In looking at the decision, it’s quite a bit to digest, but to answer the question about conflicts of interest moving forward, we look to the conclusions of the majority..
We agree and reformulate the questions presented by the Governor’s request into one question as follows:
Whether Article III, § 12 prohibits all contracts between legislators and the State.
This case presents an appropriate instance to exercise our advisory opinion jurisdiction under Article V, § 5. The current state of our decisional law concerning Article III, § 12 is not sustainable. Our holdings in Asphalt Surfacing and Pitts, which equated general appropriation for ordinary and current expenses with legislative authorization to enter into specific contracts, are contrary to well established constitutional limits on general appropriation legislation set out in Article XII, § 2 and our cases. These holdings expressed in Asphalt Surfacing and Pitts are, therefore, overruled.
Our answer to the Governor’s restated question whether Article III, § 12 prohibits all contracts between legislators and the State is: No, it does not. The contract restriction stated in Article III, § 12 is not a categorical bar on all contracts funded by the State. Instead, it prohibits a legislator, or former legislator within one year following the expiration of the legislator’s term, from being interested, directly or indirectly, in contracts that are authorized by laws passed during the legislator’s term. The purpose and effect of general appropriation legislation is restricted to simply allocating money to fund state government; it does not, itself, authorize specific contracts relating to ordinary or current expenses.
Big change is that while it would allow Kevin Jensen to benefit indirectly, if his wife’s business is being paid through the state as an expense through the general appropriations bill, it would now not be considered a conflict of interest under the constitution.
However, because the COVID money appropriated through the CARES act involved separate legislation, the court is holding that their decision in Noem “correctly prohibited legislators from participating in contracts relating to the grants the Legislature had authorized.” So, the unfortunate Castleberry situation would not have been prevented.
End result? I think this is going to open up a number of people to run for the legislature who had been barred or thought they may be barred previously because of how they’re paid, or who pays them.
In speaking with Senate President Pro Temp Lee Schoenbeck about what this means, which it seems this decision is going to take a lot of digesting before we see if it prompts more candidates to run, Senator Schoenbeck was complimentary towards the Governor in this challenging process noting “Governor Noem gets huge credit for taking the heat for leaving vacancies open until this was resolved – and you can quote me on that.”
It sounds as if we’re going to see some legislation coming that may clarify the decision, such as “how does it affect state employees?” But this decision is sure to bring many changes to the bank from which parties can draw candidates from.