The Ethics Act was passed to promote high standards of conduct in state government. In furtherance of this end, section 8 of the Act prohibits participation in official action directly affecting a business or matter in which an employee has a substantial financial interest. We hold that there is no violation of Act 263 for committee members to apply for loans or for persons having loans to be appointed to the committee. However, there must be self-disqualification and complete abstention from all action regarding this type of loan by such members to avoid participation in violation of the Act. The money allotted by the legislature for loan is limited, and in the past has proved to be insufficient for all qualified applicants.
Principal repaid is again available for loan, and interest collected pays for loan administration.
The committee members, even after a loan application has been granted, have discretion to grant extensions on principal payment in certain instances and have discretion to declare the loan due on breach of conditions or default. Thus, a member who has applied or is contemplating applying for a loan should take no official action regarding loans. Any decision he is called upon to make regarding other applications, or upon extension or collecting of loan money, directly affects the amount of money available for loan and thus his interest in obtaining a loan. A member who has at some earlier time obtained a loan must also abstain from all official action regarding loans to avoid participation in violation of section 8 of the Act. Because his interests are so closely connected with the loan fund, its disbursements and collections, any action on other loans may well in the future influence committee action on his loan.