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I need a lot more facts. You will have to explain the relationships of the various parties and the type of organization.
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After reviewing the Public Contracts Code and the Corporations Code, I cannot find any specific law that would prohibit the arrangement that you describe in your facts.
The only issues that appear to have an effect on a government entity's ability to contract are: (1) organizations with boardmembers who have been convicted of certain crimes (Pub. Contracts Code Secs. 10285-10285.5), and (2) boardmembers of the organization who are also employees or boardmembers of the public agency contracting for the goods and/or services (Pub. Contracts Code Secs. 10410-10412).
There may be internal conflict issues related to your organization's articles and bylaws, but these wouldn't disqualify the organization from contracting with a public agency.
I'm having some trouble following the players here. It seems as though you are describing three different entities. In order to analyze a potential conflict, I need to know the various organizations involved and who works for or represents which organization.
Thanks in advance.
The three different entities here are:
1. The potential contracts with city/county
2. The Chairman of the Board wanting to use the Ex. Secretary of the corporation as Assistant Secretary to the board. Bylaws state must be a board member.
3. Ex. Secretary is a paid employee of the corporation which I understand may be a conflict of interest with city/county contracts.
I do not have any legal background, as you can well tell, but as a board member I want to do what is best and legal for the organization.
Don't worry about your understanding. We will sort this out together.
Where is the statement, "No members of the Board of Directors may be employed by the Contractor if this Contractor is a corporation" found? In the contract with the city?
And which entity is defined as the "contractor?" I'm thinking that the contractor is the city, and that this may be confusing you.
The statement is found within the contract with the county or city within Conflict of Interest clause.
The contractor is the organization signing the contract with the county or city.
Then the executive secretary cannot be the Secretary for the Board of Trustees, because the secretary is an employee of the corporation.
In other words, the city wants the Board to be absolutely independent of the corporation's employees and officers.