who incorrectly advised him that a one year period was applicable. Mr. Pieno presented Mr. Lala with a 1998 legal opinion that he had authored and delivered to the Authority. In this opinion, Pieno cited laws other than the Code of Governmental Ethics and concluded that former members of the housing authority could perform work as long as one year had passed since termination of service on the housing authority board. Mr. Lala relied on this faulty legal advice.
7.
On July 6, 1999, Gary Lala through IWG, L.L.C. entered into a contract with the Ethics Board Docket Authority to provide financial services. The contract was executed and took effect after the expiration of one year but before the expiration of two years from the termination of Mr. Lala’s service as a member of the Authority.
8.
If called upon to testify, Mr. Lala would also state that he was unaware that his actions presented a violation of the Code and that he did not intend to violate any provision of the Code.
9.
Within the period of two years from his resignation as a member of the Authority, Mr. Lala, through IWG, L.L.C., was compensated for the services he rendered under the contract in the amount of $ 10,800. After the expiration of two years from the date of his resignation, Mr. Lala was compensated for services he rendered under the contract in the amount of $9,360.
10.
If called to testify at a public hearing, Mr. Lala would state that based on his financial service, the Authority tripled the interest income that it had earned the year before he began providing services under the said contract.
II.
APPLICABLE LAW
At issue in this case is Section 1121A(2) which prohibits certain post-employment activities of former members of boards and commissions. Section 1121A(2) provides that:
A. No former member of a board or commission shall, for a period of two years following the termination of his public service on such board or commission, contract with, be employed in any capacity by, or be appointed to any position by that board or commission.
III.
OPINION
It is the finding of the Board that Gary Lala did not intentionally or knowingly violate the Code of Governmental Ethics. Further, the circumstances of the case demonstrate no improper motive or purpose on Mr. Lala’s part. First, he did not solicit the services contract but was approached by the Authority. Second, he was selected as the low bidder in a competitive process. Third, he relied on the legal advice of an attorney who was experienced in the law applicable to housing authorities. Nevertheless, it is the opinion of the Board that Gary Lala, a former member of the Jefferson Parish Housing Authority Board of Commissioners, violated Section 1121A(2) of the Code of Governmental Ethics by entering into a contract with the housing authority through his wholly owned company, IWG, L.L.C., to provide financial services within two years following the termination of his service on the board for the housing authority.
The Board is authorized to impose civil penalties upon finding that a violation of the Code has occurred. However, although the provisions of the Code were not observed, this case does present unusual mitigating circumstances. Mr. Lala took pains to follow the law but was misinformed by counsel. Further, he fully cooperated with this Board during the course of its investigation. Considering these circumstances it is the conclusion of the board that a civil penalty of $2000 be imposed of which $1000 will be suspended based upon Mr. Lala’s future compliance with the Code of Governmental Ethics.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 Gary Lala, a former member of the Jefferson Parish Housing Authority Board of Commissioners, violated Section 1121A(2) of the Code of Governmental Ethics by entering into a contract with the housing authority through his wholly owned company, IWG, L.L.C., to provide financial services within two years following the termination of his service on the board for the housing authority.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that a civil penalty of $2,000 be and is hereby imposed upon Gary Lala of which $1,000 is hereby suspended based upon Mr. Lala future compliance with the Code of Governmental Ethics.
By Order of the Board this 12th day of September, 2002.



s/Robert L. Roland s/T. O. Perry, Jr.
Robert L. Roland, Chairman T. O. Perry, Jr., Vice-Chairman
Absent and did not participate. s/John W. Greene
Janice Martin Foster Judge John W. Greene


Absent and did not participate. s/R. L. Hargrove, Jr.
Judge E. L. Guidry, Jr. R. L. Hargrove, Jr.


s/Michael J. Kantrow, Sr. s/Joseph Maselli
Michael J. Kantrow, Sr. Joseph Maselli

s/Hank Perret s/Ascension Delgado Smith
Henry C. Perret, Jr. Ascension Delgado Smith


s/Edwin O. Ware
Edwin O. Ware

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 his conduct, as described above, violated Section 1121A(2) 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.


Gary Lala Date
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