IN THE MATTER OF JANE PALEY-PRICE
COIB Case No. 2003-096
September 22, 2005
SUMMARY: The Board issued a public warning letter to Jane Paley-Price, a member of the New York City Board of Correction (“BOC”), who co-owned a firm that was engaged in business dealings with the New York City Department of Correction (“DOC”). By statute, BOC has oversight responsibilities over DOC. Ms. Paley-Price’s firm had business dealings with DOC during the period that Ms. Paley-Price served as a BOC member. The Board advised Ms. Paley-Price that, because of the statutory relationship between DOC and BOC, BOC members are public servants who serve both BOC and DOC for purposes of the City’s conflicts of interest law. Thus, City Charter Section 2604(a)(1)(a), which prohibits a public servant from having an interest in the firm engaged in business dealings with the agency served by the public servant, applies not only to business dealings with BOC, but also to business dealings with DOC. The Board also stated that it is not required to prove that a public servant made a profit from his or her business dealings with the City in order to find that the public servant violated the Charter, and that ignorance of the law provides no excuse for violating the conflicts of interest law. In issuing the letter to Paley-Price, the Board cautioned all public servants of the dangers inherent in having an interest in a firm that is engaged in business dealings with the City, and of the need to contact the Board for guidance in such cases and particularly before proceeding in matters involving such firms. In Re Paley-Price, COIB Case No. 2003-096 (2005).
STIPULATION AND DISPOSITION
Dear Ms. Paley-Price:
The Conflicts of Interest Board (the “Board”) is writing to you in connection with your interest in a firm that was engaged in business dealings with the Department of Correction (“DOC”), the agency that you serve as a member of the New York City Board of Correction (“BOC”). By your signature below, you have agreed to waive confidentiality with respect to this letter, so that the Board may make it public to provide guidance to other public servants in similar situations. The Board appreciates the cooperation and spirit of public service you and your counsel have displayed in concluding the disposition of this matter via this letter. The Board has concluded that no further action is required in this matter under the particular circumstances presented here.
Chapter 68 of the New York City Charter (the “Charter”), Sections 2604(a)(1)(a) and 2604(b)(2) are applicable here. These sections prohibit a public servant from having an interest in a firm that the public servant knows or should know is engaged in business dealings with the agency served by the public servant and from engaging in any business, transaction or having any financial or other private interest that conflicts with the proper discharge of the public servant’s official duties. As a BOC member, you are a public servant within the meaning of Charter Section 2601(19), even though you serve without compensation.[1]
Facts
The undisputed facts of this matter, stated briefly, are as follows. You are a member of the BOC, which board, pursuant to Chapter 25, Section 626 of the Charter, is empowered to inspect the books, records, and papers of DOC and evaluate DOC’s performance, including its compliance with health standards and standards of confinement in all City correctional facilities. BOC also reviews DOC inmate and employee grievances, investigates serious incidents, and makes recommendations regarding correctional planning. You were appointed to BOC by then Mayor Rudolph Giuliani on or about November 30, 2001, and have served as a member of BOC since that time. Your term as a BOC member expires in October 2005. You serve on BOC without compensation.
You and your husband, Larry Price, co-own a television and video production company, Paley/Price Productions. As co-owner of the firm, you have managerial responsibilities and make important decisions for the firm. You also serve as a writer, producer, and supervisor for the firm. Beginning in mid-1998, more than three years prior to your joining BOC, DOC selected Paley/Price Productions to produce films for DOC, including an inmate orientation film, an inspirational video, a video on DOC’s Reducing Adolescent Problems program, an informational video about DOC’s Gang Intelligence Unit, and a DOC training video. The costs of the videos and the production services were paid with funds from the New York City Correction Foundation, a § 501(c)(3) organization that was formed in 1991 to fund programs and activities designed to strengthen morale among DOC Correction Officers and to develop and implement new programs to reduce violence within City jails. The final payment for these services was made to Paley/Price Productions on July 27, 2001, four months before you joined BOC.
After you joined BOC on November 30, 2001, Paley/Price Productions worked on two projects for DOC: the production of additional material for the inspirational film and a videotape of 9-11 memorial services. On November 22, 2002, while you were on BOC, Paley/Price Productions invoiced DOC $6,975 for the production of those two videos. The invoice shows an itemized breakdown of the cost of that work:
For shooting, editing, and producing of additional material for inspirational
film $2,500
For shooting, editing, producing 9-11 memorial service video $3,900
For re-editing of 9-11 memorial service video $500
For video cassette masters [for 9-11 memorial service video] $75
Total $ 6,975
On January 31, 2003, DOC prepared a purchase order reflecting that same itemized breakdown and invoice total. DOC signed that purchase order on March 20, 2003. The invoice was paid in full. The Board has been informed that Paley/Price Productions has done no work for DOC since the work reflected in the November 2002 invoice.
The work on the inspirational video was a continuation of the inspirational video work previously produced by the company prior to your joining BOC and consisted of new footage that had to be shot of those recently promoted within DOC. The Board has been informed that Paley/Price Productions offered to produce the 9-11 memorial service video at no charge to DOC and only billed for the work after certain DOC employees declined the offer of free services from Paley/Price Productions. Your counsel has informed the Board that production of that video was billed at or below cost and that Paley/Price Productions received no profit from the video.[2] The Board is further informed that at the time of your appointment to BOC, you fully disclosed to BOC the company’s previous work for DOC and also disclosed its further work during your service on BOC. You state that no one ever informed you of any potential conflicts of interest resulting from your ownership in a firm doing business with DOC.
Discussion
Charter Section 2604(a)(1)(a) provides, in pertinent part, that
no public servant shall have an interest in a firm which such public servant knows is engaged in business dealings with the agency served by such public servant.
Given the statutory relationship between BOC and DOC, for purposes of Chapter 68, the Board considers the agency you serve to be both BOC and DOC.
Charter Section 2604(b)(2) provides:
No public servant shall engage in any business, transaction or private employment, or have any financial or other private interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties.
The Board has determined that maintaining your interest in Paley/Price Productions while it was doing business with DOC violated both of these Charter provisions.
At the outset, it must be clearly stated that any lack of information or understanding you may have had about your obligations under the Conflicts of Interest Law set forth in Chapter 68 of the Charter does not excuse your failure to comply fully with that law. “Ignorance of the law does not excuse persons so as to exempt them from the consequences of their acts, such as punishment for criminal offenses.” Municipal Metallic Bed Mfg. v. Dobbs, 253 N.Y. 313, 171 N.E. 75 (1930). See also In re Estate of Overgard, 5 Misc. 3d 628, 785 N.Y.S.2d 662 (N.Y. Surr. Ct. 2004) (“It is axiomatic that ignorance of the law is no excuse” (citation omitted)).
Furthermore, whether Paley/Price Productions made any “profit” from its work on the 9-11 memorial service videotape is not determinative of the Chapter 68 issue. The definition of “business dealings with the city” in Charter § 2601(8) does not require that the public servant, or the entity in which she has an interest, have made any profit. The fact remains that Paley/Price Productions did charge for its services on the 9-11 video, if only to cover its costs. Performance of services at cost may provide substantial benefits to a company, such as the employment of staff during down time or the development of good will, or may merely reflect a miscalculation of the costs of the services to be performed -- although none of those examples appears to have been the case here. Moreover, as a practical matter, to require the Board to undertake forensic accounting to prove that a “profit” has been made before a respondent can be found to have violated Section 2604(a)(1)(a) would place an unacceptable burden on the Board in prosecuting Chapter 68 violations.
In addition, in terms of Paley/Price Productions’ work on the update to the inspirational film which took place after you became a member of BOC, the Board does not view that work as “winding down” of work begun before you joined BOC, since it was contracted for and performed several months after you joined BOC. Even if it could be characterized as a “winding down” of previous work, you could have, but did not, seek and receive permission from the Board for any such “winding down.” Cf. COIB v. Kerry J. Katsorhis, COIB Case No. 94-351 (1998), appeal dismissed, M-1723/M-1904 (1st Dep’t, April 13, 2000), appeal dismissed, 95 N.Y.2d 18, 719 N.Y.S.2d 645 (2000).
While the Board has concluded that no further action is required in this matter under the particular circumstances presented here, the Board takes this opportunity to remind you -- and, through the public release of this letter, all public servants -- of the importance of strict compliance with Chapter 68 of the Charter. Precise compliance with these provisions avoids even the appearance of impropriety and helps strengthen public confidence in City officials and City government. You are also advised that you must consult the Board before Paley/Price Productions undertakes any further business with DOC or with BOC, including business undertaken after you leave City service. See Charter § 2604(d).
If in the future you have any questions regarding the permissibility of your interests or conduct under Chapter 68, including your conduct after you leave City service, please contact the Board staff at 212-442-1400.
Very truly yours,
Steven B. Rosenfeld, Chair
Monica Blum
Angela Mariana Freyre
Andrew Irving
Board Members
(Board Member Jane W. Parver did not participate in this matter)
cc: Randy M. Mastro, Esq.
Counsel to Jane Paley-Price
I hereby waive any right I may have to confidentiality in this matter and agree that the Board may make this document public.
______
Jane Paley-Price
[1] “‘Public servant’ means all officials, officers and employees of the city, including members of community boards and members of advisory committees, except unpaid members of advisory committees shall not be public servants.” (Charter § 2601(19).)
[2] The Board is also informed that you and your husband personally donated $2,000 to 9/11 charities during this period.