Opinion 98 - 3


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 -- Appointment to Office (of town supervisor's business partner) -- Contracts (appointment to office)

GENERAL MUNICIPAL LAW, §§800(2), 805-a: The appointment of the town supervisor's business partner to the office of town comptroller, by itself, does not constitute a prohibited conflict of interest. However, the supervisor and comptroller would have a prohibited interest in contracts between the town and the partnership, unless an exception in General Municipal Law, §802 applied. Compensated appearances, or the performance of other compensated services on behalf of clients of the partnership in connection with matters before the town may violate section 805-a, depending on the particular circumstances. It may be advisable for the supervisor to recuse himself or herself and abstain from voting on matters before the town board which specifically relate to the town comptroller and for the town comptroller's audit function in connection with claims, accounts or receipts of the town supervisor to be performed by the deputy comptroller, if that office has been established.

You ask whether an individual may be appointed by the town board to the office of town comptroller if he or she is a business partner of the town supervisor. You state that the town has no business relationship or contracts with the partnership, and that according to the individuals involved, neither individual shares in the other's pay.

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, an officer or employee is deemed to have an interest in a "contract" of a firm, partnership or association of which he or she is a member or employee (General Municipal Law, §800[3][b]). An 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). If an interest in a "contract" is not prohibited, General Municipal Law, §803 requires, with certain exceptions, that the interest be disclosed in writing and included in the official record of the governing board's proceedings.

A "contract", for purposes of article 18, is defined in General Municipal Law, §800(2) as any "claim, account or demand against or agreement with a municipality, express or implied". An appointment to a municipal office, however, does not, by itself, give rise to a contract within the meaning of article 18 (26 Opns St Comp, 1970, p 126; see also Bookout v Levitt, 43 NY2d 612, 423 NYS2d 200; Hansell v City of Long Beach, 61 AD2d 84, 401 NYS2d 271). Thus, the appointment of a business partner of the town supervisor to the position of town comptroller does not violate General Municipal Law, article 18. Rather, each situation involving a contract in which the supervisor or comptroller potentially may have an interest must be examined on its own merits. If, for example, the town in the future were to contract with the partnership, both the supervisor and the comptroller would be deemed to have an interest in the contract and, because of their respective powers and duties (see, e.g., Town Law, §§34[1], 64[6]), the interests would be prohibited unless an exception in section 802 were applicable (see also 1985 Opns St Comp No. 85-60, p 84).

Further, if the individuals were to make appearances or render other services on behalf of clients of the partnership in connection with matters before the town, section 805-a of the General Municipal Law would have to be considered. That section provides that no municipal officer or employee may receive, or enter into any agreement for compensation for services to be rendered in relation to any matter before any municipal agency of which he or she is an officer, member or employee or of any municipal agency over which he or she has jurisdiction or to which he or she has the power to appoint any member, officer or employee (General Municipal Law, §805-a[1][c]). It further prohibits any municipal officer or employee from receiving or entering into an agreement for compensation for services to be rendered in relation to any matter before any agency of his or her municipality, whereby his or her compensation is to be dependent or contingent upon any action by the agency with respect to that matter (General Municipal Law, §805-a[1][d]). The applicability of these prohibitions would be dependent upon each particular set of facts and circumstances.

In addition, the town's code of ethics should be reviewed to ascertain whether it contains any pertinent provisions. Under General Municipal Law, §806, the code must provide standards relating to the conduct of officers and employees, including with respect to private employment in conflict with official duties. In addition, we note that the courts of this State have held public officials to a high standard of conduct and, on occasion, have negated certain actions which, although not violating the literal provisions of article 18 of the General Municipal Law or a code of ethics, violate the spirit and intent of the statute, are inconsistent with public policy, or suggest self-interest, partiality or economic impropriety (see e.g. Zagoreos v Conklin, 109 AD2d 281, 491 NYS2d 358; Matter of Tuxedo Conservation and Taxpayers Ass'n v Town Board of the Town of Tuxedo, 69 AD2d 320, 418 NYS2d 638; Conrad v Hinman, 122 Misc 2d 531, 471
NYS2d 521). Based on these principles, and in view of the private business relationship between the supervisor and comptroller, it may be advisable, to avoid even an appearance of partiality, for the supervisor to recuse himself or herself, and abstain from voting, on matters before the town board which relate specifically to the town comptroller, such as the appointment of the comptroller to office and the setting of the comptroller's salary and benefits, if any, and, if the office of deputy comptroller has been established (see Town Law, §20[3][d]), for the town comptroller to recuse himself or herself from the audit of claims, accounts and receipts submitted by the town supervisor. Under those circumstances, we believe it would be appropriate for the audit function to be performed by the deputy comptroller (cf. Kagatt v Dinkins, 148 Misc 2d 510, 560 NYS2d 736).

Accordingly, the appointment of the town supervisor's business partner to the office of town comptroller, by itself, does not constitute a prohibited conflict of interest. However, the supervisor and comptroller would have a prohibited interest in contracts between the town and the partnership, unless an exception in General Municipal Law, §802 applied. Compensated appearances, or the performance of other compensated services on behalf of clients of the partnership in connection with matters before the town may violate section 805-a, depending on the particular circumstances. Finally, it may be advisable for the supervisor to recuse himself or herself and abstain from voting on matters before the town board which specifically relate to the town comptroller and for the town comptroller's audit function in connection with claims, accounts or receipts of the town supervisor to be performed by the deputy comptroller, if
that office has been established.

January 22, 1998
Timothy J. Greeman, Esq., Town Attorney
Town of West Seneca