MONROE — At the latest Monroe City Council meeting on Tuesday, Nov. 9, Councilwoman Angelia James spoke about a contract between the City of Monroe and Holloway’s Music Center that she believes is unethical and illegal. Holloway’s Music Center is owned by Mayor Pro-Tem Marion Holloway.

Through the contract, Holloway’s Music Center replaced an old mixer from about 2009 with a new one in June of 2020.

James claims the contract violates North Carolina General Statute 14-234, which states in part a: “No public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract except as provided in this section, or as otherwise allowed by law. A public officer or employee who will derive a direct benefit from a contract with the public agency he or she serves, but who is not involved in making or administering the contract, shall not attempt to influence any other person who is involved in making or administering the contract. No public officer or employee may solicit or receive any gift, favor, reward, service, or promise of reward, including a promise of future employment, in exchange for recommending, influencing, or attempting to influence the award of a contract by the public agency he or she serves.”

Frayda Bluestein with the UNC School of Government published commentary on the statute in 2015. She explained that:

“A violation occurs when a government official (or his or her spouse) derives a direct benefit from a contract they make or administer. The statutory definition provides that a person ‘administers a contract’ if he or she has the authority to make decisions about or interpret the contract.

“Governing board members always have authority to do those things, since the ultimate authority to contract rests with the board, even when aspects of contracting have been delegated to others. So contracts with governing board members are always potentially problematic. So if a board member (or his or her spouse) stands to derive a direct benefit, and there is no exception that applies, the contract simply cannot lawfully be made.”

The Enquirer-Journal obtained commentary from City Attorney Mujeeb Shah-Khan on why he interprets the contract as legal.

In his commentary, Shah-Khan writes to James that each time the City of Monroe enters a contract with Holloway Music Center, he “scrutinizes” the contract and checks it against the applicable Council ethics policy and General Statute 14-234 to be certain both the City of Monroe and Holloway’s are following the law.

“So far, each time, my decision, based on the facts and circumstances surrounding each contract, has been that entering into the contract is not a violation of law or policy for the City or Mayor Pro Tem Holloway. While someone may have called your attention to the most recent contract, the contracts have been above board,” Shah-Khan wrote.

Because Holloway is receiving a benefit from the contract, the focus, Shah-Khan explains, should be on whether Holloway is drafting or administering the contract. According to Shah-Kahn, “Mayor Pro Tem Holloway does not, under the statutory definition, administer the contract. He has no oversight of the contract from the City’s side. He does not make any decisions on the contract from the City side.”

The contract between the City of Monroe and Holloway is a standard form used by the City and no one on council is involved in the “drafting, preparation or supervision” of it. Holloway, however, did provide a contract amount, which he is allowed to do.

The amount Holloway provided was below a threshold for council approval and he did not award the contract, Shah-Khan pointed out to prove why the contract remains legal. “But the facts of this contract, and the amount of the contract, put this in the area where Department Heads approve the contract as opposed to the City Manager or City Council.”

Shah-Khan wrote saying the contract neither violates City Council’s ethics policy nor does it violate state law.

“And as the ethics policy encourages a member to reach out to the City Attorney for guidance, if I was asked, I would advise Mayor Pro Tem Holloway that his actions are legal and ethical,” Shah-Kahn wrote. He added that it is up to each councilmember to decide for themselves if their conduct is “appropriate” which would be Holloway’s decision.

At the end of his commentary, Shah-Khan told James that should she have any questions, he would be willing to discuss them with her.

Emails provided to the Enquirer-Journal show the communication between Shah-Khan and James occurred in October of 2020. James asked the City attorney if the contract was ethical or legal.

Shah-Kahn was appointed by council as City Attorney in 2014. His experience includes being city attorney of Greensboro, senior assistant city attorney for the City of Charlotte for 10 years. He has also practiced law in the private sector.