Section 16.32. Improper expenditure of moneys

(a)  No  provider of services certified pursuant to this article shall
  make any charitable contribution of any 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 provisions of  this  section  shall
  not  apply  to  receipts  or  donations from private or non-governmental
  sources and any interest or other income earned thereon.
    (b) No loans, other than through the purchase of bonds, debentures, or
  similar obligations of the type customarily sold in public offerings, or
  through ordinary deposit of  funds  in  a  bank,  shall  be  made  by  a
  not-for-profit  corporation which is certified as a provider of services
  pursuant to this article to its employee who receives an  annual  salary
  in excess of thirty thousand dollars, or to any other corporation, firm,
  association  or  other  entity  in  which such employee is a director or
  officer or employee or holds a direct or indirect substantial  financial
  interest,  except  a  loan  by  one corporation incorporated as a type B
  corporation pursuant to the not-for-profit corporation  law  to  another
  type B corporation, or a loan for a temporary or emergency purpose which
  will  further  the  health  and  welfare  of the employee so long as the
  purpose and amount of such loan are disclosed to  and  approved  by  the
  board  of  directors of such agency. Such disclosure shall be filed with
  the secretary of the corporation and  entered  in  the  minutes  of  the
  meeting,  and,  if approved by such board, such disclosure shall also be
  forwarded in  writing  to  the  commissioner  and  to  the  director  of
  community services of each local governmental unit that has, at the time
  of  such  disclosure, a contract with such corporation for the rendition
  of services pursuant to article forty-one of this chapter. 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  which  is  certified  as a provider of services pursuant to
  this article and one or more of its  employees  who  receive  an  annual
  salary in excess of thirty thousand dollars, 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:
    a. 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,  and  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
    b. 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  members,  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  or  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.