Meetings
 
Agenda Item
Docket No. 21-058
 
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RE:
Advisory opinion concerning the Commissioner of the Office of Financial Institutions' prior affiliation with regulated entities and his son's employment with a regulated entity.
Facts:
The Governor is considering appointing Stanley M. Dameron to the position of Commissioner of the Office of Financial Institutions (OFI). The Commissioner has exclusive supervisory and regulatory jurisdiction and authority over Louisiana state-chartered financial institutions and other financial entities regulated by OFI. OFI is responsible for the chartering/licensing; examining and investigating complaints; and, other matters related to regulated entities, with the primary focus of its examination and regulation being the lending practices of banks and other financial institutions, which can result in management criticism. Mr. Dameron does not currently work for or provide services to any kind of state-chartered or licensed financial institution. Mr. Dameron's prior affiliation with regulated entities: 1. First Guaranty Bank - former President/CEO. Owned less than 1% interest, which has been sold to non-family members. 2. American Bank & Trust - former CEO. Owned less than 2% interest, which has been sold to non-family members. As part of his compensation package when he was CEO, the bank purchased a bank-owned life insurance policy, which will provide Mr. Dameron with an annual annuity for the next 10 years. Mr. Dameron's son works for Gulf Coast Bank & Trust, which is a state-chartered bank subject to OFI's regulatory authority. His son is the Assistant Vice-President/Commercial Lender for the bank. His son does not have authority to approve loans, does not serve on the bank's board of directors, does not make policy decisions for the bank, and does not have an ownership interest in the bank. He does not have a record ownership in bank stock other than his participation in the bank's Employee Stock Ownership Plan.
Law:
R.S. 42:1111C(2) 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: (a) Bona fide and actually performed by the public servant or by the entity;

(b) Not within the course of his official duties;

(c) Not prohibited by R.S. 42:1112 or by applicable laws or regulations governing nonpublic employment for such public servant; and

(d) Neither performed for nor compensated by any person from whom such public servant would be prohibited by R.S. 42:1115(A)(1) or (B) from receiving a gift."

R.S. 42:1111E(1) provides that "No public servant, and no legal entity of which such public servant is an officer, director, trustee, partner, or employee, or in which such public servant has a substantial economic interest, shall receive or agree to receive any thing of economic value for assisting a person in a transaction, or in an appearance in connection with a transaction, with the agency of such public servant.

R.S. 42:1115 provides that no public employee "shall solicit or accept, directly or indirectly, any thing of economic value as a gift or gratuity from 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: [A](1) Has or is seeking to obtain contractual or other business or financial relationships with the public servant's agency, or . . . B. . . (1) Conducts operations or activities which are regulated by the public employee's agency. (2) Has substantial economic interests which may be substantially affected by the performance or nonperformance of the public employee's official duty.

R.S. 42:1112 prohibits a public servant's participation in a transaction in which he or the following have a substantial economic interest:

(1) Any member of his immediate family.

(2) Any person in which he has a substantial economic interest of which he may reasonably be expected to know.

(3) Any person of which he is an officer, director, trustee, partner, or employee. (4) Any person with whom he is negotiating or has an arrangement concerning prospective employment.

(5) Any person who is a party to an existing contract with such public servant, or with any legal entity in which the public servant exercises control or owns an interest in excess of twenty-five percent, or who owes any thing of economic value to such public servant, or to any legal entity in which the public servant exercises control or owns an interest in excess of twenty-five percent, and who by reason thereof is in a position to affect directly the economic interests of such public servant.

C. Every public employee, excluding an appointed member of any board or commission, shall disqualify himself from participating in a transaction involving the governmental entity when a violation of this Part would result. The procedures for such disqualification shall be established by regulations issued pursuant to R.S. 42:1134(A)(1).

R.S. 42:1113A.(1)(a) provides that "No public servant, . . ., or member of such a public servant's immediate family, or legal entity in which he has a controlling interest shall bid on or enter into any contract, subcontract, or other transaction that is under the supervision or jurisdiction of the agency of such public servant.

42:1114A requires disclosure by a public servant and each member of his immediate family who derives any thing of economic value, directly, through any transaction involving the agency of such public servant or who derives any thing of economic value of which he may be reasonably expected to know through a person which (1) is regulated by the agency of such public servant, or (2) has bid on or entered into or is in any way financially interested in any contract, subcontract, or any transaction under the supervision or jurisdiction of the agency of such public servant.

R.S. 42:1122 provides the following:

A. Pension and benefit plans. A public servant may continue in a bona fide pension, insurance, or other benefit plan maintained by a former employer, provided that such former employer makes no contributions in his behalf with respect to the period of his public service. However, a former employer may make contributions to a pension plan that is qualified under the Internal Revenue Code or to any pension, insurance, or other benefit plan, if such contributions are made on behalf of all former employees who continue in the plan.

B. Profit sharing or stock bonus plans. The rights acquired by a public servant under a bona fide profit sharing or stock bonus plan qualified under the Internal Revenue Code and maintained by a former employer may be retained by such public servant, provided the former employer makes no contributions on his behalf based upon profits derived during the period of his public service.

R.S. 6:102C provides that the OFI Commissioner may employ a principal assistant, a private secretary, and such other examiners and employees as may be necessary for the efficient operation of the office. The OFI Commissioner may delegate to any officer or employee of the office such powers as he may deem appropriate and may designate any officer or employee of the office to perform any of his duties.


Recommendations:
Adopt proposed advisory opinion.
Assigned Attorney: Kathleen Allen
 
 
ATTACHMENTS:
Description:
2021-058 - Advisory Opinion Request Matthew F. Block
2021-058 - Draft advisory opinion