In a July 24, 2012, email Bill Goodrich attached that item in response to an earlier data disclosure request of mine to him. The document largely speaks for itself. However, a few things deserve special mention.
The opening suggests and "understands" things in an interesting way, stating, "Your City has a Councilmember who voted in favor of making a loan to a Developer for an apartment complex. Shortly after voting to authorize the loan, the Councilmember indicated that he wants to become an employee of the Developer. You asked me to research the potential conflict of interest issues presented. It is my understanding that the City Council had authority to make the loan and that there was no employment opportunity available when the Councilmember voted to make the loan."
Emily, not Colin. First, it appears that at the time Colin McGlone was the subject of things and was anticipating possibly working for Flaherty people himself; but later things changed to Emily McGlone being the one of the two employed in contractor trailers as construction period project clerk. I doubt that change was intended to give greater stealth to the situation, but that rather Emily McGlone was the more desirable of the two for Flaherty's project manager and for the general contractor to work with. I would feel that way in their place, based on personality and on Emily being the spouse handling the office end of McGlone family business ventures.
Second, that opening "understanding" - "that there was no employment opportunity available when the Councilmember voted to make the loan" stands alone without any evidence mentioned to bolster that understanding vs. any other. If there is evidence to surface of any prior quid-pro-quo understandings with Flaherty people about a McGlone vote and in return a McGlone job, then MS 609.42 and 609.193 might deserve attention.
Third, from the item's second paragraph onward, only the gross misdemeanor [i.e., criminalization] conflict of interest statute was consider; Minn. Stat. § 471.87, (a statute not updated since the 1950's).
The McGlone vote for lending Flaherty millions of city money made that loan proposal prevail by a 4-3 vote of the HRA and then also a 4-3 vote by the council. During that time, Colin McGlone chaired the HRA.
Surprisingly the HRA statute went wholly neglected; e.g., MS 469.009 stating that for HRA commissioners:
Before taking an action or making a decision which could substantially affect the commissioner's or an employee's financial interests or those of an organization with which the commissioner or an employee is associated, a commissioner or employee of an authority shall (1) prepare a written statement describing the matter requiring action or decision and the nature of the potential conflict of interest and (2) submit the statement to the commissioners of the authority. The disclosure shall be entered upon the minutes of the authority at its next meeting. The disclosure statement must be submitted no later than one week after the employee or commissioner becomes aware of the potential conflict of interest. However, no disclosure statement is required if the effect on the commissioner or employee of the decision or act will be no greater than on other members of the business, profession or occupation or if the effect on the organization with which the commissioner or employee is affiliated is indirect, remote, and insubstantial. A potential conflict of interest is present if the commissioner or employee knows or has reason to know that the organization with which the commissioner or employee is affiliated is or is reasonably likely to become a participant in a project or development which will be affected by the action or decision. Any individual who knowingly fails to submit a statement required by this subdivision or submits a statement which the individual knows contains false information or omits required information is guilty of a gross misdemeanor.
The statute is clear, "A potential conflict of interest is present if the commissioner or employee knows or has reason to know that the organization with which the commissioner or employee is affiliated is or is reasonably likely to become a participant in a project or development which will be affected by the action or decision." Colin and Emily McGlone are affiliated by marriage, and if initially he personally considered taking a Flaherty job and did not disclose, there is a problem. If he or some other official asked Goodrich to check things out, neglecting return notice of this statute was problematic. There is an online AGO of record directly on point, this link. It has been there for nearly twenty years, I easily found it, and I am not a lawyer.
Fourth, the LMC item neglected to consider factual matters, whether the McGlone pay anticipated would be in line with reasonable norms for project clerks, or so far out of line to constitute an impermissible gift; MS 471.895, a more recent enactment than the MS 471.87 statute, which is all Bill Goodrich's friend at LMC wrote of.
May 21 - May 23, 2012: Unfortunately, this is all too true for analyzing Flaherty-McGlone detail - the what, when, how, who aspects of dealing.
In a thread of emails exchanged with the city clerk she first wrote about that May 21-23 date range being when the City sent officials to Las Vegas for what has become an annual trip:
After a specific inquiry of whether Ryan Cronk was being sent too by the city, the city clerk added he was:
Hence, with Goodrich days before having procured the LMC opinion, McGlone and Cronk of the Flaherty enterprises were face-to-face over days in Las Vegas when details of the contemplated employment could be finalized on a handshake. Perhaps there even may be a paper trail from Vegas. I doubt that, however.
In any event, the opportunity for face-to-face Vegas dealing clearly existed, the nearness of the LMC item to McGlone's Ramsey departure and Cronk's departure from Indiana hardly seems coincidental, and the subsequent employment suggests it was all a done deal by Vegas time, whatever happened or not months earlier; and it all stayed in Vegas except for Emily's job and paycheck.
Ulrich and Lazan were part of the Vegas entourage, (Nelson had already left for Wayzata). Hence it is unclear from the record which official or agent of the city tasked Goodrich with procuring a sanitizing opinion for McGlone-Flaherty job plans, but somebody did. Bill does not do that kind of stuff on his own, unauthorized opinion seeking. It is also unclear how many heads may have gotten together in Vegas; but Colin McGlone's and Ryan Cronk's is a good starting guess.
April 24, 2012: A mere month before the Vegas journey, bonding was finalized by the City, for the benefit of bankrolling Flaherty's adventure's risk as his bank of last resort [PNC, a bank in Pittsburgh would only pop for a part of the cost and took a first position lien on the project, while Flaherty would not pop for the balance and the deal would have flipped, no McGlone job that way, but for the city on 4-3 voting (where McGlone was the deciding swing vote) committing to provide millions of city generated bond money to Flaherty]. See, this ABC reporting, and this email to me from City CFO Lund in response to a data discovery request:
April 10, 2012: Right. Two weeks before the bonding was final, an official Flaherty rental-by-the-rails groundbreaking, as reported April 11, by ABC newspapers.
May 3, 2012: [UPDATE] Quit claim deed of HRA to one of Flaherty's LLC entities recorded; giving notice of change of title to the public. Deed was notarized as signed by McGlone as HRA chair, April 27, 2012, (the notary miscrivening date of expiration of her commission but her stamp showed the notarization was official). A right of reverter was retained.
BOTTOM LINE: With a groundbreaking ceremony a month and a half before the Vegas trip, and the bonding final a month before; and with planning including hiring a general contractor, and arranging for Flaherty entry and starting construction; it appears that the McGlone job was locked in as for the McGlone family; without any other potential project clerk having any time for a chance at the job.
It appears an almost inescapable conclusion that a particular construction job, one of responsibility with an unknown but presumably high pay rate, had been clearly earmarked as being for the McGlones, others need not apply, and that this was finalized sometime between groundbreaking and Vegas, where it may have been that Emily McGlone was picked then, rather than Colin.
The appearance of things is all we can go on. I emailed Cronk and he never responded. I emailed the McGlones. Colin informs me that on advice of counsel he will tell me nothing. The appearance of things is quite problematic, and question prone where an unreliable and incomplete sanitizing analytical LMC thing was procured days before Vegas, and where there now has been a total stonewall erected.
I await any reader to say it is not so and to present some evidence, such as when Emily's first paycheck was issued, who she interviewed with, who else if anyone had a shot at the job, and what the pay rate is relative to prevailing wage for project clerks such as the wage rate at the rail stop trailers, a few hundred yards east of the Flaherty trailers.
It was all within a short window of time, April and May of this year.
This is a lot of work to assemble things this way simply because McGlone will not put it of record in minutes; Emily has the job, and it started on xx/yy/12. That's all he needs to say, but will not. The LMC document all but says that, except for identifying McGlone, and giving a starting date.
The opening LMC item does in an ending paragraph note:
Another important consideration is that while these facts may not technically involve a prohibited conflict of interest, they certainly do raise concerns that something improper occurred. The appearance of impropriety can be damaging to a both a councilmember’s image and a city’s reputation. Thus, there are prudential reasons for the Councilmember to pass on this employment opportunity.
Amen, brother. Amen.
One hopes that that paragraph was not read by the McGlones, with them saying, well install Emily there instead. The earlier referenced AGO notes:
There is no question that opportunity, or even the public perception of opportunity, for self-dealing by public officials must be carefully avoided. However, it is submitted that not every "personal financial interest" is of sufficient magnitude to support an absolute criminal prohibition against a public officer holding or continuing to hold office if a proposed "contract" affecting that interest may arise. Furthermore, in light of the severe consequences imposed for violation of the prohibitions of Sections 471.87 and 469.009, subd. 3, we believe that public officials are entitled to clearer directions concerning when, and how, their personal interests may permissibly intersect with those of a government agency with which they serve.
Like, at least tell them the HRA statute has a "conflicts of interest" reach.
Do not just hang your hat, coat, scarf, and umbrella all on MS 471.87.
That's imprudent, and makes the LMC analysis incomplete. I guess that's why they put their disclaimer language at the end of it.
We say it, but don't rely on us and what we say.
Worded differently, but that's the gist.
I recall speaking with Emily McGlone at the Flaherty trailers in early July, and I recall her then stating the job began in late May - early June so that she'd been on the job about a month. And she mentioned "Ryan," but declined to elaborate when questioned. That fits with the timeframe suggesting things likely could have been finalized in Vegas, May 21-23, when Colin McGlone and Ryan Cronk had the opportunity to meet face to face at length to hammer out remaining details of a deal. Employment pay records would show a starting date; and the public could learn that if it were not for the stonewalling.