April 8, 1987

Disposition Agreement

This Disposition Agreement (Agreement) in entered into between the State Ethics Commission (Commission) and Ernest LaFlamme (Mr. LaFlamme), pursuant to section 11 of the Commission's Enforcement Procedures. This agreement constitutes a consented to final Commission order enforceable in the Superior Court pursuant to G.L. c. 268B, s.4(j).

On May 20,1986, the Commission initiated a preliminary inquiry into possible violations of the conflict of interest law, G.L. c. 268A, involving Mr. LaFlamme, the Chicopee City Treasurer. The Commission concluded its inquiry and, on December 8,1986, found reasonable cause to believe that Mr. LaFlamme violated G.L. c.
268A, s.19.

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The parties now agree to the following findings of fact and conclusions of law:

1. Mr. LaFlamme is the elected Treasurer for the City of Chicopee, a position that he has held for approximately 15 years. As City Treasurer, Mr. LaFlamme is a municipal employee as that term is defined in G.L. c. 268A, s.1(g).


Chicopee Cooperative Bank Deposits

2. Shortly after being first elected as Treasurer, Mr. LaFlamme became a member of the Board of Directors of the Chicopee Cooperative Bank. As a member of the board, he received a nominal yearly stipend of $700. More recently, however, because of additional bank duties, this stipend increased to approximately
$10,000 per year.

3. As City Treasurer, Mr. LaFlamme has sole discretion to determine where to deposit city funds.

4. Although he deposited the bulk of city funds into large commercial banks, Mr. LaFlamme also deposited and reinvested substantial sums of city money into the Chicopee Cooperative Bank.

5. Although no written record can be found, Mr. LaFlamme states that he asked his bank's general counsel as long as 15 years ago whether it was a conflict of interest for him to deposit city money into a bank of which he served as director. The bank's general counsel incorrectly advised him that so long as he filed a
disclosure statement relative to his bank position and the deposits he makes as treasurer, the conflict of interest law would be satisfied. Mr. LaFlamme contends that such a disclosure was prepared and filed with the city clerk.

6. General Laws c. 268A, s.19 provides in pertinent part that, except as otherwise permitted in s.19, a municipal employee may not participate as such in a particular matter in which to his knowledge a business organization in which he serves as a director has a financial interest None of the exceptions in s.19 applies

7. Each time he deposited or reinvested city funds with the Chicopee Cooperative Bank while he served as a director, Mr. LaFlamme participated in a matter in which the Chicopee Cooperative Bank had a financial interest, thereby violating s.19.

8. The Commission has found no evidence that Mr. LaFlamme gave preferential treatment to Chicopee Cooperative Bank either in the amount of deposits placed with the bank or in terms of interest rates on those deposits.

9. The Commission recognizes that Mr. LaFlamme made an attempt to determine whether his service on the bank's board of directors created problems under the conflict of interest law. The Commission will not defer to the advice given to Mr. LaFlamme. Not only was the advice incorrect, it was sought and received orally, rather than in writing, and was not given by the city solicitor.

As the Commission has made clear in past disposition agreements involving certain City of Revere officials[2] and members of the Massachusetts State Police[3], if a public employee involved in a potentially serious conflict of interest situation seeks to rely on a legal opinion as a shield against any action taken by the Commission, the important substantive provisions controlling the issuance of such opinion must be followed. Of paramount importance is that the opinion be in writing and be made a matter of public record. See, G.L. c. 268A, s.24. As to municipal employees, the opinion must also be given by a corporation counsel, city solicitor or town counsel.[4]


Sale of Parcel to Brother

10. Pursuant to G.L. c. 60, s.77B, Mr. LaFlamme was appointed by the Mayor of Chicopee to act as custodian of city property. As custodian, he is responsible for the care, custody, management and control of tax title properties.

11. A parcel of land located at 76A River Avenue in Chicopee was taken by tax title in the early 1970's. A final decree, foreclosing all redemption rights, was issued by the Land Court on September 27,1982. This decree allowed Mr. LaFlamme to sell the property at public auction.

12. Mr. LaFlamme's brother was at the time an abutter to the parcel of land.

13. Because his brother was an abutter, Mr. LaFlamme consulted with an assistant city solicitor to determine how he should conduct the sale. Although nothing was put in writing, the assistant solicitor apparently advised him to obtain an independent appraisal on the property instead of allowing the board of assessors to conduct its own appraisal. Mr. LaFlamme was further advised to follow the normal auction procedures and sell the property to the highest bidder.

14. On March 16, 1983 notices of the sale were posted at the main library and at city hall. Abutters were also notified, including Mr. LaFlamme's brother. The sale was also advertised in the newspaper.

15. According to the minutes of the sale, Mr. LaFlamme's brother was the only bidder; and Mr. LaFlamme accepted his bid of $3,000, which was equal to the appraisal amount.

16. General Laws c. 268A, s.19 provides, in part, that, except as otherwise permitted in s.19,[5] a municipal employee may not participate as such in a particular matter in which, to his knowledge, a family member has a financial interest.

17. By participating in the sale of the land to his brother, Mr. LaFlamme participated in a particular mat-

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ter in which his brother had a financial interest, thereby violating s.19.

18. The Commission has found no evidence that Mr. LaFlamme gave preferential treatment to his brother in connection with the sale of the land.

19. The Commission recognizes that Mr. LaFlamme sought legal advice from the assistant city solicitor regarding problems inherent in his selling city land to his brother.

As previously indicated in paragraph 9, the Commission will not defer to such advice where, in addition to being incomplete and/or incorrect, it is not put in writing and made a matter of public record.

Based on the foregoing facts, the Commission has determined that the public interest would be served by the disposition of this matter without further enforcement proceedings on the basis of the following terms agreed to by Mr. LaFlamme:

1. that he pay to the Commission the amount of fifteen hundred dollars ($1,500) as a civil penalty for depositing funds into the Chicopee Cooperative Bank in violation of s.19;

2. that he pay to the Commission the amount of five hundred ($500) as a civil penalty for selling city property to his brother in violation of s.19;

3. that, in the future, he refrain from participating, e.g. depositing or reinvesting city funds into the Chicopee Cooperative Bank, while serving as director for that bank; and

4. that he waive all rights to contest the findings of fact, conclusions of law and terms and conditions proposed under this Agreement in this or any related administrative or judicial civil proceeding in which the Commission is a party.


[1] Assuming Mr. LaFlamme had made the disclosure he contends he made, he would still not have avoided a s.19 violation. In the case of demand bank deposits, elected municipal officials can be exempted under s.19 by filing a disclosure of their financial interests with the city clerk. The deposits made by Mr. LaFlamme
were not bank demand deposits as defined by the Banking Commissioners office.

[2] In the Matter of John Deleire, (Docket No. 289); In the Matter of James F. Connery (Docket No. 285).

[3] In the Matter of John j. Hanlon, (Docket No. 299).

[4] Municipal employees may also seek an opinion directly from the Commission.

[5] None of the exceptions in s.19 is applicable to this case.