Hypothetical
Advisory Opinion No. 87-1
BEFORE
THE NEVADA COMMISSION ON ETHICS
In
the Matter of the Request for Advisory Opinion of Public Officer
You
have asked us for an advisory opinion in your dual capacity as a legislator and
as Executive Director of a nonprofit association (Association), as follows:
1.
As a result of your position as Executive Director of the Association, is
there a potential for conflict of interest while serving in the Legislature?
2.
If so, what can you do to avoid a conflict of interest?
3.
Would it be a violation of the code of ethics to continue drawing a
part-time salary and accruing benefits from your employer while serving in the
Legislature?
4.
Would a conflict of interest exist if you supported legislation
benefiting state employees when your spouse is a state employee?
FINDINGS
OF FACT
You
serve as Executive Director of a nonprofit community agency (Association) which
receives state and federal funds. You have filed a statement of financial
disclosure with the commission indicating that you receive ten percent or more
of your gross income from the Association.
You
have been elected to the Legislature and intend to remain employed on a
part-time basis by the Association during the legislative session. The
Association will compensate you for performing your duties as agency executive
director for approximately eight to ten hours per week, and your sick leave and
annual leave benefits will continue to accrue at a full-time rate.
Your
spouse is an employee of the state. In your financial disclosure statement you
have acknowledged that your spouse's income due to state employment constitutes
ten percent or more of your gross income.
QUESTION
NUMBER ONE
As
a result of your position as Executive Director of the Association, is there a
potential for conflict of interest while serving in the Legislature?
The
answer to this is yes. There may be times when your personal interest or gain
may be incompatible with your public trust. Therein lies an inherent potential
for conflicts of interest.
The
Code of Ethical Standards is set forth in NRS 281.481. A careful reading of this
code will indicate to you that the heart of this conflict of interest statute
deals with self-serving motivations involving personal financial or economic
benefit which are not compatible with public duty.
Public
officials are chosen to make decisions best for the public, impartially
according to justice and equity. The public is deprived of that legitimate
expectation when an official uses his position to further his own material or
self-interest or the interests of family or business associates.
In
your case, the self-interest would center around financial proposals for the
Association which would tend to secure or enhance your personal income or that
of the Association. The potential conflict of interest would arise with regard
to bills which offered state aid for existing or expanded Association
activities. If you serve on committees other than Ways and Means, you would
seldom be confronted with this situation. The exception would be where the bill
contains a fiscal note indicating it needs to be referred to Ways and Means.
Absent a fiscal note, you should be able to forcefully participate in
discussions and voting on committee bills without fear of a conflict of
interest.
QUESTION
NUMBER TWO
What
can you do to avoid a conflict of interest?
If
you are a member of a committee considering legislation which your Association
supports or opposes, you should determine whether you have a financial interest
that would be affected as a result of the proposed legislation. Financial
interest is defined in NRS 281.4335 as follows:
1.
Ownership of 10 percent or more of the capital stock or assets of any
business entity, directly or through a member of the interested person's
household.
2.
Income amounting to 10 percent or more of the gross income of the
interested person.
If
you have a financial interest, you must disclose the nature and extent of this
interest to the chairman and other members of the committee prior to approving,
disapproving, voting, abstaining or otherwise acting upon the matter. NRS
281.481(3).
Members
of the legislative branch have imposed additional ethical standards upon
themselves. These additional standards are set forth in NRS 281.501 which
requires, in pertinent part, that a member of the legislative branch not vote
upon "a matter with respect to which the independence of judgment of a
reasonable person in his situation would be materially affected by: (a)
His acceptance of a gift or loan; (b) His private financial interest; or (c) His
commitment in a private capacity to the interest of others."
NRS
281.501 would permit limited participation in the discussion and consideration
of a matter. However, we feel the extent of the participation should be to
enlighten the committee about the merits or demerits of the legislation and to
suggest constructive amendments. Participation should not include active
lobbying or pressuring a bill and then abstention from voting. Otherwise, it
would not be a purifying procedure. Instead, it would leave a taint of
hypocrisy.
If
the bill comes before the Assembly for approval, this being a different body
than the committee, you should follow the same procedure as you did in the
committee about disclosure and voting or abstaining. NRS 281.481(3) and 281.501.
As
we have previously indicated, if you are not a member of the Ways and Means
Committee, your exposure to conflict situations is greatly reduced since the
budget decisions made by that committee concerning financial aid, directly or
indirectly to your Association, would never involve you in any way.
We
do not think you would need to abstain from voting for the final legislative
appropriations measure. That budget contains many thousands of items and many
millions of dollars. Any items benefiting your Association would be a very minor
part of the total. Everyone votes for the final budget product, benefited or
not. You should not be expected to be on record against or abstaining on this
all important document because of a de minimis budget benefit. By the
same reasoning, you are not expected to vote against initial and subsequent
bills appropriating money to operate the legislature, including your own salary
and per diem.
One
other caveat. You should not sponsor or co-sponsor legislation proposing
pecuniary benefits, directly or indirectly, to your Association. See generally,
NRS 281.481(2). Such sponsorship can come home to haunt you.
QUESTION
NUMBER THREE
Would
it be a violation of the code of ethics to continue drawing a part-time salary
and accruing benefits from your employer while serving in the legislature?
The
answer to this is no. This is solely a matter between you and your Association.
Your executive committee permitted you to run for the Assembly and has approved
an arrangement providing leave without full pay during the legislative session.
This has resulted in substantial salary savings to the Association while you are
committed to continue your ultimate administrative responsibility during the
legislative session on a partial pay basis. This is a good arrangement all
around. In addition, you, as a part-time legislator, are not expected to give up
your personal livelihood.
QUESTION
NUMBER FOUR
Would
a conflict of interest exist if you supported legislation benefiting state
employees when your spouse is a state employee?
As
we have previously discussed in question number three, you must disclose the
full nature and extent of your interest prior to approving, disapproving,
voting, abstaining or otherwise acting upon any matter in which you have a
financial interest. NRS 281.481(3).
Since
your spouse's income from state employment constitutes ten percent or more of
your gross income, you have a financial interest in legislation which benefits
state employees. See NRS 281.4335. Therefore, you must disclose this interest
prior to taking any action.
However,
NRS 581.501(2) permits you to vote upon a matter benefiting state employees
since your spouse receives no special gain, but only benefits in the same manner
as all other state employees.
This
advisory opinion is rendered based upon the facts presented. Given other facts,
the opinion of the commission may differ.
NEVADA
COMMISSION ON ETHICS
By:
CHAIRMAN