STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6648

July 3, 1990

LOTTERY, BUREAU OF STATE:

Contracting authority

The Commissioner of the State Lottery does not have the authority to enter into a contract to engage in a public relations campaign that does not directly promote the lottery; any contract entered into for such a purpose is, accordingly, void as exceeding the statutory authority of the Commissioner.

The Commissioner of the State Lottery may not enter into a contract aimed at promoting the lottery if that promotion is directed toward persons under the age of 18; any contract entered into for this purpose is void as being contrary to the public policy established by MCL 432.29; MSA 18.969(29), prohibiting the sale of lottery tickets or shares to such persons.

Honorable Joe Young, Sr.

State Representative

The Capitol

Lansing, MI

Honorable Shirley Johnson

State Representative

The Capitol

Lansing, MI

Honorable Morris Hood, Jr.

State Representative

The Capitol

Lansing, MI

You have requested my opinion with regard to the authority of the Bureau of State Lottery to conduct a public relations campaign. Specifically, you ask whether the Bureau or its agents may contract with a sports celebrity to make appearances at elementary and high schools and in the media to urge young people to stay in school and stay off drugs.

I am informed that your request was prompted by news reports concerning a contract entered into between a Detroit Pistons basketball player, Joe Dumars, and two advertising agencies acting on behalf of the Bureau of State Lottery. I am advised that, in October 1988, the State of Michigan entered into a four year contract with W.B. Doner and Company to provide advertising and related services to the Bureau of State Lottery. That contract requires Doner to prepare an annual media and public relations plan. The contract also allows Doner to enter into subcontracts with Bureau approval. Pursuant to its subcontracting authority, Doner executed a subcontract on December 12, 1989, with Cognos Advertising, Inc., under which Cognos is to act as minority communications agency for the Lottery. On March 6, 1990, Doner and Cognos jointly entered into a three year contract with Joe Dumars Enterprises, Inc. The contract contemplates that Mr. Dumars will participate in radio and television commercials, still photographs, and personal appearances, including four school appearances each year.

Pursuant to the contract, Cognos has prepared a "Public Relations and Advertising Plan featuring Joe Dumars for the Michigan State Lottery."' The Plan's stated objectives are to "[i]mprove the image ofM$L [the Michigan State Lottery] among black citizens"' and to "[e]nhance the overall image of M$L statewide."' The Plan's strategy to accomplish these objectives is to "'[a]ssociate M$L with a public service campaign beneficial to school kids"' and to "[a]ssociate M$L with Joe Dumars of the Pistons."' The Plan contemplates that Mr. Dumars will make personal appearances at schools, urging the students to "'stay in school, stay off drugs and keep your eyes on the prize."' Radio and television advertisements which include a similar message, aimed at teens, are also planned. I am further informed there has been discussion of a plan to provide incentive for children to attend school every day in a given month, with those schools with best overall attendance and those with most improved attendance "winning"' an appearance at the school by Mr. Dumars. In all of the planned activities, the sponsorship of the Lottery would be clearly stated. However, it does not appear that Mr. Dumars will directly promote the sale of lottery tickets in this campaign.

In light of these circumstances, you have asked if the Bureau or its agents have the authority to enter into a contract to carry out this type of public relations campaign. To answer this question, it is necessary to examine the statutory authority conferred upon the Bureau of State Lottery by the Legislature.

On May 16, 1972, the electors ratified 1972 HJR V, thus amending Const 1963, art 4, Sec. 41, to remove the provision that had previously prohibited the Legislature from authorizing a lottery. Shortly thereafter, the Legislature enacted 1972 PA 239, MCL 432.1 et seq; MSA 18.969(1) et seq, to establish and operate a state lottery.

Section 5 of the Act, MCL 432.5; MSA 18.969(5), created the Bureau of State Lottery and the office of Commissioner of the State Lottery. Section 9 of the Act, MCL 432.9; MSA 18.969(9), states:

The Act also creates a state lottery fund, and strictly limits the uses of lottery revenues deposited to that fund. Section 41 of the Act, MCL 432.41; MSA 18.969(41), provides in pertinent part:

Section 43 of the Act, MCL 432.43; MSA 18.969(43), provides:

Thus, the revenues generated by the lottery may be utilized only for payment of prizes and certain liabilities owed to the State by prize winners, and for payment of reasonable expenses incurred by the Bureau in operating the lottery. All remaining funds must be deposited in the state school aid fund for distribution to school districts.

The Commissioner's authority to enter into contracts is set forth in section 18 of the Act, MCL 432.18; MSA 18.969(18), as follows:

Administrative agencies and officers have no common law powers; their powers are limited to those expressly conferred by or necessarily implied by statute. Coffman v State Board of Examiners in Optometry, 331 Mich 582, 590; 50 NW2d 322 (1951). Moreover, public officers may not enter into contracts which are not within the authority granted to them by law. Sittler v Board of Control of the Michigan College of Mining and Technology, 333 Mich 681, 687; 53 NW2d 681 (1952). As the Supreme Court stated in Roxborough v Michigan Unemployment Compensation Commission, 309 Mich 505, 510; 15 NW2d 724 (1944), quoting with approval from 59 C.J., pp 172-173, Sec. 286:

The fact that the purpose of a public officer's actions may be laudatory does not serve to extend his or her authority beyond that conferred by statute. See, e.g., OAG, 1979-1980, No 5591, p 463, 466 (November 13, 1979).

Section 18 of the Act, by its express terms, authorizes the Commissioner to enter into contracts only for the operation of and for the promotion of the lottery. Nothing in this language, nor in any other section of the Act, suggests that the Commissioner has the authority to enter into contracts for public relations campaigns such as a campaign to encourage young people to stay off drugs and stay in school. However laudable such a campaign may be, it simply does not enhance the operation or promotion of the lottery.

This conclusion is especially compelling when section 18 of the Act is read in light of the mandate of section 9, supra, that the lottery "shall produce the maximum amount of net revenues for the state"' and the requirements of sections 41 and 43, supra, which permit the use of lottery revenues only for the payment of prizes and for the reasonable expenses of the Bureau in operating the lottery. In interpreting a statute, pertinent provisions must be considered together to the end that the general plan and purpose of the Legislature must be ascertained and given effect. Melia v Employment Security Commission, 346 Mich 544; 78 NW2d 273 (1956). To permit the use of lottery revenues to conduct a public service campaign unrelated to the actual operation or promotion of the lottery would plainly be contrary to the legislative intent expressed in these sections of the Act and would plainly reduce the net revenues available for deposit in the school aid fund for distribution to school districts.

Moreover, to the extent that the proposed activities are directed toward promoting or enhancing the image of the lottery with school children by including actual appearances at public schools, these activities not only exceed the Commissioner's contracting authority but also directly contravene the public policy expressed in section 29 of the Act, MCL 432.29; MSA 18.969 (29), which provides in pertinent part that "[a] ticket or share shall not be sold to any person under the age of 18. ..."' By means of this provision, the Legislature has established a public policy against participation in the lottery by persons under the age of 18. Promotional activities by the Bureau of State Lottery directed to school children clearly contravene this legislatively established public policy. This conclusion is not altered by the fact that the message may be laudable and include only very brief references to the Bureau of State Lottery. In Mahoney v Lincoln Brick Co, 304 Mich 694, 705; 8 NW2d 883 (1943), the Court quoted 12 Am Jur, Sec. 167, p 664:

It is my opinion, therefore, that the Commissioner of the State Lottery does not have the authority to enter into a contract to engage in a public relations campaign that does not directly promote the lottery; any contract entered into for such a purpose is, accordingly, void as exceeding the statutory authority of the Commissioner. It is my further opinion that the Commissioner of the State Lottery may not enter into a contract aimed at promoting the lottery if that promotion is directed toward persons under the age of 18; any contract entered into for this purpose is void as being contrary to the public policy established by MCL 432.29; MSA 18.969 (29), prohibiting the sale of lottery tickets or shares to such persons.

I am constrained, therefore, to advise you that the public relations and advertising plan prepared by Cognos Advertising, Inc., pursuant to which the Bureau of State Lottery would compensate Mr. Dumars for personal appearances at schools urging students to "stay in school, stay off drugs and keep your eye on the prize,"' is clearly contrary to public policy as expressed by 1972 PA 239, supra. Therefore, the contract in question may not be carried out in its current form.

Frank J. Kelley

Attorney General