February 27, 1996
Robert Oren Eades, Esquire Catawba County Attorney
P. O. Box 218 Hickory, North Carolina 28603
RE: Advisory Opinion; Conflict of Interest; N.C.G.S. §14-234; Use by County Agencies and Employees of a Hotel Owned by a Member of the Board of County Commissioners
Dear Mr. Eades:
Commissioner A of the Catawba County Board of Commissioners is engaged in the business of property development, including the development of residential, industrial, and commercial properties. One of his properties is a newly renovated and expanded hotel. As is typical of similar properties, in addition to individual rooms, this hotel offers a variety of meeting areas and food services. Given the availability of similar accommodations in Catawba County, it is anticipated that various county agencies will from time to time desire to use the meeting and food service facilities offered by this hotel. By way of illustration, it is anticipated that one or more county agencies or departments may host a work-related meeting at the hotel. In other instances, Catawba County employees may schedule hotel meetings involving some or all of the commissioners and other elected officials. In all of these illustrations, as in other similar instances, county funds would be used to pay for the accommodations.
Based on the above illustrations, you ask our advice whether a violation of N.C.G.S. §14-234 has occurred where:
- (1)
- There is no Board of Commissioner involvement in planning the meeting or other activity from which the hotel space is used and which is paid for by county funds;
- (2)
- The Board of County Commissioners vote, with or without Commissioner A’s involvement, to hold a meeting or other county activity at the hotel and to pay for such meeting or other activity with county funds.
For reasons which follow, so long as the Board of County Commissioners is not involved in the making or approving of any contract or agreement to use the hotel, N.C.G.S. §14-234 does not present a problem. If the Board of County Commissioners is involved in any way, directly or indirectly, in making the decision to hold the meeting at the hotel owned by Commissioner A even though Commissioner A does not participate in the decision, N.C.G.S. §14-234 may present a problem.
As you know, the purpose of N.C.G.S. §14-234 is to remove from public officials the temptation to take advantage of their official positions to "feather their own nests," by letting to themselves or to firms or corporations in which they are interested contracts for services, materials, supplies, or the like. See, Lexington Insulation Co. v. Davidson County, 243 N.C. 252 (1955). Our office, in interpreting the statute, has consistently opined that in order for the statute to apply the public body must be directly or indirectly involved in the making of a contract or agreement, or the approval of a contract or agreement to use the company or business which is owned by the
member of the public body. If the public body is not involved in the transaction in any way, nor in the approval of the transaction, our office believes that N.C.G.S. §14-234 is inapplicable. Therefore, where there is no Board of Commissioner involvement in planning the meeting or other activity for which the hotel space is used and which is paid for by county funds, it is our opinion that N.C.G.S. §14-234 is not applicable.
On the other hand, where the Board of County Commissioners vote, with or without Commissioner’s A involvement, to hold a meeting or other county activity at the hotel and to pay for such meeting or other activity with county funds, we believe that N.C.G.S. §14-234 may present a problem. Subsection (a) of the statute makes it a misdemeanor for a public official to "make any contract for his own benefit . . . or be in any manner concerned or interested in making such contract, or in the profits thereof . . . ." Moreover, the statute specifically exempts from its coverage a situation where the public official owns 10% or less of the business or entity doing business with the public body or where the transaction is located in a county that has no city having a population of more than 7,500, and the public official-owner does not participate in the deliberation or vote of the public body. Therefore, it is clear that the General Assembly recognized that there would only be certain instances where the business owned by the public official could in fact do business with the public body. See, N.C.G.S. §14-234 (c1) and (d1). Since Commissioner A does not fall within any of the exceptions, N.C.G.S. §14-234 may apply.
We have been careful to say that the statute "may apply." We do so because this is a criminal statute, and only the appropriate district attorney responsible for prosecuting criminal violations can give a definitive answer to this question.
Should you require anything further, please advise.
Andrew A. Vanore, Jr. Chief Deputy Attorney General