Conflict and Confusion

Controversy over ‘conflict of interest’ have commissioners crying ‘raw politics’

Do Blount County Commissioners have conflicts of interest that prevent them from being objective in their commission service?

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The buzz around the courthouse Tuesday was news of a state consulting agency opinion that two Blount County commissioners had violated a conflict of interest law.

Depending on who was talking, the issue behind Monday’s County Technical Assistant Service opinion varied. Some believed a Democratic commissioner was being unfairly treated because she raised an issue in an open forum of a Republican commissioner having a conflict of interest.

Others said she was simply playing politics, could have asked her questions in private and that she had conflicts of interest of her own she should have revealed.

On Wednesday, Oct. 10, the question Wendy Pitts Reeves raised about Mike Lewis’ job was answered in an opinion from the state attorney general.

On Saturday, Oct. 20, commissioners received a copy of an CTAS opinion regarding a possible conflict of interest involving Pitts Reeves and commission Bob Proffitt. The CTAS opinion was requested by Blount County Mayor Jerry Cunningham at the request of “several commissioners,” he said.

And thus heated up the debate regarding commissioners’ jobs and their ability to serve without conflict of interest.

Commissioners in conflict

The state attorney general found that Lewis, who is vice president at Green Bank, where the county does its business, did have a conflict of interest. When he learned of the opinion, Lewis said he was prepared to resign his seat.

“If legally I can’t serve, I don’t want to. I fully intended to go by whatever the attorney general’s opinion was,” he said. “I was obliged at that point to do the right thing, and, if the right thing was to resign, that’s what I wanted to do.”

Lewis said the attorney general provided a remedy for the conflict.

“A shareholder not only has potential conflict to serve on the budget or purchasing committees but also on the commission,” Lewis said. “As a result, I transferred my stock to my wife. All the attorney general says is you can’t own it. It doesn’t say who can own it, but you can’t own it.”

Commissioner Bob Proffitt said the question regarding himself and Reeves is different from the conflict of Lewis being on the purchasing committee.

“The opinion was if he did not own stock, then it was really OK. That leaves me with questions. The stock can be changed in 30 minutes,” he said. “I like him personally and count him as a friend but (his response) did not answer my question about that conflict of interest.”

Commissioner David Ballard had the same concerns in Lewis’ case.

“Looking at the attorney general’s opinion on commissioner Lewis, I don’t know that transferring holdings to your spouse is defined a circuitous,” he said.

Reeves said she raised the question of Lewis’ conflict after reading the Budget Law of 1957, which the county now operates under. She said it appeared to her that Lewis had a conflict because of the law’s strict rules. Before she could vote to approve Lewis being on the Budget committee, she wanted an answer from the county attorney.

Reeves said the county had $37 million in Green Bank where Lewis was an executive.

Reeves’ motion at the July commission meeting to get an opinion from the county attorney before approving Lewis to the purchasing committee was defeated.

“The commission voted and didn’t want to ask the opinion,” she said. “I accepted the will of the commission.”

A month later during the August meeting, commissioners Scott Helton and Tonya Burchfield both read prepared statements raising questions about Reeves and Proffitt and their affiliation with Highland Health Partnership, which the county uses in its medical coverage. Proffitt is a family practice physician and Pitts Reeves is a licensed clinical social worker. Helton said they had conflicts of interest because they were being paid by the county to treat county employees.

Reeves said that at no point has she been aware of any conflict of any kind until Helton read his statement.

“I said I would look into that, and I have. I met with the director of Highlands Health Partnership, and I’ve watched, and I do not get checks that say Blount County government,” she said. “I do not have any conflict of interest.”

Reeves said she resigned from the human resources committee because she knew at some point they would be voting on where the county got its health insurance as an employee benefit. Reeves wondered why the commission chair, a Republican and a dentist, hadn’t been mentioned in the issue.

“It’s interesting to me Dr. (Bob) Ramsey has not been mentioned. Why are we the only two who have been mentioned?’” Reeves said.

Fellow Democrat David Ballard echoed Reeve’s concerns.

“I’m curious as to why there’s not mention of Dr. Ramsey in there,” he said.

Ramsey said dentists operate differently than other health care providers.

“We’re not under contract with BlueCross BlueShield. In the practice of dentistry, what you do is a verbal contract with the patient, and they choose to pay through their insurance company,” he said.

Ramsey said this isn’t the first time this has come up. Former commissioner Dr. Otto Slater, a dentist, was questioned about the subject when he was in office, and the state attorney general sided with Slater.

“They assured us before that when you’re not under contract with an insurance provider, then there’s no conflict of interest,” Ramsey said.

The chairman said that as far as he knows he doesn’t have a contract with BlueCross BlueShield or the county.

“This is something that needs to be settled. This will be something that the ethics committee will have to make a recommendation on. It will be the decision of county attorney Rob Goddard, the ethics committee, CTAS and the state attorney general.”

Reeves said the real story isn’t about alleged conflicts of interest on the part of herself and Proffitt.

“No, I’m sure I don’t have a conflict of interest of any kind. The story is about what happens to people who ask questions and attempt to hold people accountable in Blount County,” she said. “I asked one question about one person on one committee and an enormous amount of energy is being spent. That’s wasted energy. The people of Blount County deserve better.”

According to the CTAS opinion, written by legal counsel Stephen Austin, Reeves and Proffitt do have “an indirect conflict” because they were being paid by the county through a third party. An indirect conflict can be remedied so long as the commissioner acknowledges the conflict to the commission. Both Proffitt and Reeves told Blount Today they didn’t read the disclaimers during the June meeting because they didn’t think they had conflicts.

Commissioner Mike Walker said the disclaimer needs to be read.

“Whether you contract directly or indirectly then this needs to be read,” he said. “If reading the disclaimer form is not enough, then how do we remedy the problem?”

Commissioner Gary Farmer said he read the disclaimer as a matter of conscience and as a way of being cautious.

“The rule is there and was explained to us by CTAS, and it’s not difficult to abide by. Read the statement,” Farmer said.

The disclaimer the commissioners who read it in the June meeting acknowledged an conflict on his or her part, explained the conflict and then assured the body that the commissioner could “vote according to their conscience and obligation to their constituents.”

The following commissioners read the statements during the June meeting before voting on the budget:

* commissioner Tonya Burchfield (employee of Blount County Juvenile Court employee).

* commission Gary Farmer (teacher with Blount County Schools).

* commissioner Scott Helton (employee with Blount County Juvenile Court).

* commissioner Ron French (member of board of directors of Seymour Volunteer Fire Department).

* commissioner Mark Hasty (his wife is an employee of the Blount County Planning Department).

* commissioner Joe McCulley (his wife is a Blount County school teacher).

* commissioner Holden Lail (former and retired Blount County schools employee).

* commissioner Steve Hargis (member of Friendsville Volunteer Fire Department board of directors).

* commissioner Gerald Kirby (commissioner with Blount County Fire Protection Utility).

* commissioner Mike Lewis (Blount County sheriff is on board of Green bank where he is an executive).

Reeves and Proffitt both said they didn’t read the disclaimer statements.

“I did not have any contract with the county. I don’t work for the county and don’t have any contracts with the county,” Reeves said.

Proffitt said he didn’t read the disclaimer because there was no discussion of the health plan that night. Proffitt said he didn’t think there was even a case of indirect conflict in his situation.

“I don’t feel there is even an indirect conflict of interest because I have no way of altering who people choose as their physician, and they have no way of requiring that I see them,” he said. “I have trouble with even indirect conflict of interest.”

Both Reeves and Proffitt said the way they’re being treated will make others reluctant to ask questions in commission meetings.

“The end game is to get people to stop asking questions,” Reeves said.

Proffitt said he was concerned the issue will cause the public and commissioners to be disinclined to raise questions about conflict of interest.

“That would be the last thing I would want to see,” he said. “You get to a point along the way there has to be a certain trust, that is trust by commissioners of other commissioners and trust by commissioners of people in the other courthouse offices.”

Ballard agreed with his colleagues on their assessment that it is only getting more difficult to ask questions of county authority.

“Anybody asking hard-hitting and relevant questions as to county business and finances and ethics have been pretty much attacked in regard to doing what would be or should be good representation of people and good county business,” Ballard said. “They’ve been in turn attacked.”

Reeves said she didn’t believe she would have to resign based on the CTAS opinion.

“My concern all along since this was brought up in August,” she said, “has been to protect my clients, and I’ve done everything I can to make sure that happens.”

Proffitt was even more adamant when asked about resigning.

“No, I’m certainly not an attorney, but I would seek legal assistance myself before considering resigning,” he said. “I’m stubborn.”

What Proffitt and Reeves must do now is in the hands of the State Attorney General. State Rep. McCord, at the request of Mayor Cunningham, is to bring the question to the state attorney general.

Once the attorney general makes an opinion, Proffitt and Reeves would need to take a look at it as far as the potential conflicts and whether the attorney general thinks there is a violation or a potential violation of the statute, Blount County Attorney Rob Goddard said.

“All these violation situations have to be looked at on their own facets. He will issue an opinion like in Mike Lewis’ case, and the parties need to go from there based on what he does opine,” Goddard said.

When asked what remedies there may for Reeves and Proffitt, if found to be in a conflict of interest situation, Goddard said, “I wouldn’t want to speculate until I saw what the attorney general said, where the problem areas are, and if there are problem areas, in his opinion.”

Mayor Jerry Cunningham said it was his job to pass the request regarding Proffitt and Reeves to CTAS.

“I was asked to get the opinion, by fully one-third of the commissioners on separate occasions over the past couple of months after she didn’t request an opinion as did Mike Lewis,” he said. “I was the conduit, and I got the opinion, and there it is. Whatever they decide, I’ll abide by it.”

“I think at this point, actions to be taken have to be on an individual basis,” Cunningham added. “I intend to go no further with it because I have fulfilled the request.”

The mayor said Lewis was willing to go to the attorney general for an opinion.

“Mr. Lewis said when he received the attorney general’s opinion, he would abide by it, even if it demanded resignation,” he said. “I would expect the same of Mr. Proffit and Ms. Reeves based on the oath they took.”

Cunningham said the matter began in July when Reeves asked for an opinion about whether Lewis had a conflict by serving on the Purchasing Committee.

“Protocol and respect for a fellow commissioner dictate you pick the phone up and say, ‘You may have a problem, you need to look into this,’” Cunningham said. “Even if he had come (to the meeting), he would have been completely blind sided. It’s plain old raw politics. I understand that.”

Cunningham said Lewis immediately asked him to seek the state attorney general’s opinion on whether he could serve on the purchasing committee.

The mayor said this issue may go to the ethics committee and, if it does, the commissioners should recuse themselves for that committee.

“Because one of the commissioners about whom questions were raised sits as chair (Pitts Reeves), certainly they would not want to give the impression of the fox guarding the hen house,” he said.

Attempts were made to contact all 21 commissioners regarding the issue. Several gave responses to the issue.

* Commissioner Steve Samples said each commissioner must address conflict of interest in his or her own situation.

“I appreciate what the mayor has sent out, and I appreciate it in the fact it made me look at my own situation and make certain there are no potential conflict in my own situation,” he said.

* Commissioner David Graham said he would like the state legislature to clarify the conflict of interest law.

“The law seems to have a lot of questions, more questions than answers from the legislation. Whether you take it to the county mayor’s attorney, CTAS attorneys or the state attorney general’s office, all these legal levels are being bombarded with questions about conflict of interest,” he said. “I think it needs to be more clarified, and I hope they do that in the next session.”

* Commissioner Scott Helton said he was one of the individuals who requested the mayor ask for a CTAS opinion.

“In light of the concerns about conflict of interest involving commissioner Lewis and the situations that have arisen in Knox County, I requested from the mayor to seek CTAS and attorney general’s opinion in order to prevent a similar situation in Blount County that occurred in Knox County by being upfront and straight-forward with the public,” he said.

* Commissioner Mike Walker said that when it comes to contracting with the county for health providers, it is part of the things commissioners need to consider.

“We’ve got several county employees, several school board employees, and several service providers, whether banking like the original opinion was on, and physicians and health care providers. Our commission is made up of people who do business,” he said. “If there is a problem with the people serving as commissioners in a profession that contracts directly or indirectly with the county, then I would like the attorney general to say there’s a problem with people in those occupations serving on commission.”

* Commissioner John Keeble said evidently some questions had been brought up to Cunningham, and he was getting clarification. “I think with an ethics committee, we have to police ourselves,” he said.

Commissioner Gerald Kirby said some laws outlined in the packet of information from CTAS appear to conflict one another. Commissioner Tonya Burchfield was out of town and unable to comment on the story.

* Commissioner Brad Harrison said he hadn’t really looked over the CTAS opinion closely since getting it.

“To be honest with you I really haven’t looked it over real well.,” he said. “I don’t know what to say about the situation.”

* Commissioner Ken Melton said he received the package from the county mayor but had not had opportunity to read it.

The following commissioners could not be reached for comment, did not return phone calls or were unavailable for comment because they were out of town: Joe McCulley, Mark Hasty, Holden Lail, Ron French and Monika Murrell.

CTAS is a part of the University of Tennessee’s Institute for Public Service with the purpose of assisting county governments with questions relating to fiscal administration, public works, accounting and other government issues.

CTAS’ opinion

On Oct. 3, Stephen Austin with CTAS replied to Cunningham’s initial request of Proffitt and Reeves voting on the budget, writing: “I am writing in response to your request for legal opinion regarding whether Blount County commissioners who work as doctors are in violation of state law by providing health care services to county employees under the county employee health benefit package funded by the county.

“As I understand the situation, Blount County contracts with Highlands Health Partnership to provide the county a list of doctors for use in the county’s health benefit package for county employees. The two county commissioners in question are listed doctors. By using listed doctors the county pays less for health care services for its employees when employees use a listed doctor.

“County employees do not have to use a listed doctor but will pay a higher co-pay if they do not use a listed doctor. When a county employee receives services from a listed doctor, the county pays the doctor through its agent, Health Cost Solutions. However, the county does not contract directly with any doctor on the list. In addition, Highlands Health Partnership does not provide any form of compensation to the listed doctors.”

Austin outlined provisions of T.C.A. 12-4-101 (b) which state it is unlawful for a public official whose duty it is to vote, let out, overlook or in any manner superintend any work or any contract with the county, to be indirectly interested in any such contract unless the officer publicly acknowledges a conflict of interest.

Austin said indirectly interested means any contract in which the official is interested, but not directly so. Austin also stated said that “an official who violates the provisions of 12-4-101 shall forfeit all pay and compensation under the contract and shall be dismissed from office and shall be ineligible for the same or a similar position for 10 years.

“It is my opinion based on the facts as I understand them to be that the commissioners in question have an ‘indirect interest’ in the contract that the county has with Highlands Health Partnership. Under T.C.A. 12-4-101 (b), they must publicly acknowledge this indirect interest prior to voting on the contract. Failure to do so would constitute a violation of T.C.A. 12-4-101 (b).

“As previously stated, the penalty for an official who violates the provisions of T.C.A. 12-4-101 is the forfeiture of all pay and compensation under the contract and dismissal from office. However, under the present situation, the commissioners in question receive no pay or compensation under the county’s contract with Highlands Health Partnership. Nevertheless, they could face removal from office if they have failed to publicly acknowledge their ‘indirect interest’ prior to voting on the contract,” Austin said.

Austin said the County Purchasing Law of 1957, which Blount County went back to on July 1, 2007, contains a separate, more stringent conflict of interest provision. T.C.A. 5-14-114(a) prohibits county commissioners from being financially interested or having any personal beneficial interest, either directly or indirectly, in any contract for contractual services used by or furnished to any department or agency of the county government.

“Putting aside the issue of the Highlands Health Partnership contract there is another issue of concern. In your letter, you stated that the county commissioners in question voted on the county budget and appropriations to fund the employee health benefit package. As noted in your letter, these funds are used to pay the doctor bills of county employees who see the doctors on the list provided by Highlands Health Partnership. In essence, the commissioners voted on the budget which pays their compensation as doctors when they see county employees. County commissioners are prohibited from voting on a budget that includes their salary, however, such commissioners may vote on the tax rate.

Austin said T.C.A. 5-14-114(b) prohibits a county commissioner from accepting or receiving, directly or indirectly, any money or anything of value whatsoever from any person, firm or corporation to which any county contract may be awarded.

“It is my opinion that the county commissioners in question are in violation of this statute. An official who violates this statute commits a Class D Felony. However in the aforementioned case, State vs. Whitehead 43 S.W.3d 921, the Tennessee Court of Criminal Appeals found this penalty to be unenforceable.

In a letter dated Oct. 5, Austin responded to a second request from Cunningham regarding conflict of interest as it relates to commissioners who are employed by the county.

Austin said the law relating to county employees who are commissioners is T.C.A. 12-4-101, the general conflict of interest statute, which Austin says has been amended several times.

Under the current statute, said Austin, “A county commissioner is prohibited from voting on a contract in which he is directly interested. The attorney general opined that it is a direct conflict of interest for a county commissioner who is a county employee to vote on a budget that contains his salary.”

However, Austin said that “a county commissioner who is also a county employee whose employment predates his election or appointment to the county legislative body may vote on the budget, appropriation resolution or tax rate resolution or amendments thereto, unless the vote is on a specific amendment to the budget or a specific appropriation or resolution in which such person is directly interested.

“However, prior to voting in those instances when it may be permissible, the commissioners must disclose the interest.”

Austin concluded that the issue of commissioners who are county employees did not apply to Cunningham’s first question.

“The aforementioned exception to the rule does not affect my answer to your original question because in the instant case, the county commissioners/doctors are not county employees,” he said.

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