| Advisory opinion request submitted by Antonio Ferachi, General Counsel 1 for the Louisiana Department of Revenue, regarding his displaying artwork at a gallery owned by an attorney that has a contract with the Louisiana Department of Revenue to provide legal services. |
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Mr. Ferachi is currently employed as a General Counsel 1 with the Louisiana Department of Revenue (LDR). His duties include, but are not limited to, managing and supervising LDR's in-house staff attorneys, paralegals and administrative staff; managing and supervising LDR's outside counsel hired to represent LDR in litigation; providing counsel to LDR's appointed officials, directors, assistant directors and employees; and, representing LDR in more complex and sensitive litigation, settlement and mediation.
In regards to managing and supervising outside counsel, those duties include, but are not limited to, reviewing their pleadings; attending court appearances; discussing strategy of the case; getting internal information about the matter from the respective client group; offering his expertise on procedural and substantive tax law based on his twelve years of experience; and, advising the LDR on its overall policy and directives on the particular issue being handled for LDR. Mr. Ferachi handles the day to day management and supervision of the outside attorneys. LDR's executive management selects and signs off on LDR's outside attorneys.
In regards to this opinion request, the outside counsel in question (Outside Counsel A) began representing LDR many years prior to Mr. Ferachi becoming the General Counsel in 2015. Outside Counsel A contract terms have not changed since he became outside counsel prior to Mr. Ferachi becoming General counsel.
Mr. Ferachi is also an artist in his spare time. Outside Counsel A owns a majority interest in a gallery/shop that allows customers to create art as well as offer various artists' artwork for sale. The gallery/shop is open to any artist that has an interest in displaying their work, but is subject to review and ultimate selection by the gallery/shop. Typically, the selection is in the order in which an artist requests his work be shown. If multiple artist happen to request at the same time, a list is started. The gallery/shop has a manager (not Outside Counsel A) who handles the management of the list, the setting up of the artist in the gallery/shop, paper work or signing of a commission agreement and any questions an artist may have. While the manager handles the day to day operations, Outside Counsel can have a part in these processes.
There are no minimum qualifications for an artist to show his work at the gallery/shop. Artists submit an inventory list/portfolio of their current artwork available for sale. If the gallery/shop is interested and thinks the work is a good fit for their customers, an artist is chosen to show their work for usually a month to two month period. The manager and Outside Counsel A can have a say in the decision of which artist can show at the gallery/shop.
Mr. Ferachi is interested in showing his work at the gallery/shop. Mr. Ferachi would enter into an agreement that is of the same terms and conditions as well as fee as any other artist. No upfront fee is charged. Pursuant to the commission agreement, any proceeds from any sale of artwork would be split on the same commission/artists' proceeds percentage basis as any other artist showing at the gallery/shop.
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La. R.S. 42:1111C(2)(d) provides that no public servant and no legal entity in which the public servant exercises control or owns an interest in excess of twenty-five percent, shall receive any thing of economic value for or in consideration of services rendered, or to be rendered, to or for any person during his public service unless such services are: (d) Neither performed for nor compensated by any person or from any officer, director, agent, or employee of such person, if such public servant knows or reasonably should know that such person has or is seeking to obtain contractual or other business or financial relationships with the public servant's agency; conducts operations or activities which are regulated by the public employee's agency; or has substantial economic interests which may be substantially affected by the performance or nonperformance of the public employee's official duty.
La. R.S. 42:1112B(5) prohibits a public servant from participating in a transaction in which a person has a substantial economic interest when the person has a contract with or is owed a thing of economic value from the public servant or a company in which he owns in excess of 25% and by virtue of contract or indebtedness can affect the economic interest of the person.
La. R.S. 42:1112C allows a disqualification plan to be developed in accordance with rules adopted by the Board to remove a public servant from participating in transactions that would otherwise present violations of Section 1112 of the Code.
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To be discussed at the meeting.
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| Assigned Attorney: |
Tracy Barker |
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