What counts as an 'immediate family member' for purposes of Arkansas county ethics rules on conflicts of interest?

Plain-English summary

Roger Norman, the Legislative Auditor, asked AG Dustin McDaniel about A.C.A. § 14-14-1202, Arkansas's county-government ethics statute. The statute has two relevant pieces:

• Subsection (a)(3) prohibits a county officer or employee from using the office, its influence, or information gained through it to advance a personal economic interest or that of an immediate family member or associate, apart from incidental benefits of laws affecting the public generally.
• Subsection (c)(1) prohibits county officers and employees from being "interested, either directly or indirectly," in any county contract or transaction.

Three questions:

Q1: What does "immediate member of his or her family" mean?

The statute does not define it. Absent a controlling legislative definition or case on point, the AG predicted a court would look by analogy to A.C.A. § 21-8-304(a). That provision lists a spouse, child, parents, and other persons standing in the first degree of relationship; it does not define the county statute's phrase. The AG said the county phrase would not extend further than the class listed there and declined to opine further.

Q2: What does "interested, either directly or indirectly" mean, and does a family tie alone establish it?

The provision speaks of the officer or employee's interest, not a family relationship by itself. The AG said a family relationship "standing alone" ordinarily would not establish a violation of (c)(1), but it could be relevant to the factual question whether the officer or employee is interested in a county contract or transaction.

Q3: How do (a)(3) and (c)(1) relate?

Both codify aspects of the common-law conflict-of-interest principle, which centers on whether an official is acting to further personal interest rather than the public's. But they are not directly tied at the operational level. The (a)(3) "use-of-position" prohibition requires the official to leverage their position to obtain something. The (c)(1) "interested in a contract" prohibition does not require such use. So (c)(1) can apply even where (a)(3) does not. The (a)(3) language about family does not narrow or define the (c)(1) "interested" inquiry.

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Does this statute apply to elected officials, county employees, or both? A.C.A. § 14-14-1202 applies to "county government officers and employees," which encompasses both elected officials and salaried employees of county offices.

What if my spouse works for a company that sells goods to the county? The AG said the family tie ordinarily would not, standing alone, establish a violation of subsection (c)(1). It could still be relevant to whether the officer or employee has a direct or indirect interest in the county contract or transaction. The opinion did not decide the result for a particular spouse's employment or contract.

Where would a court look for the meaning of "immediate family"? The AG predicted that a court would look to A.C.A. § 21-8-304(a) by analogy. It lists a spouse, child, parents, and other persons standing in the first degree of relationship. The AG said the county phrase would not extend further than that class and declined to opine further without clarifying legislation.

What is the "common law conflict of interest" principle? A long-standing legal principle that public officials cannot use their offices to advance personal interests at public expense. Arkansas courts have applied this principle to county officials even outside the four corners of statute. A.C.A. § 14-14-1202(c)(1) is one statutory codification of part of that broader principle.

Are there other Arkansas statutes with similar bans? The opinion quotes A.C.A. § 21-8-304(a), which applies to state and local public officials and employees, including county personnel. The AG used that provision to interpret the county statute by analogy.

Background and statutory framework

A.C.A. § 14-14-1202 is the county-government ethics statute, codifying conflict-of-interest principles for county officers and employees. Subsection (a)(3) addresses use-of-position to secure unwarranted advantages for the official or "an immediate member of his or her family." Subsection (c)(1) prohibits the officer or employee from being interested, directly or indirectly, in any county contract or transaction.

A.C.A. § 21-8-304(a) is a similar ethics provision that lists a spouse, child, parents, and other persons standing in the first degree of relationship. The AG predicted that a court construing § 14-14-1202(a)(3) would look to that list and that the county phrase would not extend further, applying the principle of reading related statutes together.

The opinion stresses that § 14-14-1202(a)(3) has no definition or controlling case on point. It also notes that earlier AG opinions looked to a different statute's broader list of family members; this AG considered § 21-8-304(a) more similar in substance and could not predict with certainty how a court would decide.

Citations

• A.C.A. § 14-14-1202(a)(3) (county officer use-of-position, including for immediate family)
• A.C.A. § 14-14-1202(c)(1) (county officer interest in contract or transaction)
• A.C.A. § 21-8-304 (analogous ethics provision covering specified relationships)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS

Tue ATTORNEY GENERAL
Dustin McDANIEL

Opinion No. 2013-134

February 11, 2014

The Honorable Roger A. Norman
Legislative Auditor

Division of Legislative Audit

172 State Capitol

Little Rock, Arkansas 72201-1099

Dear Mr. Norman:

You have requested my opinion on the following questions regarding A.C.A. § 14- 14-1202, which deals with ethics for county government officers and employees:

I. What does Ark. Code Ann. § 14-14-1202(a)(3)’s phrase “immediate member of his or her family” mean, in terms of family relationships? What family relationships are encompassed by this phrase?

2. What does Ark. Code Ann. § 14-14-1202(c)(1)’s phrase
   “interested, directly or indirectly” mean, in terms of family relationships? Could a family relationship, by itself, constitute a direct or indirect interest under the Code section?

3. What relationship does Ark. Code Ann. § 14-14-1202(a)(3)
   have to Ark. Code Ann. § 14-14-1202(c)(1)? Does the former provision give guidance as to the meaning of direct or indirect interests in the latter provision?

As background for these questions, you note that you are “finding a number of instances where a county officer’s or employee’s family member is contracting or transacting business with the county employing the officer or employee” and that “(t]he family member may be doing business with the county personally or through a business entity.”

323 CENTER STREET, SUITE 200 ¢ Litre Rock, ARKANSAS 72201 TELEPHONE (501) 682-2007 © Fax (501) 682-8084 INTERNET WEBSITE ° http://www.ag.state.ar.us/

Roger A. Norman, Legislative Auditor
Opinion No. 2013-134
Page 2

RESPONSE

I cannot provide a definitive response to your first set of questions in the absence of a controlling legislative definition or judicial authority on point. I can only opine, as explained further below, that a court faced with interpreting the phrase would likely look to other similar ethics provisions to determine its meaning and scope. It is my opinion in response to your second set of questions that the mere existence of a family relationship ordinarily would not, standing alone, establish a violation of A.C.A. § 14-14-1202(c)(1). But the existence of a family relationship could in some cases undoubtedly be relevant to the factual question whether an officer or employee is “interested” in a county contract or transaction and thus in violation of subsection (c)(1). With regard to your third set of questions, subsections 14-14-1202(a)(3) and (c)(1), taken together, appear to codify certain aspects of the common law conflict of interest principle, the focal point of which is the furtherance of the officer’s personal interest. The subsections do not otherwise appear to be directly related.

Question I - What does Ark. Code Ann. § 14-14-1202(a)(3)’s phrase “immediate member of his or her family” mean, in terms of family relationships? What family relationships are encompassed by this phrase?

Arkansas Code Annotated § 14-14-1202(a) provides as follows:

PUBLIC TRUST. (1) The holding of public office or employment is a public trust created by the confidence which the electorate reposes in the integrity of officers and employees of county government.

(2) An officer or employee shall carry out all duties assigned by law for the benefit of the people of the county.

(3) The officer or employee may not use his or her office, the influence created by his or her official position, or information gained by virtue of his or her position to advance his or her individual personal economic interest or that of an immediate member of his or her family or an associate, other than advancing strictly incidental benefits as may accrue to any of them from the enactment or administration of law affecting the public generally.’

"A.C.A, § 14-14-1202(a) (Supp. 2013) (emphasis added).

Roger A. Norman, Legislative Auditor
Opinion No. 2013-134
Page 3

Section 14-14-1202 does not define what is meant by “immediate member of his or her family,” nor do we have the benefit of judicial authority directly on point. But under the rule of construction known as “in pari materia,” statutes relating to the same subject matter should be read together and in a harmonious manner.” I note in this regard that the language of subsection 14-14-1202(a)(3) respecting the use of a county position to further one’s personal interest or that of a family member bears a striking similarity to the language of another ethics statute, A.C.A.
§ 21-8-304. This Code section applies to state and local public officials and employees (including those at the county level),® so it also encompasses those covered by A.C.A. § 14-14-1202. Section 21-8-304 states in pertinent part:

No public servant shall use or attempt to use his or her official position to secure special privileges or exemptions for himself or herself or his or her spouse, child, parents, or other persons standing in the first degree of relationship, or for those with whom he or she has a substantial financial relationship that are not available to others except as may be otherwise provided by law.’

In my opinion, a court faced with the question would likely look to this similar ethics provision and determine that the phrase “immediate member of his or her family” in A.C.A. § 14-14-1202(a)(3) does not extend further than A.C.A. § 21-8- 304(a), in terms of the class of individuals covered.’ Absent clarifying legislation, I am unable to opine further regarding the meaning and scope of A.C.A. § 14-14- 1202(a)(3).°

? E.g., Mays v. Cole, 374 Ark. 532, 289 S.W.3d 1 (2008); Weiss v. Maples, 369 Ark, 282, 253 S.W.3d 907 (2007); Monday v. Canal Insurance Company, 348 Ark. 435, 73 S.W.3d 594 (2002).

3 See A.C.A. § 21-8-301(a) (Supp. 2013).

• A.C.A. § 21-8-304(a) (Supp. 2013) (emphasis added).

° Accord Op. Att’y Gen, 88-357 (opining that A.C.A. § 21-8-304(a) “may be relied upon by analogy as offering guidance in construing ... A.C.A. § 14-14-1202(a).”). Several other previous Attorney General opinions cite a different ethics statute — A.C.A. § 19-11-701 — for guidance in determining the scope of A,C.A. § 14-14-1202(a)(3). In Op. Att’y Gen. Nos. 87-462 and 87-269, reference is made to A.C.A. § 19- 11-701(11) (Repl. 2007), which defines “immediate family” as “a spouse, children, parents, brothers and sisters, and grandparents.” While I cannot predict with certainty how a court would decide the issue, the substantive language of A.C.A. §§ 14-14-1202(a)(3) is much more similar to A.C.A. § 21-8-304(a), prompting me to surmise that a court would most likely look to the latter provision by analogy.

® It should be noted, however, that A.C.A. § 14-14-1202 is a penal provision (see subsection 14-14- 1202(d)(3)), and as such must be strictly construed. See generally Austin v. State, 259 Ark. 802, 536 5.W.2d 699 (1976); Knapp v. State, 283 Ark. 346, 66 S.W.2d 433 (1984),

Roger A. Norman, Legislative Auditor
Opinion No. 2013-134
Page 4

Question 2 - What does Ark. Code Ann. § 14-14-1202(c)(1)’s phrase “interested, directly or indirectly” mean, in terms of family relationships? Could a family relationship, by itself; constitute a direct or indirect interest under the Code section?

The phrase “interested, directly or indirectly” in subsection 14-14-1202(c)(1) is not couched in terms of family relationships. As stated by one of my predecessors: “The statute only speaks of the officer or employee and does not mention family members.”’ Consequently, it seems that the mere existence of a family relationship ordinarily would not, standing alone, establish a violation of A.C.A. § 14-14-1202(c)(1). The existence of a family relationship could, nevertheless, in some cases undoubtedly be relevant to the factual question whether an officer or employee is “interested” in a county contract or transaction and thus in violation of subsection (c)(1).

Question 3 - What relationship does Ark. Code Ann. § 14-14-1202(a)(3) have to Ark. Code Ann, § 14-14-1202(c)(1)? Does the former provision give guidance as to the meaning of direct or indirect interests in the latter provision?

It seems clear that these statutory provisions codify certain aspects of the common law conflict of interest doctrine. The common law prohibition against conflicts of interests provides generally as follows:

A public office is a public trust .. . and the holder thereof may not use it directly or indirectly for personal profit, or to further his own interest, since it is the policy of law to keep an official so far from temptation as to insure his unselfish devotion to the public interest. Officers are not permitted to place themselves in a position in which personal interest may come into conflict with the duty which they owe to the public, and where a conflict of interest arises, the office holder is disqualified to act in the particular matter and must withdraw.*

” Op. Att’y Gen. 88-167.

• 67 CLS. Officers § 204. See also Op. Att’y Gen. 2003-007 (and cases and Attorney General opinions
  cited therein).

Roger A. Norman, Legislative Auditor
Opinion No. 2013-134
Page 5

A familiar application of the doctrine is the rule that prevents public officers from being interested in public contracts. As the Arkansas Supreme Court has observed:

. according to the great weight of authority a contract with a member of a board or public body or in which a member thereof is interested, is unenforceable, even though there is no statute directly prohibiting such a contract. A public officer cannot lawfully make a contract either with himself, or with himself as agent for others.’

The furtherance of the officer’s “personal and individual interest” is the focal point of inquiry in determining whether an unlawful conflict of interest exists at common law.’ Moreover, such contracts are invalid “although there may have been no actual loss or detriment to the public or fraudulent intent in entering into the contract, since the rule invalidating the contract is based on public policy."

It seems clear that A.C.A. § 14-14-1202(a)(3) and (c)(1), taken together, codify these common law conflict-of-interest rules (although they appear to go further in governing the conduct of county employees, in addition to county officers). The subsections do not otherwise appear to be directly related. Indeed, in some respects they are clearly unrelated, given that A.C.A. § 14-14-1202(c)(1) prohibits an officer or employee from being interested in or benefiting from any county contract or transaction regardless of whether the interest or benefit arises from the individual’s use of his or her position.

Deputy Attorney General Elisabeth A. Walker prepared the foregoing opinion, which I hereby approve.

Sincerely,

Attorney General

DM:EAW/cyh

” Warren v. Reed, 231 Ark. 714, 718 331 S.W.2d 847 (1960). '° Id. at 718 (citation omitted). See also Van Hovenberg v. Holman, 201 Ark. 370, 144 S.W.2d 719 (1940).

"! Warren, 231 Ark. at 717 (quoting 43 Am.Jur. § 294).