Source: Standard Examiner
After the approval of a $500,000 business loan to a local startup company, Ogden City says it’s avoided any conflicts of interest connected to one of the company’s principals being a city attorney’s brother.
Earlier this week, the Ogden City Council approved the half-million dollar city loan for the company, Destination Express. The loan is part of a $1.5 million incentive plan the city hopes will bring new commercial air service to the Ogden-Hinckley Airport.
According to city officials, the airport loses between $500,000 and $750,000 annually and commercial service will help make the airport more sustainable.
As part of the plan, Destination Express will provide vacation packages that would be offered with new charter air service at the airport.
The city wants to provide flights out of Ogden to Los Angeles and Oakland, with Orlando and Cancun being added later. The city has not yet named a carrier that will provide the air service but hopes to begin offering the new flights by June or July, according to Community and Economic Development Director Tom Christopulos.
The $500,000 loan will allow Destination to buy a software system used for booking hotels, cruises and tickets to theme parks. The loan will also cover some other startup costs.
Randall A. Hunt of Clearpath Strategies LLC and Bruce Stratford of Stratford Legal are listed as Destination’s two principals. Stratford is the brother of Assistant Ogden Attorney Mark Stratford. Bruce Stratford has experience in the travel industry and has served as an executive with local travel agency Get Away Today.
Ogden Chief Administrative Officer Mark Johnson said the city has been aware of the relationship from the outset and Mark Stratford has not had any involvement with the plan.
“We’ve totally firewalled Mark off,” Johnson said. “He’s had zero to do with it at all.”
Johnson said Mel Smith, another assistant city attorney, has been the point person handling the legal aspects of the deal.
“Again, we’ll stand tall on this one because we’ve kept him completely out of it and he’s kept himself out of it,” Johnson said, adding that as an attorney, Stratford is well-versed in ethics.
Salt Lake City-based attorney David Irvine is a board member at Alliance for a Better Utah, a nonprofit organization that works to ensure transparency and accountability in Utah politics and government.
Irvine said he’d have to know more details to make a conclusive judgement, but that the situation in Ogden isn’t an inherent conflict.
“It strikes me as a gray area, a non-black and white issue,” he said. “If the city council was aware, if the city took active steps to make sure (Mark Stratford) wasn’t involved in the process, then I would think they’d be OK.”
“A lot of times these things are coincidental, other times they’re directly associated with favoritism,” Stephenson said. “But the fact is, in the real world, you can’t avoid all conflicts. Unless he was involved in the selection process, or the (loan) process or served in some kind advisory capacity, I imagine they’re covered.”
The terms of the loan require Destination repay the city over a five-year period at 5 percent interest. Payments will be deferred for two years while interest accrues, but after that Destination will begin paying the city nearly $7,000 per month. The remaining balance of more than $370,000 must be repaid by May 1, 2022.
Read Standard Examiner article here.