Section 7 of G.L. c. 268A, the conflict of interest law, generally prohibits a state employee (paid or unpaid, appointed or elected, full-time or part-time) from having a financial interest, directly or indirectly, in a contract made by the state or a state agency. There are, however, several exceptions and exemptions from this prohibition.
All state employees must comply with an exception or exemption to § 7 in order to lawfully have a financial interest in a state contract.
Any current state employee who wants to add another state position that is appointed and compensated must qualify for an exception or exemption. Similarly, if the state employee wishes to have a financial interest in a state contract that does not involve another state position, she must also qualify for an exception or exemption.
Second, if a prospective state employee already has a financial interest in a contract with the state, he must qualify for an exception or exemption when he begins to serve as a state employee.
Third, if a current appointed and compensated state employee wants to add an unpaid state position or an elected state position (whether paid or unpaid), she will need to qualify for an exception or exemption. However, unlike the first two types of state employees described above, she needs to qualify for an exception or exemption that will allow her to continue to be paid in her current state position while also serving in her appointed/unpaid or elected position.
Exceptions
Section 7 does not apply if the state employee's financial interest is the ownership of less than one percent of the stock of a corporation. It also does not apply to a state employee who in good faith and within 30 days after he learns of an actual or prospective violation of the section makes a full disclosure of his financial interest to the contracting agency and terminates or disposes of his interest.
Section 7 does not apply to a state employee who provides services or furnishes goods to a recipient of public assistance, provided that such services or such supplies, goods and materials are provided in accordance with a schedule of charges promulgated by the department of transitional assistance or the division of health care policy and finance and provided, further, that such recipient has the right under law to choose and in fact does choose the person or firm that will provide such services or furnish such supplies, goods and materials.
The section does not prohibit a state employee from teaching or performing other related duties on a part-time basis in an educational institution of the Commonwealth, provided he does not participate in or have official responsibility for the financial management of the institution.
A MassPort employee who is eligible for any residential sound insulation program administered by MassPort is not prohibited from participating in the program provided she has no responsibility for the administration of the program.
Exemptions
A state employee, other than a member of the general court may have a financial interest in a contract with the state if:
- the state employee is not employed by and does not participate in or have responsibility for the activities of the contracting agency or an agency which regulates the activities of that agency;
- the contract is made after public notice or competitive bidding; and
- the state employee files with the ethics commission a disclosure of his and/or his family's interest.
In addition, if the contract is for personal services, additional requirements must be met; a state employee seeking a contract for personal services should seek advice from the Ethics Commission.
A member of the general court may have a financial interest in a contract with an agency other than the general court if:
- the member's direct and indirect interests and those of his immediate family in the corporation or other commercial entity with which the contract is made do not in the aggregate amount to ten percent of the total interests; and
- the contract is made after public notice or competitive bidding; and
- the member files with the ethics commission a disclosure of his and/or his family's interest.
Finally, a state employee is not prohibited from being employed part-time at any 24-hour facility of the state, provided that he does not participate in or have responsibility for the financial management of the facility. Such facilities include mental health, public health and correctional facilities that operate on an uninterrupted and continuous basis. The state employee may not work more than four hours at the facility on any day in which he is otherwise compensated by the Commonwealth and faces restrictions on the amount of compensation he can earn and the head of the facility must file a written certification that there is a critical need for the services of the employee.
Special State Employees
The Legislature created "special state employee" status to allow the state to engage individuals who, otherwise, might not be able to serve because of their private activities or because they already are state, or special state, employees in another capacity.
A special state employee is a state employee who is:
- serving in a position that is not compensated, or
- not elected and occupies a position which permits personal or private employment during normal working hours, provided that disclosure of such classification or permission is filed in writing with the state ethics commission prior to the commencement of any personal or private employment, or does not earn compensation for more than eight hundred hours during the preceding three hundred and sixty-five days.
For this purpose compensation by the day shall be considered as equivalent to compensation for seven hours per day. A special state employee shall be in such a status on days for which he is not compensated as well as on days on which he earns compensation.
Special state employee status narrows, but does not eliminate, the scope of the restrictions on a special state employee's conduct.
Additional Exemptions for Special State Employees
A special state employee may have a financial interest in a state contract if she "does not participate in or have official responsibility for any of the activities of the contracting agency" and she files with the State Ethics Commission a disclosure of her interest and her immediate family's interest.
A special state employee who either participates in or has official responsibility for any of the activities of the contracting agency must not only file the same disclosure as described in § 7(d) but also obtain the approval of the governor for an exemption.
It's complicated! You can contact the Ethics Commission at (617) 371-9500 for specific advice.