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Conflict of Interest and the Spouse


February 22, 2019 by Paul Sullivan
Category: Ethics and Conflicts of Interest

Conflict of Interest and the Spouse

There’s no problem if a councilmember, commissioner, or board member joins with other members and votes to approve a contract with his or her spouse, is there? Afterall, the official is not personally benefitted.

If one thinks that, he or she may be wrong. Before considering this question, let’s get a refresher on the state’s conflict of interest law. RCW 42.23.030 provides in part:

No municipal officer shall be beneficially interested, directly or indirectly, in any contract which may be made by, through or under the supervision of such officer, in whole or in part, or which may be made for the benefit of his or her office, or accept, directly or indirectly, any compensation, gratuity or reward in connection with such contract from any other person beneficially interested therein.

There are some exceptions to the prohibition, as well as a few situations (remote interests) where an officer may have an interest in a contract but, if certain requirements are met, he or she may remain on the council, board, or commission. (For purposes of this article, I will refer to councilmembers, commissioners, and board members collectively as “commissioners.”)

What Is a Contract?

Let’s just consider a basic contract, one for goods or services. Some examples of a basic local government contract are as follows:

  • An agency purchases a piece of equipment from a local hardware store owned by the spouse of a commissioner.
  • The spouse of a commissioner is hired to work in the parks department.

In these situations, those involving purchases or employment, the nature of the relationship is contractual, and thus, may fall under the prohibition of the above statute.

Who Can Contract?

For local agencies, the contracting authority is typically the legislative body, or the “commissioners.” Thus, if the commissioners vote to purchase equipment from the local hardware store, they are contracting with the hardware store. Or if a spouse of a commissioner is hired to work as an employee in the parks department, he or she is contracting with the agency to perform services in return for compensation.

Contractual situations involving spouses of local government officials can present complications that are not immediately apparent. For example, when a commissioner votes to approve an employment contract with his or her spouse, the contract is not with the commissioner, and the benefit goes to the spouse, not the commissioner, correct? Not necessarily. One must remember that Washington is a community property state. Under community property laws, compensation earned during marriage by one spouse (or a domestic partner) is considered to go to each spouse or partner equally. Thus, if a commissioner’s spouse owns a hardware store, Washington law maintain that both the store owner and the commissioner would benefit from any sale made by the local government with the store. And the earnings of an employee in the parks department go to the benefit of both spouses or domestic partners. Therein lies the problem: even if an agency contracts with a commissioner’s spouse or partner, the benefit of the contract is shared and the commissioner is benefitted, thus bringing the contract under the potential application of the RCW 42.23.030 prohibition.

Are There Any Exceptions?

There may be some exceptions to this prohibition. In most instances, if the amount received under contract does not exceed $1,500 in any calendar month, or $18,000 for a calendar year, and the contract is with a city, town, non-charter code city, or county fair board in a county without a purchasing department, the prohibition does not apply. For an officer of a rural public hospital district, there is an exemption if the amount does not exceed $1,500 for a calendar month or $24,000 in a calendar year, with the limit subject to possible annual increases.

Importantly, these exceptions do not apply to sales or leases by the municipality and contracts for legal services.  Additionally, the exceptions also do not apply to:

  • counties with a population of 125,000 or more,
  • cities with a population of 10,000 or more, or
  • irrigation districts that encompass more than 50,000 acres.

In the municipalities listed above, there can be zero benefit.

Specialized Exceptions for Special Purpose Districts

Port district: There are also exceptions that apply to port districts where the port leases property to an officer, if there are three disinterested appraisals, and the superior court determines the transaction to be fair to the port district and in the public interest.

Hospital districts: There is an exception allowing the employment of the spouse of a hospital district provided the following requirements are met:

  • the contract for employment predates the commissioner’s initial election,
  • the contract is consistent with the district’s pay plan or union contract for similar employees,
  • the commissioner’s interest is disclosed, and
  • the commissioner does not vote on the contract or its conditions.

School districts: Other exceptions apply in some instances to contracts involving a school district. If one of these does apply, the officer’s interest must nevertheless be disclosed to the governing body and reflected in the minutes, and the officer may not vote on the contract’s authorization, approval, or ratification. In addition to these exceptions, an official may nevertheless remain an officer if his or her interest in the contract is considered a “remote interest” (see RCW 42.23.040 for more information).

When Both Spouses Hold Public Office

RCW 42.23.030 only relates to interests in contracts. Public officers, however, are compensated by reason of their office, not because of a contract.  Thus, if the spouse of an elected official is also a public officer of the same agency, there is no conflict. As an example, the spouse of a fire district commissioner may be appointed to the position of board secretary (an office) since neither the commissioner nor the board secretary are compensated by reason of a contract (see AGO 1978 No. 22).

Why Is This so Important?

If the officer has a beneficial interest in a contract prohibited by the statute, the penalty may be the potential forfeiture of office, a $500 fine and other civil or criminal liability or penalties, and the voiding of the contract, per RCW 42.23.050.

Questions? Comments?

If you have a question about this blog post or any other topic, please use our Ask MRSC form or call us at (206) 625-1300 or (800) 933-6772. If you have comments about this blog post or other topics you would like me to write about, please email me at psullivan@mrsc.org.

About Paul Sullivan

Paul has worked with local governments since 1974 and has authored MRSC publications on local elections, ordinances, and general local government operation. He also provides training on the Open Public Meetings Act.

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