Louisiana Board of Ethics In re Great Southern Dredging, Inc.

195 So. 3d 631, 2015 La.App. 1 Cir. 0870, 2016 WL 3058202, 2016 La. App. LEXIS 1049
CourtLouisiana Court of Appeal
DecidedMay 27, 2016
DocketNo. 2015 CA 0870
StatusPublished
Cited by5 cases

This text of 195 So. 3d 631 (Louisiana Board of Ethics In re Great Southern Dredging, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Louisiana Board of Ethics In re Great Southern Dredging, Inc., 195 So. 3d 631, 2015 La.App. 1 Cir. 0870, 2016 WL 3058202, 2016 La. App. LEXIS 1049 (La. Ct. App. 2016).

Opinions

CRAIN, J.

| pGreat Southern Dredging, Inc. (Great Southern) appeals a decision of the Louisiana Ethics Adjudicatory Board (EAB) finding that it violated the Louisiana Code of Governmental Ethics (Ethics Code) by making payments to an entity that was prohibited from receiving the payments, and assessing it with a $10,000.00 penalty for the violation. We affirm.

FACTS AND PROCEDURAL HISTORY

In 2011, the Greater Lafourche Port Commission awarded Great Southern a [634]*634$1,6 million contract for the Flotation Canal Shoreline Protection Project. During the project, Great Southern subcontracted work to Larry Griffin Towing Company, Inc, (Griffin Towing), and paid Griffin Towing approximately $94,000.00 for services rendered. Additionally, Great Southern paid Griffin Towing approximately $194,000.00 for work unrelated to the Flotation Canal Shoreline Protection Project.

The Louisiana Board of Ethics (the Board) charged Griffin Towing with violating the Ethics Code by receiving the payments from Great Southern. The charge was based on the Board’s allegation that Larry Griffin was both an elected member of the Greater Lafourche Port Commission and owner of a greater than 25% interest in Griffin Towing. Griffin Towing had 100 shares of stock outstanding, and 51 shares were issued in the ñamé of Larry Griffin’s wife. Although Larry Griffin did not own Griffin Towing stock in his own name, the Board alleged that he owned a one-half interest in the 51 shares in community with his wife. Because of Larry Griffin’s ownership interest in Griffin Towing and his membership on the Greater Lafourche Port Commission, the Board alleged that the Ethics Code prohibited Griffin Towing from receiving payments from Great Southern, an entity with a contractual relationship with the Greater Lafourche Port Commission. Griffin |sTowing admitted to the charged violation and accepted a $20,000.00 penalty assessed to both Griffin Towing and Larry Griffin.

The Board separately charged Great Southern with violating the Ethics Code by making the prohibited payments to Griffin Towing. After considering the evidence presented at a public hearing, the EAB issued a written decision and order finding that the payments violated the Ethics Code because Larry Griffin’s ownership interest in Griffin Towing prohibited Griffin Towing from receiving the payments. The EAB then assessed a $10,000.00 penalty to Great Southern, the maximum penalty for the violation. Great Southern now appeals.

STANDARD OF REVIEW

The Louisiana Administrative Procedure Act (APA) governs judicial review of the EAB decisions. La. R.S. 42:1143; La. R.S. 49:950 et seq.; Board of Ethics In re Davies, 10-1339 (La.App. 1 Cir. 12/22/10), 55 So.3d 918, 920. Judicial review is confined to the record developed in the administrative proceedings, and the EAB’s decision may be reversed or modified only if substantial rights of the appellant are prejudiced because the findings, inferences, conclusions, or decisions are: (1) in violation of constitutional or statutory provisions; (2) in excess of the agency’s statutory authority; (3) made upon unlawful procedure; (4) affected by other error of law; (5) arbitrary, capricious, or an abuse of discretion; or (6) not supported and sustainable by a preponderance of evidence as determined by the reviewing court. La. R.S. 49:964 G. The reviewing court owes no deference to the legal findings of the EAB, rather, it reviews questions of law de novo then renders judgment on the record. See Ellis v. Louisiana Bd. of Ethics, 14-0112 (La.App. 1 Cir. 12/30/14), 168 So.3d 714, 720-21, writ denied, 15-0208 (La.4/17/15), 168 So.3d 400.

UETHICS CODE VIOLATION

The Ethics Code was enacted to establish ethical standards for the conduct of elected officials and state employees to protect against conflicts of interest between their private interests and the duties of their positions. La. R.S. 42:1101 B. To prohibit persons seeking to obtain or having governmental contracts or hav[635]*635ing interests substantially affected by the performance of certain governmental employees from attempting, through payments of something of economic value, to curry favor, gain preferential treatment, or be excused from substandard performance by reason of prohibited payment, Louisiana Revised Statutes 42:1111 C(2) prohibits public servants and entities they own or control from receiving certain payments. See IT Corp. v. Commission on Ethics for Public Employees, 453 So.2d 251, 258 (La.App. 1 Cir.1984), affirmed, 464 So.2d 284 (La.1985) (interpreting Louisiana Reviséd Statutes 42:1118, the predecessor to Section 42:1111).

Section 42:1111 C(2) provides:

(2) No public servant and no legal entity in which the public servant exercises control or owns an interest in excess of twenty-five percent, shall receive any thing of economic value for or in consideration of services rendered, or to be rendered, to or for any person during his public service, unless such services are:
(a) Bona fide and actually performed by the public servant or by the entity;
(b) Not within the course of his official duties;
(c) Not prohibited by R.S. 42:1112 or by applicable laws or regulations governing nonpublic employment for such public servant; and
(d) Neither performed for nor compensated by any person from whom such public servant would be prohibited by R.S. 42:1115(A)(1) or (B) from receiving a gift.

|fiLouisiana Revised Statutes 42:1115, referenced in Section 42:1111 C(2), provides:

A. No public servant shall solicit or accept, directly or indirectly, any thing of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public servant knows or reasonably should know that such person:
(1) Has or is seeking to obtain contractual or other business or financial relationships with the public servant’s agency, or
(2) Is seeking, for compensation, to influence the passage or defeat of legislation by the public servant’s agency.
B. No public employee shall solicit or accept, directly or indirectly, anything of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public employee knows or reasonably should know that such person:
(1) Conducts operations or activities which are regulated by the public employee’s agency.
(2) Has substantial economic interests which may be substantially affected by the performance or nonperformance of the public employee’s official duty.

Sections 42:1111 C(2) and 42:1115 prohibit receipt of payments by the public servant and entities in which he exercises control or has the requisite ownership interest. Correlatively, Section 42:1117 of the Ethics Code prohibits a third party from making those payments to the public servant or entity, providing:

No public servant or other persont[1] shall give, pay, loan, transfer, or deliver or offer to give, pay, loan, transfer, or deliver, directly or indirectly, to any public servant or other person any thing of economic value which such public [636]

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195 So. 3d 631, 2015 La.App. 1 Cir. 0870, 2016 WL 3058202, 2016 La. App. LEXIS 1049, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louisiana-board-of-ethics-in-re-great-southern-dredging-inc-lactapp-2016.