January 12, 1987

 

FACTS:


You are the executive director of the Community Economic
Development Assistance Corporation (CEDAC), a quasi-public
corporation created pursuant to G.L. c. 40H. Section 3(d) of c.
40H expressly provides that G.L. c. 268A applies to all directors,
officers and employers of CEDAC, subject to certain conditions.[1]
You have been authorized to seek an opinion on behalf of two
members of the CEDAC board. Thomas Welch is a member of the CEDAC
board of directors and is also a principal in Welch and Associates,
a development consulting firm. CEDAC is currently reviewing a
funding request from the Codman Square Housing Development
Corporation (HDC) to pay for certain architectural services, test
borings, and site surveys for the Lithgow Project(Project). The HDC
has retained Welch and Associates as its development consultant.
Under the proposed arrangement, Mr. Welch will not be paid for his
consultant services out of any CEDAC funding, nor would he
have any dealings as consultant with any CEDAC officials or staff. He will
also abstain from any participation as a CEDAC member in connection
with this project and follow the disclosure procedures of c. 40H
s.3(d) and G.L. c. 268A s.6.

Linda Conroy is a CEDAC board member and also is employed on a
full-time basis as the director of research and program development
for the Massachusetts

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Housing Finance Agency (MHFA). William Jones, a member of the MHFA
board of directors, is the executive director of the Codman Square
HDC and has appeared before the CEDAC board in connection with the
Project.
 


QUESTIONS:


1. Does the proposed conduct of Mr. Welch satisfy the
requirements of G.L. c. 268A?

2. Does G.L. c. 268A permit Ms. Conway to participate as a
CEDAC member in reviewing the Codman Square HDC funding request?
 


ANSWERS:


1. Yes.

2. Yes, subject to certain conditions described below.
 


DISCUSSION:

A. Application of G.L c. 268A to Mr. Welch


We conclude that the safeguards which Mr. Welch has proposed are
sufficient to prevent a violation of G.L. c. 268A. Four sections
of G.L. c. 268A are relevant.


1. Section 6

This section prohibits Mr. Welch from participating[2] as a
CEDAC director in any decision, contract or other particular
matter[3] in which either he or his firm has a financial interest.
The HDC funding decision is a particular matter which would require
Mr. Welch's abstention under s.6 because of his firm's consultant
relationship with the HDC. Therefore, his proposed abstention from
participation in any decision relating to the CEDAC project would
satisfy G.L. c. 268A, s.6. The safest course would be for him to
leave the room during any CEDAC discussions or votes concerning the
HDC.[4]
 

2. Section 23

This section, like s.6, places limitations on Mr. Welch's CEDAC
activities. In particular, s.23(b)(2) prohibits him from using his
official position to secure unwarranted privileges or exemptions
of substantial value for the HDC. Because Mr. Welch will be
abstaining as a CEDAC director from any matters relating to the
HDC, however, s.23 should not pose any problems for him.


3. Section 7


This section generally prohibits a part-time or special state
employee from having a financial interest in a contract made by
his own state agency. This section will not apply to Mr. Welch as
long as his consultation fees will be derived from non-CEDAC
sources. See, also, G.L. c. 40H, s.3(d).


4. Section 4


This section restricts the outside activities of Mr. Welch. In
essence, Mr. Welch may not receive compensation from or act as
agent for his firm or the HDC in relation to any matter which is
within his official CEDAC responsibility. For example, he could not
(as a consultant) deal with CEDAC staff in connection with the
CEDAC funding approval or oversighc Based on the information which
you have provided, it does not appear that s.4 will be a problem
because Mr. Welch will not have any such dealings with CEDAC staff;
as we understand it, CEDAC staff will be dealing with individuals
other than Mr. Welch, and his development consultant fees will not
be attributable to CEDAC funding.


B. Application of G.L. c. 268A to Ms. Conroy


We conclude that Ms. Conroy may participate as a CEDAC member
in reviewing the Codman Square HDC funding request, subject to
certain conditions. Under G.L. c. 268A, s.6, Ms. Conroy must
refrain from participating in any particular matter in which either
1) she; 2) her immediate family; 3) her partner; 4) a business
organization in which she serves as officer, director, trustee,
partner, or employee; or 5) a person or organization with whom she
is negotiating, or has an arrangement for future employment has a
financial interest. Based upon the information you have provided,
we find that none of the above-described relationships are affected
financially by Ms. Conroy's participation in the Codman Square HDC
decision. The fact that the executive director of the HDC which is
seeking CEDAC funds is also on the MHFA board of directors does
not, without more, give rise to a sufficient financial relationship
for s.6 to apply.[5]

Although Ms. Conroy's participation will not violate G.L. c.
268A, s.6, she must also comply with the restrictions of s.23.
Specifically, she must refrain from using her official CEDAC
position to secure for Mr. Jones unwarranted privileges or
exemptions of substantial value. G.L. c. 268A, s.23(b)(2). She must
also avoid creating a reasonable impression that her decisions as
a CEDAC member will be unduly affected by the fact that Mr.Jones
is a member of the MHFA board of directors. Id. s.23(b)(3). To
avoid creating such an impression, prior to participation in the
CDC decision, she must disclose in writing to the governor the fact
that she is employed by MHFA, and that Mr. Jones, the executive
director of the DCD, is a member of the MHFA board. Alternatively,
she may avoid creating an impression of

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undue favoritism by voluntarily abstaining from participation in
the CDC funding decision.

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

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

[1] Under s.3(d), CEDAC may purhase from, sell to, borrow from,
loan to, contract with or otherwise deal with any eligible
organization in which any director of the corporation is in any way
interested or involved; provided, that such interest or involvement
is disclosed in advance to members of the board and recorded in the
minutes of the board, and provided, further, that no director
having such an interest or involvement may participate in any
decision of the board relating to such eligible organization.

[2] "Participate," 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).

[3] "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 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).

[4] His disclosure and abstention would also be consistent with the
independent requirements of G.L. c. 40H, s.3(d).

[5] On the other hand, if Ms. Conroy's continued employment or
promotional opportunities at MHFA will depend on how she votes on
the HDC proposal, then she would be subject to the abstention
requirements of s.6. We understand that there are no pending
personnel actions involving Ms. Conroy which are under review by
the MHFA board. Compare, EC-COI-86-25.

 

End Of Decision