New York Laws
Article 32 - Regulation and Quality Control of Chemical Dependence Services and Compulsive Gambling Services.
32.33 - Improper Expenditures of Money.

(a) No provider of services issued an operating certificate pursuant
to this article shall make any charitable contribution of state moneys,
medical assistance payments or social security or supplemental security
income or any interest or other income earned thereon, except as
authorized by the commissioner. Provided, however, the provision of this
section shall not apply to receipts or donations from private or
non-governmental sources and any interest or other income earned
thereon, or to monies advanced to employees in accordance with
performance of their official duties as employees.
(b) Notwithstanding the not-for-profit corporation law, no loans,
consisting in whole or in part of funding provided by the office, shall
be made by a not-for-profit corporation issued an operating certificate
as a provider of services pursuant to this article to any employee of
such corporation, or to any other corporation, firm, association or
other entity in which an employee is a director or officer or employee
or holds a direct or indirect substantial financial interest. A loan
made in violation of this section shall be a violation of the duty to
the not-for-profit corporation of the directors or officers authorizing
it or participating in it, but the obligation of the borrower with
respect to the loan shall not be affected thereby.
(c) 1. No contract or other transaction between a not-for-profit
corporation issued an operating certificate as a provider of services
pursuant to this article and one or more of its employees, or between a
not-for-profit corporation and any other corporation, firm, association
or other entity in which one or more of such persons are directors or
officers of the board or corporation, or employee who receives an annual
salary in excess of thirty thousand dollars, or have an indirect or
direct substantial financial interest, shall be either void or voidable
for this reason alone:
(i) If the material facts as to such person's interest in such
contract or transaction and as to any such common directorship,
officership or financial interest are disclosed in good faith or known
to the board or committee, the board or committee authorizes such
contract or transaction by a vote sufficient for such purpose without
counting the vote or votes of such interested person; or
(ii) If the material facts as to such person's interest in such
contract or transaction and as to any such common directorship,
officership or financial interest are disclosed in good faith or known
to the members entitled to vote thereon, if any, and such contract or
transaction is authorized by vote of such members.
2. If such good faith disclosure of the material facts as to the
person's interest in the contract or transaction and as to any such
common directorship, officership or financial interest, is made to the
directors or member, or known to the board or committee or members
authorizing such contract or transaction, as provided in paragraph one
of this subdivision, the contract or transaction may not be voided by
the corporation for the reasons set forth in paragraph one of this
subdivision. If there was no such disclosure of knowledge the
corporation may void the contract or transaction unless the party or
parties thereto shall establish affirmatively that the contract or
transaction was fair and reasonable as to the corporation at the time it
was authorized by the board, a committee or the members.

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