Legal Memorandum: Public Officer's Conflict of Interest in Contract

Issue: Under Nebraska law, when does a public official have a conflict of interest in a contract matter?

Nebraska Revised Statutes § 49-14,103.01  states that no village official, or other officer of a municipality, may “have an interest in any contract to which his or her governing body, or anyone for its benefit, is a party” if the individual has a business association with the entity involved in the contract.  Neb. Rev. Stat. § 49-14,103.01(2) (1999).  Any conflict of interest that exists under the terms of this statute renders the contract voidable.  Id.  However, under the statute, a conflict will not exist if the individual discloses his interest prior to the time the contract is officially considered, does not vote on the contract (unless needed to secure a quorum) and does not act for the governing body with regard to performance under the contract.  Id. § 49-14,103.01(3). 

It has been previously determined that a public official should not be disqualified from voting on a particular ordinance or matter if that individual has only a “remote, contingent, and speculative conflicting interest” and that the “decision as to whether a particular interest is sufficient to disqualify is necessarily a factual one and depends upon the circumstances of the case.”  Copple v. City of Lincoln, 202 Neb. 152,167, 274 N.W.2d 520, 528 (1979) (quoting Van Itallie v. Borough of Franklin Lakes, 28 N.J. 258, 148 A.2d 111(1958)).

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