City lawyer Gene Klenke has recommended against requiring council members to pay their own up-front legal expenses when defending themselves against pecuniary interest allegations.
Klenke said the city is not a disinterested third party when its officials are accused of pecuniary interest. Elected officials who recuse themselves from matters to avoid the threat of potential legal costs may not be governing in the city’s best interest. He also noted the city carries insurance coverage for its officials.
Klenke’s advice came in response to two motions Coun. Cam MacKay had on the agenda for the Jan. 23 council meeting. MacKay opted not to bring them forward after a 30-minute in camera discussion, but said he still thought the city “shouldn’t always be on the hook for this stuff.”
The first motion would have the city “provide full cooperation to both sides in the Nolan Crouse pecuniary interest matter,” referring to the Court of Queen’s Bench application by resident Steve Stone to have Crouse removed from office for allegedly voting on matters in which he had a pecuniary interest.
The second motion would have had council direct the city’s insurance company to cease coverage for any pecuniary interest matter, and have the individuals involved pay instead.
Although the discussion itself was in camera, Klenke said the advice he would offer was not different than what was included in administrative backgrounders attached to MacKay’s two motions.
With respect to the first motion, he wrote that because the city’s insurance policy covers Crouse, and because the applicant clearly has interests that are adverse to the city, he recommended against that action.
“The City is not a neutral third party and ‘full cooperation’ with the applicants is not appropriate or in the City’s best interests,” he wrote.
For the second motion, Klenke wrote that the city’s insurance policy covers general liability including “errors and omissions,” which is a common risk-mitigation strategy.
It protects council members from the direct costs of responding to third-party allegations of pecuniary interest, “some of which may lack substance,” and residents from the potential governance disruptions.
“The proposed motion may have the effect of subverting the fundamental governance role of elected representatives, who, faced with the prospect of incurring significant (upfront) legal expenses, may be far more inclined to recuse themselves,” he wrote.
Klenke wrote that this kind of insurance coverage allows council members to consider the issue of pecuniary interest without that “distraction.”
Prior to any discussion of the motions, Crouse said he would recuse himself, citing a pecuniary interest.
“I’m actually pleased to recuse myself on these matters, as council and the city has no role whatsoever in attempting to influence a matter that’s before the courts,” he said.
“I think we all know what these matters are really about,” he added, although he declined to comment further when asked to elaborate.
The motion to go in camera passed unanimously. Councillors MacKay, Sheena Hughes and Bob Russell all questioned the need to go in camera, but agreed to receive advice in camera so long as any debate could be done publicly.
“Certainly the matter deals with the city’s legal position, so any time we talk about that I think it’s best to go in camera,” Klenke told them.
