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# The Attorney General of Texas May 5, 1980

MARK WHITE Attorney General

Honorable Robert Bernstein, M.D. Acting Commissioner ofHealth Texas Department ofHealth HO0West49th Street Austin, Texas 78756 Opinion No. NW-179 Re: Whether the Department of Health may purchase supplies from a business owned by a member of the Texas Board ofHealth. Dear Dr.Bernstein: Youhave requested our opinion asto whether the Texas Department of Health may purchase supplies from e business owned by a member of the Board ofHealth. The Texas Board of Health employs the Commissioner ofHealth, who isdesignated the “executive head ofthe Department.” Articles 44l8a, 44184 V.T.C.S. The Commissioner is required to “perform the duties assigned to him by the Board,” and he %erve[sI at the will of the Board.” Id Article 4419c,V.T.C.S., prescribes to the Department certain duties withxgard to the treatment ofcrippled children:

Sec. 3. The Crippled Children’s Division of the State Department of Health is empowered to take census, make surveys and establish permanent records of crippled children end children who have cancer; to procure medical and surgical service for eligible children, provided that only physicians legally qualified to practice medmme and surgery in Texas be employed for purposes of diagnosis and treatment, that not more than the customarv minimum fees be paid for such services, and that ph&!icians or surgeons so employed shall be approved by the State Board of Health as qualifuxl to render such servme; to select and designate hospitals for the care of children contemplited by this Act, and to take such other steps as may be necessary in order to accomplish the purposes ofthis Act.

p. 568Honorable Robert Bernstein, M.D. - Page Two (MW-179)

At the discretion of the State Department of Health, transportation, appliances, braces and material necessary in the proper handling of crippled children or children who have cancer may be in part or entirely provided. Such appliances, braces and materiel, beurz a Dart of the care and treatment orosram and necessary to be Physical restoration of the individuei crippled child as defined in this Act ora child who has cancer, shell not be considered to be state-owned personal property and shall be excluded from the personal property inventory required of stateowned property; and all such property including appliances, braces, end materials, being apart ofthe care and treatment program, and which are now being accounted for under the provisions of the present system of eccounting shall be deleted from end not required after the passage and effective date of this Act The State Department ofHealth, however, shall maintain at all times a complete record of such appliances, braces and materials provided and such records shall be verified bythe State Auditor. The State Department of Health is directed to provide in Rules and Regulatrons, the necessary details for the conduct of this work. in accordance with the pure&es of this Act, which shall ermit & far as possible, the free choice ofpatients in their selections o --=7- physicians and hospitals, and shall arrange with hospitals, brace departments and other services providing for crippled children’s work and children who have cancer, compensation for such sees, provided that such fees or charges shell not exceed the average charges for the same services rendered to patients in the hospitals approved for purposes ofthis Act. (Emphasis added). The Board ofHealth approves alist ofphysicians qualified to treat crippled children, and designates hospitals for their care. Within the ambit of these statutory guidelines, a patient eligible for services under article 4419c,V.T.C.S., selects his own physician, and if a brace or appliance is prescribed for the patient, the physician selects a supplier to furnish the brace. The supplier then submits a state purchase voucher to the Department of Health for payment. You ask whether such payment ispermissible when the supplier is en entity wholly orpartially owned bya member ofthe Board ofHealth. In Attorney General Opinion MW-124(1980),we held a similar arrangement to be void in which a county purchased crushed rock from a company which stored the material at one of five quarries, one of which waspartially owned by a county commissioner, who received aroyalty for each truckload ofrock removed from his quarry. Wedescribed this arrangement asone involving

a contract and claims against the county in which a public official has an indirect pecuniary interest, at least, and perhaps a direct one.

P- 569Honorable Robert Bernstein, M.D. - Page Three (Mw-179)

Although Opinion MW-124(1980)was based largely upon the applicability of article 2340, V.T.C.S., which requires every county commissioner to take an oath that “he will not be directly or indirectly interested in any contract with, or claim against, the county in which heresides,” it also referred to the long established state policy that

a contract between a public official and the public body of which he is a member is contrary to public policy and therefore void, if the official has any personal pecuniary interest inthe contract. See also Attorney General Opinion MW-34(1979). See Meyers v.Walker, 276S.W.305, 307 (Tex.Civ. App. - Eestland 1925,no writ). See%0 m 378 S.W.2d 126(Tex. Civ. App.- San Antonio 1964,writ ref’d nr.e.1; Starr County v.Guerre, 297S.W.2d379(Tex. Civ. App.- San Antonio 1956,no writ). This office has frequently applied the public policy rationale of Meyers v. Walker, s ra even when no statute waspresent to render the contract void InAttorney General *-pu-uonH 916(1976),it was held that a school district was without authority to contract with a company which employed a member of the district’s board of trustees in a managerial capacity. In Attorney General Opinion H-734 (1975),this office said that a school district should not contract with one of its trustees to furnish garbage pickup, even though the trustee operated the only garbage pickup service in the area. See also Attorney General Opinions M-1236 (1972);WW-1362(1962);O-2306 (1940);O-1589(1939); O-878 (1939). See art. 6252-9b, V.T.C.S., §S6,8(statement ofgeneral state policy).

- In the present instance, a member of the Board of Health presents for payment by the Board of Health a purchase voucher for supplies furnished to a third person. In our opinion, payment of such a claim isprohibited bythe doctrine ofMeyers v.Walker, S .F It istherefore our view that the Department of Health should not purchase supplies ram a business owned bya member ofthe Board ofHealth. SUMMARY The Department of Health is prohibited by the doctrine of Me ers v. Walker, 276S.W. 305 (Tex. Civ. App. - Eastland 1925,no writ -5 from purchasing supplies from a busines wholly orpartially owned bya member ofthe Board ofHealth.

MARK WHITE Attorney General ofTexas JOHN W.FAINTER, JR. First Assistant Attorney General

P. 570Honorable Robert Bernstein, M.D. - Page Four (MW-179)

TEDL.HARTLEY Executive Assistant Attorney General Prepared byRick Gilpin Assistant Attorney General APPROVED: OPINIONCOMMITTEE C. Robert Heath, Chairman Susan Garrison BobGauss Rick Gilpin Bruce Y oungblood

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