Question Submitted by: The Honorable Brenda Stanley, Oklahoma State Senate, District 42 ( 2024 )

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<p><strong><font face="ARIAL" size="4">Question Submitted by: The Honorable Brenda Stanley, Oklahoma State Senate, District 42</font><font face="ARIAL" size="2"><br>2024 OK AG 8</font><br>Decided: 06/04/2024<br>Oklahoma Attorney General Opinions<br></strong></p><hr>
<font size="1">Cite as: 2024 OK AG 8, __ __</font><hr>
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<p>&#182;0 This office has received your request for an official Attorney General Opinion in which you ask, in effect, the following:<br>
<b>May a municipality lawfully contract with a school district while a city councilmember for the municipality is an employee of said school district without violating article X, section 11 of the Oklahoma Constitution? </b></p><b>
</b><p>I.</p>
<p>SUMMARY</p>
<p>&#182;1 Except as provided in this opinion, a municipality may lawfully contract with a school district while a city councilmember for the municipality is an employee of said school district without violating the Oklahoma Constitution's prohibition against officers receiving interest. This office has already opined that elected city officials are subject to article X, section 11 of the Oklahoma Constitution. <span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 7. Consequently, city councilmembers are officers of the city and are subject to article X, section 11. Although municipalities may enter into such contracts, if circumstances show that the officer received an interest, profit, or perquisite unique to that officer as a result of the contract, a constitutional violation exists. But if the use or loan of public funds simply results in the public receiving the same type of benefit as the officer, there is no constitutional violation. This office does not analyze any specific factual circumstance because questions of fact are beyond the scope of an official Attorney General opinion. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 11; <i>see </i></font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">(A)(5).</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
<b></b><p>II.</p>
<p>BACKGROUND</p>
</font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;2 The question presented to this office stems from a municipality trying to reconcile two of this office's past Attorney General Opinions: </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2"> and </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">. Both interpret the state constitution's criminal prohibition on officers receiving interest, profits, or perquisites. Article X, section 11 of the Oklahoma Constitution provides:</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
<blockquote>The receiving, directly or indirectly, by any officer of the State, or of any county, city, or town, or member or officer of the Legislature, of any interest, profit, or perquisites, arising from the use or loan of public funds in his hands, or moneys to be raised through his agency for State, city, town, district, or county purposes shall be deemed a felony.</blockquote>
<p>OKLA. CONST., art. X, &#167; 11.</p>
<b></b><p>III.</p>
<p>DISCUSSION</p>
</font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;3 As a preliminary matter, Oklahoma law mandates that strict construction must be afforded to provisions resulting in felony punishment and disqualification to hold office. <i>State v. Humphrey, </i></font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 3,<i> </i></font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, 409. As a result, article X, section 11 of the Oklahoma Constitution must be strictly construed and not expanded. Thus, the prohibition on receipt of interest, profit, or perquisite only applies to individuals who are explicitly outlined within the provision. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 8.</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
<b></b><p>A. As officers of a city, councilmembers are subject to the prohibition in article X, section 11 of the Oklahoma Constitution. </p><b>
</b></font></font><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2"><b>
</b></font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;4 This office previously determined that "elected city officials" are subject to the Oklahoma constitutional prohibitions against interest. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 7. In all three statutory forms of city government that include the city councilmember role, the councilmembers are elected unless a vacancy occurs. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, 10-103, 11-103; </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">(A). Therefore, city councilmembers are elected city officials and subject to the Oklahoma constitutional prohibitions against interest.</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
<b></b><p>B. A municipality may lawfully contract with a school district while a city councilmember is an employee of said school district if circumstances show the officer received no additional interest, profit, or perquisite in the contract than the public received. </p><b>
</b></font></font><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2"><b>
</b><i></i></font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2"><i>&#182;5 Noscitur a sociis</i>,<span></span></font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2"> the rule of construction which provides that the meaning of a word should be determined by considering the words with which it is associated, guides this office in interpreting the meaning of "interest, profit, or perquisites." The Oklahoma Court of Criminal Appeals interpreted both the terms "interest" and "profit" as used in the constitutional provision to mean monetary interest earned as a result of an officer depositing public funds in a bank and retaining the interest earned on said funds for the officer's personal use. <i>State v. West</i>, </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">. Black's Law Dictionary defines perquisite as "a privilege or benefit given in addition to one's salary or regular wages. Often shortened to <b><i>perk</i></b>." <i>Perquisite</i>, BLACK'S LAW DICTIONARY (11th ed. 2019). Read together, the constitutional prohibition cannot be solely applied to pecuniary gain. This office's prior opinions analyzing article X, section 11, are consistent with this reading.</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
</font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;6 Initially, this office found that "[t]he type of interest subject to the prohibition is a private or personal interest of a financial or pecuniary nature." </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 2 (citing </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">). Then, this office determined that an officer receives interest, profit, or perquisite:</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
<blockquote>[W]hen a city official has any interest that arises from the use of city funds by a private entity <b><i>even</i></b><i> <b>if the city official does not have a proprietary interest in the private entity</b></i>, and even if the city official's compensation is not paid out of any funds received by the private entity from the city . . . . [T]he city official could have an interest in the city funds <b><i>if the private entity could not survive without the city funds</i></b> or if the city funds <b><i>have a relationship to the funds</i></b> that are used for the city official's compensation (i.e., matching funds for grants, etc.).</blockquote>
</font></font><p><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182;&#182; 3, 5.</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
</font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;7 The office continued to expand its interpretation when issuing </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">. There, this office concluded that even a contract between a public utility and a state agency board, where the officer of the State was also an employee of the public utility, could be defined as receipt of interest, profit, or perquisite by the officer-employee if "specific facts and circumstances" warranted it. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">,<i> </i>&#182; 22.</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
</font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;8 This office reaffirms its previous opinions. Funds of the state, county, city, town, or legislature of the officer given, contractually or otherwise, to another employer of the same officer does not in itself violate the State constitution. That officer's receipt of interest, profit, or perquisite can be shown only by the circumstances of the situation. This office cannot resolve questions of fact because they are beyond the scope of Attorney General Opinions. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 11; <i>see</i> </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">(A)(5).</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
</font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;9 Nonetheless, this office has made clear that "[i]t is the officer himself who must receive the direct or indirect profit or interest." </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 2. Indirect receipt of such prohibited gain by the officer, however, includes receipt of the same by the officer's spouse. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182;&#182; 18--23. Even gain by the officer's father-in-law, if circumstances reveal an indirect receipt of benefit by the officer as a result, could fall within the constitutional prohibition, though "the existence of such a family relationship does not, in and of itself, establish such interest." </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, &#182; 3. However, if the <b><i>public</i></b> receives <b><i>the same benefit</i></b> the officer receives, there is no direct or indirect interest to the officer. There, a public benefit has been bestowed and the government has simply done its job to serve its people.</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
</font></font><p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">&#182;10 The primary purpose of school districts is to provide free school education, supported by public taxation. </font></font><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">, 1-106. A municipality's contract with a school district from which the entire district benefits from equally, where no specific facts or circumstances point to additional benefit received by the dual-role public servant, is a public benefit to that school district and is not a constitutionally prohibited interest, profit, or perquisite received by the officer. Accordingly, if a use or loan of public funds results in the public receiving the same type of benefit as the officer, with no additional interest, profit, or perquisite, there is no violation of article X, section 11 of the Oklahoma Constitution.</font></font></p><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2">
<p>&#182;11<b> It is, therefore, the official Opinion of the Attorney General that:</b></p><b>
</b><b>
</b><p>A municipality may lawfully contract with a school district while a city councilmember for the municipality is an employee of said school district without violating the Oklahoma Constitution, provided that the city councilmember does not receive any additional interest, profit, or perquisite from the contract different than what the public received. </p>
<p> </p>
<p>GENTNER DRUMMOND<br>
ATTORNEY GENERAL OF OKLAHOMA</p>
<p>STEPHANIE ACQUARIO<br>
ASSISTANT ATTORNEY GENERAL</p>
<b></b><p>FOOTNOTES</p>
</font></font><p><span></span><span></span><font face="Arial,Arial" size="2"><font face="Arial,Arial" size="2"> Also known as the Associated-Words Canon.</font></font></p>
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