STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5681

April 1, 1980

CONFLICT OF INTEREST:

Member of Legislature voting on legislation in which spouse may be interested

A member of the legislature is not in a position of conflict of interest when the legislator votes upon legisation in which his or her spouse may have some interest.

Honorable Bill S. Huffman

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion whether there is a conflict of interest between your duties as a Senator and the fact that your wife owns stock in a corporation which leases land to another corporation which has been issued a parimutuel horse racing track license by the State Racing Commissioner.

You advise that your wife, Betty Huffman, owns 80 of 15,000 shares of stock in the Northville Driving Club Corporation. You further advise that the stock was acquired by her with her own funds, that her ownership interest represents less than one percent of the stock of the corporation, and that she is neither a member of the Board of Directors nor an officer of the corporation.

It should be noted at the outset that the corporation in which your wife owns stock is not licensed to conduct racing meets. Instead, it leases its property to Northville Downs, Inc., which does have a harness race meeting license and which either conducts or subleases race meetings on the track owned by and licensed to Northville Driving Club Corporation. Further, it is clear that the corporation in which your wife owns stock is not a party to any contract involving the State of Michigan or any department or agency thereof.

Consideration of the question you have raised must begin with the fact that the 80 shares of the Northville Driving Club Corporation stock involved are owned solely by your wife. A married woman's right to control and ownership of stock is guaranteed by Const 1963, art 10, Sec. 1, which, in pertinent part, provides:

Several opinions of the Attorney General have addressed the question as to possible conflict of interest on the part of a public official which may arise from the activities of his or her spouse. OAG, 1976-1976, No 4869, p 95, 96 (June 4, 1975), held that an individual could properly serve on a county board of commissioners at the same time his spouse served as director of the county's department of social services. That opinion relied upon a previous opinion addressed to Representative David C. Hollister, dated February 3, 1975, which passed on the question whether a member of a board of education was in conflict of interest when his spouse served as an employee of the board and adopted the following test to determine a conflict of interest:

The opinion ruled that the official had no conflict of interest. In so concluding, the opinion pointed out that 1911 PA 196, Sec. 1; MCLA 557.11; MSA 26.171 provided that a married woman in this state shall be entitled to have, hold, retain and enjoy all of her earnings acquired as a result of her personal efforts.

A more recent opinion, dated September 18, 1979, and addressed to the Director of the Department of Management and Budget concerned sponsorship of an amendment to include supplemental funding for a nonprofit housing corporation by a member of the Senate. The Senator's wife held the salaried position of executive director of the nonprofit corporation. That opinion concluded that the Senator's action did not constitute a conflict of interest.

While the activities conducted by the spouse in each of the aforementioned opinions are different than the ownership interest of your wife, the rationale and conclusion of these opinions is applicable to your question. The ownership by your wife of stock in the Northville Driving Club Corporation does not create a conflict of interest which would preclude you from executing your public duties with a fair, impartial and objective judgment.

It is also necessary to consider Const 1963, art 4, Sec. 10 which provides:

1968 PA 318, Sec. 4, MCLA 15.304; MSA 4.1700(24), implements the provisions of Const 1963, art 4, Sec. 10, and states, in part:

There is no violation of either of the constitutional or statutory prohibitions cited above, since there are no contracts between the Northville Driving Club Corporation and the State of Michigan or any of its departments or agencies.

While the Northville Driving Club Corporation is licensed by the State Racing Commissioner to own a parimutuel race track, the license is not a contract. Rhode Island State Fair Association v Racing & Athletics Hearing Board, 80 RI 486; 98 A2d 821 (1953); Morse v Liquor Control Commission, 319 Mich 52; 29 NW2d 316 (1947); Fitzpatrick v Liquor Control Commission, 316 Mich 83; 25 NW2d 118 (1946); Johnson v Liquor Control Commission, 266 Mich 682; 254 NW 557 (1934); Bisco's Inc v Liquor Control Commission, 395 Mich 706; 238 NW2d 166 (1976).

It should be noted that in Bundo v City of Walled Lake, 395 Mich 679; 238 NW2d 154 (1976), and in Bisco's v Liquor Control Commission, supra, the Michigan Supreme Court found that a person holding a liquor license had a property right that entitled an application for renewal of the license to be considered in accordance with rudimentary due process, but neither decision held that the liquor license was a contract. Assuming, arguendo, that a court might find the liquor license to be a contract, only Betty Huffman would have a minor and indirect interest in the contract. ⁽¹⁾

A recent opinion considered the question of conflict of interest in respect to a medical physician, who was serving in the legislature, voting on legislation concerning the substance Laetrile. OAG, 1979-1980, No 5520, p ___ (July 9, 1979), held that a physician was not precluded from voting on legislation relating to the legalization of Laterile when many of his professional colleagues had officially opposed the legalization of the substance. This opinion concluded:

Finally, it is important to note that the Michigan Senate has adopted a rule which prescribes procedures for disclosing matters that involve conflict of interest of a member. Thus, the Senate has established within its own political body procedures that enable a member to file a written disclosure of the logic of his or her voting or disqualification therefrom where a conflict of interest exists. Rule 1.34 of the Senate Rules provides:

It is, therefore, my opinion that the conflict of interest laws are not violated if you vote on legislation that, in general, affects racing in which your spouse may have some interest.

Frank J. Kelley