TO BE PUBLISHED IN THE OFFICIAL REPORTS


                            OFFICE OF THE ATTORNEY GENERAL

                                      State of California


                                      DANIEL E. LUNGREN

                                        Attorney General


                          ______________________________________

                  OPINION            :
                                     :          No. 94-207
                  of                 :
                                     :          May 13, 1994
        DANIEL E. LUNGREN            :

           Attorney General          :

                                     :

         CLAYTON P. ROCHE            :

        Deputy Attorney General      :

                                     :

______________________________________________________________________________

          THE HONORABLE LOUISE RENNE, CITY ATTORNEY, CITY AND COUNTY
OF SAN FRANCISCO, has requested an opinion on the following question:

                May the San Francisco Art Commission consider and approve the architectural design
for a terminal at the San Francisco International Airport as required by the city charter if (1) the
contract for the design was awarded to an architectural firm chosen by the San Francisco Airports
Commission and (2) the architectural firm has as a partner an architect who is also a member of the
San Francisco Art Commission?

                                           CONCLUSION

                The San Francisco Art Commission may not consider and approve the architectural
design for a terminal at the San Francisco International Airport as required by the city charter if (1)
the contract for the design was awarded to an architectural firm chosen by the San Francisco
Airports Commission and (2) the architectural firm has as a partner an architect who is also a
member of the San Francisco Art Commission.

                                            ANALYSIS

               Section 1090 of the Government Code1 provides in part:

               "Members of the Legislature, state, county, district, judicial district, and city
       officers or employees shall not be financially interested in any contract made by
       them in their official capacity, or by any body or board of which they are members."



   1
    All references hereafter to the Government Code are by section number only.

                                                  1.                                               94-207

We are asked to determine whether a violation of section 1090 would occur in a situation where the
public official with the financial interest is not responsible for awarding the contract. The San
Francisco Airports Commission has awarded a contract to an architectural firm to design a new
terminal at the San Francisco International Airport. The firm employs 700 architects and has
approximately 20 partners. Under section 3.601 of the San Francisco City Charter, the design must
be approved by the San Francisco Art Commission. If the latter fails to approve the original design,
a new design must be submitted at no further cost to the city until one satisfactory to the commission
is tendered. One of the members of the art commission is an architect who is a partner in the firm.
He is responsible for all of the firm's work in the area of urban design and planning.         The issue
to be resolved is whether the architect, as a member of the art commission, would violate section
1090 by having to approve the design submitted by his firm. We conclude that he must resign from
the commission before it considers the design of the airport terminal.

               In 76 Ops.Cal.Atty.Gen. 118 (1993), we summarized the general requirements of
section 1090 as follows:

               ". . . Section 1090 is concerned with financial interests, other than remote or
       minimal interests, which would prevent officials from exercising absolute loyalty and
       undivided allegiance in furthering the best interests of their public agencies. (See
       Stigall v. City of Taft (1962) 58 Cal. 2d 565, 569.) Moreover, when section 1090 is
       applicable to one member of the governing body of a public entity, the proscription
       cannot be avoided by having the interested member abstain; the entire governing
       body is precluded from entering into the contract. (Thomson v. Call (1985) 38
Cal. 3d 633, 647-649; Stigall v. City of Taft, supra, 58 Cal.2d at p. 569; City of
       Imperial Beach v. Bailey (1980) 103 Cal. App. 3d 191, 197; 70 Ops.Cal.Atty.Gen. 45,
       48 (1987); 69 Ops.Cal.Atty.Gen. 102, 104 (1986).) A contract which violates
       section 1090 is void. (Thomson v. Call, supra, 38 Cal.3d at p. 646.)" (Id., at p. 119;
       fn. omitted.)

                In a recent informal opinion (Cal.Atty.Gen., Indexed Letter, No. IL 92-1212 (Jan. 26,
1993)), we concluded that a former member of a city planning commission would violate section
1090 if he were to enter into a contract with the city to be a consultant with respect to the city's
general plan revision. While he was still a commission member, the planning commission had
adopted a policy to use consultants instead of staff members for the plan revision. This policy was
adopted in a somewhat segmented fashion through approval of budget allocations during prior fiscal
years and various discussions held by members of the planning commission and its subcommittees.
In determining that the consulting contract would be "made" by the former commissioner in his
official capacity for purposes of section 1090, we stated:

               "The critical test for determining whether section 1090 has been violated is
       whether an officer or employee has participated in the making of a contract in his or
       her official capacity. (Millbrae Assn. for Residential Survival v. City of Millbrae
       (1968) 262 Cal. App. 2d 222, 237; 66 Ops.Cal.Atty.Gen. at 160-161.) `[T]he statute
       not only strikes at situations that do involve actual fraud and dishonesty but also at
       those in which such is absent but in which the possibility exists nonetheless for
       personal influence of an interested [officer] to be brought to bear, either directly or
       indirectly, on an official decision. [Citations.]' (66 Ops.Cal.Atty.Gen. at 160, fn. 3.)

              "In People v. Sobel (1974) 40 Cal. App. 3d 1046, 1052, the court outlined the
       broad reach of section 1090:



                                                  2.                                              94-207

               `The decisional law, therefore, has not interpreted section
       1090 in a hypertechnical manner but holds that an official (or a public
       employee) may be convicted of violation no matter whether he
       actually participated personally in the execution of the questioned
       contract, if it is established that he had the opportunity to, and did,
       influence execution directly or indirectly to promote his personal
       interests.'

In Millbrae Association for Residential Survival v. City of Millbrae, supra, 262
Cal.App.2d at 237, the court defined the `making' of a contract to include the
preliminary discussions, negotiations, compromises, reasoning, planning, drawing
of plans and specifications, and solicitation for bids.

        "Section 1090's prohibition applies regardless of whether the contract is
found to be fair and equitable (Thomson v. Call (1985) 38 Cal. 3d 633, 646-649) or
the official abstains from all participation in the decision to contract (Fraser-Yamor
Agency, Inc. v. County of Del Norte (1977) 68 Cal. App. 3d 201, 211-212). In
Thomson a city mayor was found to have violated section 1090 despite his selective
abstentions on votes concerning the acquisition of his property by the city, upon
advice he received from his city attorney. The court refused to segment the
`transaction' as urged by the mayor to preclude a violation of section 1090.

        "Section 1090 applies to persons in advisory positions to contracting
agencies. (City Council v. McKinley (1978) 80 Cal. App. 3d 204, 212-213; Schaefer
v. Berinstein (1956) 140 Cal. App. 2d 278, 291-292.)

         "In Stigall v. City of Taft (1962) 58 Cal. 2d 565, 569-571, the court concluded
that where a councilman had been involved in the preliminary stages of the planning
and negotiating process but had resigned from the council prior to its vote on the
contract, he nonetheless had been involved in the `making' of the contract. In City
Council v. McKinley, supra, 80 Cal.App.3d at 212, the court followed this reasoning,
stating:

               `. . . The negotiations, discussions, reasoning, planning, and
       give and take which go beforehand in the making of a decision to
       commit oneself must all be deemed to be a part of the making of an
       agreement in the broad sense [citation] . . . . If the date of final
       execution were the only time at which a conflict might occur, a city
       councilman could do all the work negotiating and effecting a final
       contract which would be available only to himself and then present
       the matter to the council, resigning his office immediately before the
       contract was executed. He would reap the benefits of his work
       without being on the council when the final act was completed. This
       is not the spirit nor the intent of the law which precludes an officer
       from involving himself in the making of a contract.'

       "In 66 Ops.Cal.Atty.Gen. 156, we concluded that county employees who
proposed that their functions be accomplished through private consulting contracts
were barred from contracting with the county to perform such services. We stated:

              `We are told that the persons involved, while employees of
       the county and as employees of the county, have provided input in the

                                          3.                                              94-207

               formulation of the contract . . . . By that participation in the give and
               take that went into such "embodiments" of the contract and drawing
               of plans and specifications, the county employees had the opportunity
               to, and did bring their influence to bear on the ultimate contract itself.
               While no fraud or dishonesty may have been involved, we are
               nonetheless satisfied that in so doing they participated, not in their
               personal capacities but in their official ones as county employees, in
               the `making of the contract' within the meaning of section 1090 . . .
               .' (Id. at p. 160.)"

              We have consistently determined that any modifications to a contract would also fall
within the proscription of section 1090. (See 65 Ops.Cal.Atty.Gen. 305, 308-309 (1982); 3
Ops.Cal.Atty.Gen. 333, 334 (1944); Cal.Atty.Gen., Indexed Letter, No. IL 87-601 (June 8, 1987).)

                With these various conclusions, principles, and interpretations in mind, we turn to
the awarding of the San Francisco airport terminal contract. The art commissioner here would be
financially interested in the contract as a partner in the architectural firm even if the art commission
were to approve the first proposed design submitted. As a partner, he would share in any profits
from the contract. Should the art commission reject the first design, under the terms of the contract
the firm's profits would necessarily be reduced as each new design was submitted to the art
commission for approval.

                 While the commissioner would clearly have a financial interest, the question remains
whether the contract would be "made" by him as a member of the art commission for purposes of
section 1090. If the contract for the design were examined in isolation up to the time of its award,
we might conclude that the commissioner would not be in violation of the statute. The contract
would only be "made" by the airports commission, the awarding body. Such an approach, however,
is neither realistic nor in accord with the case law. The "making" of a contract within the meaning
of section 1090 is not to be given a hypertechnical meaning; all the facts and circumstances
surrounding the contract are to be examined. Essentially, if it is determined that an official
participated in the transaction, taken in its totality, and it would or potentially could affect his
personal financial interests, then the official would fall within the section 1090 proscription. (See
Thomson v. Call, supra, 38 Cal. 3d 633, 647-649.)

                Here, the approval of the design services by the art commission is part of the original
contract. The transaction may not be segmented into two steps. Although the contract was awarded
by the airports commission, it was not merely for a design, but for a satisfactory design. The art
commission will in essence determine the ultimate terms and conditions of the contract, that is, what
constitutes a satisfactory design. As such, art commission members may be said to be participants
in the making of the contract.

               The function of the art commission may be likened here to determining whether the
original contract should be affirmed or modified. If the original design is satisfactory, the
commission in effect will affirm the original contract, thus participating in its "making." If the
original design is not satisfactory, the contract will essentially be "modified" by a new design
approved by the art commission, thus again making the art commissioners participants in the
contract's execution. (See, e.g., 65 Op.Cal.Atty.Gen., supra, 308-309.)

                In sum, the basic transaction here is the submission by the architectural firm of a
satisfactory design for a new airport terminal. The commissioner in question will participate in the
transaction through his commission's review and approval of the design. To conclude otherwise


                                                  4.                                            94-207

would give section 1090 a strict, hypertechnical construction which would be contrary to the
consistent and longstanding approach taken by the courts and this office.

              Having concluded that section 1090 would otherwise be applicable herein, we must
consider whether one of the sanctioned "remote interests" contained in section 1091 would allow
the art commission to approve the contract without first requiring the resignation of one of its
members. Section 1091 states:

                   "(a) An officer shall not be deemed to be interested in a contract entered into
          by a body or board of which the officer is member within the meaning of this article
          if the officer has only a remote interest in the contract and if the fact of that interest
          is disclosed to the body or the board of which the officer is a member and noted in
          its official records, and thereafter the body or board authorizes, approves, or ratifies
          the contract in good faith by a vote of its membership sufficient for the purpose
          without counting the vote or votes of the officer or member with the remote interest.

                  "(b) As used in this article, `remote interest' means any of the following:

                  ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                 "(11) That of an engineer, geologist, or architect employed by a consulting
          engineering or architectural firm. This paragraph applies only to an employee of a
          consulting firm who does not serve in a primary management capacity, and does not
          apply to an officer or director of a consulting firm.

                  ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "

We believe that section 1091's remote interest exception for consultants is inapplicable in the present
circumstances. The art commissioner with the financial interest in the airport terminal contract may
be "employed" by the architectural firm; however, he is also a partner in the firm. Hence, he is not
only an employee, but an owner.2 Also, he serves in a primary management capacity as the design
quality partner responsible for all of the firm's work in the area of urban design and planning. The
interest of the art commissioner here thus does not meet the requirements for the remote interest
exception of subdivision (b)(11) of section 1091.3

                In answer to the question presented, therefore, we conclude that the San Francisco
Art Commission may not consider and approve the architectural design for a terminal at the San
Francisco Airport as required by the city charter if (1) the contract for the design was awarded to an
architectural firm chosen by the San Francisco Airports Commission and (2) the architectural firm
has as a partner an architect who is presently a member of the San Francisco Art Commission.

                                                                *****




   2
       We are informed that his partnership interest is approximately five percent.
   3
     Whether the architectural firm in question may be considered a "consulting" architectural firm
in the circumstances presented for purposes of section 1091, subdivision (b)(11) is beyond the scope
of this opinion.

                                                                      5.                                             94-207