Request By:
Mr. Vic Hellard, Jr.
Director
Legislative Research Commission
Capitol Building
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your question was stated as follows:
"A question arose in the recent meeting of the Personal Service Contract Review Subcommittee, on which the subcommittee has requested that I seek your opinion. It involves a contract between a state agency and a corporation whose vicepresident is a member of the General Assembly.
"I, on behalf of the subcommittee am requesting your opinion as to whether there is any constitutional or statutory provision which prohibits the parties from entering into a contractual relationship. I am aware of the provisions of KRS 6.775(7) which are not applicable in this case, since the legislator neither controls the corporation nor owns or controls more than five percent of the stock of the corporation."
We assume the contract was let without competitive bidding.
We see nothing in KRS 61.096 which would prohibit engaging in this contract. Cf. KRS 61.096(4). We assume the legislator's spouse has no greater interest in the corporation than 5% of the total value thereof. We further assume that the legislator will receive no compensation for services to be rendered in negotiations with the state or any agency if the purchase of real property is involved. See KRS 61.096(1). Also we agree with you that KRS 6.775(7) [which prohibits use of influence by a legislator] has no application, since the legislator does not control the corporation and he does not own or control more than 5% of the stock.
If the legislator will derive a direct monetary gain from the contract, then he should refrain from voting on the contract if he is a member of the subject subcommittee. See KRS 6.765, 6.760, and 6.770.
It is a salutary doctrine that he who is entrusted with the business of others cannot be allowed to make such business an object of profit to himself. Thus the disqualifying interest must be pecuniary or proprietary by which he stands to gain or lose something.
Commonwealth v. Withers, 266 Ky. 29, 98 S.W.2d 24 (1936) 25. This common law principle was undoubtedly recognized by the General Assembly in enacting KRS 6.765.
Based upon the facts given, it is our opinion that there is nothing in the constitution or statutes prohibiting the parties from engaging in this contract.