Some deals, even if they have a fatal flaw, just seem too good to pass up.  That’s what the City of Anderson fell prey to back in 2005 when it entered into a contract with Anthem to direct the city’s self-funded health benefits plan. The deal was touted by City Councilman Art Pepelea and others as one that would save the city millions of dollars. And Pepelea, who served as broker of the deal, declined to accept a brokerage fee and indeed — as he had pledged during the 2003 campaign — saved the city money versus its previous health benefits plan.

Now, you can’t blame city officials for wanting to save money on an insurance program, since doing so would certainly benefit taxpayers. But surely someone in the administration of Mayor Kevin Smith or sitting on the council would have noticed the red flag that was waving. It’s called a conflict of interest.

To his credit, Pepelea did abstain from voting on the contract (and has abstained from all votes related to the city’s dealings with Anthem). But he and other council members and administration members should have removed him from the situation further. They should have requested that Pepelea step aside and then used a different broker for the deal.

Short term, it would have cost the city tens of thousands of dollars for the broker fee. But in the long term it would have averted both the perception of possible impropriety and the litigation now entangling the city.

Pepelea, who still sits on the council, is suing the city for a $75,000 fee he claims he is owed for brokering the city’s 2008 Anthem insurance contract. (He made no campaign promises in 2007 not to charge the fee.) The contract, which included the brokerage fee for Pepelea, was signed by the city in November 2007 when Smith’s administration was a lame duck.

To some it appears that the Smith administration decided to saddle the incoming administration with Pepelea’s brokerage fee. This perception is encouraged by the politics: Smith and Pepelea are Republicans; the new mayor, Kris Ockomon, is a Democrat, as was the majority of city council that voted on the 2008 Anthem contract.

The Ockomon administration has refused to pay the brokerage fee, claiming Pepelea never had a contract with the city to act as its broker. Pepelea has filed suit to recover the fee, as well as his attorney fees and other costs.

“They’re paying everyone else (other contractors and brokers); why shouldn’t I get paid?” Pepelea said in a July 25 article in The Herald Bulletin. “I’m a professional. ... It’s what I do for a living.”

That’s true. However, he’s also a member of City Council. And it is improper for a member of the council to benefit directly from a contract signed by the city.

Elected officials should have thought three years ago of the possibility that the current scenario would develop. They should have requested a different broker, swallowed the fee and moved on.

Instead, the city now faces a costly legal battle springing from an inherent conflict of interests.