Court Opinion

ID: 4131157
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:12:36.92611+00
Date Added: 2024-06-11T14:10:54.773707
License: Public Domain

The Attorney            General of Texas
                                                     April 15. 1985
JIM MAlTOX
Attorney General

Supreme Court Building         Honorable Dan B. Grfssom                Opinion No.   JM-310
P. 0. BOX 12549
Austin, TX. 78711.2549
                               District Attorney
51214752501                    Erath and Eood Counties                 Re: 'Whether a county clerk may
Telex 910/874-1387             P. 0. Box 729                           purchase an interest in a title
Telecopier  5l21475.0255       Granbury, Texas   76048                 company and serve as its part-
                                                                       time manager
714 Jackson, Suite 700
Dallas, TX. 752024508          Dear Mr.   Grissom:
214i742.SM4
                                    You ask whether a county clerk may, without conflict of interest,
                               purchase an interes,cin a title company and manage it part-time, go
4S24 Alberta Ave., Suite 160
El Paso, TX. 789052793
                               long as he transacm no business with the county on behalf of the
915633-3484                    title company and dil.igentlyperforms his duties as county clerk. We
                               conclude that he may.
-
     Texas, Suite 700               Before the enwtment of article 988b, V.T.C.S., in 1983, no
Houston, TX. 77002-3111
                               conflict of interest statute applied generally to local public
713r223.59a9
                               officials. Under article 988, V.T.C.S., now repealed, Acts 1983, 68th
                               Leg., ch. 640.  57. at 4082,  eff. Jan. 1, 1984, city councilmen and
5C8 Broadway. Suite 312        other city officers could have no personal or pecuniary interest in,
Lubbock, TX. 79401.3479        or stand as surety on, any city contract. See Meyers v. Walker, 276
SMJ747.5239
                               8.W. 305. 307 (Tex. Civ. App. - Eastland 1925,110 writ). Article 988
                               applied only to genwal law cities. Woolridge v. Folsom, 564 S.W.2d
4399 N. Tenth. Suite S         471 (Tex. Civ. App. - Dallas 1978, no writ).        County judges and
McAllen, TX. 79501.1885        commissioners. who constitute the couuty's governing body (Tex. Coast.
512f5824547
                               art. V, 118). are bound by their oath of office to hold no interest in
                               county contracts. V.T.C.S. art. 2340.   No other county officers were
200 Main Plaza, Suite 409      similarly constrained after the repeal in 1973 of article 373 of the
San Antonio. TX. 792’352797    Penal Code, which jmposed a fine on' county officers who became
512l2254191                    pecuniarily interecited in bids, proposals, and coutracts for
                               construction work undertaken by the county or in sales transactions
An Equal Opportunilyl
                               with the county. Acts 1973, 63rd Leg., ch. 399, 83, at 991.
Attirmatlve Actlon Employer
                                    Under common lt;wconflict of interest rules, a local government
                               contract in which su,chan official has a direct or indirect pecuniary
                               interest is void as against public policy, ,even if that interest does
                               not influence the official. Meyers v. Walker, supra at 307;.Attorney
                               General Opinion MU-.%77 (1982). It is the existence of the interest,
                               not its actual effect or influence, if any, that is decisive. Delta
                               Electric Constructiop Company v. City of San Antonio, 437 S.W.2d 602,
                               609 (Tex. Civ. App. - San Antonio 1969, writ ref'd n.r.e.). This
                               office has stated that a governmental body may not contract with an

                                                             p. 1412
Honorable Dan B. Grissom - Prge 2       (JM-310)                         .

entity in which one of it% officers holds an ownership interest,
Attorney General Opinions WW-179 (1980); H-624 (1975); M-340 (1969).
or serves in a decision-mslring or managerial capacity, Attorney
General Opinions Ii-916 (19X); H-649 (1975), even if the service
provided is otherwise unava:t:lable,Attorney General Opinions D-734,
E-695 (1975). Neither the contract nor the benefit derived therefrom
need be direct. Attorney General Opinions .JW-171 (1984); MW-477
(1982); MW-124 (1980); H-916 (:1976).

     We have also noted, however, that the rule voiding a contract in
which an officer or employee of the governmental body has a pecuniary
interest is

          intended to apply where the public official or
          employee waking th,e contract on behalf of the
          govermuentel body 1:~himself a beneficiary of the
          contract.

Attorney General Opinion MW-236 (1980). It does not apply where. the
officer has no power to wake or influence the making of the contract.
Most recently, this office has stated that

          the [common law] co~nflictof interest prohibition
          is triggered when a. member of the governing body
          of a political subdivision . . . is an officer or
          employee of a firm seeking to do business with
          that political subdj.vision.

Attorney General Opinion JM-:i71(1984).

     Article 988b. the current local conflict of interest statute,
which became effective Januazy 1, 1984, applies a narrower conflict of
interest prohibition to a broader group of public officials and,
despite the existence of a conflict, does not void governmental action
unless influence is actually exerted.

     Under article 988b,   secion     l(l)*

             '[llocal public official' means a member of the
          governing body or mother officer, whether elected
          Or  appointed, paid or unpaid, of any dis-
          trict . . . county'. . . or other local goveru-
          Illante entity who exercises responsibilities
          beyond those that me advisory in nature.

Article 988b does not bar e,uch an official's interest in a local
government contract, however, but instead penalizes the official if he
knowingly

                                    p. 1413
Honorable Dan B. Grissom - P1g.e3   (JM-310)

          participates in a vote or decision on a matter
          involving a business entity in which the local
          public official has a substantial interest if it
          is reasonably foreseeable that an action on the
          matter would confEc an economic benefit to the
          business entity iumlved. . . .

V.T.C.S. art. 988b. $3(a)(l). See Attorney     General Opinion ~74-178
(1984). Au official who vj.olatesthis provision commits a class A
misdemeanor, V.T.C.S. art. 98Sb, 93(b), but an action by the governing
body on a matter involving the prohibited conflict is not voidable
unless the interested official, as a member of the governing body,
casts the deciding vote. V.T..C.S.art. 988b, 16. See Bexar County v.
Weutworth, 378 S.W.2d 126 (Tex. Civ. App. - San Antonio 1964, writ
ref'd n.r.e.); cf. Delta Electric Construction Company v. City of San
Antonlo, w-

     The county clerk is a ":Localpublic official" within the terms of
article 988b. As clerk of the commissioners court and county recorder
(see Tex. Const. art. V, 52'1:), he is a county officer whose duties,
though psiwarily ministerial~ and clerical, are not simply advisory.
See V.T.C.S. art. 2345 (keepLug court records, issuing notices, writs,
and process);- arts. 1941 et seq., 6591 et seq. (recording duties);
art. 1935 (marriage licenses. oaths, affidavits, and depositions);
arts. 3930 et seq.; Code Grin. Proc. arts. 1001 et sep. (collection of
fees). Be is not, howwer, a member of the county s governing body
(see Tex. Const. art. V, 91:3:1 and cannot contract for the county or
vz   on a matter pertaining to county business.

     A violation of the "knowing participation" provision of section
3(a)(l) of article 988b mnsists        of three parts.     First, the
official's interest in the business entity involved must be
"substantial," as defined by section 2.       We will assume it     is
substantial. Second, action on the matter must confer a reasonably
foreseeable economic benefp: on that business entity. Third, the
official must knowingly participate in a vote or decision on the
matter that would confer the benefit. Since he is not a member of the
county's governing body, the clerk will not, in his official capacity.
vote or decide on any such matter. See Attorney        General Opinion
JM-270 (1984) (prohibition applies onlytoofficers    with authority to
participate in votes or decic,ionsfor governmental entity).

     You indicate that the clerk will not act for the title company in
any business transacted with the county. We thus do not address
whether article 988b app1i.m to an official's activities in his
private capacity.    We conl::ludethat, under the conditions you
describe, the clerk's intereot in and employment by the title company
would result in no violation of article 988b.

                              p. 1414
Honorable Dan B. Grissom - Page 4 (~~-3113)

     Since the clerk cannot mntract for the county and will not be
contracting for the title company, no conflict arises under the
doctrine of dual agency. -See Attorney General Opinions MU-477 (1982);
E-1309 (1978).

     Although we think article 988b does not prohibit a county clerk's
holding an interest in a title company, other law clearly requires the
clerk to deal with the title mupany at complete arm's length. Where
the clerk records and preserves the records used in the business of
the title company in which he owns an interest, the potential ~for
actual misconduct may be greiit:erthan where the two employments are
completely unrelated. -See Attorney General Opinion JM-99 (1983).

     Article 1945, V.T.C.S., requires the clerk to keep dockets,
books, and indexes as required by law and provides further that such
records

          shall at all resmmable     times be open to the
          inspection and examination of any citizen, who
          shall have the righl:to make copies of the sane.

V.T.C.S. art. 1945. Although article 3930, V.T.C.S., requires the
clerk to collect fees for 'certain record-keeping services, that
article does not 'limit or deny to any person, firm, or corporation,
full and free access to . . . records," or the right to examine and
copy information from public records without charge,

          under reasonable rules and regulations of the
          county clerk at al:L reasonable times during the
          hours the county clerk's office is open to the
          public. . . .

V.T.C.S. art. 3930. An early opinion holding that a title company had
the same right of access to such records as other citizens declared
that the county clerk's office!

          is a purely public office, open alike at all
          times, and on the same terms, to all members of
          the public, subject to such reasonable rules and
          regulations as may bse imposed, in good faith, by
          the clerk.

Tobin v. Knaggs. 107 S.W.2d 6~77, 680 (Tex. Civ. App. - San Antonio
1937, writ ref'd). Although ,:heclerk may impose reasonable rules and
enforce reasonable hours to ensure the smooth and efficient operation
of his office, he has no disecetion to apply such rules selectively or
to grant access to or allow ce,pyingof records on a selective basis.

     If the clerk fails or re,fusesto perform his legal duties, he may
be removed from office. -See 'Pex. Const. art. V, 924; V.T.C.S. arts.

                               p. 1415
Honorable Dan B. Grissom - Page 5   (JM-310)

5970. 5973. If, in order to obtain a benefit, he violates a law
relating to his office or zlisapplies anything of value, he will be
subject to criminal penalties under section 39.01 of the Penal Code.
Section 39.03 imposes a pena:ttyfor the misuse of official information
not yet made public. So long as the clerk faithfully performs his
official duties, however, keeping his private activities separate,
these provisions will not come into play. Misconduct, of course, is a
question of fact, which this office cannot address. We simply draw
your attention to the possib:leapplication of these provisions.

                              SUMMARY

            A county clerk may, without conflict of
         interest, purchase ,an interest in a title company
         and manage it part-time.       He must, however,
         maintain a complete arm's length relationship with
         the title company.

                                        JIM     MATTOX
                                        Attorney General of Texas

TOMGRREN
First Assistant Attorney General

DAVID R. RICHARDS
Executive Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Rick Gilpin
Assistant Attorney General

APPROVED:
OPIRION COMMITTEE

Rick Gilpin, Chairman
Coliu Carl
Susan Garrison
Tony Guillory
Jim Moellinger
Jennifer Riggs
Nancy Sutton

                                p. 1416