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February 16, 2023

Bar Harbor Council airs concerns about conflicts of interest over cruise ships

crowded sidewalk File photo / Laurie Schreiber The Bar Harbor Town Council said it would ask the town’s cruise ship committee to stop meeting while litigation around cruise ship disembarkation is pending against the town.

Citing potential conflicts of interest, the Bar Harbor Town Council plans to ask the town’s cruise ship committee to stop meeting while litigation around cruise ship disembarkation is pending against the town.

The discussion about financial-based conflicts among members of the cruise ship and warrant committees arose when councilors met earlier this month. 

“Requesting that they not meet for the next couple of months might be the easiest thing to do,” Councilor Matthew Hochman said of the cruise ship committee.

Town attorney Stephen Wagner of Rudman Winchell said the issue pertains especially to members of the cruise ship committee.

“We understand this would include members that are owners or employees of organizations named as plaintiffs or members that submitted affidavits on behalf of plaintiffs and have at least an indirect financial interest in the outcome of the litigation,” Wagner said in a memo to the council.

Vote versus lawsuit

Bar Harbor is the center of a debate over whether the number of cruise ships and their passengers strains resources, or if they are a welcome source of tourism-related revenue.

On Nov. 8, in a 1,780 to 1,273 vote, residents backed a citizen-initiated amendment to the town’s Land Use Ordinance placing a 1,000-person daily limit on the number of people who could disembark; the previous daily limit was 5,500. Bar Harbor has been booking over 150 ships in recent years. On some days, two or three ships arrive in port; many carry several thousand passengers.

A group of Bar Harbor businesses and residents calling themselves the Association to Protect and Preserve Local Livelihoods filed a lawsuit in U.S. District Court against the town on Dec. 29, to reverse the disembarkation limit.

The association contended the initiative would crush the tourism-based economy and result in the loss of jobs and businesses in a local industry worth as much as $30 million annually.

At the council’s meeting earlier this month, Wagner said that the day after the association filed the suit, the association filed a motion for a preliminary injunction to declare the November ordinance invalid.

The town intends to file an objection to the injunction by the March 20 deadline the town has to respond, Wagner said.

The council’s position, he said, is that the voters have spoken by passing the ordinance and councilors will preserve the ordinance unless directed otherwise through a court order.

Following a Jan. 26 meeting between the council, plaintiffs, plaintiff interveners and legal counsel before a magistrate of the U.S. Federal District Court there was consensus that the suit could go to trial by July or August. 

“The parties agreed to an expedited case schedule,” Wagner said, adding the proposal would be subject to court approval.

“In the context of federal litigation, that’s an exceptionally fast timetable and much sooner than we had anticipated.”

Through the meeting, the parties discovered that they shared some broad objectives, which included a goal to minimize damages and an interest to have a quick resolution to the litigation, he said.

The next mediation session is scheduled for March 6, he said.

Conflict of interest

Wagner wrote in his memo that, although there was no blanket answer either way, “it is especially likely that a conflict of interest may arise in the context of the cruise ship committee.”

According to his memo, “This is especially true for members that swore in affidavits to having an indirect or direct financial interest in the outcome of the litigation as employees of plaintiffs in the litigation.”

Plaintiffs “essentially claim the ordinance will have the eventual effect of nearly entirely eliminating the cruise ship traffic to town and, therefore, rendering many of plaintiffs’ properties nearly entirely valueless,” the memo says. 

The cruise ship committee is responsible for operational and environmental issues, the cruise ship budget, and industry relations. 

“At the very least, any vote for the committee to take a position on any statement directly concerning the lawsuit, concerning the difficulty of implementing the ordinance, or the effects of enforcing the ordinance, would constitute a special interest and a personal interest,” the memo says. “Therefore, whenever there is an action or discussion anticipated to result in a vote or recommendation that would support or undermine claims made by the plaintiffs, such a member likely has a conflict of interest.”

Appearance of impropriety

The memo says that, at least while the litigation is pending, “it is foreseeable that the cruise ship committee will have to devote substantial time to evaluating whether a point of discussion presents a conflict of interest that must be disclosed and voted on.

"Even if it is determined there is not a ‘special interest’ or ‘personal interest,’ the continued operation of the cruise ship committee in its present form may create an appearance of impropriety because of the participation of members involved in the litigation and because the line between inadvisable discussion of the litigation and legitimate discussion of cruise ship committee duties unrelated to the litigation may be difficult to identify, especially for members of the public.”

In light of the concerns, the memo advised the council to consider temporarily suspending the committee’s meetings or abolishing it altogether. 

In his discussion with the council this month, Wagner said the council could also simply ask the chair of the cruise ship committee not to schedule any committee meetings while proceedings are underway. 

“That would be at least for the next couple of months,” said Wagner.

Councilor Hochman said, realistically, the cruise ship committee has little to do while litigation is pending. 

The council agreed that Hochman, as the council’s liaison to the committee, would reach out to the committee’s chair to ask that it not meet at least until April or May.

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