Advisory
Opinion No. 99-21
BEFORE
THE NEVADA COMMISSION ON ETHICS
IN
THE MATTER OF THE REQUEST FOR ADVISORY OPINION OF
HENRY
K. ARRIEN, II, Member, Humboldt General Hospital Board of Trustees
This
Opinion is in response to a first-party opinion request filed with the Nevada
Commission on Ethics (Commission) by Henry K. Arrien, II. Mr. Arrien
serves on the Humboldt General Hospital Board of
Trustees (“Board”). He was appointed to this position in January,
1997 and elected in November, 1998. His term expires in 2002.
Mr.
Arrien is also a partner in Gamma Electric ("Gamma"). His partner is
Albert Padilla. They have been partners since 1982. Since being appointed to the
Board, Mr. Arrien has not bid on any hospital related work.
Specifically,
Mr. Arrien asked if he could bid on hospital projects that would ultimately go
before the hospital board for approval. Mr. Arrien noted that he would be
bidding on projects as a subcontractor, not as the general contractor.
A
hearing on the opinion request was held on July 16, 1999. Mr. Arrien appeared
and presented testimony. At the conclusion of the hearing, Mr. Arrien waived his
statutory right to confidentiality so this opinion will be publicly distributed.
Based on the foregoing, the Commission makes the following Findings of Fact, Conclusions of Law, and Opinion.
2.
He was appointed to this position in January, 1997 and elected in
November, 1998.
3.
His current term will expire in 2002.
4.
He is also a partner in Gamma Electric in Winnemucca, Nevada and has been
since 1982.
5.
Since he was appointed to the Board, Mr. Arrien has not bid on any
hospital projects.
6.
State law requires that general contractors list all sub-contractors on
the bids that are presented to boards and commissions for approval.
OPINION
The
Commission has jurisdiction in this matter pursuant to NRS 281.511(1). Based
upon the Findings of Fact, the Commission concludes that Mr. Arrien is a public
officer as defined in NRS 281.4365.
NRS
281.505(1) and NRS 281.481(2) contain the relevant statutory provisions in this
matter.
NRS
281.505(1) provides:
1.
Except as otherwise provided in this section, a public officer or employee shall
not bid on or enter into a contract between a governmental agency and any
private business in which he has a significant pecuniary interest.
NRS
281.481(2) states:
2.
A public officer or employee
shall not use his position in government to secure or grant unwarranted
privileges, preferences, exemptions or advantages for himself, any member of his
household, any business entity in which he has a significant pecuniary interest,
or any other person.
The
question before the Commission is whether Mr. Arrien can simultaneously serve on
the Board and submit bids as an electrical sub-contractor regarding hospital
improvement contracts that will be voted on by the Board.
As
a partner of Gamma Electric, it is obvious that Mr. Arrien has a significant
pecuniary interest in the success of the business. As such, we find that it
would be a violation of NRS 281.505 for Mr. Arrien or Gamma to submit bids as an
electrical subcontractor that would ultimately be voted on by the Board he is a
member of. Furthermore, it could also be a violation of NRS 281.481(2) as Mr.
Arrien could use his Board position to gain an unwarranted privilege for Gamma
Electric. As such, it is unfortunate but Mr. Arden will have to decide whether
he wishes to continue serving on the Board or whether he wishes to begin bidding
on hospital improvement projects.
The
Commission wishes to make it very clear that it is not intimating that Mr. Arden
has or would commit the above violations. As a matter of fact, the Commission
commends Mr. Arrien for not bidding on any hospital projects during his two
years of Board service. The Commission also commends Mr. Arrien for seeking an
advisory opinion prior to submitting any bids. Nonetheless, the Commission
cannot refuse to recognize that the opportunity for opportunism exists because
of the influence Mr. Arrien may have on his Board. This potential for financial
gain could lead to direct violations of NRS 281.481(2) and NRS 281.505.
CONCLUSION
Due
to the potential opportunity for opportunism, the Commission finds that it would
be a violation of NRS 281.481(2) and NRS 281.505 for Mr. Arden to bid on
electrical work for the Humboldt General Hospital projects since he currently
serves on that Board. As such, it is unfortunate but Mr. Arrien will have to
decide whether he wishes to continue serving on the Board or whether he wishes
to begin bidding on hospital improvement projects.
COMMENT
It
is specifically noted that the foregoing Opinion applies only to these specific
circumstances. The provisions of the NRS quoted and discussed above must be
applied on a case-by-case basis, with results which may vary depending on the
specific facts and circumstances involved.
DATED:
February 1, 2000.
NEVADA
COMMISSION ON ETHICS
BY:
Peter C. Bernhard, Chairman