Recent Ohio Ethics Commission Opinion - 2016-01

July 5, 2016

2016-01 Restrictions on Public Officials Employed by Entities that Receive Public Financial Assistance
Syllabus:

 

(1) Division (A)(3) of Section 2921.42 of the Revised Code prohibits a public official, during his or her term of office and for one year thereafter, from profiting from a contract that was awarded by the official or his or her legislative body while he or she is a member thereof, unless the contract was competitively bid and was awarded to the entity that submitted the lowest and best bid. In the absence of competitive bidding, there is no exception to R.C. 2921.42(A)(3).

 

(2) For purposes of Division (A)(3) of Section 2921.42 of the Revised Code, the term "public contract" includes a public agency's provision of financial assistance, including but not limited to, grants, loans, and tax abatements, to a for profit or nonprofit corporation, company, or other entity and from which, in return, the public agency acquires desired community services, regardless of whether the financial assistance is derived from state, federal, or other moneys.

 

(3) Division (A)(3) of Section 2921.42 of the Revised Code prohibits a public official from also being employed by a for profit or nonprofit corporation, company or other entity, where: (i) the establishment or operations of the for profit or nonprofit corporation, company, or other entity are dependent upon receipt of the public agency's financial assistance; (ii) the creation or continuation of the official's position of employment is dependent upon the financial assistance; (iii) monies received from the financial assistance would be used to compensate the public official or as a basis for his or her compensation; or (iv) the public official would otherwise profit from the award of the contract.

 

(4) For purposes of Division (A)(3) of Section 2921.42 of the Revised Code, whether the establishment or operation of a for profit or nonprofit corporation, company, or other entity is "dependent" on a public agency's financial assistance is determined by the totality of the situation's facts and circumstances including, but not limited to: (i) the amount and nature of the financial assistance that the for profit or nonprofit corporation, company, or other entity receives from the public agency; and (ii) the proportional effect that the financial assistance has upon its operation.

 

(5) For purposes of Division (A)(3) of Section 2921.42 of the Revised Code, absent a showing to the contrary, if a for profit or nonprofit corporation, company, or other entity receives a cumulative value of twenty-five percent or more of its funding during either a calendar or fiscal year from the financial assistance that is provided to it by a public agency, there is a rebuttable presumption that it is "dependent" on the public agency's financial assistance.

 

(6) The prohibition imposed by Division (A)(3) of Section 2921.42 of the Revised Code does not apply to a public official who serves a nonprofit corporation in an uncompensated position regardless of the amount of financial assistance that the entity receives from the public agency that he or she serves.