OPINION NUMBER - 151

ADOPTED - 1994/11/18

SUBJECT - Conflicts of Interest/Use of public office for financial gain.

REQUESTED BY: Dean Skokan, Fremont City Attorney on behalf of Fremont City Council Member Diane Johnson.

QUESTION: May a city council member whose spouse is the manager of a liquor store participate in and vote upon: a) applications for special liquor permits not involving the spouse's employer; b) applications of the spouse's employer for special liquor permits; or c) liquor issues in general.

CONCLUSION

See Analysis.

FACTS

The spouse of a member of the Fremont City Council is the manager of a liquor store in Fremont. He has no ownership in the business. The spouse receives a specific wage or salary which is not affected by the level of sales. The liquor store also operates a catering service which serves alcoholic beverages at private and public events which may be held at city owned facilities. The city council must approve requests to serve liquor on city owned property. Other liquor license holders may make similar requests. In addition, the city council recently considered an ordinance to permit the off-premises sale of alcoholic beverages on Sunday. This would affect all liquor license holders within the city. The city council member wishes to know whether she is obliged to abstain from participating or voting on these types of matters.

ANALYSIS

Section 49-14,101(3) of the Nebraska Political Accountability and Disclosure Act provides that no public official or public employee "shall use that person's public office or any confidential information received through the holding of a public office to obtain financial gain, other than compensation provided by law, for himself or herself, a member of his or her immediate family, or a business with which the individual is associated."

Section 49-1425 defines the term immediate family member as "a child residing in an individual's household, a spouse of an individual, or an individual claimed by that individual or that individual's spouse as a dependant for federal income tax purposes." Clearly a spouse fits the definition of the term immediate family member. Thus, as to each question presented the key issue becomes whether the city council member's participation in a vote constitutes the use of her public office for the financial gain of an immediate family member.

In situations in which the employer of the spouse applies for a special liquor permit, the city council member is not required to abstain from participating or voting upon the matter if the spouse's only connection with the business is that of salaried or wage earning employee. Strictly speaking, favorable action on the application does not result in financial gain for the spouse. The same rationale would apply to a vote on an ordinance permitting the off-premises sale of alcoholic beverages on Sunday or other matters of general application to liquor licensees. There may be a financial benefit to the business, but there is no financial benefit to the spouse. The city council member may, therefore, participate and vote on the matter. A vote, however, on the renewal of the liquor store's liquor license is a somewhat different matter.

A vote to renew or not to renew a liquor license is essentially a vote to keep a business in operation or to close a business. A vote on the renewal of the license of the spouse's employer, therefore, has an element of financial gain for the council member's spouse. In Advisory Opinions #69 and #102 we stated that official action taken which is the proximate or direct cause of obtaining financial gain would be evidence of a violation of Section 49-14,101(3). We further stated that a vote in such a situation will constitute a violation of the statute where only the minimum votes necessary for the action to be taken are cast. Therefore, the council member should not vote on the matter of renewing or not renewing the liquor license of the business that employs her husband.

SUMMARY

A city council member whose spouse manages a liquor store may vote on matters coming before the city council pertaining to liquor license holders in general or applications for special permits by the employer of the spouse as long as the spouse has no connection with the business other than as a salary or wage earner. The council member should not vote upon the matter of the renewal or non-renewal of the liquor license of the spouse's employer.