The payment of an indemnity to a state official for an incurred hurt, loss or damage under any provision of law when the same indemnity is available to all private citizens for identical hurts, losses or damages does not constitute a conflict of interest.

ANUlALS : AGRICULTURE: STATE VETERINARIAN: CONFLICT OF INTEREST: The payment of an indemnity to a state official for an incurred hurt, loss or damage under any provision of law when the same indemni t y is available to al l private citizens for identical hurts, losses or damages does not constitute a conflict of interest . December 14, 1973 Honorable John D. Ashcroft State Auditor State Capitol Building Jefferson City, Missouri 65101 Dear Mr. Ashcroft : OPINION NO . 35 l FI LEDI : 3~ I I I L. __ _ This opinion comes in response to a request made by your pre- decessor in office as to whether a conflict of interest arises under the provisions of Sections 105.490 or 105.495, RSMo 1969 , when the state veterinarian certifies for payment an indemnity claim for personally owned livestock under the Brucellosis Control and Eradication Law, Sections 267 .4 70 et seq., RSMo 1969, or the Livestock Disease Control and Eradication Law, Sections 267 .560 et seq. , RSMo 1969 . The facts underlying this opinion request are as follows : 1 . In conjunction with a cooperative agreement entered into between the Missouri Department of Agriculture and the United States Department of Agriculture , the Missouri Department of Agriculture set up a brucellosis eradication program under the provisions of the Livestock Disease Control and Eradication Law. Under this program , the following standards were set forth by the United States Department of Agriculture , the Missouri Department of Agriculture, and the State Veterinarian governing the payment of indemnities on animals exposed to or infected with brucel l osis : "A. Reactor Animals 1. 2. $50.00 on grade animals (including grade bulls) $100.00 on registered animals (reg- istration certificate must accompany indemnity claim) Honorable John D. Ashcroft 3 . If owner requests , young calves on reactor cows may also be branded and indemnified in the amount of $50 . 00 and shipped to slaughter. (This is to facilitate the imme- diate removal of all reactor ani- mals and eliminate the requests to retain a reactor animal until her calf reaches weaning age . ) 4. Indemnity is available to Missouri owners on brucellosis reactors dis- closed at livestock markets . To facilitate processing and payment of claims, forward one completed set and one blank set of ANI! Form 1-23 , both signed by the owner and the veterinarian . The ANH Form 1-27 is to be completed and attached to the Mo . DAV-11 or to the ANH Form 4-33. Reactors are to be tagged and branded and consigned to slaugh- ter. One market to market movement will be allowed. 5. Appraisal of animals is not required in view of established indemnities paid. 6. Indemnity claims for reactor animals are to be submit ted on separate ANI! Form 1-23 from negative exposed animals. "13 . Suspect Animals Same as above "C . Exposed Animals 1. Complete herd depopulations Entire breeding herd (including re- placement heifers) will be branded and indemnified . 2. Partial depopulations Negative animals, culled from an in- fected herd may be branded and indem- nified (as a reactor animal) and shipped to slaughter along with the -2- Honorable John D. Ashcroft reactors, with prior approval from the State Veterinarian's office. "D . All animals for which indemnity is claimed , will be branded and tagged and shipped to slaughter within 15 days . " E. Branding on the farm may be waived if animals move under direct supervision to a slaughtering establishment. 1 . Branding of all reactors, suspects, and negative exposed animals is the responsibility of the District Veter- inarian . However, whenever mutual l y agreed upon , may be performed by the practicing veterinarian on a fee basis . "F . Cattle which have moved interstate will be eligible for indemnity providing: They have been in Missouri for a minimum of 30 days , and the owner has evidence of a negative brucel- losis test conducted by an approved laboratory within 30 days of entry. "G. At the time the required quarantine is is- sued on all reactor herds , the herd owner is to be reminded that no quarantined ani- mals are to be removed without shipping permit to slaughter or prior approval of the State Veterinarian. Refer to Paragraph C 2 on partial depopu- lation . "II. Where Federal funds are involved , require- ments of CFR , Part 51, shall be met. " I. All claims and allied papers are to be submitted to : USDA [United States De- partment of AgriculturEij, API-IS [Animal and Plant Health Servicv , VS [Veterinary Ser- vice~ , Box 1027, Jefferson City, Missouri 65101. " -3- Honorable John D. Ashcroft 2. If the presence of brucellosis were detected or suspected in a herd , it would be tested for brucellosis by a deputy state veterinarian . Blood samples would be drawn from individual animals and forwarded to a state laboratory for testing. The testing pro- cedure at the laboratory involves a two-step process . The blood sample is initially subjected to a "screen" test . I f there is a negative reaction to this test , the test is concluded and the animal from which the sample was taken is determined not to be a diseased animal . However , if there is a positive reaction to the "screen" test , a secondary test is conducted on the sample. A positive reaction to the second test as well as the first means the animal from which the sample was taken is a reactor or a positive carrier of brucellosis . A negative reaction to the second test along with a positive reaction on the first test means that the animal is a suspected carrier of brucellosis. 3. If it were determined by testing that any animals in a herd were carriers of brucellosis, the entire herd was placed under quarantine for a certain period. The entire herd could then be branded as reactors and slaughtered and indemnified . If this step were not taken , a l l of the reactor animals and suspect animals would be segregated and slaughtered and indemnified . At the end of the quarantine period , blood samples would again be taken from the remaining animals in the herd and forwarded to a state labo- rator y for testing . If no carriers of brucellosis were detected , the quarantine of the herd would be lifted. 4 . If , for any reason , the herd owner wished to sell some or all of the exposed animals in a quarantined herd , i .e., ani- mals which had been exposed to brucellosis but tested negative on the "screen" test, he would be allowed to sell them for slaugh- ter and claim an indemnity as long as they were branded as reac- tors . In order to accomplish this, the herd owner would contact the deputy state veterinarian in his area who would then telephone the state veterinarian for authorization. Authorization was al- ways given when requested and a form "permission to move" such livestock was issued . 5. Indemnities were uniformly paid by the Department of Ag- riculture to all owners who slaughtered their reactors, suspect animals, and exposed animals under quarantine . 6 . During the period of October , 1971 through September, 19 72 , the state veterinarian received appropriately $14,000 in indemnity payments for personally owned cattle which were slaugll- tered under the provisions of the brucellosis eradication program . Indemnities were claimed on approximately 279 head of personally owned cattle, 163 of which were determined to be positive carriers -4- Honorable John D. Ashcroft or reactors , 17 of which were determined to be suspect carriers, and 99 of which were exposed cattle belonging to herds under quar- antine. A discussion of the principl es of law surrounding the payment of indemnities to state officials would be in order at this point. Our research docs not disclose any statute which express l y forbids the payment of an indemnity to a state official. The only possi- ble restrictions would be the provisions of the conflict of in- terest laws, Sections 105 . 490 or 105.495 , RSMo 1969 . Section 105.490 , in pertinent part , reads: "1. No officer or employee of an agency shall transact any business in his official capacity with any business entity of which he is an officer , agent or member or in which he owns a substantial interest ; nor shall he make any personal investments in any enterprise which will create a substantial conflict between his private interest and the public interest , nor shall he or any firm or business entity of which he is an officer , agent or member , or the owner of substantial interest , sell any goods or ser- vices to any business entity which is licensed by or regulated in any manner by the agency in which the officer or employee serves." Section 105.495 , in pertinent part, reads: " No officer or employee of an agency shall enter into any private business transaction with any person or entity that has a matter pending or to be pending upon which the officer or em- ployee is or will be cal l ed upon to render a decision or pass judgment. If any officer or employee is already engaged in the business transaction at the time that a matter arises, he shall be disqualified from rendering any decision or passing any judgment upon the same . " It seems clear that the purpose of these provisions is to pre- vent an individual from transacting business between himself as an individual and an agency in which he holds official capacity and to prevent business transactions between an official and a private enterprise which has matters pending before his agency. The ques- tion then is whether the payment of an indemnity to a state offi- cial constitutes a "business transaction" as that term is used in the conflict of interest laws . - 5- Honorable John D. Ashcroft A business transaction can best be defined as the engagement in the purchase or sale of commodities or service . In its purest sense, an indemnity is simply compensation for an incurred hurt, loss or damage . When an event occurs which would entitle a state official to the payment of an indemnity by the state in the same manner as any other citizen of this state , we fail to see that such compensation would constitute a "business transaction. " The key is uniform application of the indemnity provisions under the law. The indemnity payment must be authorized by stat- ute or lawfully constitut ed regulation , and the state official in- volved cannot have exercised his discretion so as to allow himself the payment of an indemnity where none would be allowed to a pri- vate citizen . Applying these principles to the facts at hand , we are of the opinion that the state veterinarian did not violate the conflict of interest laws by presenting his claim for and accepting indem- nity payments for privately owned cattle which were slaughtered pursuant to the brucellosis eradication program. In reaching this conclusion, we are mindful of the potential for abuse in this par- ticular matter because of the powers and duties of the state veter- inarian . IIowever , we have not been presented with any information which would lead us to believe that the state veterinarian acted in his official capacity in a manner calculated to increase his personal fortunes at the expense of the state . We have found noth- ing in the Missouri law which would prevent the state veterinarian from owning and raising cattle in his individual capacity. When an event occurs which would entitle him to the payment of an in- demnity by the state , we fail to see that seeking and accepting such compensation would constitute a conflict of interest. CONCLUSION It is the opinion of this office that the payment of an in- demni t y to a state official for an incurred hurt, loss or damage under any provision of law when the same indemnity is available to all private citizens for identical hurts, losses or damages does not cons t itute a conflict of interest. The foregoing opinion , which I hereby approve, was prepared by my assistant , Richard L. Wieler . ~ e~y ~2-.(_zt JOHN C. DANFORTH Attorney General - 6-