Opinion 88-52


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

CONFLICTS OF INTEREST -- Purchases and Sales (community college officers and employees who are directors of a not-for-profit corporation which purchases real property from county) -- Interest in Contract (community college officers and employees who are directors of a not-for-profit corporation which purchases real property from county) -- Exceptions (contracts with not-for-profit corporations) -- Disclosure of Interest (when required)

COMMUNITY COLLEGES -- Conflicts of Interest (community college officers and employees who are directors of a not-for-profit corporation which purchases real property from county) -- Real Property (community college officers and employees who are directors of a not-for-profit corporation which purchases real property from county)

GENERAL MUNICIPAL LAW, §§802(1)(f): Officers and employees of a county community college who are also members of a board of directors of a not-for-profit corporation which intends to purchase real property held by the county for the college will have an interest in the purchase contract. The interest must be disclosed as soon as the officer or employee has knowledge of the prospective interest. However, the interest would not be prohibited.

This is in reply to your letter concerning the proposed sale to a not-for-profit corporation of real property held by the county for the county community college. You state that the following officers and employees of the community college are members of the board of directors of the not-for-profit corporation: three members of the board of trustees of the college; the college president; the assistant to the president; the dean of the college and a professional at the college. You ask whether the above-mentioned individuals, all of whom are paid by the county, are required to comply with the disclosure requirements of General Municipal Law, §803 prior to the sale.

Article 18 of the General Municipal Law (§§800, et seq.) contains the provisions of law which relate to conflicts of interest of municipal officers and employees. Pursuant to General Municipal Law, §800(3), a municipal officer or employee has an interest in any contract with his or her municipality if he or she receives a direct or indirect pecuniary or material benefit as a result of that contract. In addition, regardless of whether an officer or employee receives a direct or indirect pecuniary benefit from a contract, an officer or employee is deemed to have an interest in any contract of a corporation of which the officer or employee is a director, officer or employee (General Municipal Law, §800[3][c]).

That interest is prohibited if the officer or employee, individually or as a member of a board, has the power or duty to: (a) negotiate, prepare, authorize or approve the contract or approve payments thereunder; (b) audit bills or claims under the contract; or (c) appoint an officer or employee who has any such powers or duties (General Municipal Law, §801), and none of the exceptions contained in Article 18 are applicable (see General Municipal Law, §802). For purposes of Article 18, officers or employees of a county community college are considered to be county officers and employees (General Municipal Law, §800[5]; 1983 Opns St Comp No. 83-6, p 6; see also People v Wendel, 116 Misc 2d 91, 455 NYS2d 322).

Clearly, a sale of real property is a "contract" within the meaning of subdivision two of General Municipal Law, §800 (see Rose v Eichhorst, 42 NY2d 92, 396 NYS2d 837; D.E.P. v Village of Monroe, 131 AD2d 719, 516 NYS2d 953; 1981 Opns St Comp No. 81-113, p 116). Therefore, since the listed individuals are officers or employees of the county for purposes of Article 18, each would be deemed to have an interest in the sale of the real property. However, since General Municipal Law, §802[1][f] provides an exception to the provisions of section 801 for contracts with voluntary non-profit corporations or associations, none of the officers or employees would have a prohibited conflict of interest in the transaction even though they may have functions listed in section 801 in connection with the transaction.

With respect to the disclosure of interests in contracts, General Municipal Law, §803 provides as follows:

"1. Any municipal officer or employee who has, will have, or later acquires an interest in any actual or proposed contract with the municipality of which he is an officer or employee, shall publicly disclose the nature and extent of such interest in writing to the governing body thereof as soon as he has knowledge of such actual or prospective interest. Such written disclosure shall be made part of and set forth in the official record of the proceedings of such body. Once disclosure has been made by an officer or employee with respect to an interest in a contract with a particular person, firm, corporation or association, no further disclosures need be made by such officer or employee with respect to additional contracts with the same party during the remainder of the fiscal year.

2. Notwithstanding the provisions of subdivision one of this section, disclosure shall not be required in the case of an interest in a contract described in subdivision two of section eight hundred two hereof." [Emphasis added]

As appears from the above-quoted provision, each of the listed officers and employees is required by section 803 to disclose his or her interest in accordance with that section as soon as he or she has knowledge of the prospective interest. Although section 803 excepts interests described in subdivision two of General Municipal Law, §802 from its disclosure requirements, that exception is not applicable here because the exception for contracts with voluntary non-profit corporations is contained in subdivision one of section 802. Accordingly, assuming all officers and employees presently have knowledge of their prospective interests, each should disclose their interests as soon as possible.

November 9, 1988
James F. Collins, Esq., County Attorney
County of Herkimer