CANNON BEACH — A state ethics probe found that Karen La Bonte, the city’s public works director, violated state conflict of interest laws after the city hired a company she co-owns with her husband for pandemic-related signs and other products.

It was common knowledge that La Bonte and her husband, Darwin Turner, own Cannon Beach Design Co. But while La Bonte disclosed her relationship to the business and declared a potential conflict of interest verbally to her co-workers and City Manager Bruce St. Denis, she did not do it in writing before each transaction as required by state laws, the Oregon Government Ethics Commission found.

Under a settlement agreement, La Bonte will be required to pay a $1,000 fine. La Bonte opted to settle the matter than continue with an investigation and possible hearing.

City Manager Bruce St. Denis called it a technical violation and noted that the city had removed La Bonte from the transaction process when conducting business with her husband’s company.

In a memo to the City Council, St. Denis wrote that La Bonte “continues to be an outstanding representative of the city, a thoughtful and generous member of the community and a leader and role model within the city organization who has spearheaded numerous initiatives that will improve the lives of Cannon Beach residents for generations.”

The ethics probe stemmed from complaints filed by Manzanita resident Rusty Morris earlier this year regarding signs the city commissioned from La Bonte’s company in 2020. He claimed she had abused her position and benefited from the transactions.

La Bonte and St. Denis have pushed back against Morris’ complaints, saying La Bonte is being targeted because of a personal disagreement and that many of the claims Morris has made are unfounded or false. St. Denis called the complaints a campaign of harassment.

He plans to ask the City Council at an upcoming meeting to consider allowing the city to cover La Bonte’s legal fees.

“The actions taken by Morris were personal, but he used her position at the city to go after her,” St. Denis said. “When someone goes after one of our leadership team then they’re also going after the city because they’re saying that we don’t do things properly here, and Karen bore the brunt of that defense.”

For his part, Morris holds firm to his belief that La Bonte acted in bad faith. He says his complaints were not motivated by a personal grievance.

Large signs went up at city entrances in the spring of 2020. They were considered an emergency measure after an influx of visitors and stated that, “Due to COVID-19 Cannon Beach is closed to visitors.” Other signs ordered later depicted animals wearing face masks to remind people to wear protective face coverings as a precaution against the virus.

In a preliminary review of the ethics complaints, a state investigator said it didn’t appear La Bonte used her position to benefit financially but she may not have properly disclosed a possible conflict of interest.

In a final decision this month, the state found the city made 111 purchases of goods or services from Cannon Beach Design Co. between 2017 and 2021 for products ranging from business cards to city signs.

State findings show La Bonte was the city official who ordered products and services from the design company on 13 occasions. St. Denis counters that La Bonte was merely listed by the vendor but she was not the one in charge of the orders. The cost in these transactions came to $2,470.95, according to La Bonte’s agreement with the state.

Morris continues to push for La Bonte’s dismissal from the city. He circulated a petition this year on Change.org calling for the city to fire La Bonte. As of Friday, the petition had just over 1,000 signatures.

Morris told The Astorian he plans to file a complaint with the Oregon elections division because he believes she improperly advocated for the city’s proposed 5% tax on prepared food.

St. Denis says La Bonte forwarded an email at another person’s request. This happened during a time when staff were still allowed to advocate for the measure.

“What began as a personal issue has escalated to an effort by one individual to use my job as a tool to harass me,” La Bonte said in an email.