City Attorney Weighs In On Conflicts of Interest

I have to admit that when I read Phil’s piece about City Commissioner, Tracy Houck and CDBG funding, I was a little lost. I struggled through it a few times, and really never knew what happened other than the Community Development Council (“CDC”), which allocates CDBG funding, originally voted to recommend to the City Commission that the Paris Gibson Square’s grant request not be funded.  Then, apparently there was some sort of inquiry by Commissioner Houck, the vote was changed, and now the CDC has recommended that PGS receive about $27,0000.00 in CDBG funds.

A March 14, 2017, letter from Commissioner Houck to Craig Raymond (the last two pages of this linked .pdf file), the City Planning and Community Development Director, sheds some light on this. In the letter, Houck says that the CDC Chairperson, Harmony Wolfe, was somehow affiliated with PGS (it’s hard to be sure because Houck says in her letter that Wolfe was both an employee and an independent contractor), but left that affiliation under less than amicable circumstances. Apparently Wolfe alleges sexual harassment against an unnamed PGS employee and intends to pursue it in litigation. Houck suggests that PGS and Great Falls Public School staff investigated these allegations, and determined them to be false. I do not believe they have been adjudicated by any independent finder of fact. Houck alleges a “vendetta” by Wolfe, and asserts she should recuse herself for such conflicts of interest.

This letter was on PGS letterhead and was written by Houck as the Executive Director of PGS.

A day earlier, though, Commissioner Houck had emailed Raymond, City Commissioner Bill Bronson, City Manager Greg Doyon, and another member of planning staff (This email can be found in Phil’s post). In this email, Houck complained of conflicts of interest by Mayor Bob Kelly and a NeighborWorks staff person. She makes only a vague reference to Wolfe, despite the fact that the following day she accuses her of a “vendetta.” This email was clearly written as a City Commissioner.

Then, apparently, based on Houck’s complaints of conflicts of interest, on March 16, Greg Doyon emailed Houck and said, in essence, she and Wolfe would have to recuse themselves, and there would be a re-vote to see if PGS would get its funding. It did. (GFDA was also funded, NeighborWorks apparently was not. See p. 68, here).

What helped to figure this out is City Attorney, Sara Sexe’s letter to Commissioner Houck from March 20, 2017 (pages 1 and 2), instructing Houck that she should “not vote or participate in any Commission action or discussion” related to the CDBG grant process.

So, roughly here is what I think we know: Wolfe apparently voted on grant allocations and according to Houck, down voted the PGS application. According to Houck, Wolfe had a conflict of interest in so voting. So Houck contacted the City, to complain about Wolfe’s participation, but was Houck doing so a conflict of interest?

As a result of Houck’s allegations, there was a revote with Wolfe not participating, and under the revote, the CDC awarded PGS its grant money. I can’t suggest that the PGS as an entity should have been unable to complain of a potential conflict simply because its Executive Director is a City Commissioner. Maybe a different PGS employee should have made the Complaint. But this whole thing leaves a number of questions.

First, in her March 13 email to City staff, Houck complains of a conflict of interest on the part of Mayor Kelly. Why was this question not raised earlier, or did she only care when PGS wasn’t funded? And then PGS gets its funding, and we don’t hear another word about that conflict. Does it seem as though Commissioner Houck had more interest in making sure her employer got funding than she did in protecting the public from a conflict of interest that she alleged? (I am certainly not alleging a conflict on the Mayor’s part–I don’t know the details of his relationship with GFDA.)

Second, Houck definitely participated in the discussions related to CDBG contrary to Sexe’s admonitions at the March 20, 2017, work session. Sexe’s letter was dated March 20 and was noted to have been hand delivered. Can we assume it was hand delivered before the meeting? If so, it seems Houck ignored the conflict of interest. I don’t know when she received the letter.

Third, the March 13, 2017, email is concerning. She wrote to City staff about her employer’s business as a City Commissioner. Who was she representing, the voters or Paris Gibson Square?

Here is the City’s Ethical Code. I guess you can be the judge.

Last Question: Where is the local media on this questions?


Posted by Gregg Smith

Gregg Smith is a Great Falls attorney and businessperson. He writes a monthly column for the Great Falls Tribune.

Reader interactions

8 Replies to “City Attorney Weighs In On Conflicts of Interest”

  1. Capt BlackEagle May 3, 2017 at 2:03 PM

    I didn’t think you could be both an employee and an independent contractor? The whole purpose of the contractor registration law was to keep that from happening.


  2. Capt. – Houck is an agent of the city as commissioner plus a CEO of Paris Gibson Square. According to HUD rules, she must recuse herself from any discussion regarding PGS getting CDBG funds from the city. What she did is a “real” conflict of interest in HUD’s terms.


  3. There are 25,137 active registered voters and 12,624 inactive registered voters in Great Falls according to the city’s adopted budget for fiscal year 2017. Amongst those voters are potential candidates for the city commission and the community development council with zero potential for conflicts of interest. Citizens with no ties to the the non-profits that compete for city funds. It’s maddening that Great Falls continues to elect and appoint people to office having any potential for a conflict of interest when there’s a whole city full of people without such baggage.

    The self-perpetuating, impenetrable Great Falls cronyism network will continue in perpetuity, unless this practice stops.


    1. Well, Jeni, that’s about the most perfect way I’ve ever heard it stated. You absolutely nailed it!


  4. Jeni said we should elect Commissioners who are “Citizens with no ties to the the non-profits that compete for city funds.”

    I must beg to differ, at least on some respects. First, Commissioner Houck is different in that she is employed by a nonprofit seeking CDBG funds. I think there is a substantive difference between employment and volunteers.

    Second, I don’t think we want to rule out anyone who volunteers on a non-profit. There are many, many really good people in this town who give their time to help others, and I cannot think of a good reason why we would want to exclude someone with those instincts from City government.

    Instead, people who have those connections must be ever vigilant for even perceived conflicts of interest and, if recusal is not good enough, they need to resign from the boards, just as Mayor Kelly and Commissioner Bronson did. But exclusion? No, I disagree.


    1. I agree with what you write here, but…

      FWIW, both Bronson and Kelly resigned from the GFDA board, and Bronson also abstained from the vote. But Kelly still voted (neither recused themselves). Not sure what that means, or if it was proper, but again, FWIW!


    2. Gregg, I really appreciate your comments and totally respect your opinions. I have to admit I am very cynical about Great Falls politics after all the years I’ve spent watching the same people and same organizations always get their way. Add that to that the fact that Great Falls doesn’t seem to care about questionable ethics or actual law violations when they vote, and yes, I wholeheartedly own my cynicism.

      I see your point about non-profit volunteers and would have to agree that Houck’s situation as a paid executive director of a non-profit seeking funds from the very city she is also supposed to represent the best interests of, is a totally different animal. Considering her actions regarding PGSMOA funding, I would say she stepped way over the line and exerted undue influence. I actually think she should be removed from office because to me, it does appears she violated the Montana Code Annotated, but hey, that’s my opinion.

      However, I stand by what I wrote about and here’s why.

      People associate with non-profits for a variety of reasons. If a person is genuinely altruistic, can remain vigilant about their own selfish tendencies and honest about their intentions then yes, perhaps they could serve in government and remain unbiased.

      However, a disproportionate number of people that I see involved with governing non-profits in this town and serving on boards are there for self-serving reasons, such as increasing their social status and networking. Now, I’m not referring to the person serving soup at the mission. I want to be clear that I am referring to those with financial and/or managerial responsibilities. That’s where I believe the potential for conflicts exist, not with the everyday volunteer.

      Some non-profit volunteers boards in Great Falls have given unfair advantages in contracting opportunities. Once you do those “favors” you set up a “you scratch my back, I’ll scratch yours” relationship, favors are exchanged and the network is forged. I’ve seen it happen in this town with certain contracts that were offered without competitive bidding. One must wonder about the legality of letting contracts in that manner, particularly when public funds are involved. Yet, very few people in Great Falls seem to question it. That gives me pause.

      I’m also disgusted with the way Great Falls continues to elect people to office with questionable ethics or who committed actual violations of the law. Houck violated campaign law but was elected anyway. Great Falls just re-elected a school board trustee that, as director of a non-profit, forged the signature of a board member to sign his own paycheck because he felt he couldn’t wait for the person to return from vacation. Yes, never charged with anything—but in my opinion, questionable ethics. And don’t get me started on a former mayor who cost the city so much money because of her actions.

      Apparently, the majority of Great Falls voters don’t see it that way, which gives me cause for concern about the moral and ethical health of Great Falls.

      What does all this say about Great Falls voters? To me, it says voters don’t care about the ethics or character of the people they elect. Maybe the answer is for Great Falls to wise up and start electing people with ethics and impeccable character. Then I might agree that certain ties to non-profit organizations, such as a former volunteer, might not matter as much.

      The good-old-boy and girl network that runs Great Falls. “And that’s the way it is,” as Walter Cronkite would have said.


  5. Gregg- I think Dodd is right, volunteer all you want but when your personal interests collide with your public responsibilities, back up and drop one. It’s not that hard to spot the conflicts so I have little sympathy for those caught up in the overlaps after the fact. Neighbor Works has the worst record for number of offenders who can’t pass the “it just looks bad” test.


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