Letter Ruling  Public Education Letter in the Matter of James Jajuga

Date:	04/30/2020
Organization:	State Ethics Commission
Referenced Sources:	G.L. c. 268A, the Conflict of Interest Law, as Amended by c. 194, Acts of 2011

Public Education Letter

April 30, 2020

James Jajuga

 

 

Dear Mr. Jajuga:

As you know, the State Ethics Commission conducted a preliminary inquiry into whether you, in your former capacity as a City of Methuen city councilor, violated the conflict of interest law by, in September 2017, voting to approve the Methuen Police Department (“MPD”) Superior Officers’ collective bargaining agreement covering the period from July 1, 2017 through June 30, 2020 (“Superior Officers’ CBA”). On December 19, 2019, the Commission voted to find reasonable cause to believe that your actions violated the state conflict of interest law, General Laws chapter 268A, and authorized adjudicatory proceedings.

Rather than initiating adjudicatory proceedings, however, the Commission chose to resolve this matter through the issuance of this Public Education Letter for the following reasons: (1) you relied in good faith on the advice of Methuen’s city solicitor in voting to approve the Superior Officers’ CBA; (2) prior to your votes in question, you had a practice of abstaining from participating as a city councilor in MPD matters; (3) you were not involved in negotiating or drafting the Superior Officers’ CBA; (4) the City Council unanimously approved the Superior Officers’ CBA and evidently would have approved it without your votes; and (5) you cooperated fully with the Commission’s investigation. The Commission believes that the public resolution of this matter is warranted given its importance to Methuen and its residents and the extent of the controversy and confusion concerning how the conflict of interest law applied to the City Council’s September 2017 approval of the Superior Officers’ CBA. The Commission believes further that this Public Education Letter will give you, other public employees and the public in general a clearer understanding of how the conflict of interest law applied in your situation in Methuen and applies in similar circumstances throughout the Commonwealth. 

The Commission and you have agreed that this matter will be resolved publicly with this letter and that there will be no formal proceedings against you. You have chosen not to exercise your right to a hearing before the Commission. 

The Facts

On September 18, 2017, seven collective bargaining agreements, including the Superior Officers’ CBA,^[1] which had been negotiated by then Methuen Mayor Stephen N. Zanni,^[2] were before the City Council at its regular meeting for approval. Except for the MPD Patrolmen’s collective bargaining agreement,^[3] the Council, with nine members present, voted unanimously to approve each of the agreements.^[4] Also on September 18th, immediately following its regular meeting, the City Council held a special meeting in which it again voted on the seven collective bargaining agreements.^[5] The City Council again unanimously voted to approve the Superior Officers’ CBA.^[6] At both meetings, the motion to approve the Superior Officers’ CBA was made by Councilor George Kazanjian and seconded by Councilor Thomas Ciulla, the Council’s votes were voice votes without roll calls.

Both September 18, 2017 City Council meetings were chaired by Councilor Atkinson. In addition to the city councilors, Mayor Zanni, Methuen City Solicitor Richard J. D’Agostino and Methuen City Auditor Thomas Kelly were present at both meetings. There was no presentation, explanation or discussion whatsoever prior to the votes during either meeting of the terms, cost or financial impact of any of the collective bargaining agreements negotiated by Mayor Zanni and approved by the City Council. Not a single question was asked about the substance of the agreements prior to the votes at either meeting.^[7] 

Prior to the September 18th votes, City Solicitor D’Agostino provided the City Council with a memorandum, dated September 18, 2017, in which he advised that the city councilors who normally abstained under the conflict of interest law from participating in Council discussions and votes on MPD-related issues could nonetheless do so under the so-called “Rule of Necessity” if without their participation the Council would lack a quorum to act on the issues.^[8] City Solicitor D’Agostino more specifically advised in the memorandum that all city councilors could vote on the MPD collective bargaining agreements at the September 18, 2017 Council meeting. Prior to receiving the city solicitor’s September 18th memorandum, several city councilors, including each of you, had regularly abstained from participating in MPD-related matters due to conflict of interest concerns.^[9]

At the September 18, 2017 regular City Council meeting, City Solicitor D’Agostino, in response to questions from you, repeated his written advice that all city councilors could vote on the MPD collective bargaining agreements under the Rule of Necessity without “peril” under the conflict of interest law. After the Council’s first votes to approve the seven collective bargaining agreements, the city solicitor gave further advice on the Rule of Necessity describing its invocation as “a last resort,” but not explaining what that meant or how the invocation of the rule on September 18th was a last resort. Later that evening at the Council’s special meeting, when asked by Councilor Vidler just before the second votes on the two MPD collective bargaining agreements whether the Rule of Necessity needed to be invoked again, City Solicitor D’Agostino replied “yes” and reaffirmed his advice concerning the rule.^[10]

After receiving the city solicitor’s advice at both the regular and special City Council meetings that you could vote on the MPD collective bargaining agreements under the Rule of Necessity, you voted at both of those meetings to approve the agreements including the Superior Officers’ CBA. At the time of your votes, your son was a MPD superior officer and was to be compensated pursuant to the Superior Officers’ CBA.

You had not participated in drafting or negotiating the Superior Officers’ CBA and you testified under oath that then-Mayor Zanni told you, and that you believed, the agreement only offered “0/2/2” raises to officers (i.e., zero increase the first year, 2% the second, and 2% the third). The agreement itself, which is dated August 31, 2017,^[11] copies of which were apparently provided to you at or before the September 18th meeting, included on page 22, in Article XXIV – Compensation, the following language in bold font: 

The Superior Officers shall receive the following compensation,

The cost of living increases are as follows:

July 1, 2017 – zero percent increase

July 1, 2018 – two percent increase

July 1, 2019 – two percent increase

The agreement, however, further provided on the same page “The preceding increases shall be implemented as follows:” and then set out nearly two pages of complex formulas for calculating the superior officers’ compensation. These formulas were substantially different from those used in prior agreements and had the effect of dramatically increasing the superior officers’ compensation.^[12]  Prior to or at the time of your September 18, 2017 votes, you were not provided with, nor did you request, any comparison of the new Superior Officers’ CBA’s language and compensation formulas with those of the prior superior officers’ collective bargaining agreement, nor with any estimate of the financial impact on the City of the new formulas and other terms of the new agreement. ^[13]

The City did not cost-out the new Superior Officers’ CBA until after you as Methuen’s new Mayor requested a financial analysis of the agreement shortly after your January 2018 inauguration. Estimates of salaries under the new Superior Officers’ CBA varied due to the complexity of the agreement’s compensation formulas, but all indicated that the superior officers would be receiving exceptionally large pay increases. It was estimated that the salaries of captains, lieutenants, and sergeants would rise more than 180% to approximately $440,000, $270,000, and $190,000, respectively, under the new Superior Officers’ CBA, not including overtime or paid details. Reportedly, these salaries were never paid. In July 2018, the Mayor’s office entered into a memorandum of understanding (“the MOU”) with the superior officers’ union that reduced their pay increases to an average 18.7% increase. Under the MOU, captains’ average base pay was to rise to about $130,000, lieutenants’ to about $113,000, and sergeants’ to about $92,000 by fiscal year 2020.

On February 1, 2019, the Office of the Inspector General (“OIG”) issued and made public a letter to you as Mayor and the City Council detailing and criticizing, among other things, the City’s process for approving the Superior Officers’ CBA. The OIG letter concluded that under the circumstances it was unlikely that the 2017 Superior Officers’ CBA and the 2018 MOU were legally enforceable agreements and recommended that the City Council seek to rescind the CBA and MOU. Following the issuance of the OIG’s letter, the Mayor’s office reset superior officers’ salaries to the levels provided for in the superior officers’ collective bargaining agreement for 2014-2017. Arbitration between the City and the superior officers’ union concerning the agreement is reportedly ongoing. 

The Law

Section 19

As a Methuen City Councilor at the relevant time, you were a municipal employee subject to the restrictions of the conflict of interest law, G.L. c. 268A. Section 19 of the law prohibits a municipal employee from participating^[14] in his public capacity in a particular matter^[15] in which to his knowledge he or his immediate family^[16], or partner, or a business organization^[17] in which he is serving as an employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment has a financial interest. The financial interest may be positive or negative, large or small.

In this matter, the City Council’s September 18, 2017 decision to approve the Superior Officers’ CBA was a “particular matter” under § 19. One’s son is a member of one’s “immediate family.” As your son would be compensated pursuant to the Superior Officers’ CBA, he had a financial interest in the contract of which you had knowledge.

Accordingly, you were prohibited by § 19 from participating as a city councilor in the City Council’s September 18, 2017 decision to approve the Superior Officers’ CBA.^[18]  Nonetheless, you participated in that decision as a City Councilor by twice voting to approve the agreement after having been advised by the City Solicitor that you were permitted to do so under the “Rule of Necessity.”

The Rule of Necessity

In almost all circumstances, elected officials must abstain from participating in their official capacities in any particular matter as to which they have a conflict of interest under § 19.^[19] In rare instances, however, when: (1) an elected governmental body is legally required to act on a matter, and (2) no quorum can be obtained of non-conflicted members of the body, and (3) there is no other governmental body that can act on the matter, then, as a last resort, the members of the elected body may invoke the judicially-created “Rule of Necessity” and act on the matter.  With respect to the City Council September 18, 2017 approval of the Superior Officers’ CBA, the rare circumstances permitting the invocation of the Rule of Necessity did not exist.

First, the Rule of Necessity may only be invoked when it is legally necessary to act. Here, the City Council was not legally required to act at the time of the September 18, 2017 votes because the existing collective bargaining agreement for the superior officers contained an “evergreen clause” providing that the agreement would remain in effect “until the approval of a successor contract.” Thus, the MPD superior officers would continue to be compensated pursuant to the existing collective bargaining agreement until such time as a new agreement was approved. Accordingly, although the prior agreement’s stated term had expired on June 30, 2017, it nonetheless was still in full force and effect on September 18, 2017 and would have continued to be so beyond that date until the approval of a new agreement. (Indeed, the prior superior officers’ agreement was signed in July 2015, more than one year into the July 2014 to June 2017 period it covered.) No law, rule or regulation required the City Council to replace the existing superior officers’ collective bargaining agreement with a new one at the time of the 2017 vote. That Mayor Zanni’s term was expiring and five city councilors were leaving the Council in December 2017 did not create a legal necessity to replace the existing agreement before 2018, let alone by September 18, 2017. Nor did the prohibition against raising municipal employees’ salaries during the last three months of an election year create a necessity to approve the new agreement on September 18, 2017. The approval of a new superior officers’ agreement legally could have waited until after a new mayor and new city councilors were sworn in in January 2018.^[20] Accordingly, there was no legal necessity for the City Council to act on the Superior Officers’ CBA on September 18, 2017.

Second, even when there is a legal necessity for an elected body to act, the Rule of Necessity may only be invoked when a quorum cannot be obtained of members who are not conflicted or whose conflicts of interest cannot be resolved through public disclosure or otherwise. Therefore, before a body may act under the Rule of Necessity, all members of the body must fully disclose their conflicts of interest with respect to the matter before the body. If members have conflicts of interest with respect to the matter before the body arising under § 23(b)(3)^[21] of the law rather than under § 19, they may still lawfully participate in the matter if they first publicly disclose their conflicts and then act fairly and impartially in the matter. If, taken together, there are enough unconflicted members and conflicted members who are able to resolve their conflicts through disclosure or otherwise for a quorum, the Rule of Necessity may not be used. Accordingly, in the present matter, rather than invoking the Rule of Necessity on the basis of the vaguely described conflicts of unidentified city councilors, as was done by the City Council on September 18, 2017, each city councilor’s MPD-related conflict of interest should have been fully disclosed and separately considered to determine if the conflict was resolvable through public disclosure pursuant to § 23(b)(3) or an unresolvable conflict under § 19. Had this been done, it is apparent that the City Council could have obtained a quorum of councilors who were not conflicted under § 19 at the time of the September 18, 2017 votes. Specifically, had all of the city councilors fully and publicly disclosed their MPD-related conflicts of interests at the September 18, 2017 regular and special Council meetings prior to the votes on the MPD collective bargaining agreements, it would have been evident that with respect to the Superior Officers’ CBA, only your conflict and those of two other councilors, were not resolvable by public disclosure under § 23(b)(3) and that, without the three of you, the City Council had sufficient members present who were eligible, or would become eligible through public disclosure under § 23(b)(3), to participate in the Council’s action on the Superior Officers’ CBA for a quorum. Accordingly, even had there been a legal necessity for the City Council to act on the Superior Officers’ CBA on September 18, 2017, the Council could not properly have invoked the Rule of Necessity to do so with your participation because it had a quorum of members eligible (immediately or following disclosure) to act without you.

Given that the circumstances required to permit the City Council to invoke of the Rule of Necessity did not then exist,^[22] the Commission found that there is reasonable cause to believe that you violated § 19 of the conflict of interest law by voting as a city councilor to approve the Superior Officers’ CBA on September 18, 2017.

Disposition

The Commission is authorized to resolve violations of G.L. c. 268A with adjudicatory proceedings and civil penalties. Based upon its review of this matter, however, the Commission has determined that the public interest would be best served by the issuance of this educational letter in lieu of adjudicatory proceedings, and that your receipt of this Public Education Letter should be sufficient to ensure your understanding of and future compliance with the conflict of interest law.

This matter is now closed.

 

[1] The Superior Officers’ CBA is with the Methuen Police Officers Association, New England Police Benevolent Association, Local 17, which represents all Methuen police captains, lieutenants and sergeants, excluding intermittent and auxiliary police, and covers the period from July 1, 2017 through June 30, 2020. The 2017 Superior Officers’ CBA succeeded a prior collective bargaining agreement between the same parties which was signed on July 9, 2015 and covered the period from July 1, 2014 through June 30, 2017.

[2] Mayor Zanni left office at the end of 2017 when his term ended. In addition to Mayor Zanni, the City’s negotiating team reportedly included City Solicitor Richard J. D’Agostino, MPD Chief Joseph Solomon and Human Resources Director Anne Randazzo.

[3] The Patrolmen’s CBA was approved with eight in favor, none opposed, and one (Fountain) abstaining.

[4] The Council took separate votes approving each of the seven agreements in a total of about seven minutes.

[5] City of Methuen ordinances required two separate meetings and votes for the City Council to approve collective bargaining agreements. At the special meeting, the city solicitor stated that the second vote on the agreements was occurring in the special meeting rather than at the next regular Council meeting in October because the Council was prohibited by statute from voting to raise municipal employee salaries during the last three months of a year during which a municipal election is held. 2017 was an election year in Methuen.

[6] One City Councilor (Ferry) was not present at the special meeting, which lasted a little over six minutes.

[7] Toward the end of the regular meeting, after the votes on the collective bargaining agreements and during the discussion of the contract with the city council’s employees, there was a brief exchange between City Councilor Jennifer Kannan and City Auditor Kelly in which Kannan stated of Mayor Zanni and the collective bargaining agreements he negotiated that “he put a 0, 2 and 2 for next year,” and Kelly stated that the approved collective bargaining agreements “all go into fiscal year 2019 and 2020.”

[8] The City Council, a nine-member body, required at least five members present and voting to have a quorum to act on the collective bargaining agreements.

[9] As of September 18, 2017, there were two city councilors (including you) with immediate family members who were MPD superior officers, one who was employed at the MPD as a permanent intermittent police officer and one who had an arrangement for future employment with the MPD.

[10] Based on the meeting minutes and videos, it is not clear that a city councilor rather than the city solicitor expressly invoked the rule at either meeting.

[11] According to news media reports, however, the agreement may in fact not have been signed until September 6, 2017. The agreement was signed by Mayor Zanni and Gregory J. Gallant, President, NEPBA Local 17.

[12] Most importantly, the Article XXIV paragraph A of the new agreement changed the definition of “base pay” to include additional payments that were not included in the prior contract and changed the order in which the “base pay” is calculated to maximize the benefit for the superior officers, thus “Base pay and added base pay calculations are to be calculated in the following order and manner to arrive at base pay for all purposes: Base pay, then add cleaning allowance, subtotal, then calculate and add Holiday compensation under Article XII, then add calculated Protective Vest/Hazardous Duty and Technology Compensation percentage, calculate Quinn Bill/Education Incentive.” 

[13] The new Superior Officers’ CBA, like its 2015 predecessor, contained in its final article (Article XXXI – Duration of Agreement) a so-called “evergreen clause” stating that “[t]he provisions of this Contract shall remain in effect until the approval of a successor contract.”

[14] “Participate” means to participate in agency action or in a particular matter personally and substantially as public employee through approval, disapproval, decision, recommendation, the rendering of advice, investigation or otherwise. G.L. c. 268A, §1(j).

[15] “Particular matter” includes any contract, claim, controversy, decision or determination. G.L. c. 268A, §1(k).

[16] “Immediate family” means the employee and spouse, their parents, children and brothers and sisters. G.L. c. 268A, §1(e).

[17] “Business organization” does not include municipalities. EC-COI-06-03.  The MPD, as a municipal agency, is an “organization” but not a “business organization” within the meaning of § 19.

[18] Given that the superior officers’ salaries were based under the Superior Officers’ CBA on the maximum patrolman’s salary, § 19 also prohibited you from participating in the approval of the Patrolman’s CBA.

[19] While appointed public employees may seek to obtain an exemption to this section through disclosure to and approval by their appointing authority, this option is not available to elected public officials.

[20] Councilors Atkinson, Ferry, Ciulla, Marsan and Fountain were not eligible for reelection in November 2017 due to term limits. You were seeking election as mayor.

[21] Section 23(b)(3) prohibits a public employee from knowingly or with reason to know acting in a manner which would cause a reasonable person, having knowledge of the relevant circumstances, to conclude that any person can improperly influence or unduly enjoy the public employee’s favor in the performance of her official duties, or that she is likely to act or fail to act as a result of kinship, rank, position or undue influence of any party or person. The section further provides, however, that “it shall be unreasonable to so conclude if such officer or employee has disclosed in writing to his appointing authority or, if no appointing authority exists, discloses in a manner which is public in nature, the facts which would otherwise lead to such a conclusion.”

[22] A fuller explanation of the Rule of Necessity and its proper use, with examples, may be found at https://www.mass.gov/advisory/advisory-05-05-the-rule-of-necessity.