If a school board member's company doesn't sell directly to the schools, but instead sells materials to contractors who in turn install them at the schools, does that indirect arrangement still violate § 14-236?

Plain-English summary

The same attorney who asked about a school board member's HVAC service business (see the companion opinion of the same date) also asked a tougher question: what if the board member's company sells supplies, not directly to the school system, but to general contractors who then bring those supplies onto school grounds as part of construction or maintenance work?

The board member's company was the exclusive local representative of a particular brand. Contractors doing work at the schools needed parts of that brand for compatibility. If the contractor bought the parts from the board member's company and installed them at the schools, was that an indirect supply that violated § 14-236?

The AG's answer was cautious and stern. Section 14-236 makes it a crime for a member of a public body to "have any pecuniary interest, either directly or indirectly, proximately or remotely in supplying any goods, wares or merchandise of any nature or kind whatsoever for any of said institutions or schools" that the board administers. The "directly or indirectly, proximately or remotely" language is the operative breadth. Selling parts to a contractor who installs them at the schools is exactly the kind of indirect, remote pecuniary interest the legislature was targeting.

The Chief Deputy AG explicitly noted his own view that § 14-236 was "overbroad" but reminded the reader that the statute is presumed constitutional and no appellate court has struck it down. So the policy critique is one thing; the practical advice is another. Until the legislature narrows the statute or a court invalidates it, board members should treat indirect supplies as covered.

The advice was therefore: unless the local district attorney advises that he or she would not prosecute under this fact pattern, both the board and the individual board member should refrain from allowing the board member's business to sell goods to contractors working on school-system projects.

Currency note

This opinion was issued in 1996. 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. Section 14-236 has been amended in the decades since this opinion. Whether the "directly or indirectly" language remains as broad as in 1996 should be checked.

Background and statutory framework

Section 14-236's breadth is one of the more distinctive features of North Carolina school-board ethics law. Most public-officer conflict statutes use a "directly or indirectly" formulation, but few extend that to "directly or indirectly, proximately or remotely." The four-adverb stack reaches even attenuated pecuniary interests; the supplier-to-contractor scenario is one of the canonical attenuated cases the legislature was likely trying to reach.

Historical context helps. School-board self-dealing was a recurring problem in early-twentieth-century North Carolina, and one common workaround was the contractor-intermediary route. A board member who could not sell directly to the school district could sell to the contractor doing the work, with the contractor effectively passing through the cost to the schools. The legislature's "indirectly . . . remotely" language was the textual block on that workaround.

The Chief Deputy AG's personal-opinion footnote about the statute being overbroad is unusual but not unheard of in AG opinions of this era. AG opinions sometimes flag a statutory provision that the AG would change if asked, while still confirming what the current law says. The flag is a signal to the legislature, not an invitation to ignore the statute. Until the legislature or a court changes the rule, the advisory office gives the law as written.

The district-attorney advice in the closing line is also notable. Section 14-236 is a criminal statute, and the AG cannot bind a DA's prosecutorial discretion. If a local DA has reviewed the fact pattern and given a "no-prosecution" letter, a board member could conceivably proceed without realistic risk. But that approach is brittle: DAs change with elections, prior no-prosecution letters do not bind successors, and a federal investigation or state ethics complaint could still trigger consequences. The realistic course of action under the 1996 framework was to keep the board member's company out of the school-supply chain entirely, even through contractor intermediaries.

The companion opinion of the same date about HVAC servicing identified pure labor as outside § 14-236. That distinction matters here: a board member could service schools as long as no parts moved. But supplying parts to contractors who then install them is goods-supply, even through an intermediary, and § 14-236 catches it.

Common questions

What if the contractor would have bought the same parts somewhere else anyway?

The opinion does not directly address this counterfactual, but the statutory text is not about whether the board member's interest changed any actual purchase; it is about whether the board member has a pecuniary interest in the supply, "proximately or remotely." Even a hypothetically replaceable supply still gives the board member a pecuniary interest if it goes through his company.

Does this apply even for tiny purchases (e.g., $20 of fasteners)?

The statute does not have a de minimis floor. As a textual matter, even a small sale is covered. Whether a DA would prosecute over a small amount is a separate question; small-dollar violations are unlikely to be investigated unless they show a pattern.

Could the board member sell to a wholesaler who sells to a distributor who sells to the contractor?

The further removed the supply chain becomes, the more attenuated the pecuniary interest. At some point the chain is too remote to be a § 14-236 violation, but the AG opinion does not draw a clear line. The safest interpretation is that any link in the supply chain that ends at a school project is captured.

Is § 14-236 still good law?

As of the 1996 opinion, no appellate court had struck it down. The Chief Deputy AG noted his personal view that it was overbroad but enforced it. Anyone working a current case should check current case law and statutory amendments.

What if the board member divests during his term?

The opinion does not address divestiture. Divesting the company before joining the board, or selling it during the term, would eliminate the pecuniary interest going forward. Past supplies would not be retroactively legalized, but new supplies post-divestiture would not violate § 14-236.

Source

• Landing page: https://ncdoj.gov/opinions/company-owned-by-member-of-board-of-education-supplying-materials-to-firms/

Citations

• N.C. Gen. Stat. § 14-236

Original opinion text

N.C.G.S. §14-236, however, presents a problem. This statute arguably would be violated under the fact situation set out above. It is a crime for a member of a public body to "have any pecuniary interest, either directly or indirectly, proximately or remotely in supplying any goods, wares or merchandise of any nature or kind whatsoever for any of said institutions or schools" which are administered by the board upon which he sits. Although it is my personal opinion that N.C.G.S. §14-236 is overbroad, the statute is presumed constitutional and no appellate court has ever ruled it unconstitutional. Therefore, so long as N.C.G.S §14-236 is law, and unless the local district attorney advises that he would not prosecute this Board member, both the Board of Education and the individual Board member should refrain from allowing the Board member's business to sell goods, wares or merchandise to contractors of the school system.

Andrew A. Vanore, Jr.
Chief Deputy Attorney General