Who needs permission anyways?

Certainly not Marc Maxwell or Nate Smith.

There's been a lot of banter about how City officials have flirted around with conflict-of-interest issues, transparency, and arm's-length safegaurds.

Another example of this is the formation of Greater Sulphur Springs Regional Center, LLC, an EB-5 entity whose purpose is to raise capital from foreign investors. EB-5 is an immigration program where foreign individuals can invest a large sum of money and get a green card, basically. It's a legit USCIS program. The important thing to note here is that the LLC can generate income for its members.

Where cities are involved, its seems fairly common for councils to authorize their City Manager to operate in a dual role as City Manager and Manager of the EB-5 entity. Our esteemed Council did the same thing in April of 2023:

So far so good, right? Nope.

What's not acknowledged here is Maxwell had already formed the LLC a couple of months earlier.

So he was proactive. What's the big deal? Because, man, he wasn't authorized to do it.

The next real issue is that there is no mention of the Council restricting Maxwell's income from the LLC. Maxwell or Nate Smith certainly aren't on the record as suggesting that the Council do so, which sets up a huge potentional conflict-of-interest.

Other cities forbid their City Manager from receiving compensation from the entity in order to alleviate this risk, but I guess we're just generous that way.

So why didn't our trusted legal advisor, Nate Smith, recommend this? It's possible he didn't learn this stuff at Texas Weslyan, or maybe it's something else.

If you look at this 2024 PIR update on the LLC , what do you notice?

Interesting, right? I know people are aware of this already, but let's go over it with a few other points:

• There is no record of the City Council authorizing Smith's dual role.

• It creates another appearance of a conflict-of-interest and raises ethical concerns that could undermine public trust.

• In the other cities I reviewed, there is no mention or authorization of the City Attorney serving in a dual role. It's not uncommon for City Attorneys to advise on EDC matters or sit on non-profit EDC boards, but this seems something altogether different.

Now, it's possible that the income is restricted in the LLC operating agreement, but as far as I can see, that document has not been made public or ratified by the Council.

I've submitted a TPIA to obtain the LLC documents.

Update: Removed reference to LOI vote on MSB project. See here.