| Advisory opinion request from Hospital Service District No. 1 of Iberia Parish regarding a contractual arrangement with a third-party service provider when Iberia Medical Center's CEO and the third-party service provider's CFO are siblings. |
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Hospital Service District No.1 of Iberia Parish ("District") is a political subdivision of the State of Louisiana created by the Iberia Parish Council. The District operates as Iberia Medical Center ("IMC"), an acute care hospital in New Iberia, Louisiana. IMC has a behavioral health unit within its facility to provide behavioral health services to its patients. For several years, IMC has contracted with Compass Health, a third-party behavioral health service provider, to manage its behavioral health unit, provide the physician medical director, and provide staffing for patient care services.
Dionne Viator is IMC's Chief Executive Officer ("CEO"). She is an officer and employee of the District. Ms. Viator does not have the authority to enter into any contracts with third-party service providers, as such a contract would require the approval of the District's Board of Commissioners.
IMC started negotiations with another third-party behavioral health service provider, Oceans Healthcare ("Oceans"), but negotiations ceased when Oceans hired Ms. Viator's brother, Eric Elliot, to serve as its Chief Financial Officer ("CFO"). Mr. Elliot is a salaried/wage-earning employee of Oceans and is eligible to participate in a standard corporate bonus plan, which is tied to budget and metrics. Mr. Elliot does not benefit from any incentive compensation plans with Oceans. Upon Mr. Elliot's employment with Oceans, he was given several shares of Class B stock, which does not confer any voting rights and comprises less than a 10% ownership interest in Oceans.
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La. R.S. 42:1113A(1)(a) states no public servant, excluding any legislator and any appointed member of any board of commission and any member of a governing authority of a parish with a population of ten thousand or less, 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.
La. R.S. 42:1112B(1) states that no public servant, except as provided in R.S. 42:1120, shall participate in a transaction involving the governmental entity in which, to his actual knowledge, any member of his immediate family has a substantial economic interest.
La. R.S. 42:1112C states that every public employee, excluding an appointed member of any board or commission, shall disqualify himself from participating in a transaction involving his governmental entity when a violation of this Part (Section 1112) would result. The procedure for such disqualification shall be established by regulation issued pursuant to R.S. 42:1134(A)(1).
La. R.S. 42:1114 provides that each public servant and each member of his immediate family who derives anything 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 shall disclose certain information as set forth in Section 1114.
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Adopt the proposed advisory opinion.
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| Assigned Attorney: |
Jessica Meiners |
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