Pecuniary Interest FAQ 2

May a mayor who owns the only automobile dealership in the city sell police squad cars to the city?
Generally speaking, the answer is no with a limited exception. The governing body member risks committing a felony if he or she sells cars to the municipality. Indeed, the officer would be in danger of committing a felony simply by submitting price quotes or a bid to the municipality. Wis. Stat. sec. 946.13 generally prohibits municipal officials from having a private financial interest in a public contract. As a result, local officials are generally prohibited from entering into a contract for goods, services, construction or employment with the municipality.

Specifically, sec. 946.13(1)(b) provides that a public official may not participate in the making of a contract in his or her official capacity if the official has a direct or indirect financial interest in the contract. Since this is a prohibition on official action, abstaining from voting on the contract will prevent violation.

However, sec. 946.13(1)(a) provides that a public official may not in his or her private capacity negotiate or bid for or enter into a contract in which the public official has a direct or indirect financial interest if the official is authorized or required by law to participate in his capacity as such officer or employee in the making of that contract. This latter provision is a prohibition on private action. A public official cannot avoid violating it merely by abstaining from voting. All that is necessary for a violation to occur is that the official be authorized to vote on or exercise discretion with regard to a contract in which the official has a private financial interest and the official has negotiated, bid for, or entered into the contract.
Section 946.13 does not apply to contracts in which receipts and disbursements do not, in the aggregate, exceed $15,000 in any one year. This means that a municipal governing body member can do a total of $15,000 in business with the municipality in any calendar year without violating sec. 946.13. So, the governing body member could sell or lease a car to the municipality without violating sec. 946.13 if the price of the car or the lease payments do not exceed $15,000 annually.