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EXHIBIT A <br /> <br />Case 7 <br /> <br />CONFLICT OF INTEREST <br />By: Terry Hendriksen <br /> <br />Background: <br /> <br />Mr. Hardin was an unemployed loan officer when he took office in 1991. During 1991 Mr. <br />Hardin obtained employment as a Vice-president of North East State Bank and on January 14, <br />1992 North East State Bank was first designated as a depository for city funds. <br /> <br />In 1993 Gary Gohrem and Tony Emmerich, major customers of North East State Bank, were <br />granted special financial consideration in the development of Amber Ridge. The amount of <br />irrevocable credit required by city code was reduced from $750,000.00 to $120,000.00. <br /> <br />Early in 1994, it was alleged that then councilmember Hardin had a conflict of interest <br />regarding Amber Ridge and the granting of this special consideration. On April 15, 1994, City <br />Attorney Goodrich rendered an opinion. <br /> <br />Early i~ 1995 it was discovered Mr. Goodrich's investigation of the alleged conflict of interest <br />consisted of a conversation with Mr. Hardin who was not required to document anything or <br />sign an affidavit. <br /> <br />On June 27, 1995, the City Council received a legal opinion from James J. Hanton, Bam~igan <br />& Kelly, P.A. Mr. Hanton concluded there is reason to believe a violation of MS 471.88 <br />subd.2, has occun'ed and potential violations of MS 471.87 can not be evaluated without <br />detailed financial information. <br /> <br />On June 27, 1995 Mr. Hardin refused to publicize the detailed financial information required <br />to make a determination under MS 471.87. <br /> <br />Section 2.8 of our City Charter grants the City Council the power to: "make investigations <br />into the affairs of the city and the conduct of any city department, office or agency" and to <br />"subpoena witnesses, administer oaths, take testimony, and require the production of <br />evidence." <br /> <br />Observations: <br /> <br />The city administrator has attempted to trivialized an apparent violation of MS 471.88, <br />comparing it to potential conflicts over road alignments, community education and labor <br />negotiations. However, the Attorney General has taken this issue very seriously. Opinions <br />from the Attorney General appear to prohibit the designation of North East State Bank as a <br />city depository. <br /> <br />Mr. Hardin's failure to disclose his relationship with North East State Bank in 1992 isn't the <br />only time he has been less than candid about matters with North East State Bank. In 1993 <br />when the developers of Amber Ridge were seeking financial consessions from Ramsey, Mr. <br />Hardin neglected to inform the council that the development was being financed trough his <br /> <br />Page 1 of 2 <br /> <br /> <br />