THE ATTORNEY GENERAL
OF TEXAS
April 5, 1988
Mr. Sidney J. Braguet Opinion No. JM-884
Chairman
Texas Commission for the Re: Whether a conflict of
Deaf interest results from certain
P. 0. Box 12904 employments by members of the
Austin, Texas 78711 Texas Commission for the Deaf
(RQ-1234)
Dear Mr. Braguet:
You request an opinion about conflicts of interest
that might arise when members of the Texas Commission for
the Deaf serve as officers or employees of other entities.
You state that some commission members serve as members,
employees, or advisory members, of nonprofit local
councils for the deaf with which the Texas Commission for
the Deaf contracts to deliver direct services as provided
by the appropriations act, and you ask whether such dual
service constitutes a conflict of interest under state
law.
Section 81.006 of the Human Resources Code provides
in part that the commission shall:
(2) provide direct services to the deaf,
including interpreter services, information
and referral services, message relay
services, advocacy services, services to
elderly deaf and hearing impaired, training
in basic life skills and job-seeking skills,
and individual and family counseling:
(3) work to ensure more effective
coordination and cooperation among public
and nonprofit organizations providing
social and educational services to deaf
individuals. . . .
Hum. Res. Code 881.006(a). In addition, the commission
may:
p. 4318
Mr. Sidney J. Braguet - Page 2 (JR-884)
(4) contract with or provide grants to
agencies, organizations, or individuals as
necessary to implement this chapter.
Hum. Res. Code 581.006(b). The current appropriations act
appropriates funds for "Local Contract Services" subject
to the following rider:
5. The Commission shall use all funds
appropriated in Local Contract Services to
enter into contracts with local councils for
the deaf for only those services and amounts
so listed.
Acts 1987, 70th Leg., 2nd C.S., ch. 78, art. II, at 12,
14. Similar provisions were included in the prior
appropriations act. Acts 1985, 69th Leg., ch. 980, art.
II, at 10, 12. A number of contracts have been awarded to
local councils with starting dates of September 1, 1987.
&R Tex. Comm'n for the Deaf, 12 Tex. Reg. 2868 (1987)
(notice of contract awards): Texas Sunset Advisory
Commission, Final Reuort (Jan. 1985) at 160.
Officers of state agencies are prohibited from having
a direct or indirect pecuniary interest in a contract
entered into on behalf of their agency. Kevers v. Walker,
276 S.W. 305 (Tex. Civ. App. - Eastland 1925, no writ);
Attorney General Opinion Nos. JM-817, JM-671 (1987);
MW-179 (1980); H-1309 (1978). If the commission members
who serve as members, employees, or advisory members of
local councils are compensated for their services, they
have a pecuniary interest in the local council and the
contracts benefitting it. m Attorney General Opinion
NOS. JM-171 (1984); H-1309 (1978); H-916 (1976); M-714
(1970). Contracts made in violation of the policy
prohibiting such pecuniary interests are illegal and void.
Mevers . Walker . Thus, the commission cannot
legallyVcontract &it??local council in which a commis-
sion member has a pecuniary interest. The commission
member will have to resign from either the commission or
the local council before such contracts may be validly
entered into.
If a commission member holds a position with a local
council which authorizes him to enter into contracts on -,
behalf of it, another legal doctrine would also bar such
contracts. In such cases, the same individual attempts to
represent both the Commission for the Deaf and the local
council in contract formation. Attorney General Opinion
?,
H-1309 (1978) stated that a policy against dual agency
p. 4319
Mr. Sidney J. Braguet - Page 3 (JM-884)
prevented one person from representing both a state agency
and the other party in forming a contract. The state is
- entitled to the best efforts and unbiased judgment of its
agent. Attorney General Opinion O-2929 (1942) (guot$ng
and discussing Scott v.~;~;sQ, 130 S.W. 610 (Tex. Civ.
App. 1910, no writ)). if a commission member is
also an employee or membek of a local council with
authority to contract on behalf of the council, the policy
against dual agency would prevent the commission from
entering into a contract with that local council.
Section 8 of article 6252-9b, V.T.C.S., is relevant
to your question. It includes the following standard of
conduct:
(c) No state officer or state employee
should accept other employment or compensa-
tion which could reasonably be expected to
impair his independence of judgment in the
performance of his official duties.
V.T.C.S. art. 6252-9b, §S(c).~ This provision applies to
the officers and employees of a "state agency," which is
defined in part as:
(A) any department, commission, board,
office, or other agency that:
(i) is in the executive branch of state
government;
(ii) has authority that is not limited
to a geographical portion of the state:
and
(iii) was created by the constitution or
a statute of this state. . . .
V.T.C.S. art. 6252-9b, §2(8). Thus, section 8 of article
6252-9b, V.T.C.S., applies to the Commission for the Deaf,
even though it is not a "major state agency" for purposes
of that statute.
You point out section 81.002(d) of the Human Re-
P sources Code which provides as follows:
(d) An officer. emolovee. or Daid con-
sultant of an association reuresentino the
Jnterests of deaf or hearina-imnaired nersons
mav not be a member or emnlovee of the
p. 4320
Mr. Sidney J. Braguet - Page 4 (JN-884)
commission, nor may a person who cohabits
with or is the spouse of an officer, mana-
gerial employee, or paid consultant of an
association representing the interests of
deaf or hearing-impaired persons be a member
of the commission or an employee of the
commission grade 17 and over, including
exempt employees, according to the position
classification schedule under the General
Appropriations Act. (Emphasis added.)
Hum. Res. Code 581.002(d). It is a ground for removal
from the commission if a member violates section
81.002(d). &.8 Hum. Res. Code .$81.0021(a)(3).
Section 81.002(d) was adopted in 1985 in connection
with review of the commission by the Sunset Advisory
Commission. m Acts 1985, 69th Leg., ch. 619, 51, at
2300. It is one of a number of "across the board"
recommendations of the Sunset Advisory Commission which
the legislature adopted for the Commission for the Deaf.
&.8 Bill Analysis to S.B. No. 384, 69th Leg. (1985).
Conflict of interest provisions are recommended by the
Sunset Commission to prevent agencies from developing
close ties with professional trade organizations and other
interest groups which may not be in the public interest.
Texas Sunset Advisory Commission, Final ReDOrt (Jan. 1985)
at 2. In our opinion, "an association representing the
interests of deaf or hearing-impaired persons" directs its
major efforts toward advocacy of policies regarding deaf
or hearing-impaired persons. Whether a particular entity
is the kind of association described by that provision is
a fact question which cannot be answered in an Attorney
General Opinion.
We finally point out the following provision which
was adopted in 1987:
(f) A person is not eligible for appoint-
ment as a member of the commission if the
person or the person's spouse:
(1) is employed by or participates in
the management of a business entity or
other organization regulated by the
commission or receiving funds from the
commission. . . .
Hum. Res. Code 581.002(f); Acts 1987, 70th Leg., ch. 343,
52, at 3490. This provision does not apply to a member of
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Mr. Sidney J. Braguet - Page 5 W-884)
the Texas Commission for the Deaf who held office on
September 1, 1987. L 5511, 14, at 3497, 3498. Although
it does not apply to the conflicts of interest you inquire
about, it should prevent them with respect to persons
appointed after the effective date of this provision.
SUMMARY
Common law prohibitions against conflict
of interest prevent the Texas Commission for
the Deaf from contracting with a local
council for the deaf if a commission member
serves the local council as a paid employee
or in a decision-making capacity which
authorizes him to contract for the council.
Whether a particular local council is "an
association representing the deaf or hearing-
impaired personsn within section 81.002(d) of
the Human Resources Code is a fact question.
JIM MATTOX
Attorney General of Texas
MARYKELLER
First Assistant Attorney General
Lou MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Susan L. Garrison
Assistant Attorney General
p. 4322
Untitled Texas Attorney General Opinion
Combined Opinion