HARRISBURG — State cabinet secretaries are not violating conflict-of-interest laws if they approve grants to nonprofit organizations that employ their spouses, a Pennsylvania court ruled Friday.

The majority Commonwealth Court decision cited a state Supreme Court ruling in 2006 that a nonprofit should not be considered business, and thus are not subject to conflict-of-interest laws in this case.

The 5 to 2 decision overruled a finding last year by the State Ethics Commission, which said two of Gov. Ed Rendell's cabinet secretaries would be violating the laws if they continued giving grants to the organizations.

The commission had told Rendell that he would have to appoint stand-ins for the secretaries when their agencies considered grants to their spouses' organizations.

The two cabinet secretaries in question are Michael DiBerardinis of the Department of Conservation and Natural Resources and Kathleen McGinty of the Department of Environmental Protection, who has since left the agency.

The commission's executive director, John Contino, said he disagreed with the decision, and that an appeal could allow the state Supreme Court to clarify whether its 2006 ruling should affect this case. The commission's board could decide in a week or so whether to appeal, Contino said.

Rendell in a statement said the ruling underscores his contention that DiBerardinis and McGinty acted with honesty and impartiality.

"Today's decision affirms our position that our secretaries have been upholding the public's interest and their trust when making decisions," Rendell wrote.

A dissenting opinion said the Supreme Court ruling should not apply to this matter because it dealt with a campaign-related case in which the court found that a candidate was not required to publicly disclose a nonfinancial interest in a nonprofit. Instead, the two dissenting judges said, a nonprofit in this case should be considered a business because of the financial benefit to the spouses if their employer receives a grant.

"The secretaries' spouses and the organizations which pay them for their work have strong financial interests in the agency grants," Judge Renee Cohn Jubelirer wrote.

The Pennsylvania Horticultural Society has received $2.3 million from DiBerardinis' department since 2003 to help manage a program he created that encourages tree-planting, according to DCNR. The group employs DiBerardinis' wife, Joan Reilly, in its urban parks program.

The Pennsylvania Environmental Council and its subsidiary, Enterprising Environmental Solutions, received more than $2.7 million in grants from the DEP between 2003 and 2007 for activities such as agricultural conservation, watershed protection and abandoned mine cleanups. The groups have employed McGinty's husband, Karl Hausker.