February 6, 1996
Ms. Jill R. Wilson Mr. James T. Williams, Jr. Attorneys at Law
P. O. Box 26000 Greensboro, North Carolina 27420
RE: Advisory Opinion; Service and Repair Services to School System Property by a Business Owned by a Board Member; Conflict of Interest; N.C.G.S. §§14-234, 14-236, and 14-237
Dear Jill and Jim:
I reply to your February 5 letter requesting our opinion whether a member of a Board of Education has a conflict of interest should a business he owns continue to do work for the school system.
The Board member’s business sells and services air conditioning equipment and is the exclusive local representative for a specific brand of air conditioning units. That business has had an ongoing relationship with the school system or its predecessors for a number of years. A large number of the facilities in the school system have installed that product over the years and continue to need routine service of the air conditioning units. Purchasing and service decisions are made at an administrative level and do not involve the decision making or approval of the Board of Education, except where they are a part of the bidding process for a major installation or replacement of the air conditioning units.
Since the Board member has joined the Board of Education, the school system has restricted the new Board member’s company from doing any business with the school system pending a thorough review of the legal restrictions on public officers doing business with boards on which they sit. You request our opinion on the following question:
Question: Assuming that decisions with regard to when and who to use for servicing HVAC are only made at the administrative level and do not in any way involve the Board of Education and assuming that any service performed does not directly or indirectly, proximately or remotely involve the supplying of any goods, wares or merchandise whatsoever, would the mere performance of service of systems of the Schools violate either N.C.G.S. §14-234 or §14-236?
Answer: So long as the Board of Education is not involved in any manner with the decisions concerning when and who to use for servicing the air conditioning equipment, and assuming that any services performed do not directly or indirectly involve the supplying of any goods, wares or merchandise whatsoever, the mere performance of service on the air conditioning systems does not violate either N.C.G.S. §14-234 or §14-236.
Our office has consistently opined that in order for N.C.G.S. §14-234 to apply, public bodies must be directly involved in the making or approving of a contract, agreement or decisions to deal with a business or company owned by a member of the public body. Since all of the servicing decisions are made by the administration, and without any input or approval by the Board of Education, we do not believe that N.C.G.S. §14-234 is applicable.
N.C.G.S. §14-236, although extremely broad in its scope, makes it a crime for a member of a public body to supply "any goods, wares or merchandise of any nature or kind" to educational institutions administered by that public body. Because the General Assembly did not define what is meant by the words "goods, wares or merchandise," we must look elsewhere for their meaning. Black’s Law Dictionary, Deluxe Fourth Edition, defines the words "goods, wares, and merchandise" as follows: "A general and comprehensive designation of such chattels as are ordinarily the subject of traffic and sale." That same dictionary defines the word "chattel" as follows: "An article of personal property; any species of property not amounting to a freehold or fee in land. A thing personal and moveable."
It is clear that "services" rendered by fixing or repairing already installed air conditioning systems would not be considered "goods, wares or merchandise." Therefore, we do not believe that N.C.G.S. §14-236 is applicable.
Andrew A. Vanore, Jr. Chief Deputy Attorney General