ADVISORY OPINION #193

Subject: Conflicts of Interest/Outside Business Interests

Requested By: Shane Osborn, Nebraska State Treasurer

Question Presented: Can the Nebraska State Treasurer provide consultation services to a business in which he has an ownership interest?

Conclusion: Yes.

Facts: The Nebraska State Treasurer took office on January 4, 2007.  Prior to that time he was employed by SilverStone Group, an Omaha financial services firm.  Specifically, he served as the head of the Aviation Risk Services Division.  The State Treasurer is currently a shareholder or partial owner of the firm.  His shares have a value of more than $1,000 and they are not publicly traded.  He does not work regular hours, but meets from time to time with potential clients of the Aviation Risk Services Division.  He does not have set hours or draw a salary.  However, he does receive commissions on relationships he developed and does participate in profit sharing with SilverStone.   According to the request, there is no commercial connection between SilverStone Group and the State Treasurer’s office.

The State Treasurer wishes to know if his activity with SilverStone Group would violate the provisions of the Nebraska Political Accountability and Disclosure Act.

Analysis: There is nothing in the Nebraska Political Accountability and Disclosure Act (NPADA) which generally prohibits a state official from engaging in consulting and other business activity outside of his or her official duties. In Advisory Opinions #117, #129, #150, #171, #172 and #173, the Commission acknowledged that state employees and state officials may engage in outside businesses or engage in consulting or speaking outside of their state duties.

Section 49-1408 generally provides that a public official or public employee has a business association with an entity if he or she is an officer, director, limited liability company member or partner in a business.  One may also have a business association by holding closed corporate stock in an entity with a value

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of more than $1,000.  By this definition, the State Treasurer has a business association with SilverStone.

Section 49-1499.02 generally provides that a public official or public employee in the executive branch of state government has a potential conflict of interest if he or she is faced with making a decision or taking an action which could result in a financial benefit or detriment to a) the official or employee; b) a member of his or her immediate family; or c) a business with which he or she is associated.

There is nothing which indicates that the State Treasurer, in his official capacity, is currently faced with taking an action or making a decision which could result in a financial benefit or detriment to SilverStone.

Section 49-14,102 establishes certain requirements in situations in which a public official or public employee has an interest in a contract with a governmental body.  There is nothing in the request which indicates that there is a current or anticipated contract between SilverStone and the State Treasurer’s office.

There are, however, general issues that any public official or public employee engaging in outside business activity needs to be aware of.

Section 49-14,101.01 of the NPADA provides as follows:

(1)   A public official or public employee shall not use or authorize the use of his or her 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.

(2)   A public official or public employee shall not use or authorize the use of personnel, resources, property, or funds under his or her official care and control other than in accordance with prescribed constitutional, statutory, and regulatory procedures or use such items, other than compensation provided by law, for personal financial gain.

Paragraph (1) of §49-14,101.01 prohibits a public official or public employee from using the power of his or her position in order to secure financial gain. Therefore, a public official or public employee may not use the power or influence of his or her position to assist his or her outside business activities by conveying the impression to any person that increased business opportunities would result in favorable treatment by the state or by the official or employee in his or her official capacity.

Paragraph (1) of §49-14,101.01 also prohibits a public official or public employee from using confidential information received through the holding of a public position for personal financial gain. In Advisory Opinion #99 the Commission took the position that confidential information includes not only that information which

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is strictly confidential, but also that information which is not generally available to the public.

Paragraph (2) of §49-14,101.01 generally provides that governmental resources may be used for governmental purposes only.  It further provides that they may not be used by a public official or public employee for personal financial gain, that of an immediate family member or that of a business association.  Thus, a state official may not use state resources under his or her official care and control for the purpose of carrying out private business activities.

As stated, it is our position that the outside business activity described would not be contrary to the provisions of the Nebraska Political Accountability and Disclosure Act.

For certain public officials or public employees, there are statutory or constitutional restrictions on outside business activity.  It is our understanding that a separate opinion has been secured from the Attorney General on that issue.

Summary: The NPADA does not prohibit the Nebraska State Treasurer from engaging in outside business activity. State resources should not be used in connection with this outside activity. Confidential information received through the holding of a state elective office should not be used in connection with outside business activity.

ADOPTED as an advisory opinion pursuant to Section 49-14,123(10) and Title 4, Chapter 1, Rules of Practice and Procedure. As provided in Section 49-14,123(10), this advisory opinion shall be binding upon the Commission unless amended or revoked, concerning the person or public body who requested the opinion and acted in reliance thereon in good faith unless material facts were omitted or misstated by the person in the request for the opinion.

DATED this ______ day of March 2007.

NEBRASKA ACCOUNTABILITY AND DISCLOSURE COMMISSION

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Kim Quandt, Chairman