Opinion 98 - 6


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 -- Exceptions (contracts entered into prior to election to office); (consideration of $750 or less) -- Family Relationships (spouse of county board member as sole proprietor)

GENERAL MUNICIPAL LAW, §§800(3), 801, 802(1)(h), (2)(e), 803: A county supervisor would not have a prohibited interest in a contract with a firm of which the supervisor's spouse is the sole proprietor if the contract was entered into prior to the time the supervisor was elected to office. Disclosure of such an interest would be required. The supervisor would have a prohibited interest in renewal of such a contract and in any additional contracts entered into with the spouse's firm unless the total consideration payable, when added to all other consideration payable under contracts in which the supervisor had an interest during the fiscal year, exceeds $750.

You state that the spouse of a newly-elected county supervisor is the sole proprietor of a company which was awarded a county printing contract in 1997. You ask whether there would be a prohibited conflict of interest if the company were to be awarded additional contracts while the supervisor is in office. You have informed us that the county manager, who is appointed by the board of supervisors, would authorize the contracts and that the board of supervisors would audit claims submitted for payment under the contracts. For purposes of this opinion, we assume the county manager is properly authorized to enter into these contracts without prior county board approval (see Municipal Home Rule Law, §§10, 23[2][f], 24[2][b]; cf. County Law, §408; Alternative County Government Law, §§51, 155).

Article 18 of the General Municipal Law (§800 et seq.) contains 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 contracts of his or her spouse and minor children or dependents (General Municipal Law, §800[3][a]). For this purpose, a contract of a company of which the spouse of an officer or employee is the sole proprietor constitutes a contract of the spouse (see 1982 Opns St Comp No. 82-264, p 331).

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.

Based on the foregoing, a member of the county board of supervisors is deemed to have an interest in contracts of his or her spouse's firm. Since the county board of supervisors appoints the county manager and audits claims submitted in connection with this contract (County Law, §§369[2], 400), that interest is prohibited unless one or more of the exceptions set forth in General Municipal Law, §802 apply.

Two exceptions in section 802 appear to be relevant here. General Municipal Law, §802(1)(h) provides that an interest is not prohibited in connection with a contract entered into prior to the time the officer or employee was elected or appointed to his or her municipal position. It further provides, however, that the exception does not apply to renewals of any such contract. In addition, section 802(2)(e) provides an exception for a contract when the total consideration payable under the contract, when added to the aggregate amount of all consideration payable under contracts in which an officer or employee had an interest during the fiscal year, does not exceed $750. Disclosure is not required pursuant to General Municipal Law, §803 when the section 802(2)(e) exception applies (General Municipal Law, §803[2]).

Therefore, if the current contract with the spouse's firm was entered into prior to the time the supervisor was elected to office, the supervisor would not have a prohibited interest in that contract. Disclosure pursuant to General Municipal Law, §803 would be required. Renewal of that contract, and additional contracts with the spouse's firm, would not fall within the section 802(1)(h) exception. In addition, if the total consideration payable under such renewals and additional contracts, when added to all other consideration payable under contracts in which the supervisor had an interest during the fiscal year, does not exceed $750, the supervisor's interest in the renewals and additional contracts would not be prohibited pursuant to General Municipal Law, §802(2)(e).

Assuming any contract with the spouse's firm is not prohibited, the county's code of ethics should be reviewed to ascertain whether it contains any pertinent provisions. General Municipal Law, §806 requires counties to adopt codes of ethics setting forth for the guidance of their officers and employees the standards of conduct reasonably expected of them. Codes of ethics must address certain specified subjects, and may regulate or prescribe conduct which is not expressly prohibited by article 18. Codes of ethics also may provide for the prohibition of conduct, but they may not authorize conduct otherwise prohibited or be inconsistent with the provisions of article 18 (1992 Opns St Comp No. 92-30, p 78). Thus, a code of ethics may not prohibit a contract which is expressly permitted under section 802, or make permissible a contract prohibited under section 801. It could, however, require supervisors to recuse themselves and abstain from voting on any permissible county contracts with the firms of their spouses (see Opn No. 92-30, supra).

We also 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, we believe that, even if the award of the printing contract to the supervisor's spouse is permissible under article 18 and the code of ethics is silent, the supervisor should recuse himself or herself from discussions on matters relating to any current or future permissible contracts with the firm of his or her spouse and abstain from voting on such matters.

March 9, 1998
Richard Swinehart, Esq., County Attorney
County of Seneca