Request By:
Mr. Thomas M. Troth
General Counsel
Department of Agriculture
Capital Plaza Tower
Frankfort, Kentucky 40601
Opinion
Opinion By: David L. Armstrong, Attorney General; Walter C. Herdman, Asst. Deputy Attorney General
In your letter of July 16 you relate the following facts and question:
"The Kentucky Department of Agriculture requests an opinion from the Attorney General concerning a possible conflict of interest that may exist when a part or full owner of a state/federally approved Kentucky livestock market also serves as the official market veterinarian of that livestock market.
"The duties of the market veterinarian are set out in 302 KAR 20:070(4). 302 KAR 20:070(1)(1) requires that the owner or manager operating a stockyard 'shall arrange for an accredited, licensed veterinarian approved by the Department of Agriculture to be present in said sales point to carry out the provisions of this regulation. "
"Market veterinarians receive a fee for any service rendered that has been agreed upon by the stockyard operator and the market veterinarian. Veterinarians' fees are to be deducted from the seller's or buyer's check, 'except for those fees reimbursed through the state/federal cooperative agreement.' Under this 'cooperative agreement' market veterinarians are paid by the state for testing cattle at markets and gathering information, including blood samples to be submitted to the laboratory for testing. The state of Kentucky pays market veterinarians from the general fund and is then partially reimbursed by the federal government. The Department of Agriculture requests an opinion from the Attorney General on the following issue:
"Is it a conflict of interest under Kentucky law for a part or full owner of a stockyard to serve as official market veterinarian for that yard?"
Our response to your question would be in the affirmative. Pursuant to 302 KAR 20:070(1) regulating stockyards, the owner of a state-federally approved livestock market is required to select a licensed veterinarian approved by the state Department of Agriculture whose duties are to be present at the livestock sale market and carry out the provisions of the state livestock regulations which include the collection of general information and blood samples for laboratory testing. The approved veterinarian is also paid from state funds partially reimbursed by the federal government.
Under the conditions presented, the market veterinarian would not, in our opinion, be considered a state employee subject to the state conflict of interest law, KRS 45A.340 since the definition section, KRS 45A.335 defines the term "officer or employee" of the state as someone appointed or employed by the state Agriculture Department. In this instance the veterinarian is paid in part from state funds, but he is not employed by the state.
On the other hand, the fact that the part or full owner of the stockyard market appoints himself as market veterinarian, would be against public policy under the self-interest principle. In this respect we refer you to McQuillin, Mun. Corps., Vol. 3, § 12.75 from which we quote the following:
"Officers who have the appointing power are usually disqualified for appointment to office to which they may appoint. Such exercise of the appointment power is against public policy, and is void on its face. . . ."
The rule is stated in 63 Am.Jur.2d, Public Officers and Employees, § 96, as follows:
"An officer entrusted with the power of appointment should exercise it with disinterested skill and in a manner primarily for the benefit of the public, for it is the policy of the law to secure the utmost freedom from personal interest in such appointments. So, it is contrary to public policy to permit an officer having an appointing power to use such power as a means of conferring an office upon himself, or to permit an appointing body to appoint one of its own members."
The court, in State v. McDaniel, 52 Del. 304, 157 A.2d 463 (1960), in concluding that the filling of the vacancies was illegal and void, said in part:
". . . Both the common law and the statute demand that the power of appointment be exercised fairly and impartially. In order to attain this purpose it is important that the deliberations of the appointing body not only be free from wrongdoing but free from suspicion of wrong as well. Meglemery v. Weissinger, 140 Ky. 353, 131 SW 40, 31 LRA, NS, 575; Parrish v. Town of Adel, 144 Ga. 242, 86 SE 1095; Wood v. Town of Whitehall, 120 Misc. 124, 197 NYS 789. For this reason the general law has been laid down - reinforced in many instances by appropriate statutes - that it is contrary to public policy to permit a Board to exercise its power of appointment by designating some one from its own body. . . ."
We next direct your attention to two sections of the court's opinion in Meglemery v. Weissinger, 140 Ky. 353, 131 S.W. 40, 41 (1910):
"As Meglemery was on December 31, 1909, a member of the body that appointed him to fill this place, the appointment was void for reasons of public policy that are both sound and sufficient. And so we have held that in cases like this the fiscal court cannot appoint one of its members to a place that carries with it duties and compensation. . . ."
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". . . But, if his appointment was void, the mere recognition by the succeeding court did not have the effect of imparting validity to it. A void appointment cannot be validated by either recognition or ratification. Mechem on Public Officers, § 531. There must be a new appointment. It may be conceded that, so far as the rights of the public are concerned, Meglemery would be treated as an officer de facto, and that his acts as such would be binding. . . ."
See also Lemon v. Fiscal Court of Casey County, Ky., 291 S.W.2d 572 (1956); State v. Thompson, 193 Tenn. 395, 246 S.W.2d 59 (1952); Hetrich v. County Com'rs of Anne Arundel County, 222 Md. 304, 159 A.2d 642 (1960).
We also call your attention to the case of Commonwealth ex rel Vincent v. Withers, 266 Ky. 29, 98 S.W.2d 24 (1936) in which the court made the following statement:
"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 view of the above, it is our opinion that a common law conflict of interest does indeed exist under the circumstances, and as a consequence the full or part owner of the livestock market cannot legally appoint himself as the official market veterinarian for his own livestock market. Such appointment and approval by the Department of Agriculture should be considered void.