So, is this local politics as usual, the mere appearance of impropriety, or a genuine breach of ethics? You make the call: The first salvo of the year in the ongoing battle over if and where to build a minor league baseball stadium in Missoula came in the form of a conflict-of-interest complaint filed against Mayor Mike Kadas, in response to his acceptance of a seat on the board of directors for Play Ball Missoula.
The complaint, filed Jan. 12 by Missoula activist Ross Best, accuses the mayor of violating the 1977 Montana Code of Ethics governing elected officials. Filed with Missoula County Attorney Fred Van Valkenberg, the document cites a provision stating that “a public official … may not acquire an interest in any business or undertaking that the officer … has reason to believe may be directly and substantially affected to its economic benefit by an official action to be taken by the officer’s … agency.” According to the complaint, non-profit organizations fall under the definition of a “business.”
In a Jan. 7 memo to the Missoula City Council, Kadas informed council members that he had accepted an invitation to serve on the board of directors of the non-profit organization that is looking to build and manage a 3,500-seat civic stadium on the old Champion mill site adjacent to McCormick Park. Play Ball Missoula is also charged with the task of raising about $6 million to accomplish that goal.
Kadas, who has been a supporter of the Champion site as the future home of the Missoula Osprey minor league ball club, denies that any conflict of interest exists, arguing that he receives no monetary compensation for his service.
“There’s no potential financial benefit to me,” says Kadas. “I, or my designee, serve on a number of non-profit boards, and if [Best’s] interpretation is correct, that can’t happen anymore. That will affect a number of boards that I serve on, as well as the county commissioners and maybe even a few that City Councilmen serve on.”
Kadas indicates that he also serves on the board of Partnership Health Center, which receives $25,000 a year from the city, as well as the Missoula Area Economic Development Corporation, which is routinely involved in economic dealings with the city. In the past, when the mayor has had a potential financial conflict with business before City Council, he has removed himself from the process, as was the case last year during the Freddy’s Feed and Read rezoning application, in which Kadas was part-owner of the building.
“I think there are reasons that the mayor and the county commissioners serve on various boards,” adds Kadas. “Mr. Best’s interpretation of the law really takes away the opportunity for some benefit that a community is accruing. … It does seem to me to be advantageous to the city to have a representative on the Play Ball board. Now whether that’s me or somebody else from the administration doesn’t make any difference to me.”
But according to Best, who has been an outspoken critic of the Champion site and the city’s process of site selection, the mayor is missing the point.
“When you join the board of directors of a nonprofit corporation, you become a trustee of that corporation. You have fiduciary duties toward that corporation, and they include what’s called the duty of undivided loyalty,” says Best. “So Mayor Kadas has put himself in the position of duty of undivided loyalty to Play Ball [Missoula] at the same time that he is a public official, and therefore a public trustee with undivided loyalty to the people.”
Best says that unlike other non-profit boards the mayor may serve on, Play Ball Missoula is not a quasi-governmental entity and has as yet no formalized legal relationship with the city. In contrast, Partnership Health Center is both a non-profit entity and a division of the Missoula City/County Health Department.
“In Mayor Kadas’ mind, the public interest may be identical with Play Ball [Missoula’s] interest,” says Best. “But needless to say, there are a lot of us who are opposed to this baseball stadium. ... So at the same time he’s supposed to be looking out for the interests of the people, he’s going to be negotiating terms of a contract while sitting on the Play Ball board.”
City Attorney Jim Nugent, who emphasizes that it will be the county attorney who decides how this case is handled, says that this legal issue has come up before. Specifically, he cites a 1979 legal opinion by the state attorney general, which says that elected officials were free to not only sit on the boards of non-profit organizations but also to allocate funds for them, provided that they first disclose that involvement to the public and receive no financial compensation for their service.
“I did, at the mayor’s request, check with the secretary of state’s office and with the commissioner of political practice,” says Nugent. “And they both indicated from the description [of the complaint] I gave them over the phone that they didn’t think it was a problem for the mayor to be on the board of directors of an entity that was going to manage city land and a city civic stadium.”
Best, who is not an attorney, says that he has “every expectation that the county attorney will not agree with me,” and expects the matter will need to be settled in a court of law.