BENTI..

EY, BENTLEY & BENTLEY

~rd~
FRED 0. BENTLEY, SR.

241 WASHINGTON AVENUE

FRED D. BENTLEY, JR.*

MARIETTA, GEORGIA 30060

CT70) 422-2300

R. RANDALL BENTLEY, SR.

OF

COUNSEL

SAM P. HENSLEY, JR.

JAMIE

5.

WINGLER

LAUREN L. MCKENZJE

ESTABLISHED 1948

STAND. BABB

No.:

FACSIMILE

ASSOCIATE ATTORNEYS

CT70) 424-5820

*ADMllTEO

November 25, 2015

TO PRACTICE IN

LOUISIANA AND TEXAS

J. MATTHEW BENTLEY
B. BLAKE HUNGERFORD

VIA EMAIL DELIVERY

Susan D. Hiott, MMC
City Clerk
City of Brookhaven
4362 Peachtree Road NE
Brookhaven, Georgia30 319
RE:

Ethics Investigation

Dear Ms. Hiott:

As requested, please find enclosed the Memorandwn regarding the ethics issue involving Bates
Mattison. For purposes of this email, the attachments are grouped as a single docwnent. The
tabbed attachments will follow early next week.
It has been a pleasure assisting you on this matter. If you have any questions, please feel free to
call.
Sincerely,

Enclosures

On November 16, 2015, the firm was retained by the City of Brookhaven to advise as to
certain ethical considerations involving Councilman Bates Mattison who accepted a full time
position as Executive Director of the Brookhaven Innovation Academy (BIA), while serving
contemporaneously on the City Council.

The following memorandum is based upon the

information that we have been provided and obtained to date.

FACTUAL BACKGROUND
In November 2012, Bates Mattison was elected and sworn in as a member of the

Brookhaven City Council.

On or about April 24, 2013, Bates Mattison was appointed as a Council liaison on the
Brookhaven Development Authority. See generally, Brookhaven Development Authority Minutes
[Tab A].
On or about May 7, 2014, the Brookhaven Innovation Academy was incorporated with the
Mayor and City Council as the original board members. See, Memorandum dated November 18,
2015 [Tab B].
At the May 13, 2014 City Council Meeting, "Council Member Mattison recognized Mr.
Gareth Genner of Edevate who provided information about Edevate' s education program for the
proposed Brookhaven Innovation Academy." [Tab

CJ.

Brookhaven's 2014 budget contained a $30,000.00 expenditure "for a study of feasibility

of a Brookhaven City School System." See, November 20, 2014 City Council Minutes [Tab DJ.
Council Member Mattison "indicated $30,000 for 2015 was an appropriate amount for the 2015
budget." Id. (See also, Edevate consulting retainer executed on March 16, 2015. [Tab E].
When concerns were raised at that November 20, 2014 meeting regarding the City Council
acting as the governing board of the Charter School, Mr. Mattison "noted that when the effort
1

started, he had not envisioned the council being the governing board. He contended his personal
vision was that the council would have designees." Id.
In early 2015, Bates Mattison was appointed chair of the Brookhaven Innovative Academy
(BIA) Exploratory Committee. The BIA is listed as a domestic nonprofit corporation on the
Secretary of State' website. [Tab F].
The July 10, 2015 minutes of the Brookhaven City Council state: "Council Member
Mattison reported that he had spoken to some people early on when he was in the process of
starting the Brookhaven Innovation Academy (BIA) and looking for space." At this meeting, Mr.
Mattison voted in favor of the purchase of the Skyland Drive property. [Tab G].
On July 17, 2015, City Manager Marie Garrett, during executive session of the city of
Brookhaven Development Authority, which Bates Mattison is also a member, disclosed the
purchase of the Skyland Drive Property as the proposed future site of the BIA or as a future city
office building. There is no reference to Bates Mattison participation in the meeting and no votes
were taken. [Tab H].
On August 13, 2015, the BIA Regular Meeting Minutes states that "Bates will take the
proposed by-laws changes required to the peers on city council." [Tab I].
On August 21, 2015, Bates Mattison was absent from the Development Authority meeting
where the property purchase for the Skyline Drive Property was discussed. [Tab J].
On August 23, 2015, City Attorney Chris Balch issued an opinion regarding conflicts of
interest regarding the Skyland property purchase. [Tab K]. Mr. Balch wrote that "it is my
recommendation that Mr. Gebbia and Mr. Mattison recuse themselves from the consideration,
discussion or voting on such issues. If this recommendation is accepted, then Mr. Gebbia and Mr.
Mattison should leave Council Chambers during any such discussion and should avoid any

discussion off the record with any of their colleagues on these topics." Id. Mr. Balch further stated
"I propose we solve this issue by utilizing the 2 Council appointed seats for private citizens,
appointed by the Mayor and confirmed by the Council, as permitted under the Charter. This will
require the resignations of Mr. Mattison and Mr. Gebbia from the Board of BIA." Id.
On September 8, 2015, Development Attorney Wendy Butler advised Member Mattison
and Member Gebbia, who also has some involvement in the BIA, that "there was no legal conflict"
and felt there was no need to recuse. Member Gebbia participated in the vote and Member
Mattison recused himself from the vote. Bates Mattison recused himself from a City Council vote
on the bond resolution for the purchase of the property. [Tab L]. (While we understand that the
bond has not been issued, careful ethical consideration should be made as to whether the type of
third party lease contemplated by the bond resolution is viable and direct the council's attention to
Greene County Development Authority v. State of Georgia, 296 Ga. 725 (2015)). [Tab M].

On September 24, 2015, the BIA Regular Meeting Minutes state "Facility update- City
wasn't williug to fmance Skyland location. Skyland renovations are intense and won't meet the
BIA timeline." [Tab N].
On October 16, 2015, Bates Mattison, BIA Board Chair, recuses himself from discussions
at the BIA Board Regular Meeting regarding his appointmentto the position of Executive Director
of the BIA through September 30, 2016. [Tab O].
On October 23, 2015, Bates Mattison excused himself from Development Authority
meeting during discussion on property purchase. [Tab P].
On November 5, 2015, Bates Mattison was reported as Executive Director on the BIA
Board Regular Meeting Minutes. [Tab Q]. The BIA Executive Director Contract was executed
on that date as listed the following as one of the Executive Director's duties: "Serve as the
3

liaison between BIA and the State Charter School Commission and other governmental agencies

.... " See, Section One (l)(f) [Tab R]. In addition to a base retainer of$60,000.00 per year, the
Contract also contained a provision under Section Two whereby "BIA will pay Contractor a 10%
commission for all sponsorship revenue earned." Id. Mr. Mattison has asked the BIA to remove
the 10% commission provision from the contract. Id.
In a Memorandum dated November 18, 2015, Mr. Mattison outlines the steps he took to
ensure that there was no conflict of interest issue. He contacted Andrew Lewis, Executive
Director, Georgia Charter School Association; Gregg Stevens, General Council, State Charter
School Commission and consulted with City Attorney Chris Balch and Development Authority
Attorney Wendy Butler. [Tab B].
On November 20, 2015, Brookhaven Innovation Academy prepared a ConfidentialDraft press release announcing Mr. Mattison as the Interim Executive Director. The press
release addresses conflict of interest as follows:
Mr. Mattison and BIA have also taken affirmative steps in assuring that there will
be no conflict of interest for Mr. Mattison in his role as BIA's Interim Executive
Director and as a member of the Brookhaven City Council. At Mr. Mattison's
request, the Board appointed an executive compensation committee to look into
best practices for compensation within the non-profit-sector, and ensure
compliance with the Association ofFundraising Professionals (AFP) ethics policy
which discourages against percentage-based compensation based on contributions
raised. Additionally, the BIA Board and Mr. Bates acted swiftly to ensure that both
contributors to BIA and Mr. Bates constituents have full confidence in his
respective roles as the BIA Interim Executive Director and Brookhaven City
Councilman by removing the commission based part of his fee structure at their
special called Board meeting on November 19, 2015. [Tab S].
LEGAL AUTHORITY
CITY COUNCIL
The basic underlying premise is that it is impermissible for members of the city council
to vote on any matter where the member has an interest. O.C.G.A. 36-30-6 states: "It is
4

improper and illegal for a member of a municipal council to vote upon any question brought
before the council in which he is personally interested." [Tab T].
The Georgia Supreme Court goes a step further il1 Montgomery v. City ofAtlanta, l 62
Ga. 534 (1926), in which a street paving contract between the city and a corporation was deemed
void where the council member was a shareholder in the corporation. In Montgomery, the court
stated:
Is the contract between the city and construction company for the laying of this
pavement void? The plaintiffs contend that the contract is void under section 100
of the charter of Atlanta, because Inman was a member of the city council and a
large stockholder in the construction company at the time the contract was made.
On the other hand, the city and the construction company maintain that the contract
is not void, because: (a) The above section of the city charter is not applicable under
the facts of this case; (b) because Imnan did not vote for the preliminary ordinance
providing for this pavement, for the ordinance accepting the bid of his company for
this work, and for the ordinance accepting the pavement after it was finished, and
did not use his influence to induce members of council to vote for them, nor take
any part in securing the execution of the contract; (c) because the contract is fair
and free from fraud; and (d) that after this controversy arose Inman resigned from
the council, which thereafter passed an ordinance or resolution ratifving and
confirming the ordinances aforesaid, and the contract, and the acceptance of the
pavement laid thereunder by the city.
By the common law and independently of statute, this contract is contrary to public
policy and illegal. One who is intrusted with the business of others will not be
allowed to make out of the same a pecuniary profit to himself. This doctrine is based
upon principles of reason, morality, and public policy. No public agent shall have
the opportunity or be led into the temptation to make profit out of the publie
business intrusted to his care, by contracting with himself, directly or indirectly, in
respect to such business. Mayor, etc., of Macon v. Huff, 60 Ga. 221; Hardy v.
Gainesville, 121 Ga. 327, 48 S. E. 921; Byrd v. Cook, 146 Ga. 657, 92 S. E. 61;
Twiggs v. Wingfield, 147 Ga. 790, 95 S. E. 711, L. R. A. 1918E, 757; Turner v.
Atlanta, 160 Ga. 216, 127 S. E. 652; Burkett v. Athens (Tenn. Ch. App.) 59 S. W
667. It does not alter the case that Inman did not vote for the ordinances relating to
the laying of this pavement, and that he did not use his influence to induce other
members of the general council to vote therefor. The fact that he did not take any
part in securing this contract for his corporation does not change the situation. The
city of Atlanta and its citizens were entitled to have this councilman exercise his
administrative and executive ability in securing the best contract that could be had
for the laying of this pavement, and to see that the pavement came up to the plans
and specifications under which it was laid, and that the terms of the contract were
faithfully performed. This he could not do ifhe were * 158 a party at interest under
5

the contract. Inaction on the part of the councilman in this respect amounted to a
violation of his duty to the public. Ensley v. Hollingsworth, 170 Ala. 396, 54 So.
95, Ann. Cas. 1912D, 652; Bay v Davidson, 133 Iowa, 688, 111 N W. 25, 9 L. R.
A. (N. S.) 1014, 119 Am. St. Rep. 650. This principle applies, although the contract
is fair and free from fraud. Public policy will not uphold it. Macon v. Hu.ff, supra.
The contract will not be upheld by reason of the fact that the public has received a
benefit thereunder. Horkan v. City ofMoultrie, 136 Ga. 561 (2), 71 S. E. 785. [Tab

UJ.
In Montgomery, even though the council member did not vote on the contract and the

contract was "fair and free from fraud," it was held that the council member violated a public duty.
However, compare Story v. City ofMacon, 205 Ga. 590 (1949), where it was held "that ownership
by a member of a municipal council ofland which will be affected by a public improvement does
not disqualify him from voting on such improvement." [Tab VJ. The Story court drew a distinction
between actions by council members that were legislative in nature versus contractual. It appears
that the Story court interpreted "personal interest" as meaning a "financial interest." Id. at594. A
distinction was also made in Smith v. City of Winder, 22 Ga.App. 278 (1918) where the Georgia
Court of Appeals found that:
While it is improper and illegal for a member of a city council to vote upon a
question in which he is personally interested (Pol. Code of 1910, 900), and a
contract entered into between a municipality and a private corporation under which
the latter is to perform certain work for which payment is to be made out of the city
treasury, "is void if at the time of its execution one of the members of the city
council was also a stockholder in such private corporation" (Hardy v. Gainesville,
121 Ga. 327, 48 S. E. 921[1]), an ordinance naming a certain bank as the city
depository and requiring the treasurer of the city to place all the municipal funds
coming into his hands therein is not necessarily void because the mayor of the city
and one of the councihnen voting to adopt the ordinance were respectively officer
and director of the bank named as depository. since it nowhere appears that any
financial profit would result to said bank so named as depository in which the
mayor and council owned stock, or that any contract whatever was made between
the city and the private corporation in which said city officials were interested
whereby any benefit direct or indirect could or would reasonably accrue to said
bank; the money to be placed therein being on demand and subject to immediate
check. The presumption is in favor of the city officials and of the ordinances. See
Carter & Ford v. Griffin, 113 Ga. 633, 634, 38 S. E. 946. [Tab W].

Therefore, under Georgia case law, each potential conflict must be analyzed to determine the
nature of the interest involved. Where a financial interest is involved, a council member should
refrain from participation in any discussions or actions taken by the council relating to the conflict.
In Dick v. Williams, 215 Ga.App. 629 (1994), the Georgia Court of appeals strupk down a

zoning decision by county commissioners where a commissioner's son was a part of the legal team
handling the matter. [Tab X]. There the Court held that "we believe that state law provides a floor
and not a ceiling for the boundaries of ethical conduct by government officials. Local county and
municipal governments are free to impose higher standards, and individuals who seek and retain
office in local jurisdictions are bound by the standards of the government they serve." Id. There
the county ethics code provided that: "public interest requires that Cobb County protect against
improper influence or the appearance of improper influence by establishing appropriate ethical
standards with respect to conduct of public officials." Id.
The City of Brookhaven has also adopted a code of ethics for its member's to follow. The
Code of City of Brookhaven, Chapter 2, Article XI, as amended by Ordinance 2014-05-07,
encompasses the Code of Ethics. Section 2.401 (e) of the Code states that "financial interest means
the following:

(i) funds received by the Member from the other person or entity during the

previous 12 months either equal to or in excess of (a) $5,000.00 in salary, bonuses, commissions
or professional fees, or $5,000.00 in payment for goods, products or services, or (b) ten percent of
the Member's gross income during that period, whichever is less; or (ii) the Member is a creditor,
debtor, or guara..TJ.tor of the other person or entity in an amount of $5,000.00 or more." [Tab Y].
Section 2.401(h) of the Code states that "substantial interest means the following: (i) the
direct or indirect ownership of 25% of the assets or of the ownership interests in any business or
property; (ii) the holder of any evidence of indebtedness of any business for borrowed money; or

(iii) any director, manager, trustee, officer or employee of any business (other than employees of
a business registered as a publicly traded company under the Securities Act of 1934)." Id. As the
Chairman of the Board of Directors of BIA and now as the Executive DireCtor, Mr. Mattison had
and has a "substantial interest" in the BIA.
Section 2.402(d) of the ethics code states in part that:

ill Members and family members shall not solicit or accept directly or indirectly
anything of value from any person, corporation or group which:
(1)
Has, or is seeking to obtain, contractual or other business or financial
relationships with the City, unless: a Member's or family member's contractual
relationship with such person, corporation, or group existed prior to the City's
contractual relationship or prior to the Member's election or appointment to office;
the. Member, if in office at the time the contractual, business or financial
relationship came before the City for consideration, disclosed such relationship or,
if not in office at such time, has immediately disclosed the relationship to the City
after being elected or appointed to office and becoming aware of the City's
relationship with such person, corporation or group; the Member abstained from
discussion of the City's consideration of entering a contract with such person,
corporation or group or competing vendor; the Member abstained from voting on
any matter related to the relationship between such person, corporation, or group or
the subject contract or services; and the Member did not make personal use of any
official non-public information, as prohibited by Section (k) hereof;
(2) In exchange for the thing of value, seeks to have a Member exercise
a matter of discretion in his or her favor; or
(3)
In exchange forthe thing of value, seeks to have interests which may
be affected by the performance or nonperformance of the official duty of the
Member.
(ii)
Members and family members shall not directly or indirectly request, exact,
receive, or agree to receive a gift, loan, favor, promise, benefit or thing of value for
him/herself or another person if:
(1)
It could reasonably be considered to influence the Member in the
future, and the Member is involved in any official act or action which results in a
pecuniary benefit for the donor or lender which is not available to the public at
large; or
(2)
It could reasonably be considered to influence, benefit or reward the
Member, and the Member recently has been, or is now or within six (6) months in
the future, involved in any official act or action which results in a pecuniary benefit
for the donor or lender which is not available to the public at large.
(iii)

[Not applicable]. Id.

Section 2.402( e) regarding Conflict ofinterest states that:

(i)
A Member may not participate in a vote or decision on a matter affecting a
family member or any person, entitv, or property in which the Member or family
member has a financial interest or substantial interest.
(ii)
A Member who serves as a corporate officer or member of the board of
directors of a nonprofit entity must disclose their interest in said entity to the Mayor
and council prior to participating in a vote or decision regarding funding of the
entity by or through the city.
(iii)
Where the interest of a Member in the subject matter of a vote or decision
is remote or incidental, the Member may participate in the vote or decision but
should disclose the interest. Id~.
Pursuant to the Code of Brookhaven, Members shall not solicit or accept directly
or indirectly anything of value from any person, corporation or group which "has, or is
seeking to obtain, contractual or other business or financial relationships with the City,
unless:"

(1) the Member, if in office at the time the contractual, business or financial
relationship came before the City for consideration, disclosed such relationship;
(2) the Member abstained from discussion of the City's consideration of entering a
contract with such person, corporation or group or competing vendor;
(3) the Member abstained from voting on any matter related to the relationship
between such person, corporation, or group or the subiect contract or services; and
(4) the Member did not make personal use of any official non-public information.
DEVELOPMENT AUTHORITY
Development Authorities were created by O.C.G.A. 36-62-4. [Tab Z]. O.C.G.A. 3662-5 sets forth certain restrictions on development authority directors and states:
(a) The directors shall be taxpayers residing in the county or municipal corporation
for which the authority is created, and their successors shall be appointed as
provided by the resolution provided for in Code Section 36-62-4. The governing
9

authority of a county or municipality may appoint no more than one member of the
governing authority as a director.
(b) The directors shall elect one of their members as chairman and another as vicechairman and shall also elect a secretary and a treasurer or a secretary-treasurer,
either of whom may, but need not, be a director.
(c) The directors shall receive no compensation for their services but shall be
reimbursed for their actual expenses incurred in the performance of their duties;
provided, however, the directors of the development authority activated by counties
having a population of 550,000 or more according to the United States decennial
census of 1980 or any future such census shall be paid a per diem allowance to be
determined by the governing authority of such counties for each day, or part thereof,
spent in the performance of their duties.
(d) The authority may make bylaws and regulations for its governance and may
delegate to one or more of its officers, agents, and employees such powers and
duties as may be deemed necessary and proper.
(e)(l )(A) The provisions of Code Section 45-10-3 shall apply to all directors of the
authority, and a director of the authority shall not engage in any transaction
with the authority.
(B) The provisions of paragraph (9) of Code Section 45-10-3 and subparagraph (A)
of this paragraph shall be deemed to have been complied with and the authority
may purchase from, sell to, borrow from, loan to, contract with, or otherwise deal
with any director or any organization or person with which any director of the
authority is in any way interested or involved, provided (1) that any interest or
involvement by such director is disclosed in advance to the directors of the authority
and is recorded in the minutes of the. authority, (2) that any interest or involvement
by such director with a value in excess of$200.00 per calendar quarter is published
by the authority one time in the legal organ in which notices of sheriffs' sales are
published in each county affected by such interest, at least 30 days in advance of
consummating such transaction, (3) that no director having a substantial interest or
involvement may be present at that portion of an authority meeting during which
discussion of any matter is conducted involving any such organization or person,
and (4) that no director having a substantial interest or involvement may participate
in any decision of the authority relating to any matter involving such organization
or person. As used in this subsection, a "substantial interest or involvement" means
any interest or involvement which reasonably may be expected to result in a direct
financial benefit to such director as determined by the authority, which
determination shall be final and not subject to review.
(2) Nothing contained in paragraph(!) of this subsection or in Code Section 45-10J shall be deemed to prohibit any director who is present at any meeting or who
participates in any decision of the authority from providing legal services in
connection with any of the undertakings of the authority or from being paid for such
services.
(f) Each development authority shall provide to its respective county or municipal
fiscal officer, as the case may be, an audited financial statement if such audit has
been required by the respective county or municipality within six months of the end
of the previous fiscal year. [Tab AA].
10

O.C.G.A. 45-10-3 states in part that: "Notwithstanding any provisions of law to the
contrary, each member of all boards, commissions, and authorities created by general statute shall:
... (9) Never take any official action with regard to any matter under circumstances in which he
knows or should know that he has a direct or indirect monetary interest in the subject matter of
such matter or in the outcome of such official action." [Tab BB].
Pursuant to 0.C.G.A. 36-62-5, (e)(l)(A), "a director of the authority shall not engage in
any transaction with the authority."

However, O.C.G.A. 36-62-5, (e)(l)(B) sets forth an

exception where "the authority may purchase from, sell to, borrow from, loan to, contract with, or
otherwise deal with any director or any organization or person with which any director of the
authority is in any way interested or involved" under the following conditions:
(1) "that any interest or involvement by such director is disclosed in advance to the directors of
the authority and is recorded in the minutes of the authority;"
(2) that any interest or involvement in excess of $200.00 is published at least 30 days in advance
of the transaction;
(3) "that no director having a substantial interest or involvement may be present at that portion of
an authority meeting during which discussion of any matter is conducted involving any such
organization or person;" and
(4) "that no director having a substantial interest or involvement may participate in any decision
of the authority relating to any matter involving such organization or person." Supra.
CONCLUSION
Under Georgia statutory law, it is improper and illegal for a council member to vote upon
any question before the council in which he is personally interested. Georgia case law goes a
step further. When a financial interest or substantial interest is involved between a council
11

member and an entity, a City's actions regarding that entity may be void. The Code of
Brookhaven would allow a council member to have an interest in an entity in which it contracts
if the interest is fully disclosed by the council member, the council member abstains from
discussions on the contract, the council member abstains from votes on the matter, and the
council member has not used nonpublic information for personal gain.
Here we have the unique situation where the Mayor and City Council acted as the initial
board of directors for the BIA. As a director, each member had a substantial interest in the BIA
pursuant to the Code of Brookhaven. There appears to be no question that the Mayor and City
Council's involvement, including Mr. Mattison's, was fully disclosed to the governing body.
As requested by Mr. Mattison, it is strongly recommended that the contractual
arrangement between the BIA and Mr. Mattison not include a percentage bonus component or
any bonus structure that allows incentives for the receipt of public funds. It is further
recommended that Mr. Mattison comply with all disclosure and publication requirements as set
forth under state law, the City's Code of Ordinances and as set forth above.
It is worthy of mentioning that it appears that the BIA is no longer interested in

occupying the Skyland Drive property which was the subject of a proposed bond issue which
lease savings might have been construed as such an incentive.
Upon the advice of Mr.

Bale~

it appears that Mr. Mattison recused and excused himself

from all BIA matters brought before the Council and Development Authority after August 23,
2015. Mr. Mattison became the Executive Director of the BIA on or about November 5, 2015.
Now, as an employee of the BIA, Mr. Mattison should recuse himself from all matters, including
discussions and votes, brought before the Mayor and Council and the Development Authority
regarding the BIA. The best practice would be that Mr. Mattison leave the dais and exit any

12

meeting, conference or forum at which any matter regarding the BIA is before the Council or
Development Authority.

13