The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL

CHARLES MOLONY CONDON
ATTORNEY GENERAL

September 14, 1995

I

I The Honorable Harold Gene Worley

I Member, House of Representatives

P. 0. Box 296
North Myrtle Beach, South Carolina 29582

Dear Representative Worley:

You have asked whether a county school superintendent can continue to serve upon
indictment for common law misconduct in office. As I understand the situation, the
underlying facts of the indictment allege that the superintendent unlawfully "rigged" or
"fixed" bids in contravention of state law. The Indictment specifically charges the
following facts:

[t]hat Gary Smith and Richard Heath, while public officers

and public officials holding positions of public trust and
having a duty of accountability to the people of Horry County
and the State of South Carolina imposed by the common law
and statutory laws upon public officers and assumed by them
as a matter of law upon their entering public office, did in
Horry County between September, 1993 and January, 1995
breach that duty in that Gary Smith and Richard Heath did
knowingly, willfully, dishonestly and corruptly violate the
procurement laws of the State of South Carolina and of the
Horry County School District by "fixing bids" in the purchase
of computers, thereby, damaging the integrity of the School
District and the bidding process. Further, Gary Smith and
Richard Heath did receive and accept gratuities of travel and
lodging from favored vendors in violation of Section 8-13-720
of the State Ethics Act, all being against the peace and dignity

REMBERT c. DENNIS Bull.DING • POST OFFICE Box 11549 • COLUMBIA, S.C. 29211-1549 • TELEPHONE: 803-734-3970 • FACSIMILE: 803-253-6283
 The Honorable Harold Gene Worley
Page 2
September 14, 1995

of the State of South Carolina and the Common Law in such

cases made and provided.

Article VI, Section 8 of the South Carolina Constitution (1895 as amended)

provides in pertinent part:

[a]ny officer of the State or its political subdivisions,

I except members and officers of the Legislative and Judicial

Branches, who has been indicted by a grand jury for a crime
involving moral turpitude or who has waived such indictment
I if permitted by law may be suspended by the Governor, until
he shall have been acquitted. In case of conviction the office
shall be declared vacant and the vacancy filled as may be
provided by law. (emphasis added)

This Office has often concluded that a county school superintendent is an officer. ~
Atty. Gen. August 9, 1991, affirming Op. Attv. Gen. April 5, 1991; Op. Attv. Gen.
February 27, 1991. It makes no difference whether the superintendent is appointed or
elected; he is still an officer. Thus, the question is whether the indictment charges a crime
of moral turpitude. It is my conclusion that it does.
'

~ Here, the Indictment alleges the dishonest and corrupt "fixing of bids" in the
purchase of computers for the school district. Moreover, the Indictment contends that
there occurred a violation of S.C. Code Ann. Sec. 8-13-720, as part of the alleged
misconduct in office. Section 8-13-720 proscribes any public official, public member or
public employee from soliciting or receiving "money in addition to that received by the
public official, public member or public employee in his official capacity for advice or
assistance given in the course of his employment as a public official, public member or
public employee." In this instance, the Indictment charges that the superintendent received
and accepted certain gratuities from favored computer vendors.

As our Supreme Court has previously held, "moral turpitude" is defined as

an act of baseness, vileness, or depravity in the private and

social duties which a man owes to his fellow man, or to
society in general, contrary to the accepted and customary rule
of right and duty between man and man ... . Moral turpitude
implies something immoral in itself, regardless of whether it
is punishable by law as a crime....
 The Honorable Harold Gene Worley
Page 3
September
,
14, 1995

State v. Horton, 271 S.C. 413, 414, 248 S.E.2d 263 (1978); Op. Atty. Gen., February 9,
1995. It does not appear that this Office has ever considered the issue of whether offenses
involving the fixing of bids are crimes of moral turpitude.

However, in O'Halloran v. DeCarlo, 162 N.J.Super. 174, 392 A.2d 615 (1978), the
Court held that a count in an indictment for "wi11fully and knowingly" conspiring "to
pervert the due administration of the laws of the State of New Jersey pertaining to the
requirements for public advertisement for bids and public bidding in public contracts" and
I "to violate the criminal laws of the State of New Jersey pertaining to the misconduct in
office of public officials" constituted moral turpitude. The lower court, which the
I referenced decision affirmed, stated the public policy considerations underlying this
conclusion as follows:

[t]his "partnership in criminal purposes" to violate the public

bidding laws is in itself a fraud upon the State. The public's
right to the benefits of public advertising and bidding were
defeated, other contractors were cheated of their right to equal
bidding opportunity, and the public was cheated of its right to
have public officials conduct its affairs with propriety and in
accordance with law.

156 N.J.Super. 249, 383 A.2d 769, 771 (1978). While the actual charge in these cases
was a conspiracy to commit the offense, the result would undoubtedly be the same as to
the substantive crime.

Moreover, the Indictment alleges a violation of the State Ethics Act wherein it is
contended that the Superintendent accepted certain gratuities from vendors. Violation of
a statute which proscribes the retention of fees or compensation in addition to those
allowed by law has been held to constitute a crime of moral turpitude. In State ex rel.
Griffm v. Anderson, 230 P. 315, 317 (Kan. 1924), for example, the Supreme Court of
Kansas stated:

[w]e hold that the law forbidding a public officer to retain any
reward other than that allowed by law for doing anything
appertaining to his duties as such, both in its general scope
and as applied to the situation here presented, involves
turpitude, within the meaning of the phrase as used in the
statute quoted.
The Honorable Harold Gene Worley
Page 4
September 14, 1995

In view of the foregoing, it is my opinion that the Indictment charges a crime of

moral turpitude and thus the Governor is empowered to suspend the individual in question
pursuant to his constitutional authority.

You have also asked whether the school board is authorized to retain an attorney
to represent the superintendent in the foregoing prosecution, or to pay the costs of the
superintendent's legal defense in those criminaJ proceedings. I am enclosing a copy of
an opinion of this Office, dated February 15, 1985 which discusses at length the authority
of a political subdivision to employ independent counsel to represent a particular member
of the body. There, we specifically noted that a public body may not employ counsel or
pay counsel with public funds as to matters in which the body is not directly interested
or which involved a private purpose. QR. at p. 4. Express statutory authority is necessary
for expenditure of public funds in criminal proceedings (e.g. public defender).

By analogy, S.C. Code Ann. Sec. 1-7-50 only permits the State to pay for the
defense of government employees in criminal actions if they acted in "good faith".
Where, however, a grand jury has returned an indictment against a public official, this
Office has concluded that Section 1-7-50 does not apply. We have previously stated:

... our Office has often taken the position that no defense will
be provided where a judicial forum has made a finding of
probable cause [which an indictment is] since this runs counter
to the "good faith" finding specified in the statute. Under
those circumstances, the employee is primarily responsible for
selecting an attorney to provide a defense and for payment of
any attorney fees and costs.

Letter from Nathan Kaminski, Executive Assistant for Administration, to Sally M. Walker,
dated September 2, 1993. While Section 59-17-110 permits school districts to employ
counsel in criminal proceedings for acts done in good faith in the course of employment,
the grand jury here has found probable cause of "fixing bids", which would be clearly
beyond the scope of a superintendent's duties. People v. Mehilic, 504 N.E.2d 1310.

Moreover, case law supports the idea that the payment of public funds for the
defense of a public official in a criminal action is not an expenditure for a public purpose,
but a private one. Holtzendorff v. Housing Authority of Los Angeles, 250 Cal.App.2d
596, 58 Cal.Reptr. 886 (1967); Bowling v. Brown, 57 Md.App. 248, 469 A.2d 896 (1984).
See also, Anderson v. Baehr, 265 S.C. 153, 217 S.E.2d 43 (1975) [legislative findings of
public purpose usually necessary]. In Bowling v. Brown, supra, the Court found that
The Honorable Harold Gene Worley
Page 5
September 14, 1995

reimbursement of the town manager and town engineer for attorney expenses in defense
against charges of official misconduct was not for a public purpose. The Court cited
numerous authorities in support of this position:

[i]t is generally agreed that a municipality has no power to

reimburse a town official for his expenses incurred in
defending himself from charges of official misconduct. Board
of Chosen Freeholders v. Conda, 164 N.J.Super. 386, 396
A2d 613 (1978); ~ 3 McQuillen, Municipal Corporations
(3d ed. 1973 rev.), § 12.137. The rationale behind the rule is
that such an indebtedness against a city would constitute the
application of money to an individual and not to a city
purpose. See,~ Chapman v. New York, 168 N.Y. 80, 61
N.E. 108 (1901). The general rule in Maryland is that public
funds of municipalities cannot properly be devoted to private
uses, even when expressly authorized by the legislature. City
of Frostburg v. Jenkins, 215 Md. 9, 136 A2d 852 (1957);
Wilson v. Board of County Commissioners, 273 Md. 30, 327
A.2d 488 (1974).

Continuing, the Court in Bowling recognized:

[a] New Jersey case presented a fact situation similar

to that in the instant case. See Township of Manalapan v.
Loeb, 126 NJ.Super. 277, 314 A2d 81, aft'd per curiam 131
N.J.Super. 469, 330 A.2d 593 (1974). The case involved a
complaint by a township for a declaratory judgment as to
whether it was authorized to pay for legal expenses incurred
by certain of its officers defending against an indictment
handed down by a grand jury. A town committeeman had
been charged with using a telephone credit card for personal
calls and incurring expenses in excess of $200.00 which was
paid from township funds. The town mayor and town
business administrator were charged with having knowledge
of the improper use of the credit card and failing to take the
necessary steps to see that the township was reimbursed for
the amount of the calls. The indictment was dismissed against
the mayor and administrator, and a jury found the
committeeman not guilty. In spite of the favorable
 The Honorable Harold Gene Worley
Page 6
September 14, 1995

termination of the legal proceedings, the court in the

declaratory judgment action held that the township was not
authorized by statute or otherwise to indemnify its municipal
officers for the cost of defending against a criminal indictment
charging them with what amounted to official misconduct.
314 A.2d at 83 citing 56 Am.Jur.2d, Municipal Corporations,
Etc., § 208, at 266, and 64 C.J.S., Municipal Corporations,
§ 183, at 34L In reference to Defendants' 'public purpose'
I argument in the present case, this Court adopts the words of
the Manalapan court: 'Here, under no circumstances can it be
I said that the acts charged against ... [the town employees] in
the indictment were for the benefit of the municipality." 314
A.2d at 82.

469 A.2d at 902.

In conclusion, it is our opinion that the Indictment charges an officer with a crime
of moral turpitude and, thus the Governor may suspend in this instance. Secondly, it is
also our opinion that a political subdivision, such as a school district, is without authority
to pay an employee's expenses of representation in a criminal proceeding. The foregoing
I
authorities clearly hold that such expenditures are not for a public purpose. It is for the
~ protection of the public that our Constitution requires that public funds be spent for public
purposes. Just as the Court recognized in the Manalapan case, referenced above, "under
no circumstances can it be said that the acts charged ... in the indictment were for the
I benefit of" the public. Accordingly, there may not be an expenditure of public funds for
the legal expenses or costs in the referenced criminal proceedings.

CMC/an
Enclosure
 The State of South Carolina
OFFICE OF THE ATTORNEY GENERAL
CHARLES MOLONY CONDON
ATTORNEY GENERAL

May 13, 1997

The Honorable Tracy R. Edge

Member, House of Representatives
'l
326A Blatt Building
Columbia, South Carolina 29211

Dear Representative Edge:

You note that in an opinion dated September 14, 1995, this Office concluded that
a school district is without authority to pay a school board member's or an employee's
expenses of representation in a criminal proceedings. You inquire as to "[w]hat legal
remedies would be available when public funds continue to be expended for this unlawful
purpose?"

Law I Analysis

In the September 14, 1995 opinion, we addressed the issue of "whether the school
board is authorized to retain an attorney to represent [the school board officials or
employees] ... in the foregoing prosecution, or to pay ... [their] legal defense in those
r
1
criminal proceedings." We referenced therein an earlier opinion, dated February 15,
1985, wherein we opined that a public body may not employ counsel or pay counsel with
public funds as to matters in which the body is not directly interested or which involved
a private purpose. We also stated in the September 14, 1995 opinion that "[e]xpress
statutory authority is necessary for expenditure of public funds in criminal proceedings
(e.g. public defender)."

Referencing by analogy a state statute -- Section 1-7-50 -- which permits the State
to pay for the defense of government employees if they acted in "good faith", we
recognized that an indictment constituted a probable cause finding of criminal conduct and
thus it represented the policy of this Office that '"the employee is primarily responsible
for selecting an attorney to provide a defense and for payment of any attorney fees and

REMBERT c. DENNIS BUILDING • POST OFFICE Box 11549 • COLUMBIA, S.C. 29211-1549 • TELEPHONE: 803-734-3970 • FACSIMILE: 803-253-6283

Kc Q~\lt;\ lttt'(L
 The Honorable Tracy R. Edge
Page 2
May 13. 1997

costs.'" Fm1her, we noted that while Section 59-17-110 permits school districts to employ
counsel in criminal proceedings for acts done in good faith in the course of employment,
where a grand jury has found probable cause of "fixing bids," however, such "would be
clearly beyond the scope of a superintendent's duties."

L Fui1hennore, we concluded that there exists a body of case law which "supports the
idea that the payment of public funds for the defense of a public official in a criminal
I action is not an expenditure for a public purpose but a private one." We particularly
referenced the case of Bowling v. Brown, 57 Md.App. 248, 469 A.2d 896 (1984) wherein
the Court found that reimbursement of the town manager and town engineer for attorney
I expenses in defense against charges for official misconduct was not for a public purpose.
We quoted from this case at length as follows because the Court had cited numerous
authorities in support of this position:

[i]t is generally agreed that a municipality has no power

to reimburse a town official for his expenses incurred in
defending himself from charges of official misconduct. Board
of Chosen Freeholders v. Conda, 164 NJ.Super. 386, 396
i A.2d 613 (1978); see 3 McQuillin, Municipal Corporations
(3d ed. 1973 rev.), § 12.137. The rationale behind the rule is
that such an indebtedness against a city would constitute the
application of money to an individual and not to a city
purpose. See e.g. Chapman v. New York, 168 N.Y. 80, 61
I N.E. 108 (1901). The general rule in Maryland is that public
funds of municipalities cannot properly be devoted to private
f'" uses, even when expressly authorized by the legislature. City
l of Frostburg v. Jenkins, 215 Md. 9, 136 A.2d 852 (1957);
\Vilson v. Board of County Commissioners, 273 Md. 30, 327
A.2d 488 (1974) ....

New Jersey [case law] presented a fact situation similar

to that in the instant case. See Township of Manalapan v.
Loeb, 126 N.J.Super. 277, 314 A.2d 81, affd. per curiam 131
NJ.Super. 469, 330 A.2d 593 (1974). The case involved a
complaint by a township for a declaratory judgment as to
whether it was authorized to pay for legal expenses incurred
by certain of its officers defending against an indictment
handed down by a grand jury. A town committeeman had
been charged with using a telephone credit card for personal
 The Honorable Tracy R. Edge
Page 3
May 13, 1997

calls and incurring expenses in excess of $200.00 which was

paid from township funds. The town mayor and town
business administrator were charged with having knowledge
of the improper use of the credit card and failing to take the
necessary steps to see that the township was reimbursed for
f the amount of the calls. The indictment was dismissed against
the mayor and administrator, and a jury found the
I committeeman not guilty. In spite of the favorable
termination of the legal proceedings, the court in the
declaratory judgment action held that the township was not
I authorized by statute or otherwise to indemnify its municipal
officers for the cost of defending against a criminal indictment
charging them with what amounted to official misconduct.
314 A.2d at 83, citing 56 Am.Jur.2d, Municipal Corporations,
Etc., § 208, at 266, and 64 C.J.S., Municipal Corporations,
§ 183, at 341. In reference to Defendant's 'public purpose'
argument in the present case, this Court adopts the words of
the Manalapan court: 'Here, under no circumstances can it be
said that the acts charged against ... [the town employees] in
the indictment were for the benefit of the municipality." 314
A.2d at 82.
469 A.2d at 902.

Thus, our September 14, 1995 opinion concluded that "a political subdivision, such as a
school district, is without authority to pay an employee's expenses of representation in a
criminal proceeding."
r'
!

The Supreme Court of Illinois recently concurred with the body of case law which
has concluded that it does not constitute a public purpose to indemnify public officials for
expenses incurred in the defense of a criminal prosecution. In Wright v. Danville, 174
Ill.2d 391, 675 N.E.2d 110 (1996), the Court held that a city ordinance was invalid to the
extent it attempted to indemnify officials convicted of crimes for their attorneys fees and
costs incurred in their unsuccessful criminal defense. The Court's view of the ordinance
consisted of the following analysis:

[a]Ithough plaintiffs are correct in their assertion that courts in

some jurisdictions have determined that defending a public
official from criminal charges may be a proper public purpose,
it is generally held in these jurisdictions that a valid public
f

The Honorable Tracy R. Edge

Page 4
May 13. 1997

purpose exists only when the authority of the municipality is

limited to the reimbursement of legal expenses incurred in a
successful defense. See Lomelo v. City of Sunrise, 423 So.2d
974, 976-77 (Fla. App. 1983) (costs of defending public
official for misconduct charges served public purpose only
f because official was acquitted of charges); Ellison v. Reid,
397 So.2d 352, 354 (Fla. App. 1981); Snowden v. Anne
I Arundel County, 295 Md. 429, 439, 456 A.2d 380, 385 (1983)
(indemnity ordinance served public purpose primarily because
it limited reimbursement to only those public officials who
I had successfully defended themselves against criminal
charges); Bowens v. City of Pontiac, 165 Mich.App. 416, 420,
419 N.W.2d 24, 26 (1988) (Shepherd, J., concurring);
Sonnenberg v. Farmington Township, 39 Mich. App. 446,
449, 197 N.W.2d 853, 854 (1972); Korschel v. City of Afton,
512 N.\V.2d 351, 355 (Minn. App. 1994); Valerius v. City of
Nevvark, 84 NJ. 591, 596, 423 A.2d 988, 991-92 (1980);
Beckett v. Board of Supervisors, 234 Va. 614, 619 n. 7, 363
S.E.2d 918, 921 n. 7 (1988). Still, other states have held that
the cost of defending a public official from criminal or official
misconduct charges is never a proper public purpose. See
Hall v. Thompson, 283 Ark. 26, 28-29, 669 S.W.2d 905, 906-
07 (1984); Bowling v. Brown, 57 Md.App. 248, 260, 469
A.2d 896, 902 (1984); Corning v. Village of Laurel Hollow,
48 N.Y.2d 348, 353-54, 398 N.E.2d 537, 540-41, 422
N.Y.S.2d 932, 935-36 (1979); Township of Manalapan v.
Loeb, 126 N.J.Super. 277, 278-79, 314 A.2d 81, 81-82 (1974)
(no authority for indemnification of municipal officer for costs
of defending criminal charges which amount to official
misconduct); Silver v. Downs, 493 Pa. 50, 55-57, 425 A.2d
359. 362-64 (1981); see also 56 Am.Jur.2d Municipal
Corporations § 208 (1971) (municipality has no power to
reimburse an official for expenses incurred in defense of
official misconduct charges); 63A Am.Jur. Public Officers and
Employees § 406 (1984) (members of governing body may
not expend public funds to shield themselves from
consequences of own unlawful and corrupt acts); 3 McQuillin
on Municipal Corporations § 12.137.10 (3d rev. ed. 1990)
(municipality cannot expend money to reimburse its officer for
 The Honorable Tracy R. Edge
Page 5
May 13, 1997

expenses incurred in defending official misconduct charges).

Under the principles of all these cases, plaintiffs would not be
able to recover the expenses of the unsuccessful criminal
defense of the commissioners and corporation counsel from
the city.
I
Further, the purpose of indemnification, so as not to
I inhibit capable individuals from seeking public office, has no
relevance in the context of the criminal conduct involved in
this case. No official of public government should be
I encouraged to engage in criminal acts by the assurance that he
will be able to pass defense costs on to the taxpayers of the
community he was elected to serve. See Powers v. Union
City Board of Education, 124 N.J.Super. 590, 596, 308 A.2d
71, 75 (1973). To the contrary, holding public officials
personally liable for the expenses incurred in unsuccessfully
defending charges of their criminal misconduct in office tends
to protect the public and to secure honest and faithful service
i by such servants. Indeed, allowing expenditure of public
funds for such use would encourage a disregard of duty and
place a premium upon neglect or refusal of public officials to
perform the duties imposed upon them by law. Bowling v.
Brown, 57 Md.App. 248, 258, 469 A.2d 896, 901 (1984)
("[T]o reimburse [convicted public officials] for their legal
expenses would not encourage the 'faithful and courageous
rrl discharge of duty on the part of public officials.' [Citation.]
I On the contrary, it would encourage the reverse"). The types
of individuals who are drawn to these corrupt practices should
not be given any incentive to seek public office.

675 N.E.2d at 115-116 (emphasis added).

A number of Attorneys General in other jurisdictions have reached the same

conclusion as these courts. For example, in Minn. Op. Atty. Gen. 125-A-25, 1980 WL
119580 (Minn. A.G.), (July 28, 1980), the Minnesota Attorney General concluded that a
county was "without authority to reimburse" a deputy for the cost of his legal defense
arising out of a criminal charge against him. While acknowledging that there might be
instances where public policy considerations "might be advanced in favor of permitting
payment of criminal defense costs ... , the authority to do so should derive from proper
 The Honorable Tracy R. Edge
Page 6
May 13. 1997

statutory or charter authorization with respect to such reimbursement." Likewise, in La.

Atty. Gen. Op. No. 89-401, 1989 WL 454326 (La. A.G.) (August 14, 1989), the Louisiana
Attome~. General found that a coroner performing medical experimentation upon infants
"is not \vithin the course and scope of his duty to investigate cause and manner of death
is not entitled to attorneys fees for successful legal defense of criminal and civil
proceedings against him." And in N.M. A.G. Op. No. 85-23, 1985 WL 190691 (N.M.
A.G.) (September 16, 1985), it was concluded by the New Mexico Attorney General that
I "no authority exists which would empower the Risk Management Division to spend money
from the \Vorkmen's Compensation Retention Fund, the Public Liability Fund or any of
the other statutorily created funds which the Division administers to either employ
I attorneys to provide a criminal defense for public employees or to purchase insurance for
I
that purpose."

The thrust of your question is what remedies are available where a school board
continues to ignore this body of case law and indemnifies a fellow school board member
or other school officials for the costs and expenses of a criminal prosecution. A number

.
I
of remedies are available, of course, the most obvious one--including the ballot box.
However. I gather that your question is focused more upon a remedy which would halt
this practice and possibly allow for recovery to the public the monies expended by the
Board for this purpose.

b A leading South Carolina case in this is Brown v. Wingar4, 285 S.C. 478, 330
S.E.2d 30 l ( 1985). There, the town of Greenwood reimbursed spouses of the City

I Council for attendance of the 1982 National League of Cities Convention in Los Angeles,
California. A taxpayer of the Town brought a declaratory judgment action challenging
such expenditures.
r
\

The initial question before the Supreme Court was whether a taxpayer possessed
sufficient legal standing to contest these payments. The Court held that he did.
Concluding that "taxpayers ... have an interest in seeing that city officials disburse funds
in a lavvful manner ... [,]" the Court found legal standing to be present. Further the Court
found that there existed "no public purpose in this case because the factual circumstances
are too remote .... 11

Likewise, in Tucker v. S.C. Dept. of Highways and Pub. Transp., 309 S.C. 395,
424 S.E.2d 468 (1992), the Supreme Court allowed a taxpayer action to challenge a
statute requiring approval of county legislative delegation for expenditure of construction
funds and allowing the delegation to contract for improvements. The Court subsequently
held that the statute violated the constitutional separation of powers provision.
t

i
The Honorable Tracy R. Edge
Page 7
May 13, 1997

Courts have also permitted taxpayers to bring an action for a declaratory judgment
that a town council had acted beyond its powers in approving reimbursement for expenses
incurred in the defense of a criminal prosecution. Bowling v. Brown, supra provides
considerable guidance in this area.

I The Bowling decision first concluded that the municipality possessed no authority
to authorize reimbursement for criminal defense expenditures. Said the Court:
I [i]t is generally agreed that a municipality has no power
to reimburse a town official for his expenses incurred in
I defending himself from charges of official misconduct. Board
of Chosen Freeholders v. Conda, 164 N.J.Super. 386, 396
A.2d 613 (1978); see 3 McQuillen, Municipal Corporations,
(3d ed. 1973 rev.) § 12.137. The rationale behind the rule is
that such an indebtedness against a city would constitute the
application of money to an individual and not to a city
purpose. See e.g., Chapman v. New York, 168 N.Y. 80, 61
N.E. 108 (1901). The general rule in Maryland is that public
funds of municipalities cannot properly be devoted to private
uses, even when expressly authorized by the legislature. City
of Frostburg v. Jenkins, 215 Md. 9, 136 A.2d 852 (1957);
Wilson v. Board of County Commissioners, 273 Md. 30, 327
A.2d 488 (1974).

A New Jersey case presented a fact situation similar to

that in the instant case. See Township of Manalapan v. Loeb,
126 N.J.Super. 277, 314 A.2d 81, affd. per curiam 131
N.J.Super. 469, 330 A.2d 593 (1974). The case involved a
complaint by a township for a declaratory judgment as to
whether it was authorized to pay for legal expenses incurred
by certain of its officers defending against an indictment
handed down by a grand jury. A town committeeman had
been charged with using a telephone credit card for personal
calls and incurring expenses in excess of 200.00 which was
paid from township funds. The town mayor and town
business administrator were charged with having knowledge
of the improper use of the credit card and failing to take the
necessary steps to see that the township was not authorized by
statute or otherwise to indemnify its municipal officers for the
 The Honorable Tracy R. Edge
Page 8
May 13. 1997

cost of defending against a criminal indictment charging them

with what amounted to official misconduct. 314 A.2d at 82,
citing 56 Am.Jur.2d, Municipal Corporations, Etc., § 208, at
266, at 64 C.J.S., Municipal Corporations, § 183, at 341. In
reference to Defendants' 'public purpose' argument in the
present case, this Court adopts the words of the Manalapan
court: 'Here, under no circumstances can it be said that the

I acts charged against ... [the town employees] in the indictment

were for the benefit of the municipality.' 314 A.2d at 82.

I Id. at 901.

The Court then noted that "[o]nee the Plaintiff has established that the expenditures
were not for a public purpose, the burden shifts to Defendants to justify relieving them
of personal liability for the amounts expended." Defendants argued, however, that they
were performing a "discretionary function" and were thus immune from suit under
Maryland lmv. The Court rejected this argument, concluding that

[a]s the Plaintiff correctly argues, if the funds expended by the

Town Council ... were not for a public purpose, the
expenditure was an ultra vires act outside the scope of
Defendant's employment and [the immunity statute] ... does
not apply.

Id. at 903. Likewise, the Court found that the doctrine of qualified immunity "applies to
actions for t011 and has no application to acts which are ultra vires." Id. Moreover, the
Court refused to hold that the defendants should not "be personally liable for the funds
expended because they exercised good faith in authorizing the expenditures." Unsure,
however. that the appropriate standard to qualify for immunity was one of "due diligence"
in authorizing the expenditures or one of strict liability the Court noted that there was
clearly la\\ favoring both standards:

[t]his Court is not sure whether the Maryland Court of

Appeals will follow the lead of the California Court and adopt
the due care standard. In a similar case, the Court of Appeals
declined to consider the question of good faith, because it
found that the defendants had acted within the scope of their
authority. See, Smith v. Edwards , 292 Md. 60, 437 A.2d
221, 228 n. 5 ( 1981 ). This Court does not reach the question
 The Honorable Tracy R. Edge
Page 9
May 13, 1997

of whether the due care standard should apply in Maryland,

because the Defendants have failed to present sufficient
evidence of due care to bring the question into play. The
Court does note that ... Defendants should show evidence of
both good faith and due care to present a serious challenge to
l the continued utility in Maryland of the strict liability standard
set forth in Gloyd v. Talbott [221 Md. 179, 156 A.2d 665
I ( 1995)]. ... The Court holds that the Defendants did exceed
their authority as Town Commissioners as the Plaintiff has
established that the expenditure of town funds by Defendants
I to reimburse town employees for legal expenses incurred
defending themselves from criminal charges of misconduct in
office was not an expenditure for a public purpose. Even if
the Court assumes that the Court of Appeals would adopt the
reasonable care doctrine as previously discussed in this
Opinion, the Defendants have failed to establish that they used
reasonable care in consulting their attorney about the
expenditures sub judice and therefore are personally liable for
the funds expended....

469 A.2d at 904-905.

The law in South Carolina is supportive ofliability for public officers who perform
ultra vires acts. Our Supreme Court has held, for example, that

[t]he principle is firmly settled in this State that a taxpayer

may maintain an action in equity on behalf of himself and all
other taxpayers, to restrain public officers from paying out
public money for purposes unauthorized by law. Sligh v.
Bowers, 62 S.C. 409, 40 S.E. 885; Mauldin v. City Council of
Greenville, 33 S.C. 1, 11 S.E. 434, 8 L.R.A.; 291;
McCullough v. Brown, 41 S.E. 220, 19 S.E. 458, 23 L.R.A.
410, Porn. Eq. Jur. 277, Sec. 260, 2 Dill. Mun. Corp. Sec.
736.

Kirk v. Clark, 191 S.C. 205, 210, 4 S.E.2d 13 (1939). In Chandler v. Britton, 197 S.C.
303, 310, 15 S.E.2d 344 ( 1941 ), the Court stated that "in the absence of any statutory law
to the contrary a public official is not liable for the loss of funds deposited with him if
he has exercised that degree of care and prudence in the management of funds which a
 The Honorable Tracy R. Edge
Page 10
May 13, 1997

person of ordinary care and prudence would exercise in his own business." The Court,
in Long v. Seabrook, 260 S.C. 562, 568, 197 S.E.2d 659 (1973) concluded that "[t]he
failure of a public official to comply with the laws governing and regulating his powers
and duties may give rise to liability." And in Sumter Co. v. Hurst, 189 S.C. 316, 1
S.E.2d 242 (1939), the Court said that "[w]e think that there can be no dispute of the
l proposition that when a public officer receives money for the public use, he is a trustee
to receive such monies and to pay them to the public official or function for whom or
I which they were intended." Id. at 319.

Moreover, in Haesloop v. City Council of Charleston, 123 S.C. 272, 115 S.E. 596
I (1923), our Supreme Court recognized the following general principle:

... In the sense that all powers of municipal corporations are

held in trust for public use, all property held by such
corporations is held in a fiduciary capacity .... Property held
by such corporations for strictly governmental purposes or
which has been devoted to a special public use may be sold or
disposed of only under express legislative authority; but
property acquired and held for general municipal purposes is
subject to the corporation's discretionary power of use and
disposal. ... It is universally conceded, however, that such
discretionary power of use and disposal does not include the
authority to donate municipal property to a strictly private use,
for the obvious reason that a transfer or release of such
property by a municipality to a private ownership without
receiving in return some consideration of reasonably
equivalent value would amount to a palpable breach of the
trust upon which it is held.

115 S.E. at 600.

Thus. it would appear to me that the most feasible remedy available with respect
to your situation is a taxpayer action concerning the expenditure of public funds for a
private purpose. The question of the use of public funds to indemnify a public official
for defense of a criminal action has never been addressed by our courts, to my knowledge.
Nonetheless. as indicated above, a number of courts in other jurisdictions have concluded
that such expenditures do not constitute a public purpose even where the defense of the
criminal action is ultimately successful. Here, the issue of the validity of § 59-17-110
would also have to be addressed in any such action. See Wright v. Danville, supra. An
 The Honorable Tracy R. Edge
Page 11
May 13, 1997

action for declaratory judgment would be the type of action typically brought by a
taxpayer. In addition, the remedy of injunction against future expenditures of such funds
for such purpose as well as reimbursement for past expenditures would be possible as
well. It is thus my opinion, consistent with the opinion of Attorney General Condon,
dated September 14, 1995 that our courts would conclude that a school district may not
expend public funds to pay a school board member's or an employee's expenses of
representation in criminal proceedings. It is also my opinion that a taxpayer action of the
I type described above would be the most effective remedy.

With kind regards, I am

I Very truly yours,

Robert D. Cook
Assistant Deputy Attorney General

"L
RDC/an

REVIEWED AND APPROVED BY:

~
¥'b C. Williams, III
r Deputy Attorney General
 Alan W ilson
Attorney General '^ouni
November 1 8. 2014

Thomas L. Martin, Esquire

Oconee County Attorney
c/o McNair Law Finn, P. A.
Post Office Box 447
Greenville, SC 29602

Dear Mr. Martin:

Attorney General Alan Wilson has referred your letter dated October 28, 2014 to the Opinions section for
a response. The following is this Office's understanding of your question and our opinion based on that
understanding.

Issues (as quoted from your letter):

[We seek an] opinion as to the constitutionality and legality of Oconee County Ordinance No. 2014-24
giving indemnification, specifically:
1) Whether or not a county may defend and indemnify public employees in the circumstances
denoted in Ordinance 2014-24. should it desire to do so;
2) Whether the means of defending and indemnifying County employees, as set forth in Ordinance
2014-24 is lawful and constitutional:
3) Whether the limits on indemnification set forth in Oconee County Ordinance 2014-24 meet the
requirements of avoiding unlimited indemnification as required by South Carolina law and
Constitution: and
4) Whether the Ordinance, in all other regards, passes legal and constitutional muster.

Law/Analysis:
This opinion in no way makes a determination as to the constitutionality of the ordinance, as only a court
may declare an ordinance unconstitutional. Ops. S.C. Altv. Gen.. 1998 WL 485264 (August 9, 1988);
1998 WL 383512 (March 31, 1988); 1988 WL 485247 (March 17, 1988); 1986 WL 289836 (September
15, 1986). This opinion does not address any ethical issues. Moreover, while the ordinance references
federal and state law, this opinion only reviews applicable stale law. It is this Office's understanding you
have already received an informal opinion from the State Ethics Commission regarding any potential
ethical issues.

Regarding indemnification at the State level, this Office has consistently stated that the State or one of its
agencies must have specific statutory authorization for indemnification. In a 2010 opinion, we noted
examples of opinions reaching this conclusion and summarized these opinions as follows:

... this office has issued several prior opinions holding that, generally, state
agencies do not have the authority to enter into indemnification agreements. As
stated in an opinion dated September 29. 2004 determining that indemnification
agreements "are without legal authority".

REMBERTC.DENNis Building • Post Office Box 1 1549 • Columbia, SC 2921 1-1549 • Telephone 803-734rtQ7n
FArcmii c Qm *)«
Thomas L. Martin, Esquire
Page 2
November 18, 2014

"[i]t is our longstanding opinion that a state agency possesses no

authority to enter into indemnification agreements. It is our further
opinion that this conclusion is not changed by the addition of language
"so far as the laws of the State permit" or any other language. Because
a state agency possesses no authority to enter into indemnification
agreements, insertion ofthe above-cited language or any other language
cannot change or alter such lack of authority. Our opinions concluding
that a state agency possesses no authority to enter into indemnification
or "hold harmless " agreements date back at least to 1966.

Another opinion dated September 27, 1972 by former Attorney General McLeod
stated that
[ijn my opinion, there is no authority for the execution by the State of
"hold harmless" clauses. Similar instances occur in nearly all
agreements with the federal government and, while such clauses have
been inserted in many instances in various agreements, there is, in my
opinion, no authorityfor the inclusion ofsuch clauses. The basis for this
position is that the State thereby subjects itself to tort action, for which
there is no authority absent legislative authorization, (emphasis added).

An opinion ofthis office dated August 15, 1972 determined that

[it] has been the consistent opinion of this Office that governmental
agencies, in the absence of specific authority therefor, do not have the
authority to execute such "hold harmless" clauses. The basis of this
conclusion is that this State possesses sovereign immunity, with certain
deviations therefrom in limited circumstances. ..The execution ofa "hold
harmless " clause is nothing more nor less than subjection ofthe State or
one of its political subdivisions to tort liability and, in the opinion ofthis
Office, can only be done by the State itselfthrough legislative enactment.
(emphasis added).
See also: Op. dated February 13, 1968 ("fwje have uniformly advised State
agencies that they do not have authority to enter into indemnification agreements
of this nature. Even if entered into, it is questionable if any rights could arise
thereunder. ").

As also stated in the referenced September 29, 2004 opinion, "...we have
consistently concluded that a state agency 'derives its powers solely from the
statutes created by the Legislature. " ' See also: Op. Arty. Gen. dated March 18,
2004 citing Razzle v Huff. 319 S.C. 443. 462 S.E.2d 273 (1993) and Nucor Steel v.
S.C. Public Service Comm.. 310 S.C. 539. 426 S.E.2d 319 (1992). As pointed out
by the 1972 opinions referenced above, generally, the State cannot subject itself to
tort action "absent legislative authorization" or "in the absence of specific
authority therefor. "

Op. S.C. Attv. Gen.. 2010 WL 1808721 (April 6, 2010). Furthermore, this Office has also previously
opined that a county, like the State, would not likely be able to enter into an indemnification agreement
without specific authority. Op. S.C. Attv. Gen.. 1991 WL 633070 (November 4, 1991). In that opinion
this Office stated:
Thomas L. Martin, Esquire
Page3
November 18, 2014

We realize that the question you have presented is not whether the County may
agree to indemnify a third party; however, as to that limited question, we advise
that this Office has previously opined that State agencies, as a general rule, lack
authority to enter into open-ended indemnification agreements. Op. fS.C.l Attv.
Gen.. April 10, 1991. We ha\'e no doubt that a similar conclusion would be
reached with regard to counties. See Wright v. Colleton County School District.
301 S.C. 282, 391 S.E.2d 564 (1990) [A political subdivision may not waive
immunity provisions provided by State law]; see also, S.C. Const. Art. X, Section 8
(1990 Cum.Supp.) ["Monies shall be drawn from ... the treasury of any of [the
State's] political subdivisions only in pursuance ofappropriations made by law. "];
Id.. Art. X, Section 7(b) [Annual expenditures shall not exceed annual revenues].

Id.

Against this background, let us review certain rights belonging to a county applicable to this opinion. A
county may sue and be sued. S.C. Code § 4-1-10 (1986 & Supp. 2013). A county may execute contracts
and do all acts necessarily relating to the property and concerns of the county. Id. A federal court has
acknowledged that "[ajlthough a state and its agencies are entitled to Eleventh Amendment immunity, the
Eleventh Amendment does not bar suits against local government entities or local government officials
sued in their official capacity. Gray v. Laws. 51 F.Sd 426, 431 (4th Cir. 1995)." Currv v. S.C.. 518 F.
Supp.2d 661, 668-669 (D.S.C. 2007).

As stated above, this opinion in no way makes a determination as to the constitutionality of the ordinance,
as only a court may declare an ordinance unconstitutional. Ops. S.C. Attv. Gen.. 1998 WL 485264
(August 9, 1988); 1998 WL 383512 (March 31, 1988); 1988 WL 485247 (March 17, 1988); 1986 WL
289836 (September 15, 1986). As this Office has previously stated:

We start with the basic proposition that a county ordinance would be entitled to a
presumption of validity. Consistent with Article VIII of the South Carolina
Constitution, which mandates Home Rule, a county possesses police power to
enact ordinances tofurther the health and welfare of its residents. See § 4-9-30. As
the Supreme Court ofSouth Carolina cautioned in Rothschild v. Richland County
Bd. of Adjustment. 309 S.C. 194, 420 S.E.2d 853, 855 (1992), "it is well settled
that ordinances, as with other legislative enactments, are presumed constitutional;
their unconstitutionality must be proven beyond a reasonable doubt. " A court will
not declare an ordinance invalid unless it is clearly in conflict with the general
law. Hospitality Assn. of S.C. v. County of Charleston. 320 S.C. 219, 464 S.E.2d
113 (1995). Keeping in mind the presumption of validity and the high standard
which must be met before an ordinance is declared invalid, we note that, while this
Office may comment upon constitutional problems or a potential conflict with
general law, only a court may declare an ordinance void as unconstitutional, or
preempted by or in conflict with State law. Accordingly, an ordinance will
continue to be enforced unless and until set aside by a court of competent
jurisdiction. Op. S.C. Attv. Gen.. March 21, 2003 (2003 WL 21043502).

In Hospitality Assn.. the Court recognized the test for resolving the issue of the
validity ofa local ordinance vis-a-vis State law. There, the Court stated that:
Thomas L. Martin, Esquire
Page 4
November 18, 2014

[djetermining if a local ordinance is valid is essentially a two-step

process. The first step is to ascertain whether the county or municipality
that enacted the ordinance had the power to do so. If no such power
existed, the ordinance is invalid and the inquiry ends. However, if the
local government had the power to enact the ordinance, the next step is
to ascertain whether the ordinance is inconsistent with the Constitution
or general law ofthis State.
Id.. 464 S.E.2d at 116. The Court referenced § 4-9-25, which provides that:
[a]11 counties of the State ... have authority to enact regulations,
resolutions, and ordinances ... respecting any subject as appears to them
necessary and proper for the security, general welfare, and convenience
of counties or for preserving health, peace, order, and good government
in them....
The Court and this Office recognize that § 4-9-25 provides general police powers
to counties. See, e.g.. Greenville County v. Kenwood Enterprises. Inc.. 353 S.C.
157, 164, 577 S.E.2d 428, 431 (2003), overruled on other grounds by Bvrd v. Citv
of Hartsville. 365 S.C. 650, 620 S.E.2d 76 (2005); Op. S.C. Attv. Gen.. September
22, 2008 (2008 WL 4489051). This broad grant ofpower, noted the Court, "is
limited only by the requirement that the regulation, resolution, or ordinance be
consistent with the Constitution and general law of this State. " Hospitality Assn..
464 S.E.2d at 116. Moreover, the [...] Court stressed that § 4-9-25 states that
"[tjhe powers of a county must be liberally construed in favor of the county and
the specific mention ofparticular powers may not be construed as limiting in any
manner the general powers ofcounties. " Id

Thus, the first question which must be addressed in analyzing whether cm

ordinance is consistent with State law is the authority of counties to regulate in
this area. Put another way, is the ordinance preempted by state law? The test for
preemption of local government regulation is set forth in Buesv's. Inc. v. Citv of
Mvrtle Beach. 340 S.C. 87, 530 S.E. 2d 890 (2000), in which the Court stated that:
[i]n order to preempt an entire field, an act must make manifest a
legislative intent that no other enactment may touch upon the subject in
any way. Town ofHilton Head Island v. Fine Liquors. Ltd.. 302 S.C. 550,
397 S.E. 2d 662 (1990). In Fine Liquors. Ltd.. the Court held, although
the General Assembly gave the Alcoholic Beverage Control Commission
the sole and exclusive authority to sell beer, wine and alcohol, it had not
preempted the field so as to preclude the Town of Hilton Head from
passing a zoning ordinance which prohibited internally illuminated "red
dot" signs.
Buesv's. 530 S.E. 2d at 892.

Applying the "manifest intention" test, the Court in Bugsv's found that "while the
General Assembly has enacted a comprehensive scheme regulating many aspects
of video poker machines, the scheme does not manifest an intent to prohibit any
other enactmentfrom touching on video poker machines. "Id. ...

Op. S.C. Attv. Gen.. 2013 WL 1803938 (April 18, 2013).

Thomas L. Martin, Esquire
Page 5
November 18, 2014

The South Carolina Legislature has addressed the payment of defense of actions against public officers
and employees by statute. South Carolina Code Section 1-7-50 states:

In the event that any officer or employee of the State, or of any political
subdivision thereof, be prosecuted in anv action, civil or criminal, or special
proceeding in the courts of this State, or of the United States, bv reason of anv act
done or omitted in good faith in the course of his employment it is made the duty
of the Attorney General, when requested in writing by any such officer or
employee, to appear and defend the action or proceeding in his behalf. Such
appearance may be by any member of his staff or by any solicitor or assistant
solicitor when directed to do so by the Attorney General.

(Emphasis added) (1976 Code, as amended). However, the statute goes on to require an investigation
first unless it appears the officer or employee was acting in good faith within the scope of his
employment. S.C. Code § 1-7-60 (1976 Code, as amended). This Office stated in a previous opinion
concerning this statute:

As can be seen, § 1-7-50 provides for legal representation by the Attorney General
even in criminal matters, if the requisite goodfaith requirements are met. Former
Attorney General McLeod drafted this statute in 1960, and submitted it to the
General Assembly, which enacted it that year. In a letter written to the Attorney
General of Arkansas on January 13, 1969, General McLeod wrote that "[i]n the
past this office, for a number of years and without specific statutory authority,
represented officers and employees of the State who were charged criminals as a
result of their actions. Thus, in order to alleviate the absence of express statutory
authorityfor such representation, the Attorney General proposed what is now § 1
7-50. In that same letter, General McLeodfurther advised that:
I suggested the enactment of the statute referred to in the belief that
officers should not have to undertake the payment of their own expenses
in defending actions brought against them for acts done in the
performance oftheir duties.

Op. S.C. Attv. Gen.. 2014 WL 4253409 (August 14, 2014). Therefore, any such ordinance should require
good faith and that any action be within the course of employment in order to indemnify.

Regarding tort liability, the South Carolina Legislature expressed its intention in South Carolina Code §
15-78-20 regarding the public policy in this State "that the State, and its political subdivisions, are only
liable for torts within the limitations of this chapter and in accordance with the principles established
herein." The statute goes on to grant the State, all political subdivisions and all employees acting within
the scope of their official duty immunity from liability and suit for tort other than what is waived in Title
15, Chapter 78. S.C. Code § 15-78-20(b) (1976 Code, as amended). The law states that all other
immunities for government entities are preserved and that Chapter 78 is the exclusive civil remedy for
torts by government entities and their employees. Id. Therefore, the only liability for torts for political
subdivisions of the State and their employees must be within the parameters of Title 15, Chapter 78.'
South Carolina Code § 15-78-70 gives the exclusive remedy for torts committed by employees of

1 Please note compliance with the South Carolina Tort Claims Act would also include compliance with the South
Carolina Insurance Reserve Fund (pursuant to S.C. Code § 1-1 1-140, et al.) in addition to any other applicable laws
and insurance requirements.
Thomas L. Martin, Esquire
Page 6
November 18, 2014

government entities as long as the employee's conduct was within the scope of his official duties and was
not fraud, actual malice, intent to harm or a crime involving moral turpitude. An action brought against
the governmental agency should name the agency or political subdivision as the defendant, not the
employee individually, unless it cannot be determined which agency the individual is employed by. S.C.
Code § 15-78-70 (1976 Code, as amended). Any person who "may suffer a loss proximately caused by a
tort of the State, an agency, a political subdivision, or a governmental entity, and its employee acting
within the scope of his official duty" has standing to file a claim under the Tort Claims Act. S.C. Code §
15-78-50(a) (1976 Code, as amended). Moreover, no governmental entity is liable for the tort of one of
its employees if the employee, as a "private person" would not himself be liable. S.C. Code § 15-78-50(b)
(1976 Code, as amended). One concern in any such ordinance would be that it attempts to expand tort
liability outside of the scope of Title 15, Chapter 78. This Office has previously opined that a county
council may indemnify a councilman acting within the scope of his official duties done in a good faith.
Op. S.C. Attv. Gen.. 1987 WL 342727 (November 23, 1987). An employee should not be personally
named in a lawsuit for torts committed within the scope of his official duty. S.C. Code § 15-78-70 (1976
Code, as amended).

Furthermore, the Tort Claims Act includes public officials and officers within the definition of an
employee for purposes of the Act. S.C. Code § 15-78-30(c) (1976 Code, as amended). While a court has
previously defined a public official as a government employee, this may not always be the case. Erickson
v. Jones Street Publishers. LLC. 368 S.C. 44, 629 S.E.2d 653 (2006). While this Office is not aware of all
the officers and employees the ordinance is attempting to indemnify, a county auditor is appointed by the
Governor to a four-year term, and this Office has opined that an auditor holds a public office. See S.C.
Code § 12-39-10; On. S.C. Attv. Gen.. 2005 WL 2652384 (September 26, 2005). Moreover, this Office
has stated that while an employee of a county may be a public official, an official may not necessary be
an employee of a county. Ops. S.C. Attv. Gen.. 2013 WL 4636665 (July 26, 2013); 2013 WL 3479875
(June 28, 2013); 1999 WL 397927 (February 17, 1999). While the ordinance designates employees and
public officials as "employees," a public official may or may not also be the employee of a county. Id.

Moreover, this Office has issued previous opinions concerning reimbursement of funds. As we stated in a
1997 opinion, neither public funds nor counsel paid for with public funds may be used in a criminal
proceeding without specific statutory authorization. On. S.C. Attv. Gen.. 1997 WL 323769 (May 13,
1997). Furthermore, as quoted above, this Office answered a similar question concerning representation
of a Retirement Systems Investment Commission member and stated in that opinion:

As one authority has stated,

[i]he purpose ofa statute requiring a governmental entity to pay costs or
fees incurred by or on behalf of an employee, in defense of a claim or
suit for a loss occurring because ofacts or omissions within the scope of
employee's employment, is to protect office holders from litigation by
those dissatisfied with the decisions they make ... In contrast, public
officials who pursue or defend personal suits ordinarily must bear their
own legal expenses.
67 C.J.S. Officers. § 387. Further, as stated in Fillipone v. Mavor ofNewton. 352
Mass. 622, 629, 467 N.E.2d 182 (1984), "fa]s a matter of policy, public
indemnification of public officials serves in part to encourage public service. "
Courts have concluded that such indemnification statutes are " "quintessentially
remedial legislation, " enactedfor the benefit ofpublic employees, and thus are "to
Thomas L. Martin, Esquire
Page 7
November 18, 2014

be liberally construed to effectuate [their] beneficial purpose. " Montgomery

County Bd. ofEd. v. Horace. 860 A. 2d 909, 919 (Md. 2004).

Op. S.C. Attv. Gen.. 2014 WL 4253409 (August 14, 2014). In the 2014 opinion this Office also
cautioned that in most circumstances involving criminal matters, especially where an officer has been
indicted by a Grand Jury, indemnification would not be appropriate. Id.

Conclusion: The proposed ordinance you provided appears to limit indemnification to actions within the
scope of an employee's duties and specifically excludes fraud, malice, intent to harm or a crime involving
moral turpitude. However, the ordinance does not limit it to civil actions or to actions where no grand
jury indicts an employee for criminal conduct. As discussed above, this Office has consistently opined
where there has been a grand jury indictment, there is a finding of probable cause that a crime has been
committed and would not be considered good faith. Op. S.C. Attv. Gen.. 2014 WL 4253409 (August 14,
2014).

Moreover, while your ordinance lists employees and elected officials in its introduction, the body of the
ordinance discusses employees generally. This Office has noted some public officials are not employees
of a county, even though they work closely with a county. Ops. S.C. Attv. Gen.. 2013 WL 4636665 (July
26, 2013); 2013 WL 3479875 (June 28, 2013); 1999 WL 397927 (February 17, 1999).

As we also stated above, while this Office does not have the authority to declare whether the proposed
ordinance is constitutional or not, the law is clear indemnification cannot exceed the scope of the South
Carolina Tort Claims Act, South Carolina Code Section 1-7-50, or the South Carolina Constitution. See,
e.g.. S.C. Const. Art. X, § 8 ("Monies shall be drawn from ... the treasury of any of [the State's] political
subdivisions only in pursuance of appropriations made by law."); S.C. Cons. Art. X, § 7(b) (Annual
expenditures shall not exceed annual revenues). Furthermore, this Office believes that without specific
statutory authorization, indemnification cannot be for criminal acts where the accused has been indicted.
Nevertheless, this Office presumes any such ordinance is constitutional until declared otherwise by a
court. Op. S.C. Attv. Gen.. 2013 WL 1803938 (April 18, 2013).

Please note this Office is only issuing a legal opinion based on the current law at this time. Until a court
or the Legislature specifically addresses the issues presented in your letter, this is only an opinion on how
this Office believes a court would interpret the law in the matter. Additionally, you may also petition the
court for a declaratory judgment, as only a court of law can interpret statutes and make such
determinations. S.C. Code § 15-53-20, et al. If it is later determined otherwise or if you have any
additional questions or issues, please let us know.

Sincerely,

Anita S. Fair
Assistant Attorney General
Thomas L. Martin, Esquire
PageS
November 18, 2014

REVIEWED AND APPROVED BY:

lobert D. Cook
Solicitor General