Clean Ohio: New Conflict of Interest Prohibitions Shape Parties Involvement at Brownfield Redevelopment Projects
On May 18, 2009 the Clean Ohio Council finalized new policies that will govern future rounds of the Clean Ohio Revitalization Fund (CORF). A major change has been incorporated into the policies that will impact developers, consultants and contractors who work on Clean Ohio projects. For the first time the Council has included conflict of interest prohibitions.
The conflict of interest prohibitions are directed primarily at consultants who have previously acted as both developer and environmental consultant on a project. Contractors are also prohibited from taking any interest in the development if they want to received Clean Ohio funds to perform work on the project.
Another important prohibition applies to consultants and prohibits participation as both consultant for the developer and a company who caused or contributed contamination at the property. This has occurred at projects because it appeared to create continuity on the project. Some public entities saw it as a positive to continue to involve the consultant who has the most knowledge about the challenges presented by contamination at the property.
If you are involved in Clean Ohio projects, this new provision carries important implications that could shape future involvement at brownfield redevelopment projects. It will also be important to monitor your partners in a project because a conflict of interest could hold up the whole project.
Here are the new provisions:
10.02 Entities paid for with Clean Ohio Revitalization Fund grant dollars on a funded property must avoid conflicts of interest. A conflict of interest occurs when an individual or organization involved in the cleanup project has an interest that might compromise their ability to execute the project in a manner consistent with the intentions of the Clean Ohio Revitalization Fund program. A conflict of interest may exist even if no proven illegal act results from it, and will include an appearance of impropriety that undermines confidence in the individuals or organizations involved in the project. To avoid a conflict of interest and ensure that proper checks and balances exist, the following restrictions are placed on funded properties:
• The Certified Professional may not act as the developer or an investor in the development on the funded project.
• The selected environmental consulting firm or their employees may not act as the developer or an investor in the development on the funded project.
• The selected contractor or subcontractors may not act as the developer or an investor in the development on the funded project.
• The selected environmental consulting firm and the contractor or subcontractor for the funded project may not be the same firm or related firms.
• The selected environmental consulting firm may not be engaged in concurrent service agreements for the grantee and the party that caused and contributed to the contamination on the funded project.