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Gift cards given to city workers may have been illegal

Friday, January 25, 2013

Blytheville Waterworks employees received $100 gift cards at Christmas time, but the legality of the city vendor's contribution has come into question.

Thursday night, Waterworks manager Gary Phillips acknowledged that 20 water department employees received $100 gift cards through a donation from vender Henard Utility, which supplies the city with water meters and other parts. The $2,000 gift was apparently originally intended to pay for a Christmas party.

"They weren't bonuses," Phillips said. "One of our vendors, Henard Utility, and we did the same thing at Public Works, the mayor asked me to contact some of my vendors and see if they would contribute to something toward a Christmas party for the employees. Mr. Henard was very generous. I think what the expectation was, I was going to take them all out to a restaurant, where the money would go toward a meal. I checked with the sales guy, he said it was OK to do this. I had the food cooked by one of my employees, who was happy to do it. We went out to the Senior Center instead of going out to a restaurant, and I took the money that he donated to us and bought gift cards for my employees."

He said there was no city money involved.

A.C.A. 21-8-801 says: "(a)(1)No public servant shall receive a gift or compensation as defined in 21-8-401, other than income and benefits from the governmental body to which he or she is duly entitled, for the performance of the duties and responsibilities of his or her office or position ... No person shall confer a gift or compensation ... to any public servant, the receipt of which is prohibited by subdivision (a)(1) of this section."

A gift is defined as: "any payment, entertainment, advance, services, or anything of value, unless consideration of equal or greater value has been given therefor."

A public servant is defined as: all public officials, public employees and public appointees.

"To me, it's a clear violation of Arkansas Code 21-8-801," city attorney Mike Bearden said.

He said the individual city employees would be among those in violation of the law.

"Now they would be unknowlegable participants, I think," Bearden said. "Gary may not even know himself. But it's clear to me it's a violation, although not a big violation. If you get down to the point to where they are giving special treatment to that person, for instance, then you get into other areas of the statute that has to do with bribery, other things like that."

He said the company could be required to file a report.

Could they just have sponsored a Christmas dinner?

"Mayor Sanders may have mentioned this in passing several months before, and I said the only way I would feel comfortable with it would be if they furnish the food, drinks, everything else for everybody and that's it," Bearden said. "That's pushing it as far as I'm concerned. That probably is OK."

He said a citizen could file a complaint with the Arkansas Ethics Commission.

Sanders said he was looking for a way for the departments to have a Christmas party and Bearden opined a sponsor would be fine.

Meanwhile, Phillips noted he personally paid for the two $50 gift cards and the Kindle Fire given away at the Christmas party.

When asked, Phillips said he hasn't heard employees from other city departments are upset because they didn't receive gift cards.

"I'm sure there probably might be," Phillips said. "The water company, I won't say it's isolated, but we operate from revenue, we always have. We don't spend a dime of city money in anything that we do. It's all revenue generated."

He pointed out the water company even contributes "heavily to the operation of the city, and we are happy to do it. I'm glad we're able to do both what we're able to do and help the city at the same time."

Phillips appreciates the vendor's contribution.

"I want to thank Henard Utility for being so generous," Phillips said. "I was not expecting it. Public Works, their Christmas party, Doug Barker (Barker Brothers Ashphalt), the guy who does our streets and asphalt, they just asked him for a contribution and he ended up paying for the entire party. We're working with some really great people."

Public Works director Marvin Crawford said Barker Brothers Asphalt sponsored his department's Christmas dinner, noting he sent out letters to potential sponsors and Barker Brothers was the only to agree to do it. Crawford noted Sanders asked him to seek sponsors because the city didn't have the funds to have a Christmas party.

Phillips said Henard has been there for the city during tough economic times.

"The thing about Henard, in some of these lean times, when bills were not getting paid, Henard continued to supply us with some of the things we needed," Phillips said.

Councilmen John Musgraves and Stan Parks, along with Mayor James Sanders, all said they thought Phillips paid for the gifts for his employees.

"Gary Phillips, that was straight from his pocket," Musgraves said. "From the kindness of his heart, he gave employees something from his pocket."

Parks added: "He made the announcement at the Christmas party that the things they had in the drawing, he bought them himself."

"That's what he told us," Sanders said.

When told how Phillips described it, Sanders said: "That wasn't my understanding of it. They bought the food and it was my understanding that he had the gift cards."

Musgraves noted when he heard about the gifts, he called Phillips, who told him that he gave gift cards out of his own personal money.

"OK, I just want to make sure we are not using taxpayer money," Musgraves said, recalling the conversation.

Messages left for Henard owner Mike Henard were not returned Friday morning. The receptionist said he was out of the office until Monday.


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