Would there be any conflict of interest if an employee of a company which has in the past sold material to a suburban water improvement district were to serve on the board of that water improvement district? 14-92-207 14-92-208 14-92-221. ANSWER: Yes, a conflict exists, but seek court approv

STATE OF ARKANSAS OFFICE OF THE ATTORNEY GENERAL wT, 201 EAST MARKHAM STREET | STEVE CLARK HERITAGE WEST BUILDING ATTORNEY GENERAL LITTLE ROCK, ARKANSAS 72201 Se: _ (501) 371-2007 Opinion No. 86-156 July 22, 1987. Senator Bill-Walters P.O. Box 280 ‘y Greenwood, Arkansas 72936 Dear Senator Walters: This is in response to your opinion request wherein you question whether there would be any conflict of interest if an employee of a company that has supplied material to a suburban water improvement district serves on the board of said water improvement district. Ark. Stat. Ann. §20-703(c) in part, provides that: No Commissioners, nor the Board of Commissioners, shall be financially interested, directly or indirectly, in any firm, corporation or association from which any. property, services, materials or facilities are purchased, acquired, or received by donation for the District; unless such is first submitted to and approved by. the court having original jurisdiction under which the District was organized; nor shall any Commissioners, or the Board of Commissioners, enter, into any contract with, or accept a donation of property” or facilities from, any person or persons with whom they are directly or indirectiy engaged in business without court approval as aforesaid.(Emphasis added) A similar conflict of interest provision pertaining to county officials, Ark. Stat. Ann. §17-4208, was the subject of Arkansas Attorney General's Opinion No, 85-101 (1985), which is attached hereto and should be read with reference to this opinion. We view Ark, Stat. Ann, §20-703(c) as we did Ark. Stat. Ann. §17-4208 in the aforementioned opinion, The Honorabie Bill Waiters Opinion No. 86-156 July 22, 1987 Page 2 in that it is not only directed at dishonor but also conduct that tempts dishonor. A situation of this nature is frought with temptation. An impairment of impartial judgment can occur in even the most well-meaning person whether that person's interest in the contract made by the board is direct or indirect. By the ‘terms of Ark, Stat. Ann. §20-703(c)}, and the facts presented to us in your opinion request, it is our opinion that a conflict of interest does exist. However, provided for in §20-703(c) is a procedure in which approval can be issued regarding the specific transaction in question by the court having original jurisdiction under which the District was organized. For your information I have attached a copy of said procedure as set out in the above-mentioned statute. The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General C. Kent Jolliff, . Attorittey General JSC: CKJ: pf£r