OPINION NUMBER - 043

ADOPTED - 1981/05/15

SUBJECT - Conflict of Interest

REQUESTED BY: Sherry Blaha, 2015 County Club Road, Gering, Nebraska 69341

QUESTION: Is a contract awarded by a city by vote of the city council, a member of which is an employee of the corporation awarded the contract and whose spouse is a shareholder therein, void or voidable under the provisions of the Nebraska Political Accountability and Disclosure Act?

CONCLUSION

No, under the circumstances described in the analysis.

ANALYSIS

The request for advisory opinion states that the person making the request is a member of a city council. Her husband is a minority stockholder in a corporation, which sells motor vehicles. She herself has no stock in the corporation but does work for it part time. The corporation apparently submits bids to the city for the purchase of motor vehicles.

The question presented amounts to whether the city can accept any bids for vehicles from that corporation because of her being a city council member.

Section 49-14,102 of the Nebraska Political Accountability and Disclosure Act is relevant to contracts entered into by a governmental body with a public official, a member of that official's immediate family, or a business with which the official is associated.

Under section 49-1443 the city councilwoman is a public official.

Section 49-1408 provides that a business with which a public official is associated includes a business in which that official is an employee or in which a member of that official's immediate family has stock valued at $1,000 or more or which stock represents more than a 5% equity interest in the case of a closed corporation, i.e. a corporation whose stock is not publicly traded.

By reason of her being an employee of that corporation or if her husband has an interest of more than 5% or $1,000, section 49-14,102 would be involved. However, under the provisions of section 49-14,102 so long as such a contract is awarded through an open and public process which includes prior public notice and subsequent availability for public inspection, such a contract is permitted and not voidable pursuant to the provisions of section 49-14,103. In addition, even if the contract did not meet those tests but the public official does not in any way represent either party in the transaction, such as negotiating, deliberating or voting on the matter, such contract would not be voidable by reason of her being on the city council.

Matters concerning the validity of contracts under state statutes, other than the Nebraska Political Accountability and Disclosure Act, or city ordinances are, of course, not within the jurisdiction of the commission.

Please consult the city attorney or other authority with regard to other applicable state laws and city ordinances, which may impose other or different requirements on the situation.