- “In April 1996, in the case of the former City Comptroller, Elizabeth Holtzman, after a full trial on the merits, the [New York City Conflicts of Interest] Board fined Holtzman $7,500 (of a maximum $10,000) for violating City Charter § 2604(b)(3) (prohibiting use of public office for private gain) and City Charter § 2604(b)(2) (prohibiting conduct that conflicts with the proper discharge of official duties) with respect to her participation in the selection of a Fleet Bank affiliate as a co-manager of a City bond issue when she had a $450,000 loan from Fleet Bank to her United States Senate campaign, a loan she had personally guaranteed. Significantly, in a landmark ruling, the Court of Appeals, New York State’s highest court, upheld the Board’s reading of the high standard of care applicable to public officials and rejected the asserted lack of actual knowledge of business dealings as a defense to ethics charges: “A City official is chargeable with knowledge of those business dealings that create a conflict of interest about which the official ‘should have known.’” The Court of Appeals also found that Holtzman had used her official position for personal gain by encouraging a “quiet period” that had the effect of preventing Fleet Bank from discussing repayment of her Senate campaign loan. The Court of Appeals held: “Thus, she exhibited, if not actual awareness that she was obtaining a personal advantage from the application of the quiet period to Fleet Bank, at least a studied indifference to the open and obvious signs that she had been insulated from Fleet’s collection efforts.” Finally, the Court held that the Federal Election Campaign Act does not preempt local ethics laws. This was the Board’s first full-blown trial, and it took eleven days. There were 2,000 pages of testimony, 150 trial exhibits, and more than 15 witnesses. COIB v. Elizabeth Holtzman, COIB Case No. 93-121 (1996), aff’d, 240 A.D.2d 254, 659 N.Y.S.2d 732 (1st Dep’t 1997), aff’d, 91 N.Y.2d 488, 673 N.Y.S.2d 23, 695 N.E.2d 1104 (1998).”
Source: NYC CONFLICTS OF INTEREST BOARD CHAPTER 68 ENFORCEMENT CASE SUMMARIES, Current as of December 13, 2012 (available at: http://www.nyc.gov/html/conflicts/html/units/enforcement.shtml)