ADVISORY OPINION #199
SUBJECT: Conflicts of Interest/ Use of public personnel, resources, property or funds.
Requested by: Thomas O. Mumgaard, Deputy Omaha City Attorney, on behalf of the Omaha City Council
Question Presented: Can Omaha Firefighters engage in campaign to raise funds for the Muscular Dystrophy Association during on-duty time paid for with taxpayer funds and/or using City-owned uniforms and equipment?
Facts: The Omaha Fire Department (“OFD”) is a department within the City of Omaha. The Muscular Dystrophy Association (“MDA”) is a private, non-profit, non-governmental, charitable corporation. The MDA depends upon private individual and corporate donations. It is not a part of any branch of state or local government in Nebraska.
The MDA is dedicated to, “curing muscular dystrophy, ALS and related diseases by funding worldwide research.” (MDA website). The MDA is, “the largest nongovernmental sponsor of muscle and nerve disease research.” (MDA Website).
OFD employees who are on duty and while they are being paid with public funds, have engaged in fundraising for the MDA. The fundraising has taken the form of soliciting contributions from the general public by OFD members. This is often done either at intersections where OFD employees solicit motorists stopped at traffic lights for donations, or in shopping centers where members of the OFD solicit contributions from members of the general public. The contributions are typically placed in a fireman’s boot, hence the informal name for this solicitation: the “fill the boot” campaign. We will refer to this fundraising activity as the MDA Campaign.
Funds received by the MDA Campaign are expended for the purposes of the MDA, and they are not utilized in any way to promote the mission or purpose of the OFD.
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In December, 2009, the Omaha City Council passed an Ordinance to amend Section 23-127, which amends the Omaha City Code and provides in pertinent part as follows: “City employees are prohibited from participating in any fund-raising which solicits contributions from the public…while working on city paid time or using city-owned property, equipment, uniforms or facilities.” This Ordinance would have the apparent effect of terminating on-duty solicitations by the OFD in the MDA campaign.
The Omaha City Law Department has written opinions concluding that the MDA campaign was not consistent with Nebraska State law because the campaign involved the expenditure of public taxpayer funds for private purposes. These opinions relied, in part, upon the terms of the Nebraska Political Accountability and Disclosure Act, and, in particular, the language of a portion of the Act, which is currently cited as Section 49-14,101.01(2). The opinions also relied, in part, upon several Advisory Opinions previously issued by this Commission.
The Omaha City Law Department has requested this Advisory Opinion to act as guidance with respect to issues raised by the MDA Campaign.
Analysis. In addressing the question presented, we turn first to a review of applicable Nebraska law. The Nebraska Political Accountability and Disclosure Act, Section 49-14,101.01(2) states:
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…
The language of the above-quoted statute means that, “government personnel, resources, property and funds [must be used] for government purposes only.” See, NADC Opinion #148, p. 2. Since the use of government personnel, resources, and property can be valued in taxpayer dollars, in the following discussion and consistent with the terms of the Section 49-14,101.01(2), we will define the term “public funds” to mean funds, as well as governmental personnel, resources and property.
The term “public funds” means, “funds belonging to the state or to any county or political subdivision of the state.”Allen v. City of Omaha, 136 Neb. 620, 625, 286 N.W. 916 (1939). The term “public funds” includes, “taxes…raised by the operation of the law...”, and the term applies to the, “funds of every political division of the state wherein taxes are levied for public purposes.” 136 Neb. at 625
Omaha Firefighters fall under the definition of the term public employee found in Section 49-1442, Neb. Rev. Statutes, “Public employee shall mean an employee of the state or a political subdivision thereof.” This definition includes employees of the City of Omaha.
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In addition to the Nebraska Statute, Section 49-14,101.01(2), quoted above, a provision of the Nebraska Constitution, at Article XIII, Section 3, provides that public credit may not be expended for private purposes: “The credit of the state shall never be given or loaned in aid of any individual, association or corporation.” While the MDA Campaign does not involve the literal extension of public credit, the Nebraska Supreme Court has said that a closely related legal principle is that governmental funds should not be used for private purposes. See generally, Haman v. Marsh, 237 Neb. 699, 467 N.W.2d 836 (1991): “The state’s credit is inherently the power to levy taxes and involves the obligation of its general funds,” 237 Neb. at 719; and, “public funds cannot be expended for private purposes...” 237 Neb at 722.
The Legislature is empowered to make appropriations to meet legal obligations of the state. However, “The Legislature is not empowered to make appropriations for purely charitable purposes.” Weaver v. Koehn, 120 Neb. 114, 231 N.W. 703 (1930). Appropriations of governmental funds or resources must therefore be for a public as opposed to a private purpose. See generally, United Community Services v. Omaha National Bank, 162 Neb.786, 77 N.W. 2d 576 (1956), at syllabus points 13 and 14: “the vital point is whether the purpose is public.” 162 Neb.at 787.
Currently, there does not appear to be any specific statute enacted by the Nebraska Legislature which would permit charitable organizations, such as the MDA, to receive taxpayer assistance. In the 1956 case of United Community Services, cited above, the Nebraska Supreme Court, on other constitutional grounds, struck down an attempt by the Nebraska Legislature to permit political subdivisions within cities of the Metropolitan Class, to make certain charitable contributions to, among others, the United Community Services, which was the successor to the Community Chest. This statute has not since been re-enacted.
In the absence of a specific legislative enactment which authorizes the MDA Campaign, and in view of the new Omaha City Ordinance, 23-127, which appears to withdraw the City’s authorization for any such campaign, there does not appear to be legal authority for the MDA campaign.
We may next turn to the question of whether the general powers granted to the City of Omaha by the Nebraska Legislature could authorize the City of Omaha to expend funds for the MDA Campaign, keeping in mind that any such grant of powers must be consistent with the legal principle that the purpose of the expenditure must be “public” in nature to meet the legal obligations of the government.
It is well settled that, “a municipal corporation possesses and can exercise, the following powers and no others: First, those granted in express words; Second, those necessarily or fairly implied in or incident to the powers expressly granted; and Third, those essential to the declared objects and purposes of the corporation—not simply convenient but indispensable.” Professional Fire Fighters of Omaha v. City of Omaha, 243 Neb 166, 498 N.W.2d 325 (1993). Expenditures of public funds must, therefore, be
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related to one of the powers or public purposes of the City of Omaha. As stated in Cather & Son Const. Inc. v. City of Lincoln, 200 Neb. 510, 264 N.W.2d 413 (1978): “…A municipality may not make a gift of its property to private persons for purposes other than corporate [public] ones..” (Syllabus point 6). Public property and resources can be expended only for a valid “public purpose.” See, State ex rel Beck v. City of York, cited above. Public expenditures must be made for the purposes for which the City was created. See generally, United Community Services v. Omaha National Bank, cited above.
In the context of this discussion, this translates to the following questions: Could funds and resources appropriated for the Fire Department by the City of Omaha properly be used for a public or governmental purpose when they are spent to support a private, non-profit, charitable corporation? A related question is whether it is an indispensable and necessary part of the Omaha Fire Department’s mission to expend governmental funds and resources appropriated for that mission in order to support the MDA Campaign?
The question of whether use of public funds, including use of public resources and personnel, are made for a public or private purpose has been addressed by the Nebraska Accountability and Disclosure Commission (“NADC”) in published advisory opinions. Generally, the NADC has refused to approve the use of public funds for private purposes. These opinions have generally also concluded that expenditures of public funds must be closely related to the purpose of the public agency or department which is undertaking the expenditure.
The NADC examined similar questions in its Advisory Opinion #148. In that Opinion, the NADC reviewed a situation in which a state employee was also a member of a private association whose purpose was similar to that of his state job. The NADC concluded:
Even when the association of the state employees with the private organization primarily benefits the state agency, the use of state resources on behalf of the private organization must be occasional. The business of private associations should not be run out of Government offices using personnel and government resources. (NADC Advisory Opinion #148, p.2, emphasis supplied; See also, NADC Advisory Opinion #161, p. 4, which addresses whether Government attorneys—public defenders—could use their offices for the private practice of law: “On the whole, it is inappropriate for a private business to be run out of an office established for the conduct of government business.”)
That same Advisory Opinion also posed the following question to be answered in these cases as follows: “...whether the use of state [resources] on behalf of a private association ultimately serves a State governmental purpose?” (Advisory Opinion #148, p. 2).
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In Advisory Opinion #150, which examined whether a state employee could conduct an outside consulting business, the NADC construed the language of what is now Nebraska Revised Statutes, Section 49-101.01(2), quoted above: “…the provision means that the activities of the private consultation business may only take place on the individual’s own time and not state time.” (Advisory Opinion # 150, p.2).
In Advisory Opinion #156, the NADC concluded that public funds could be expended for open houses at public facilities, including a fire department, “...to the extent that it is reasonably connected to the exercise of a municipal power or function.” (NADC Advisory Opinion #156, p.3).
Based upon the foregoing analysis, the MDA Campaign is private in nature and not sufficiently related to the purpose and mission of the Omaha Fire Department to warrant expenditure of public dollars.
Summary. Omaha Firefighters may not, under the terms of Section 49,101.01(2), use on duty time, paid for with taxpayer funds, to engage in a campaign to raise funds for the Muscular Dystrophy Association, which is a private, charitable corporation.
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 thereof in good faith unless material facts were omitted or misstated by the person in the request for the opinion.
DATED this _________day of March 2010
NEBRASKA ACCOUNTABILITY AND DISCLOSURE COMMISSION
___________________________________Stephen McCollister, Chairman