REPLY TO: Edwin M. Speas, Jr. Chief Deputy Attorney General
(919) 716-6400 FAX: (919) 716-6750
February 16, 2001
Burley B. Mitchell, Jr. Womble Carlyle Sandridge & Rice Post Office Box 831 Raleigh, North Carolina 27602
Re: Advisory Opinion; Conflict of Interest; Legislators; G.S. §§ 14-234 and 236;
G.S. §§ 120-85 et seq.
Dear Mr. Mitchell:
By letter dated February 9, 2001, you asked for our advice on behalf of Senator Stephen Metcalf.
Senator Metcalf has been offered, and is considering accepting, the position of Director of Development for the Mars Hill Institute, a non-profit corporation affiliated with Mars Hill College. As Director, Senator Metcalf would market the Institution’s copyrighted strategic planning products to public and private sector organizations across the country and in North Carolina. He would be paid a retainer for his services, plus a percentage of sales in excess of a specified amount, except that he would receive no compensation, either directly or indirectly, from the Institute’s sales to agencies of the State of North Carolina.
Based on these facts, you have asked whether Senator Metcalf would violate either G.S. §§ 14-234 or 236 if he accepts employment with the Institute and is compensated by the Institute for contracts he solicits with (a) governmental agencies of other states, (b) counties, cities and other local governmental units in North Carolina or (c) private for-profit or not-for-profit entities.
As we have discussed, the primary, if not exclusive, statutes regarding potential conflicts between a legislator’s economic interests and his legislative duties are G.S. §§ 120-88 and 104. These statutes require a legislator to refrain from participating in any legislative matter as to which he concludes that he has an actual economic interest “which would impair his independence of judgment,” and authorize the Legislative Ethics Committee to issue “advisory opinions on specific questions involving legislative ethics.”
With respect to your inquiry, however, it is our opinion that neither G.S. §§ 14-234 or 236 likely would be violated if Senator Metcalf solicited contracts for the Mars Hill Institute with (a) Burley B. Mitchell, Jr. Page 2 February 16, 2001
governmental agencies of other states, (b) counties, cities or other local governmental agencies in North Carolina, or (c) private for-profit or not-for-profit entities.
Essential to a violation of G.S. § 14-234 is the confluence of the power to contract and private economic interests in the same public officer. Where the power to contract is separated from the private economic interests of a public officer the statute is not violated. Thus, for example, we have opined that G.S. § 14-234 is not violated when a company in which a member of the local board of education has a financial interest contracts with the State Board of Education. 40 N.C. A.G. 217 (1970). Applying this principle to the facts you have presented, a member of the General Assembly likely would not violate G.S. § 14-234 if a company in which he has a financial interest contracts with governmental agencies in another state, a private company or a political subdivision of this State because in none of these instances is the power to contract joined with private economic interests.
G.S. § 14-236 is also inapplicable to the facts you have presented. It does not apply to members of the General Assembly; it only applies to members of boards of trustees of “educational, charitable, eleemosynary or penal institutions of the State.”
In sum, the principal statutes governing your inquiry are G.S. §§ 120-88 and 120. Senator Metcalf may inquire of the Legislative Ethics Committee regarding these two statutes. However, with respect to G.S. §§ 14-234 and 236 it is the opinion of this office that Senator Metcalf likely would not be in violation of either statute if he is compensated by the Mars Hill Institute for services provided to governmental agencies in other states, to local governmental agencies in North Carolina or to private sector entities.
Please call if we can be of further assistance.
Very truly yours,
Edwin M. Speas, Jr.
Chief Deputy Attorney General
EMSjr/sp