Docket No. 329

In the Matter of Ernest LaFlamme

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
Prod dures. 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.

Page 288

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 ofDirectors 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 organlzation in which he serves as a director
has a financial interesC None of the exceptions in s.19 applies
here.[1]

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-

Page 289

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.

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[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.