FORMAL OPINION DATE: 13 May 1993
Subject: G.S. 133-32; Applicability to Attorneys and Law Firms Providing Professional Services to Local Boards of Education; Gifts and Favors to School Board Members and Staff Members
Requested by: L. W. Lamar, Attorney for the Nash-Rocky Mount Board of Education and President of the Council of School Attorneys
Questions:
. Do the provisions of G.S. 133-32 regulating the making of gifts to governmental agencies by contractors apply to attorneys and law firms representing local boards of education?
. Does G.S. 133-32 prohibit attorneys and law firms representing local boards of education from providing meals or making gifts to members of local boards of education?
. Does G.S. 133-32 prohibit attorneys and law firms representing local boards of education from providing meals or making gifts to local school superintendents and other employees of local school systems?
Conclusions:
. Yes
. Yes, except in limited circumstances.
. Yes, for any employee of a local board of education who has the duty to administer contracts for legal services, except in limited circumstances.
G.S. 133-32(a) makes it unlawful for:
any contractor, subcontractor or supplier who: (1) has a contract with a governmental agency; (2) has performed under such contract within the past year; or (3) anticipates bidding on such a contract in the future to make any gifts or give favors to any officer or employee of a governmental agency who is charged with the duty of (1) preparing plans, specifications or estimates for public contacts; or (2) awarding or administering public contracts; or (3) inspecting or supervising construction to make any gifts or favors to any officer or employee of a governmental agency who is charged with the duty of (1) preparing plans, specifications or estimates for public contracts; (2) or awarding or administering public contracts; or (3) inspecting or supervising construction.
In identical terms, the statute makes it unlawful for an officer or employee of a governmental agency to accept gifts or favors from a contractor.
You have asked whether a local board of education is a "governmental agency" and an attorney or law firm representing a local board of education is a "contractor" within the meaning of this statute. In our opinion, the answer to both questions is "yes." Therefore, we conclude that G.S. 133-32 applies to attorneys and law firms who are retained to provide legal services to local boards of education who have been retained to provide such services within the past year and who anticipate seeking to be retained to provide such services in the future.
A local board of education is plainly a "governmental agency" for purposes of G.S. 133-32(a). "Governmental agency" is defined by G.S. 133-23(a) to mean, in effect, any unit of government created by the General Assembly which has been authorized by the General Assembly "to enter into public contracts for construction or repair or for procurement of goods or services." Local boards of education are created by the General Assembly, G.S. 115C-40, and have the power to contract for construction, goods and services. See, e.g., G.S. 115C-47 and 522.
In our opinion, an attorney or law firm retained by a local board of education to provide legal services is also a "contractor" within the meaning of G.S. 133-32(a). Parts of G.S. 133-32(a) can be read as connoting an intention by the General Assembly to limit the meaning of "contractor" to persons or companies building or repairing schools or supplying tangible goods to governmental agencies, namely, those parts referring to the preparation of "specifications" and "inspecting or supervising construction." However, reading the statute as a whole and giving its words their ordinary meaning, as the rules of statutory construction require, State v. Jones, 305
N.C. 342, 275 S.E.2d 433 (1982), we believe that the General Assembly intended the word "contractor" to be read broadly to include persons providing services to local boards of education as well as persons constructing or repairing buildings and supplying tangible goods. We base this opinion on several factors. First, the operative term in G.S. 133-32(a) is "public contracts" and that term is not modified by limiting terms like "construction contracts" or "contracts for supplies." Second, to the extent limiting clauses (like "inspecting or supervising construction") appear in the statute they are connected disjunctively by the word "or" with non-limiting clauses. Thus, the statute, by its plain terms applies broadly to include circumstances where a contractor has a contract with a governmental agency and makes a gift to an officer or employee who has responsibility for awarding or administering the public contract. See, Davis v. N.C. Granite Corp., 259 N.C. 672, 131 S.E.2d 335 (1963). Third, the definition of "governmental agency" in
G.S. 133-23(a) specifically refers to agencies authorized by the General Assembly "to enter into public contracts . . . for services." The General Assembly’s reference to service contracts must be given effect and may not be read out of the statute. Jolly v. Wright, 300 N.C. 83, 265 S.E.2d 135 (1980).
Members of local boards of education are "officer[s]…of a governmental agency" and have the duty to "award or administer" contracts for legal services. It is, therefore, unlawful under G.S. 133-32(a) for an attorney or law firm retained by the board of education to make any gifts or give any favors to the members of the board and for a board member to accept such gifts or favors. Purchasing meals for board members would amount to prohibited gifts or favors unless one of the limited exceptions in G.S. 133-32(d) applies. The exceptions listed in G.S. 133-32(d) which might apply in this circumstance are (1) a meal provided to a board member as a form of honorarium for participating in a meeting sponsored by the attorney; (2) a "banquet meal"; (3) a meal provided at a meeting of a professional organization to which the board member belongs and to which the attorney or law firm has made a donation to defray the costs of the meeting; and
(4) a meal provided to a board member who is a friend or relative of the attorney if the clear motivation for the meal is friendship or the family relationship. Purchasing gifts for board members would likewise be unlawful unless one of the limited exceptions in G.S. 133-32(d) applies. The exceptions that might apply in this circumstance are (1) the gifts can fairly be characterized as "advertising items or souvenirs of nominal value"; or (2) the gift is to a board member who is a friend or relative and the clear motivation for the gift is friendship or the family relationship. It should be noted that even if one of these exceptions applies to make the mean or gift lawful, G.S. 133-32(d) requires board members to report the meal or gift to the board.
G.S. 133-32(a) also prohibits a contractor from making gifts or giving favors to "any…employee of a governmental agency" if the employee’s authority includes "awarding or administering public contracts." While no employee of a local board of education would have the authority to award a contract for legal services, the superintendent and finance officer for a board of education would typically have the duty to administer those contracts. Whether other employees would also have duties of that type will vary from school system to school system. For superintendents, finance officers and other employees who have the duty to administer contracts for legal services, G.S. 133-32(a) would impose the same limitations on the purchase of meals and gifts for them by attorneys or law firms as that statute imposes on the purchase of gifts and favors for members of the board of education.
Michael F. Easley Attorney General
Thomas J. Ziko
Special Deputy Attorney General
David M. Parker
Assistant Attorney General