POTSDAM — Village Trustee Stephen J. Warr said on Thursday that conflicts of interest with village contracts were inevitable, in response to a Times investigation into contracts between the village and J.E. Sheehan Contracting Corp., for which Trustee Nicholas J. Sheehan works.
“I don’t think, whatever we do, we can avoid a conflict of interest,” Mr. Warr said. “When you’re a small community, you still have to get things done.”
Last month, Mr. Sheehan withdrew a $1.4 million bid from Sheehan Contracting for work on the village’s wastewater treatment plant, saying he was advised it was a legal conflict of interest.
Last year, however, another contract was awarded to Sheehan Contracting under similar circumstances.
According to Mr. Sheehan, he withdrew the treatment plant bid after consulting with the village attorney, Andrew W. Silver, and then reading the law himself. At the time, he said the issue was that his parents are shareholders in the company, and even if he recused himself from the vote, it would still be a conflict of interest.
In 2016, however, when the East Hydroelectric dam become inoperable, the village requested bids to place a cofferdam, an enclosure that can allow workers to work below water level, at the site. Sheehan Contracting submitted the only bid and was awarded a contract for $27,250. Mr. Sheehan recused himself from the vote to approve the contract.
A Watertown Daily Times check of state municipal law shows that what constitutes a legal conflict of interest depends on several factors.
The deputy press secretary for the New York State Comptroller’s Office, Brian Butry, would not comment on an individual case, but directed the Times to “The Fundamentals of Article 18 of the General Municipal Law.”
According to state General Municipal Law, a municipal officer has an interest in a company if they are an employee. There is no conflict of interest with the contracts of parents, siblings, or other relatives. A municipal officer cannot avoid a conflict by recusing themselves from a vote, or by winning a competitive bid — as Sheehan Contracting did for both the cofferdam and wastewater plant.
There are exceptions to the conflict of interest law, exceptions which may or may not apply to the cofferdam contract.
One such exceptions is if the only conflict for a municipal officer is that they are an employee of a company and not, for example, also a shareholder.
To meet this exception, the municipal officer cannot have their salary affected by the contract and they cannot be directly involved with obtaining or carrying out the contract.
When asked about the cofferdam project, Mr. Sheehan said “I don’t recall this job specifically,” and could not say if he worked on it. He declined to say whether his salary was affected by contracts that the company received, although he did say that he is not a shareholder in the company.
When Mr. Warr was asked about the cofferdam, he said “we were probably guilty then of a conflict of interest.” After the wastewater treatment plant project, “we know that almost everything we do is a potential for a conflict of interest.”
Mr. Warr’s position is that conflict of interest laws that work in Albany do not work in a small community where trustees have numerous connections, and that the board has done everything as transparently as possible.
“New York State says it’s a conflict, I don’t think it is,” he said. “I don’t think in any of these cases we did anything devious, sly.” For some small jobs, like placing the cofferdam, it might not be possible to bring in an outside company, Mr. Warr said.
Because of the risk of a conflict of interest, Mr. Warr said if any business owners joined the board, “I’d tell them to get the hell off the board and go live your life.”
Mr. Warr made it clear he was speaking for himself, and other trustees were more measured in their response.
“Clearly it‘s a shame, in the sense you have an incredibly talented local company,” said Trustee Abby Lee of Mr. Sheehan withdrawing the bid. “In my mind, you must follow the law.”
Ms. Lee was not on the board during the cofferdam vote, having been appointed to fill a vacancy left by Eleanor F. Hopke, and said she was not familiar with the contract.
Mayor Reinhold Tischler and Trustee Maggie M. McKenna could not be reached for comment.
In response to a Freedom of Information request for all invoices between Sheehan Contracting and the village since 2015, over 50 invoices were shared with the Times.
With the exception of the cofferdam, however, most seemed not to present a conflict.
Many of the invoices were for a project labeled Runway 6-24 Rehabilitation, which Sheehan Contracting was awarded before Mr. Sheehan was elected. Contracts between a company entered into before an employee of that company is elected are explicitly allowed under Municipal Law Section 802-h, and so Mr. Sheehan’s work on the runway project would not be a conflict of interest.
Most of the remaining invoices are for material bought from Sheehan Contracting by the village, mainly blacktop materials. Mr. Sheehan said these were purchased through a county bid, and that “those aren’t things that come before the board.”
Village Supervisor Gregory O. Thompson confirmed this, saying Sheehan Contracting had received a state bid to provide blacktop.
“That’s got nothing to do with Nick,” he said. “Even towns like Lisbon come over to get the state bid pricing.”