MURPHY HUBNER McKEON P.C.

(Formerly Johnson, Murphy, Hubner, McKeon, Wubbenhorst, Bucco & Appelt, PC)

COUNSELLORS-AT-LAW
MARTIN F. MURPHY1 MICHAEL E. HUBNER JAMES L. McKEON, III1 ROBERT H. OOSTDYK, JR. GARY J. CHESTER1 ANTHONY M. BUCCO SHARON L. WEINER2
1 2

RIVERDALE SOUTH 51 ROUTE 23 SOUTH, P.O. BOX 70, RIVERDALE, NEW JERSEY 07457 TELEPHONE: (973) 835-0100 FACSIMILE: (973) 835-1732 www.murphyhubnerlaw.com

JAMES T. BRYCE CHRISTOPHER I. WOODS1 OF COUNSEL: DIANA WALSH SERENE M. HENNION ROBERT S. MEYER HOWARD F. APPELT, II
NEW YORK OFFICE: 23 WEST STREET

NEW JERSEY & NEW YORK BAR NEW JERSEY, NEW YORK & PENNSYLVANIA BAR

WARWICK, NY 10990
TEL: (845) 987-1577

Writers Direct: Tel. (973) 835-0100 ext. 230 sweiner@murphyhubnerlaw.com

ATTORNEY/CLIENT PRIVILEGED MEMORANDUM

TO: CC: FROM: DATE: RE: Councilwoman Deborah Shapiro Mayor and Members of Livingston Township Council Sharon L. Weiner, Esq., Livingston Township Attorney June 22, 2011 Possible Conflict of Interest of Councilwoman Deborah Shapiro due to her involvement with the Hanyu International Academy Charter School

You have asked my opinion as to whether being a founding member of the Hanyu International Academy Charter School (HIACS) has created a conflict with your position as a Livingston Councilwoman. After examining the Local Government Ethics Law and applicable case law, I have concluded that while becoming a founding member of HIACS was not in itself a conflict with your position as Livingston Councilwoman, your subsequent actions violated the Local Government Ethics Law 40A:9-22.5(3)(c) and (d) as well as created a conflict described as an indirect personal interest in the seminal case on municipal official ethics. Wyzykowski v. Rizas, 132 N.J. 509, 526 (1993).

I.

Local Government Ethics Law Principles of common law which have governed the conduct of elected officials have been

supplemented and codified by the Local Government Ethics Law set forth at N.J.S.A. 40A:9-22.1 et seq. The primary goal has always been to eliminate any conflict between the interest of the elected official and the interest of the people they represent, whether the conflict is actual, potential or apparent. In both the common law and the Local Government Ethics Law, there is a recurrent theme that a local government official must avoid conflicts of interest. In my opinion, becoming a founding member of HIACS did not create a conflict with your position as a Livingston Councilwoman, however, your subsequent actions did violate the Local Government Ethics Law 40A:9-22.5(c) and (d) as follows: N.J.S.A. 40A:9-22.5(c). No local government official or employee shall use or attempt to use his official position to secure unwarranted privileges or advantage for himself or others. N.J.S.A. 40A:9-22.5(d). No local government official or employee shall act in his official capacity in any manner where he, a member of his immediate family, or a business organization in which he has an interest has a direct or indirect financial or personal involvement that might reasonably be expected to impair his objectivity or independence of judgment. 1. School. (a) On the Charter School application, you are listed as a Founder. Under Application for establishment of the Hanyu International Academy Charter

Business/Industry/Education/Community affiliation, you listed Elected to the Livingston Township Council effective January 2011, Liaison to Livingstons Municipal Alliance Committee, Liaison to Healthy Community Healthy Youth, Liaison to Township Arts Council, Liaison to Livingstons Environmental Commission. (b) Founders Statement of Interest. As part of the application, you utilized the

following designation in your letter addressed to Department of Education Commissioner Cerf: As Town Councilman and resident of Livingston, I write this letter to show my commitment as a

founder of the Hanyu International Academy Charter School (HIACS). Further in the letter, you state, And as Town Councilwoman, I believe the school will help attract diverse population . . . (c) Part 1, Section 7, Family Community and Consultant Involvement under

Local Governments. The following is listed: newly elected Livingston Town Councilwoman Mrs. Deborah Shapiro is a founding member of HIACS. (d) Part 2, the Application Financial Plan, Budget Summary, states: We initially

plan to obtain $100,000 line of credit from local banks under personal guarantees from founders. Also, the May 26, 2011, West Essex Tribune, HIACS representative Sharon Kou is quoted as stating, start up fees will be raised by the founding members Though you have indicated you were not aware of this statement, the application clearly states that you were going to be asked to personally guaranty and, therefore, have a financial responsibility to the financial success of the school in violation of N.J.S.A. 40A:9-22.5(d). In each of these instances, your position as a Livingston Councilwoman has been used or could be viewed as an attempt to secure advantages for yourself or others. Clearly, identifying yourself as a Livingston Councilwoman gives the impression that you are using your official position to advance a personal interest. One of the primary purposes in the regulation of the conduct of public officials is to foster the publics confidence in government. It has been stated: next in importance to the duty of the officer to render righteous judgment is to do it in a manner as will beget no suspicion of pureness and integrity of his actions. Aldon v. Borough of Roseland, 42 N.J.Super. 495, 506 (App. Div. 1956). Therefore, it is imperative that a local official avoid not only actual or potential conflicts but apparent conflicts as well. Though in your mind you felt there was no conflict with your position as Councilwoman and your becoming a founding member, your use of your official title is a conflict which is prohibited by the Local Government Ethics Law.

(e)

Town Council Resolution Opposing the Establishment of Charter School. On

May 16, 2011, a resolution was presented to the members of the Township Council opposing the establishment of charter schools. Though you have a personal involvement and a personal interest in the success of the charter schools, you participated in the vote opposing the Councils resolution against the creation of charter schools. A review of case law shows it is not necessary to prove that a special interest actually influenced the officials decision, as long as it created a possible conflict. In this instance, your personal involvement may have affected your judgment and your desire to help the school get established. So though as you state you are not being reimbursed nor will any member of your family be employed by the school, there is still a conflict which is prohibited by the Local Government Ethics Law. In fact, it was stated during the discussion of the resolution that the resolution was deemed necessary due to your actions by citing in your letter to the Commissioner of Education that you were a Livingston Councilwoman. It was noted that the resolution was needed so there was no misunderstanding that the charter school was supported by the remainder of the members of the Livingston Township Council. It was a clear conflict of interest for you to participate in the vote of the resolution. Further, due to your personal involvement going forward if a charter school is established and if the Board of Education budget is defeated and, therefore, the budget is referred to the Township Council, you would need to recuse yourself from voting on the budget of the Board of Education. II. Case Law At the common law, a public official is disqualified from participating in a proceeding in which the official has a conflict in interest which may interfere with the impartial performance of his duties as a member of the public body. While there are many fact specific situations that result in a conflict of interest, four main categories have emerged as necessitating disqualification of the interested official from the matter at hand. These are set forth in the case of Wyzykowski v. Rizas, 132 N.J. 509 (1993). I thought it would be useful if I described each of these categories.

1.

Direct Pecuniary Interest. A direct pecuniary interest is present when an official

votes or acts on a matter benefiting the officials own property or affording a direct financial gain. 2. Indirect Pecuniary Interest. An indirect pecuniary interest is present when an official

votes or acts on a matter that financially benefits one closely tied to the official, such as an employer or family member. 3. Direct Personal Interest. A direct personal interest is when an official votes or acts

on a matter that benefits a blood relative or close friend in a non-financial way but a matter of great importance. Such an interest may be characterized as palpable interest that is not financial in nature but of an immediate and unique importance to the public official. 4. Indirect Personal Interest. An indirect personal interest is when an official votes or

acts on a matter in which the persons judgment may be affected because of membership in some organization and a desire to help that organization further its policies. As set forth above, I believe your actions relative to the HIACS fall within the category of indirect personal interest. Court decisions on the subject of ethics have emphasized the fact specific nature of each potential conflict situation. Therefore, I will describe the actions you have taken regarding the charter school. As stated above, on the application for HIACS, you indicated that you were elected to the Livingston Township Council and listed all of your positions in Livingston. In your letter to Commissioner Cerf, you again stated your position that as a Livingston Councilwoman you believed in the school. Again, though you were aware you did have a personal interest in the success of the charter school, you voted on Councils resolution opposing the establishment of the charter school. In these instances, your indirect personal interest may have affected your judgment in your desire to help get the school established. Although you are not being reimbursed or any member of your family will not be employed by the school, there is a conflict of interest.

III.

Conclusion After thoroughly researching the Local Government Ethics Law and case law on municipal

ethics, I have concluded the following: 1. Becoming a founding member of the Hanyu International Academy Charter School

was not in itself a conflict. 2. You violated the Local Government Ethics Law by using your official position to

advance a personal interest. 3. You violated the Local Government Ethics Law by voting on a resolution dealing

with the establishment of a charter school while having a personal involvement in the success of the charter school made apparent by your many public statements in support of the school. Therefore, based on my examination of the Local Government Ethics Law and the current case law on local government ethics, I have concluded that you established a conflict of interest between your position as a Livingston Councilwoman and your actions in support of the establishment of the Hanyu International Academy Charter School.