June 19, 1989

FACTS:


Page 249

You are currently under consideration for appointment to a state
authority (Authority). Some of the Authority's powers include
issuance of bonds and loans to participating institutions. In your
private capacity, you currently serve on the board of overseers
(Board) of a institution (ABC), a corporation which falls within
the jurisdiction of the Authority. The Board is comprised of over
100 members who are elected by the ABC board of trustees. The
Board meets annually ad is expected to provide service through
participation in ABC committees; to seek to increase community
support and understanding of ABC's mission and to maintain a close
familiarity with the goals ad progress of ABC. Board membership is
intended to be broadly representative of the communities and
groups, served by ABC. The Trustees have the general management and
control of overall property affairs and funds of ABC, and are also
responsible for the election of officers and trustees of ABC.
Members of the Board may participate in advisory subcomnuttees
established by the Board of Trustees but do not exercise management
authority.


QUESTION:


Does G.L. c. 268A permit you to serve as a member of the
Authority while also retaining your membership on the ABC Board?


ANSWER:


Yes, subject to the conditions set forth below.


DISCUSSION:


1. Jurisdiction


We conclude that the Authority is a "state agency" within the
meaning of GL. c. 268A, s.1(p)[1] and you will become a state
employee within the meaning of G.L. c. 268A, s.1(q)[2] through your
membership. The definition of state agency includes "any
independent state authority ... [or] instrumentality ... but not
a agency of a county, city or town." G.L c. 268A, s.1(p). The
Authority's enabling statute expressly identifies the Authority as
a public instrumentality ad states that the exercise of the
Authority's powers shall be deemed to be the performance of a
essential public function. Although the enabling statute and the
legislative history surrounding the enactment of the Authority are
silent as to the proper characteriiiation for G.L. c. 268A
purposes, we regard the Authority as a state agency under G.L. c
268A. This conclusion is based on the fact that the Authority
members are appointed by the governor and exercise a statewide
jurisdiction over mstitutions throughout the Commonwealth. This
result is consistent with the Commission's application of state
agency status to other independent state authorities and
instrumentalities. See, EC-COI-81-119 (regional trasportation
authority); In the Matter of Henry Doherty, 1982 State Ethics
Commission 115 (Massachusetts Bay Transportation Authority); In
the Matter of Louis Logan
, 1982 State Ethics Commission 40
(Massachusetts Technology Park Corporation). It is the
commonwealth, rather than any county or municipality, which appears
to be the "level of government to be served by the agency in
question." Buss, The Massachusetts Conflict of Interest Law:. An
Analysis
, 45 B.U.L. Rev. 299,310 (1965); EC-COI-83-63.

In view of your uncompensated status as a Authority member, you
are also considered a special state employee under G.L. c. 268A,
s.1(o). As a special employee, you remain subject to many
prohibitions under G.L. c. 268A but are eligible for
exemptions permitting your private dealings with certain state agencies.


2. Limitations on Your Official Activities


Under G.L. c. 268A, s.6, a state employee must abstain from
official participation[3] in any particular matter[4] in which "a
business organination in which he is serving as officer, director,
trustee, partner or employee ... has a financial interest." Based
on the information you have provided, we conclude that s.6 will not
require your abstention from participation as an Authority member
in matters affecting ABC's financial interest because your status
as a member of the Board does not rise to the level of officer,
director, trustee, partner or employee of ABC. See, EC-COI-89-12
(member of board of advisors is not a relationship covered by s.6);
ad 82-145 (hospital corporator is not a officer, director, trustee,
partner or employee). In EC-COI-89-l2, the Commission observed

The Commission has previously stated that it will not be bound
by the title of the position one holds within a business
organization, but rather will examine the substance of the
position. For example, in EC-COI-87-10, the Commission
concluded that a savings bank corporator exercised management
functions sufficiently similar to a director so as to be
regarded as a director for G.L. c. 268A

Page 250

purposes. See also, EC-COI-8O-43 (relationship between attorneys
will be treated as partnership where attorneys share ownership
assets and liabilities, even absent a formal partnership
agreement). Based on the information you and the Hospital
provided, however, we conclude that your board of advisor
responsibilities are not comparable to those of a corporate
officer or director. This conclusion is based on the fact that
those corporate officer and director functions are already
performed by other individuals, and on the Hospital's intent to
establish the board of advisors as a community-based sounding
board, rather than as a decision-making management board.

The principles expressed in EC-COI-89-l2 are equally applicable to
members of the Board because ABC's corporate officer and director
functions are performed by other individuals, and the overseers
are primarily a community-based sounding board.

Should a matter come before you in which ABC has an interest,
the provisions of G.L.c. 268A,s.23 will apply. Under s.23, a state
employee may not use his official position to secure unwarranted
privileges or exemptions of substantial value for others, and must
also avoid creating the reasonable appearance of undue favoritism
towards others due to the existence of private relationships. To
dispel any appearance of undue favoritism towards ABC, you must
disclose in writing to your appointing authority the relevant facts
concerning your official responsibilities and private relationship
with ABC whenever a matter involving ABC comes before Authority.
Of course, should you decide to abstain from any participation in
such matters, no such disclosure is required.


3. Limitations on Your ABC Activities


Section 4(c) places restrictions on the outside activities of
state employees. Specifically, s.4(c) prohibits a state employee
from acting as the agent or attorney for a non-state party in
connection with any application, proceeding, determination or other
particular matter in which any state agency is either a party or
has a direct and substantial interest. As a special state
employee, however, the restrictions of s.4 apply only to matters
within your official responsibility at the Authority. For example,
if ABC has an application pending before the Authority, you may not
act as ABC's agent or spokesperson in connection with that
application. You would not be regarded as ABC's agent by
participating in in-house discussions as a member of the board of
overseers. See, EC-COI-83-145; 82-45. On the other hand, you must
avoid appearing before the Authority on behalf of ABC, which would
include signing, in your representative capacity, any documents or
correspondence directed to Authority officials, or making phone
calls to Authority members or employees.

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

[1] "State agency," any department of a state government including
the executive, legislative or judicial, and all councils thereof
and thereunder, and any division, board, bureau, commission,
institution, tribunal or other instrumentality within such
departments ad any independent state authority, district,
commission, instrumentality or agency, but not an agency of a
county, city or town.

[2] "State employee," a person performing services for or holding
an office, position, employment, or membership in a state agency,
whether by election, appointment, contract of hire or engagement,
whether serving with or without compensation, on a regular, part-
time, intermittent or consultant basis, including members of the
general court and executive council. No construction contractor
nor any of their personnel shall be deemed to be a state employee
or special state employee under the provisions of paragraph (o) or
this paragraph as a result of participation in the engineering and
environmental analysis for major construction projects either as
a consultant or part of a consultant group for the commonwealth.
Such contractors or personnel may be awarded construction contracts
by the commonwealth and may continue with outstanding construction
contracts with the commonwealth during the period of such
participation; provided, that no such contractor or personnel shall
directly or indirectly bid on or be awarded a contract for any
construction project if they have participated in the engineering
or environmental analysis thereof.

[3] "Participate," participate in agency action or in a particular
matter personally and substantially as a state, county or municipal
employee, through approval, disapproval, decision, recommendation,
the rendering of advice, investigation or otherwise.

[4] "Particular matter," 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 enactrnent
of general legislation by the general court and petitions of
cities, towns, counties and districts for special laws related to
their

Page 251

governmental organizations, powers, duties, finances and property.

[5] You have indicated that, aside from your ABC work, you are
involved in private development. While none of the restrictions of
s.4 would appear relevant to your real estate development work, you
may renew your opinion request with us if you wish to receive
further guidance on this point.

End Of Decision