Question: Is it Ethical For Mayor and City Manager to Flip Homes in City They Run?
In my hometown of Peachtree City, Georgia we have a controversy building. The Mayor, Harold Logsdon and the City Manager, Bernie McMullen, have decided to go into business flipping houses. Now I do not know about you, but the people that will have to approve any work done on the homes are the same people that report to these two gentleman.
I could see them doing this work in neighboring towns and counties as they would have no sway over zoning and approval issues, but to do business in the town they run is pretty awkward to say the least.
So my question to the real estate folks is this, is it ethical for the people in power to team up and actively engage in a business that required permitting and city approvals, when those doing the approvals are direct reports?
Logsdon said the idea started with his wish to make some extra money. He asked City Manager Bernie McMullen to join him in the venture “because I knew Bernie was very handy.”
Logsdon said he asked City Attorney Ted Meeker if the venture with himself and McMullen would be a conflict of interest, and Meeker told him it wouldn’t be.
In a guest column on Page A4, former Peachtree City Mayor Steve Brown questions the business arrangement, claiming that it could make it difficult for McMullen to “provide unbiased information” to city council members. Logsdon defeated the incumbent Brown in 2005 and Brown ran unsuccessfully last year for a seat in the Georgia legislature.
Logsdon said he and McMullen are doing almost all of the renovation work themselves, getting subcontractors just to handle the siding and landscaping work, Logsdon said. The bulk of the work so far has been replacing the damaged drywall, of which there was plenty, Logsdon said. via The Citizen Online.
I would appreciate if you would forward information on whether land contracts qualify for the tax credit.
Thanks, 
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Comment by Doug Quance on 17 September 2008:
Although I see the potential conflicts of interest, flipping seldom involves the kind of renovation that requires city approval. Paint, carpet, appliances, landscaping… these kind of things are done without permits.
I do believe, however, that politically – this might be a dangerous thing for them to do. It might not be taken well by the voters, who will ultimately decide whether or not this was a good idea.
Comment by Al on 18 September 2008:
That is absolutely a conflict. Whether it is technically illegal or not is not the issue. It is the appearance that is the issue and should be avoided.
Comment by Brandon on 29 September 2008:
Regardless of whether or not it’s ethical, at least it shows they think their city is a good investment. Maybe the country’s current financial crisis could have been avoided if CEOs of the financial firms had been required to invest their personal money in the equities and debt their companies were purchasing.