| Advisory Opinion request of Marshall Hevron on behalf of Discovery Health Sciences Foundation, Inc., and Friends of Discovery Health Sciences Foundation, Inc. |
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Discovery Health Sciences Foundation, Inc. (Discovery) recently leased a 19.9 acre parcel of land in the City of Kenner from the Jefferson Parish School Board and intends to build a charter school campus on the site. In order to address the financing concerns of lenders, Friends of Discovery Health Sciences Foundation, Inc. (Friends), a 501(c)(3) non-profit organization, was recently formed. Friends intends to sublease the property from Discovery, obtain financing, construct the school, and, ultimately, lease the property back to Discovery to operate the school.
In order to satisfy the IRS regulations on 501(c)(3) organizations, Discovery must demonstrate some level of control over Friends. Therefore, Discovery and Friends have created an arrangement whereby Friends has the sole authority to elect its five board members (Friends Board), but a majority of those members must also be Discovery board members (Discovery Board). No compensation will be received by the board members of either entity.
Don Wheat is the Chief Financial Officer (CFO) of Discovery, while Amy Gray is the Director of Operations for Discovery.
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La. R.S. 42:1112B(3) prohibits a public servant from participating in a governmental transaction in which any person of which he is an officer, director, trustee, partner, or employee has a substantial economic interest.
La. R.S. 42:1113B prohibits an appointed member of any board or commission, member of his immediate family, or a legal entity in which he has a substantial economic interest, from bidding on or entering into or being in any way interested in any contract, subcontract, or other transaction which is under the supervision or jurisdiction of the agency of such appointed member.
La. R.S. 42:1123(1) provides an exception for participation in the affairs of charitable, religious, nonprofit education, public service, or civic organizations when no compensation is received.
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Adopt the proposed advisory opinion.
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| Assigned Attorney: |
David Bordelon |
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