October 26, 1987

FACTS*:


You are the Secretary of the Executive Office of Economic
Affairs. In that capacity, you are also a member of several quasi-
public corporations which have been established by the General
Court since 1975 to further certain economic and development
programs. [1]

These corporations are typically administered by boards of
directors composed in significant part by individuals with
particular private sector backgrounds and institutional
affiliations, as required by their respective enabling statutes.
These statutorily prescribed qualifications create the potential
for conflict, as they require that corporate directors have certain
affiliations which will be affected by the actions they take as
directors. The General Court has inserted exemptive provisions in
each of the enabling statutes. The exemptive rovision from the
enabling statute of the Massachusetts Corporation for Educational
Telecommunications (MCET), for example, reads as follows:

The provisions of chapter two hundred and sixty-eight A of the
General Laws shall apply to all directors, officers and
employees of the corporation except that the corporation may
purchase from, sell to, borrow from, contract with or
otherwise deal with any organization in which any director of
the corporation is in any way interested or involved;
provided, however, that such interest or involvement is
disclosed in advance to the directors and recorded in the
minutes of the proceedings of the corporation; and provided
further, that no director having such an interest or
involvement may participate in any decision relating to such
organization. St. 1982, c. 560, s.3.

The exemptive provisions for the other enabling statutes are
substantially similar.


QUESTION:[2]


In the normal course of official duties of MCET directors,
particular matters on the MCET agenda may affect the financial
interests of business organizations for which MCET directors serve
as officers or employees. Some of these matters may be contracts
between MCET and their organizations. How do the provisions of G.L.
c. 268A, s.s.6 and 7 and the exemptive provisions in the MCET
enabling statute apply to MCET directors who are affiliated with
organizations which have matters pending before MCET?


ANSWER:


MCET directors are subject to the conditions discussed below.


DISCUSSION:


Members of the MCET board of directors are state employees for
the purposes of G.L. c. 268A. See, G.L. c. 268A, s.1(p),(q); St.
1982, c. 560
. In view of their part-time status, directors are also
"special state employees" within the meaning of G.L. c. 268A,
s.1(o). Two provisions of G.L. c. 268A are relevant to your
question.

1. Section 7


Section 7 generally prohibits a state employee from having a
financial interest, direct or indirect, in a contract made by a
state agency. For example, absent qualification for an exemption,
a state employee who has an ownership interest in a company would
violate s.7 if his company contracts with his state agency.
Further, a special state employee may have a financial interest in
a contract between his company and his agency only if the governor,
with the consent of the executive counsel, approves. G.L. c. 268A,
s.7(e).

As applied to MCET directors, s.7 places few, if any,
restrictions on directors' financial interests in contracts

Page 180

made by state agencies. MCET directors, as special state employees,
may have a financial interest in contracts made by state agencies
other than MCET following their filing of a disclosure of their
contractual interest pursuant to G.L. c. 268A, s.7(d).

With respect to their having a financial interest in contracts
made by MCET, directors need not comply with the gubernatorial
exemption procedure of s.7(e). Pursuant to MCET's enabling statute,
St 1982, c. 560, s.3, MCET may purchase from, sell to, borrow from,
contract with, or otherwise deal with any organization in which any
MCET director is in any way interested or involved, as long as the
disclosure and abstention requirements of St. 1982, c. 560, s.3 are
satisfied. In effect, the General Court has exempted MCET directors
from the restrictions which s.7 would customarily place on their
financial interest in an MCET contract [3]


2. Section 6


Section 6 generally prohibits a state employee from
participating [4] in any contract, decision, determination or other
particular matter [5] in which, in relevant part, either the state
employee or any organization for which the state employee serves
as an officer, director, trustee, partner or employee has a
financial interest. The abstention requirement is not absolute and
is tempered by a disclosure and exemption procedure under which the
employee may participate in the matter if his appointing official
has made and filed with the Ethics Commission a written
determination that the financial "interest is not so substanital
as to be deemed likely to affect the integrity of the services
which the Commonwealth may expect from the employee." G.L. c. 268A,
s.6(3).

As state employees, MCET directors would customarily be subject
to these abstention, disclosure and exemption provisions with
respect to all matters affecting financial interests covered by
G.L. c. 268A, s.6. In light of the exemptive language of St. 1982,
c. 560, s.3, there appears to be an ambiguity as to whether the s.6
exemption avenue is available at all to MCET members. Based on our
comparison of c. 560, s.3 with G.L. c. 268A, s.6, our application
of principles of statutory construction and our examination of the
legislative history of c. 560 and similar statutes, we conclude
that the s.6 exemption procedure is available to MCET directors
except for contracts or other particular matters in which the
director has been exempt from s.7 by virtue of c. 560, s.3.

Viewed in its entirety, c. 560, s.3 appears to establish for
MCET directors conflict of interest exemptions and restrictions
which supplement, rather than replace, the existing provisions of
G.L. c. 268A. The plain language of c. 560, s.3 accomplishes three
purposes:

1. a confirmation of the application of G.L. c. 268A to MCET
directors subject to an exemption from s.7 for MCET directors;

2. a disclosure requirement with respect to those interests
made exempt by c. 560; and

3. an absolute abstention requirement with respect to matters
relating to the organization and in which the director has an
interest made exempt by c. 560.

We do not believe that the Legislature intended the abstention
requirement of c. 560, s.3 to supercede the exemption avenue of
s.6. Reasonably read, c. 560, s.3 establishes an exemption to the
s.6 procedure only for contracts made exempt from s.7.

The c. 560 abstention requirement does not appear in isolation
but rather follows a proviso to a limitation or an exception to a
general rule. The use of words such as provided, further" and
"having such an interest" seem to refer to conditions under which
a director may take advantage of an exemption from s.7. We
therefore presume that the abstention requirement is confined to
its previous antecedent. Opinion of the Justices, 286 Mass. 611, 620
(1934)
.[6]

Our examination of the progression of legislative drafts which
culminated in the enactment of c. 560 as well as in the enactment
of other quasi-public corporations with similar exemption langage
reveals no further guidance as to the Legislature's intent The
relevant language in c. 560, s.3 was enacted in unchanged form from
its original version, which was modeled after earlier precedents
established by the Legislature. See, FN 1, infra. The original
legislation creating this language was contained in St. 1975, c.
866 (MCDC) and thereafter "boilerplated" in the enabling statutes
of other similarly-structured corporations. There is no indication
that the Legislature was aware of the apparent ambiguity it was
creating with s.6 or that it intended any particular result.

In light of the apparent purpose of c. 560, s.3, the absence of
any legislative history to the contrary and our obligation to
construe statutes so as to constitute a harmonious whole, we
conclude that the s.6 exemption avenue is available to MCET
directors, except for contracts made exempt from s. 7 by virtue of
c. 560, s.3. [7] Accordingly, directors appointed by the governor may
receive a s.6 exemption from the governor. Those directon who are
members by virtue of their governmental office, such as the
Chancellor of the Board of Regents, may seek an exemption from the
government officials who appointed them to their positions. Those
directors who are members by virtue of their private position, such
as the president of the WGBH Educational Foundation, would not
appear to have an official responsible for these appointments to
their positions. Consequently, they have no appointing official who
exercises the exemption authority under s.6. [8]

---------------

* Pursuant to G.L. c. 268B, s.3(g), the requesting person has
consented to the publication of this opinion with identifying
information.

Page 181

[1] These corporations include the Maasachusetts Community
Development Corporation, St. 1975 , c. 866; the Massachusetts
Technology Development Corporation, St. 1978, c. 497; the Community
Economic Development Assistance Corporation, St. 1978 c. 498; the
Bay State Skills Corporation, St. 1981, c. 351; the Massachusetts
Technology Park Corporation, St. 1982 , c. 312; the Masaachusetts
Corporation for Educational Telecommunications, St. 1982, c. 560;
and the Massachusetts Products Development Corporation, St. 1984,;
c. 208.

[2] For ease of discussion, this opinion will address the
application of G.L. c. 268A to MCET directors. The principles in
this opinion will apply with equal force to directors of other
quasi-public corporations with exemptive lanaguage similar to
MCET.

[3] The exemption may also apply to other violations of G.L.c. 268A
which otherwise accrue due to the dealings ofa director's
organization with MCET. See, G.L.c. 268A, s.4(a), which prohibits
a state employee from receiving "compensation" for the services
which others perform in their dealings with state agencies. We
note, however, that the exemption does not exempt MCET directors
from the agency restrictions of s.4(c). Under s.4(c), an MCET
director may not have any dealings with MCET on behalf of his
organization.

[4] "Particapate", is defined as participate in agency action or
in a particular matter personally and substantially as a state,
county and municipal employee, through approval, disapproval,
decision, recommendation, the rendering of advice, investigation
or otherwise. G.L.c. 268A, s.1(j).

[5] "'Particular matter", is defined as any judicial or other
proceeding, application, submission, request for a ruling or other
determination, contract, claim, controversy, charge, accusation,
arrest, decision, determination, finding, but excluding enactment
of general legislation by the general court and petitions of
cities, towns, counties and districts for special laws related to
their governmental organizations, powers, duties, finances and
property. G.L.c. 268A,s.1(k).

[6] This parsing of the enabling statute is supported by the rule
of statutory construction called "the rule of the last antecedent"
United States v. Ven-Fuel, Inc., 758 F.2d 741,751(1st Cir. 1985).
That rule holds generally that qualifying phrases are to be applied
to the words or phrase immediately preceding and not to be
construed as extending to more remote phrases unless there is a
plain indication to the contrary in the statute. Id, See, also 2A.
C. Sands, Suthetland Statutory Construction, s.s.47.09, 47.33(4th
ed. 1972). The rule which is grounded in grammar as well as logic,
has long been followed by Massachusetts courts, Moulton v.
Brooklyn Rent Control Board,
385 Mass. 228-231 (1982); Druzik v.
Board of Health of Haverhill
324 Mass. 129, 133(1949); West's
Case, 313 Mass. 146, 149 (1943).

[7] Because of the hypothetical nature of your question, we cannot
address whether a "blanket" s. 6 exemption granted by an appointing
official would suffice or whether a separate s.6 exemption need be
sought each time a matter arises affecting the member's or his
organization's financial interest. We would note that s. 6 seems to
envision the latter course because the perceived impact of the
financial interest may differ with each particular matter.

[8] This is not to say that the Commission would not consider other
potential surrogate appointing officials to effectuate the purposes
of G.L.c. 268A, s.6. See, {Commission Advisory No. 11}. Whether
the creation of such an appointing official is feasible can only be
examined in the context of a future opinion request. We note that
the selection of the trustees of the WCBH Educational Foundation
asthe "appointing official" would not be appropriate in light of
the obvious financial interest which the appointing official would
have in the result.

End Of Decision