                  TO BE PUBLISHED IN THE OFFICIAL REPORTS


                       OFFICE OF THE ATTORNEY GENERAL

                                 State of California


                                JOHN K. VAN DE KAMP

                                   Attorney General




                                             :
                 OPINION                     :                  No. 86-1003
                                             :
                     of                      :                March 11, 1987
                                             :
        JOHN K. VAN DE KAMP                  :
           Attorney General                  :
                                             :
         RODNEY O. LILYQUIST                 :
          Deputy Attorney General            :
                                             :




         THE HONORABLE H. L. RICHARDSON, MEMBER, CALIFORNIA
STATE SENATE, has requested an opinion on the following question:

              May a school board member vote upon a proposed program or contract
submitted to the board by an organization of which the member is the salaried executive
director?


                                     CONCLUSION

               A school board member may not vote upon, participate in considering, or
attempt to influence action taken upon a proposed program or contract submitted to the board
by an organization of which the member is the salaried executive director except in limited
circumstances. With respect to a contract proposal, the board would generally be prohibited
from entering into the contract.


                                             1

                                           ANALYSIS


               An organization proposes to a school district board that a program or contract
be approved involving the schools and pupils of the district. One of the board members is the
salaried executive director of the organization. May the member vote on the proposal without
violating the various conflict of interest laws of California? We conclude that the member
would generally be prohibited from voting on such a proposal.

               1.      The Political Reform Act of 1974

               The Political Reform Act of 1974 (Gov. Code, §§ 81000-91015; "Act")1 has
as one of its goals that "[p]ublic officials, whether elected or appointed should perform their
duties in an impartial manner, free from bias caused by their own financial interests...." (§
81001, subd. (b).) Accordingly, the Act provides that "inappropriate circumstances the
officials should be disqualified from acting in order that conflicts of interest may be
avoided." (§ 81002, subd. (c); see Witt v. Morrow (1977)70 Cal. App. 3d 817, 822-823.) The
Act covers both state and local officials (§§81001, 2003, 87100), including school board
members (69 Ops. Cal. Atty. Gen.102, 103, fn. 1 (1986)).

               Section 87100 contains the basic prohibition of the Act dealing with conflicts
of interest:

              "No public official at any level of state or local government shall make,
       participate in making or in any way attempt to use his official position to
       influence a governmental decision in which he knows or has reason to know
       he has a financial interest."

              Several exceptions to section 87100 allow a public official to make a
governmental decision in which he has a financial interest. Section 87103, for example,
expressly limits the definition of "financial interest," while section 87101 allows participation
where the official's "participation is legally required for the action or decision to be made."

              Extensive regulations have been promulgated by the Fair Political Practices
Commission ("Commission") with respect to potential conflicts of interest. (See §§
83111-83112; Cal. Admin. Code, tit. 2, 18700-18702.2; 66 Ops. Cal. Atty. Gen.156, 162, fn.
6 (1983).) The Commission also provides written advice and issues opinions which may be
relied upon by public officials. (§ 83114; 67 Ops. Cal. Atty. Gen. 369, 374 (1984).)



       1
        All references hereafter to the Government Code are by section number only.

                                                  2

               While we have not been given a set of facts to consider with respect to the
proposed program or contract, the case of Witt v. Morrow, supra, 70 Cal. App. 3d 817,
appears instructive concerning the general approach to be taken regarding the application of
section 87100. In Witt, a member of a redevelopment agency was the salaried president and
attorney of a nonprofit organization. The organization was the beneficiary of a trust that held
title to property near a proposed redevelopment project. The court analyzed the possible
conflict of interest as follows:

              "Morrow argues there is no conflict of interest here because there is no
       evidence his activities as president and attorney of BEE and his receipt of $550
       per month would be affected in any way by any decision on this project. His
       concept of what constitutes a conflict of interest is too narrow. It is not just
       actual improprieties which the law seeks to forestall but also the appearance
       of possible improprieties. Any employee, in the private or public sector,
       wishes to keep his job and maintain good relations with his employer. A
       person who must make decisions which may affect his employer's purse is in
       a situation where he may not give full consideration to the merits of the
       decision." (Id., at p. 823.)

               Similarly, we believe that a school board member may not generally vote upon,
participate in considering, or attempt to influence action taken upon a proposed program or
contract submitted to the board by an organization of which the member is the salaried
executive director. Limited exceptions to the prohibition of section 87100 may apply, and
the Commission is available to provide advice on a case- by-case basis.

              2.     The Board's Own Code

             The Act authorizes "the Legislature or any other state or local agency" to
impose" additional requirements on any person if the requirements do not prevent the person
from complying with" the Act's provisions. (§ 81013; see § 87102; 67 Ops. Cal. Atty. Gen.
369, supra, 375, fn. 5.) Section 87300 expressly requires public agencies to" adopt and
promulgate a Conflict of Interest Code,” which has “the force of law." (See 67 Ops. Cal.
Atty. Gen. 369, supra, 374.)

                Accordingly, the school board's own conflict of interest code may prohibit a
member from voting on a proposed program or contract that would otherwise be permissible
under the Act's provisions. (See § 87302, subd. (c).) Such code would require examination
in light of the particular circumstances involved.




                                              3

                  3.      The Common Law Doctrine

               The prohibition against a public officer having a conflict of interest in the
performance of public duties has long been recognized in common law. The common law
doctrine "strictly requires public officers to avoid placing themselves in a position in which
personal interest may come into conflict with their duty to the public." (46 Ops. Cal. Atty.
Gen. 74, 86 (1965).)

              While this doctrine is subject to being abrogated by express statutory
provisions, we have previously concluded that it is applicable where no statutory conflict
exists. (67 Ops. Cal. Atty. Gen. 369, supra, 381; 59 Ops. Cal. Atty. Gen. 604, 613-614
(1976); 58 Ops. Cal. Atty. Gen. 345, 354-356 (1975).)

              Exceptions to the common law doctrine exist, such as the rule of necessity (see
67 Ops. Cal. Atty. Gen. 369, supra 381), and the doctrine "may usually be avoided by
complete abstention from any official action with respect to or attempt to influence the
transaction" (64 Ops. Cal. Atty. Gen. 795, 797 (1981)).

             Whether the common law prohibition would prevent the school board member
from voting on a proposed program or contract, otherwise permissible under the Act and the
Board's own code, would depend upon the particular facts presented.

                  4.    Section 1090

               Since the proposal to the school board may concern a contract, the provisions
of section 1090 require examination. (See People v. Watson (1971) 15 Cal. App. 3d 28, 34,
fn. 1; People v. Darby (1952) 114 Cal. App. 2d 412, 428; 67 Ops. Cal. Atty. Gen. 369, supra,
375; 64 Ops. Cal. Atty. Gen. 369, supra, 375; 64 Ops. Cal. Atty. Gen. 795, supra, 797, fn.
2; 26 Ops. Cal. Atty. Gen. 287, 288-289 (1955); Widiss, The California Conflict of Interest
Laws (1963) 36 So. Cal. L. Rev. 186, 198-199; Kennedy & Beck, Interest of Public Officers
in Contracts Prohibited by Law (1955) 28 So. Cal. L. Rev. 335, 345; Comment, Conflict of
Interest in Public Contracts in California (1956) 44 Cal. L. Rev. 355, 360-361.)2

          Section 1090 states in part:

                 "Members of the Legislature, state, county, district, judicial district, and
          city officers or employees shall not be financially interested in any contract
          made by them in their official capacity, or by any body or board of which they

          2
           School board members are expressly covered by the provisions of section 1090. (Ed. Code. §
35233.)

                                                     4

        are members. Nor shall state, county, district, judicial district, and city officers
        or employees be purchasers at any sale or vendors at any purchase made by
        them in their official capacity."3

              Significantly, when section 1090 is applicable to one member of a board or
commission, the proscription cannot be avoided by having the interested member abstain; the
entire board or commission is precluded from entering into the contract.(Thomson v. Call
(1985) 38 Cal. 3d 633, 649; Stigall v. City of Taft, supra, 58 Cal.2d 565, 570-571; City of
Imperial Beach v. Bailey, supra, 103 Cal. App. 3d 191,195.)

               The Legislature has provided several exceptions to the prohibition of
section1090. In section 1091.5 are described nine situations where the "officer or employee
shall not be deemed to be interested in a contract." (See Citizen Advocates, Inc. v. Board of
Supervisors (1983) 146 Cal. App. 3d 171, 178-179; Frazer-Yamor Agency, Inc. v. Del Norte
County (1977) 68 Cal. App. 3d 201, 217-218.)

               In section 1091 the Legislature has described ten situations where a "remote
interest" will be found, allowing the board or commission to enter into a contract" without
counting the vote or votes of the officer or member with the remote interest."(See 67 Ops.
Cal. Atty. Gen. 369, supra, 377, fn. 8; 65 Ops. Cal. Atty. Gen. 305, 307 (1982).) For this
exception to apply, the existence of the interest must be" disclosed to the body of the board
of which the officer is a member and noted in its official records." (§ 1091, subd. (a).)

                Finally, we note the "rule of necessity" exception to section 1090. This rule
allows a governmental agency to acquire an essential supply or service despite the conflict
of interest; it allows the interested official to act where he is the only one who may do so.
Similarly the board may act with the interested member abstaining in such a situation. (See
Caminetti v. Pac. Mutual L. Ins. Co. (1943) 22 Cal. 2d 344, 366-367; 69 Ops. Cal. Atty. Gen.
102, supra, 108-109; 67 Ops. Cal. Atty. Gen.369, supra, 378; 65 Ops. Cal. Atty. Gen. 305,
supra, 310).)

              As with the other conflict of interest prohibitions, whether section 1090 would
be applicable in a particular situation would depend upon all the facts and circumstances.


        3
         While the statute refers to a contract being "made," the term has been expansively interpreted by
the courts to cover "such embodiments in the making of a contract as preliminary discussions,
negotiations, compromises, reasoning, planning, drawing of plans and specifications and solicitation
forbids." (Millbrae Aim, for Residential Survival v. City of Millbrae (1968) 262 Cal. App. 2d 222, 237;
see Stigall v. City of Taft (1962) 58 Cal. 2d 565, 571; City Council of Imperial Beach v. Bailey
(1980)103 Cal. App. 3d 191, 196; People v. Vallerga (1977) 67 Cal. App. 3d 847, 868; People v.
Sobel(1974) 40 Cal. App. 3d 1046, 1052.)

                                                    5

                In answer to the question presented, therefore, we conclude that a school board
member may not vote upon, participate in considering, or attempt to influence action taken
upon a proposed program or contract submitted to the board by an organization of which the
member is the salaried executive director except in limited circumstances. With respect to
a contract proposal, the board would be prohibited from entering into the contract unless the
situation falls within the exceptions enumerated in section 1091.5 or the "rule of necessity."




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