CONFLICT OF INTEREST OPIHION

Pagc 13

The fiird key fador is that John D. Miller played a leading role in prccuring SCDD and SP&ZC approvalof the LLC's development proposals. He personally submittecj and negotiaied the proposals as the manager or co{Tranager of each LLC. Togelher, these factors gave Claire O'Brien a substantial interest in the land use decisions inb which SCDD had substantial inpul lf Mr. Miller were to obtain regulatory approval on behalf of any of the LLCs, Claira O'Brien stood to benefit directiy by inheritng a commercial leasing, business brokerage and/or property management client fed to JD[rREl by tre manager and part owner of the LLC, l\trr. Miller. If there was any contingency in Claire's receMng such a beneft. it was the decision of John Miller and/or Claire O'Brien not to direct the business to her. Pracifcally speaking, Mr. Miller and Ms. O'Brien contolld ttrat decision: it was thus no contingency at all. Additionally, Claire O'Brien rrould and did benefit indirectly by her dose business association with Miller and JDMREI- That association allowed her to enjoy the prestige and promotional benefit JDMREI sought by its cmss-ma*eting technQues. The c"ndusion that Claire O'Brien had a substantia! interest in the decisions whether to approve the development proposals of tlre LLCs is fully consistent with the reasoning and opinions offered by the Attomey General (discussed on page 3). To condude ihat Clairs O'Brien did not have a substantial interest in the decisions whether to approve the LLC's development proposals because she did not derive substantial pearniary benefit from tre LLCs, but only from JDtvlREl, would encourage the manipulation of business entiiies to avoid the reach of ffre conffict of interest laws and thus subvert their purpose.
For all of the reasons discussed, we are of the opinion that Mr. O'Brien should have declared a conflict of inErest and should have abstained frorn participation in review of the developrnent proposals put before SCDD by allfive of the tICs. O'Brien propedy did so with respect to the Contracto/s Road LLC proposal; however. he did not do so wrth respect to tre proposals put fonrrard by Nepenthe, CarCinal (Ci$ Hatl), Soldie/s Pass (Old-Marketplace) and Coffee Pot (AMIPM), and lherefore, with respect to those LLCs violated the conflict of interest laws.

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The fact that Mr. O'Brien sought and obtained legal advice does not alter the conclusion that his wife had a substantial interest in the decisions being made by SCDD and SP&ZC. ln this case, il does appear that Mr. O'Brien sought legal aivice on the ccnflict of interest question, at least with respect to the Old Marketplace and AM/PM developrnents. lt is not clear what advice Mr. O'Brien received. Mr. Paladini's January 9, 1997, letter offered sound general advice and instructed fu1r. O'Brien to consult the City Atomey's ffiee any time that a John D. Miller entiiy should seek regulatory approval. lf there was any problem with the advice given later. it appears to be that litile was discussed about the details of the business relationship between JDMREI, the LLCs, Mr. Miller and Claire O'Brien, as the opinion letter suggested should have been