Request By:
Mr. Samuel Robinson
Executive Director
The Lincoln Foundation
233 West Broadway, Suite 400
Louisville, Kentucky 40202
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Anne E. Keating, Assistant Attorney General
You have asked this office to review and comment on an opinion that you received from the Kentucky Department of Education concerning whether you might serve on the State Board for Elementary and Secondary Education and remain Executive Director of the Lincoln Foundation. You pointed out that the Lincoln Foundation has received funds from the State Department of Education through the Division of Equal Opportunity.
Upon review, the general counsel for the Department of Education noted that, while the foundation has received federal funding through the Department of Education, the state board has not reviewed or approved proposed grants to be funded. Nevertheless, the Kentucky Department of Education serves as an agent of the state board which has ultimate authority for distribution of federal and state funds for education. KRS 156.035. Therefore, it is necessary to determine whether a potential conflict of interest exists between the positions of member of the state board, and executive director of the foundation.
Based on the facts presented in your letter and accompanying attachments, we are in agreement with the Kentucky Department of Education that no statutory conflict of interest exists under KRS 45A.340 and 160.180 for the reasons set forth in the March 4, 1991, letter from Gary Bale, General Counsel. So long as neither you nor a member of your immediate family has an ownership interest in the Lincoln Foundation, you do not have a direct or indirect interest in providing the state board with services in return for school funds. KRS 160.180(2)(g) and (3). Nor do you have a direct or indirect interest in any grant presented to the Department of Education, agent of the state board, so long as you avoid representing the foundation in any application or other matter presented to the Department of Education or to the state board. KRS 45A.340(2), (4), (5) and (6).
One final area to consider is whether any potential conflict of interest exists at common law. It is not possible for this office to provide a general ruling in this area. As Kentucky's highest court has stated:
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 . . . . Furthermore, it is not material that the self-interest is only indirect or very small.
However, the interest is not sufficient to disqualify the officer if the opportunity for self-benefit is a mere possibility or is so remote or collateral, such as being only a debtor, that it cannot be reasonably calculated to affect his judgment or conduct in the making of the contract or in its performance.
Commonwealth v. Withers, 266 Ky. 29, 98 S.W.2d 24, 25-26 (1936). This long-acknowledged standard serves to define whether a common law conflict of interest exists, and may guide you in analyzing particular circumstances.