Article 78 proceedings
A NYS General Municipal Law § 51 Lawsuit —>
This statute provides taxpayers with a right to file suit against public officials
who waste taxpayer monies (ref: “GMU General Municipal” Article 4, § 51 on
<<http://public.leginfo.state.ny.us/menugetf.cgi?COMMONQUERY=LAWS>>):
Prosecution of officers for illegal acts. All officers, agents, commissioners and
other persons acting, or who have acted, for and on behalf of any county,
town, village or municipal corporation in NY state, and each and every one of
them, may be prosecuted, and an action may be maintained against them …
to prevent waste or injury to, or to restore and make good, any property,
funds or estate of such county, town, village or municipal corporation…
Waste is defined in § 51 to include officers or agents of local government (e.g.,
county, town, village or municipal corporation) who allow for any fraudulent,
illegal, unjust, or inequitable claims or expenses to be paid:
Waste or injury consists in any board, officer or agent in any county or
municipality, by collusion or otherwise, contracting, auditing, allowing or
paying, or conniving at the contracting, audit, allowance or payment of any
fraudulent, illegal, unjust or inequitable claims, demands or expenses, or any
item or part thereof against or by such county or municipality…
Section 51 authorizes a taxpayer lawsuit “when the acts complained of are
fraudulent, or a waste of public property in the sense that they represent a use
of public property or funds for entirely illegal purposes.”
The taxpayer action is based on a public official’s misconduct, such as fraud,
collusion, corruption, or bad faith [Lavin v. Klein (2004) 783 N.Y.S.2d 815].
A bond may have to be posted when such a lawsuit is filed.
Personal liability arises only in some violations of this law, i.e. “if the illegal acts
were collusive, fraudulent, or motivated by personal gain.” [Stewart v. Scheinert
N.Y., 1979] Despite the restrictions, that definition seems broad enough to cover
many cases that might arise regarding situations like wind power.
The penalties are not clearly defined in this statute, but would likely be at least
the extent of the damages proven.
——————————————————————————————
3 – A NYS General Municipal Law Article 18 Lawsuit —>
There are several sections of NY General Municipal Law Article 18 (§800-§813)
that may apply. (See <<http://tinyurl.com/2srnb4>>.)
For instance, §809 says that town officials should disclose any financial
incentives they may obtain or relationships they have, that could result in a
conflict of interest.
For the rest of this section I quote (my emphasis) from passages from
<<http://tinyurl.com/28s4h4>>, as it seems to be very pertinent:
Article 18 of the General Municipal Law contains the provisions of law which
relate to conflicts of interest of municipal officers and employees. Pursuant to
General Municipal Law, §800(3), a municipal officer or employee has an interest
in any contract with his municipality if he receives a direct or indirect financial
or material benefit as a result of that contract.
That interest is prohibited if the officer or employee, individually or as a
member of a board, has the power or duty to: (a) negotiate, prepare, authorize or
approve the contract or approve payments thereunder; (b) audit bills or claims
under the contract; or (c) appoint an officer or employee who has any such
powers or duties (General Municipal Law, §801), and none of the exceptions
contained in Article 18 are applicable (see General Municipal Law, §802).
Any contract willfully entered into in which there is a prohibited interest
is null, void and unenforceable (§804) and any officer or employee who
willfully or knowingly violates the provisions of Article 18 may be guilty
of a misdemeanor (§805).
Also note that, if an officer or employee has an interest in a contract that is not
prohibited (under the provisions of Article 18, General Municipal Law, §803)
nonetheless it is generally required that the interest be disclosed in writing
and included in the official record of the governing board’s proceedings.
Disclosure is not required under section 803 in the case of an interest in a
contract which is not prohibited under subdivision two of section 802 (General
Municipal Law, §803[2]).
A “contract”, for purposes of Article 18, is defined in General Municipal Law,
§800(2) as any “claim, account or demand against or agreement with a
municipality, express or implied.” At least one lower court, the City Court of the
City of Mount Vernon, has held that an application for a building permit and
subsequent issuance thereof constitutes a “contract” for conflict of interest
purposes (People v Pinto, 88 Misc 2d 303, 387 NYS2d 385).
If the awarding of a wind power, water extraction (or similar) project to a
developer is found to be a contract, a municipal officer or employee would have
an interest if he or she stands to gain a direct or indirect material or pecuniary
benefit from the contract even though the officer or employee is not a party to the
contract (1985 Opns St Comp No. 85-60, p 84; 24 Opns St Comp, 1968, p 561;
1981 Opns St Comp No. 81-295, p 318).
The disclosure requirements of General Municipal Law, section 809 provide,
that every application, petition or request submitted for a variance, amendment,
change of zoning, license or permit must state the name, residence and the
nature and extent of the interest of any officer or employee of the municipality, in
the person, partnership or association making such application, petition or
request, to the extent known to the applicant.
For the purpose of this section, an officer or employee is deemed to have
an interest in the applicant when he, his spouse, or their brothers,
sisters, parents, children, grandchildren, or the spouse of any of them:
(a) is the applicant, (b) is an officer, director, partner or employee of the
applicant, (c) legally or beneficially owns or controls stock of a corporate
applicant or is a member of a partnership or association applicant, or (d) is a
party to an agreement with such an applicant, expressed or implied,
whereby he may receive any payment or other benefit, whether or not
for services rendered, dependent or contingent upon the favorable
approval of such application, petition or request.
[Since this statute contemplates that the person or entity making the application
will make the required disclosures, it also may not apply to a situation where
the interest of the local government officer or employee is adverse to that of the
applicant.]
It should be noted that even when a transaction does not result in a prohibited
conflict of interest and the provisions of section 809 do not apply, the town’s
code of ethics should be reviewed to determine whether it contains any pertinent
provisions. Under General Municipal Law, §806, a town code may regulate or
prescribe conduct which is not expressly prohibited by Article 18.
Note that the courts of this State have held public officials to a high
standard of conduct and, on occasion, have negated certain actions
which, although not violating the literal provisions of Article 18 of the
General Municipal Law, violate the spirit and intent of the statute, are
inconsistent with public policy, or suggest self-interest, partiality or
economic impropriety (see, e.g., Zagoreos v Conklin, 109 AD2d 281, 491
NYS2d 358; Matter of Tuxedo Conservation v Town Board of the Town of
Tuxedo, 69 AD2d 320, 418 NYS2d 638; Conrad v Hinman, 122 Misc 2d 531,
471 NYS2d 521).
Thus, for example, in Tuxedo, supra, the court held that a board member
should have disqualified himself from voting to grant a construction permit to a
subsidiary of a client of the advertising agency of which he was an officer.
Accordingly, any town board member should abstain from discussions — and
not even be present when such discussions are held — as well as obviously not
voting on any matter which, while not violating Article 18 or the town’s code of
ethics, suggests even an appearance of self-interest, partiality or economic
impropriety.
Violations of some sections of General Municipal Law Article 18 may mean that
public officials may also be in violation of NYS Penal Law Section 195.00, Official
Misconduct and/or Penal Law Section 200, (Bribery Involving Public Servants
and related offenses).