Request By:
Honorable Daniel N. Thomas
Attorney at Law
P.O. Box 36
606 South Main Street
Hopkinsville, Kentucky 42240
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of February 5 in which you state that you represent an individual who will soon be filing as a candidate for the office of city council (commissioner) of a second class city. This individual is an employe of a private consulting corporation which contracts with both the state of Kentucky and the city in question. You state that it is further understood that the individual in question is not an officer, director or stockholder in the corporation but merely an employe. You also relate that the candidate, if elected, would disqualify himself from discussing or dealing with his employer's corporation. The question is raised as to whether or not his candidacy will be affected by his company's contracts with the state and the city.
To begin with, no constitutional or statutory provision would, under the circumstances, affect the individual's right to become a candidate for city commissioner of the city in question. On the other hand, if elected, and if contracts are executed while he is a member of the commission, we believe that he would be disqualified from serving as commissioner under either KRS 61.260, relating to second class cities, or the common law which prohibits, in effect, a member of the city legislative body from being directly or indirectly interested in any contract with the city. In the absence of any specific conflict of interest statute under the commission form of government, there is such a statute under second class city law generally which we believe would apply, namely KRS 61.260 [mentioned above], in view of the rule under the commission form of government that any statute relating to the particular class that does not conflict with the laws pertaining to the commission form of government will apply. See KRS 89.020 and 89.400.
There are also a number of cases dealing with this situation involving a mere employe of a corporation under contract with the city, and we initially refer to the case of Byrne & Speed Coal Company v. City of Louisville, 189 Ky. 346, 224 S.W. 883 (1920), where we find the Court of Appeals construing a similar conflict of interest with respect to cities of the first class therein holding that a contract between the city and a coal company was void since a member of the city council was a paid employe of the coal company. Again in the case of Nunemacher v. City of Louisville, 98 Ky. 334, 32 S.W. 1091 (1895), it was held that a contract between the city and a printing company was void since an employe of a city council held a position with pay with the printing company at the time that the contract was made. See also the case of Bradley & Gilbert Company v. Jacques, 33 K.L.R. 618, 110 S.W. 836 (1908), and Jacques v. City of Louisville, 32 K.L.R. 547, 106 S.W. 308 (1908).
Next referring to the case of Commonwealth ex rel. Vincent, Attorney General v. Withers, 226 Ky. 29, 98 S.W.2d 24 (1936), we find the Court of Appeal stating the following common law concepts relating to the question:
"It is a salutary doctrine that he who is intrusted with the business of others cannot be allowed to make such business an object of profit to himself. This is based upon principles of reason, of morality, and of public policy. These are principles of the common law and of equity which have been supplemented and made more emphatic by the foregoing and other statutory enactments. Nunemacher v. City of Louisville, 98 Ky. 334, 32 S.W. 1091, 17 Ky.Law Rep. 933. In their application and operation it is impossible to lay down any definite rules defining the nature of the interest of the officer, or indicating the line between that which is proper and that which is unlawful. In general, the disqualifying interest must be pecuniary or proprietary by which he stands to gain or lose something. Falling within the principle are contracts with firms in which the member of the municipal body is a partner or a corporation of which he is an officer, or sometimes only a stockholder or employee. Byrne & Speed Coal Co. v. City of Louisville, 189 Ky. 346, 224 S.W. 883; Douglas v. Pittman, 239 Ky. 548, 39 S.W. (2d) 979. Further more, it is not material that the self-interest is only indirect or very small. (Emphasis added).
Under the circumstances, we must conclude that the city cannot legally execute any contract with the corporation of which a member of the commission is a paid employe of said corporation.