Abstract of Advisory Opinion No. 03-08
IN THE MATTER OF THE REQUEST FOR ADVISORY OPINION OF
PUBLIC OFFICER, Member, State Board
This matter came before the Nevada Commission on Ethics (hereinafter the “Commission”) for hearing on the confidential request for advisory opinion filed pursuant to NRS 281.511, Subsection 1, by Public Officer, Member, State Board (hereinafter “Board”).
The hearing was closed pursuant to NRS 281.511, Subsection 5. Public Officer appeared in person and was sworn and presented testimony. The Advisory Opinion is confidential pursuant to NRS 281.511, Subsection 5(c).
Public Officer requests the Commission’s advisory opinion on two issues:
1. Does Public Officer’s public capacity as a member of Board conflict with Public Officer’s private interests as a managerial-level employee of a corporation presently in the bidding process with the State of Nevada?
2. Is it a conflict of interest for Public Officer or any member of a board or commission in Nevada who is not a partner or stockholder of his/her employer to serve on a board where issues relating to the employer of that board member (e.g., awarding of bids or contracts, disciplinary actions, policy making, qualifying, licensing, etc.) may be reviewed and acted on?
The Commission, after hearing testimony and considering the evidence presented herein, makes the following Findings of Fact and Conclusions of Law.
FINDINGS OF FACT
1. In Public Officer’s public capacity, Public Officer is an appointed member of Board.
2. In Public Officer’s private capacity, Public Officer is employed by Corporation in a managerial-level position. Public Officer has been employed by Corporation for several years.
3. Public Officer reports to Corporation’s president and is responsible for corporation policy, strategy promotions, and legal issues. Three other individuals, who report directly to the corporation’s president, are responsible for project operations. The head of the particular department at Corporation managing a particular project is responsible for the bid strategy with respect to the particular project.
4. Corporation has been incorporated in the State of Nevada several years. Corporation presently employs several hundred people and its annual revenues exceed $1 million.
5. Public Officer is not a stockholder in Corporation, he does not serve on Corporation’s Board of Directors, and he has no ownership interest in Corporation.
6. Public Officer receives compensation from Corporation in the form of an annual salary plus an annual bonus.
7. The Board is comprised of State Department Director and six members appointed by the governor. Members of the Board are appointed for 4-year terms.
8. Board’s powers and duties are provided in statute.
9. Board appoints a manager who serves at the pleasure of Board and the Governor.
10. Board issued a Request for Qualifications for the proposed project.
11. In an open meeting, the matter of the proposed project was before Board. Public Officer, as a member of Board, disclosed that Corporation may be submitting statement of qualifications for the proposed project and abstained from participating in and voting on the matter.
12. A selection committee consisting of one representative each from several state agencies and two representatives from Board reviewed all statements of qualifications submitted for the proposed project and selected three qualified finalists. Corporation was selected as one of the three qualified finalists. Board notified the three finalists for the proposed project.
13. The matter of the proposed project was before Board at a subsequent meeting. Public Officer abstained from participating in the discussion of the matter.
14. Funds for the proposed project were approved by the Nevada Legislature.
15. In a subsequent open meeting, the matter of the proposed project was before Board. Public Officer disclosed the employment relationship with Corporation and abstained from participating in and voting on the matter. The Board voted to move forward with the project based upon the funding approved by the 2003 Nevada Legislature.
16. Project proposals will be submitted to the Board from the three finalists and the Board will interview the three finalists before a committee of representatives from several state agencies selects the successful proposal.
17. The contract must be signed by the Governor after approval by several state officers.
18. An entity other than the Board will manage the project.
19. Public Officer is not directly involved on behalf of the Corporation in the proposed project.
1. In the capacity of an appointed Member of the Board, Public Officer is a “public officer” pursuant to NRS 281.4365.
2. The Commission has jurisdiction to render an advisory opinion in this matter pursuant to NRS 281.511, Subsection 1, and NRS 281.521.
WHEREFORE, on motion duly made, seconded, and unanimously approved, the Commission renders the following Opinion:
First Issue
The disclosure and abstention standards for all public officers who may have private interests and/or commitments[1] that conflict with their public duties are provided in Nevada’s Ethics in Government Law at NRS 281.501, Subsections 2 and 4.
NRS 281.501, Subsection 2, provides:
…in addition to the requirements of the code of ethical standards, a public officer shall not vote upon or advocate the passage or failure of, but may otherwise participate in the consideration of, 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 pecuniary interest; or
(c) His commitment in a private capacity to the interests of others.
It must be presumed that the independence of judgment of a reasonable person would not be materially affected by his pecuniary interest or his commitment in a private capacity to the interests of others where the resulting benefit or detriment accruing to him or to the other persons whose interests to which the member is committed in a private capacity is not greater than that accruing to any other member of the general business, profession, occupation or group. The presumption set forth in this subsection does not affect the applicability of the requirements set forth in subsection 3 relating to the disclosure of the pecuniary interest or commitment in a private capacity to the interests of others.
NRS 281.501, Subsection 4, provides:
A public officer or employee shall not approve, disapprove, vote, abstain from voting or otherwise act upon any matter:
(a) Regarding which he has accepted a gift or loan;
(b) Which would reasonably be affected by his commitment in a private capacity to the interest of others; or
(c) In which he has a pecuniary interest,
without disclosing sufficient information concerning the gift, loan, commitment or interest to inform the public of the potential effect of the action or abstention upon the person who provided the gift or loan, upon the person to whom he has a commitment, or upon his interest. Except as otherwise provided in subsection 6, such a disclosure must be made at the time the matter is considered. If the officer or employee is a member of a body which makes decisions, he shall make the disclosure in public to the chairman and other members of the body. If the officer or employee is not a member of such a body and holds an appointive office, he shall make the disclosure to the supervisory head of his organization or, if he holds an elective office, to the general public in the area from which he is elected. This subsection does not require a public officer to disclose any campaign contributions that the public officer reported pursuant to NRS 294A.120 or 294A.125 in a timely manner.
Generally, when considering whether a disclosure is required and/or abstention is appropriate with regard to a matter before Board, Public Officer should consult with legal counsel for Board and be guided by the standards provided in NRS 281.501, Subsections 2 & 4, as discussed and interpreted by the Commission in Opinion 99-56 (a copy of which has been provided to Public Officer and Public Officer’s legal counsel).
Specifically, in accordance with those standards, during the time Public Officer serves as a member of Board, when a matter comes before Board that involves the project, Public Officer must (1) disclose sufficient information concerning the employment relationship with Corporation to inform the public of the potential effect of Public Officer’s action in the matter as required by NRS 281.501(4); and (2) after making such proper disclosure, refrain from advocating the passage or failure of the matter and abstain from voting upon the matter, all in accord with NRS 281.501(2).
Second Issue
Pursuant to NRS 281.511(1) and NRS 281.521, the Commission’s jurisdiction with regard to first-party advisory opinion requests is limited to rendering an opinion interpreting the statutory ethical standards and applying the standards to a given set of facts and circumstances upon request from a public officer or employee who is seeking guidance on questions which directly relate to the propriety of his or her own past, present or future conduct as an officer or employee.
The second issue raised by Public Officer is too broad and too general to fall within the parameters of the Commission’s statutory first-party advisory opinion jurisdiction and the Commission, therefore, declines to render an opinion on that issue.
NOTE: THE FOREGOING OPINION APPLIES ONLY TO THE SPECIFIC FACTS AND CIRCUMSTANCES DEFINED HEREIN. FACTS AND CIRCUMSTANCES THAT DIFFER FROM THOSE IN THIS OPINION MAY RESULT IN AN OPINION CONTRARY TO THIS OPINION. NO INFERENCES REGARDING THE PROVISIONS OF NEVADA REVISED STATUTES QUOTED AND DISCUSSED IN THIS OPINION MAY BE DRAWN TO APPLY GENERALLY TO ANY OTHER FACTS AND CIRCUMSTANCES.
DATED: October 7, 2003.
NEVADA COMMISSION ON ETHICS
By: /s/ THOMAS R. SHEETS, Chairman