IN THE MATTER OF HENRY M. DOHERTY


Appearing: David J. Burns, Esq.: Counsel for the Petitioner, State Ethics Commission William A. McDermott, Jr., Esq.: Counsel for the Respondent, Henry M. Doherty


Commissioners: Vorenberg, Ch., McLaughlin, Brickman, Mulligan


November 18, 1982



DECISION AND ORDER


I. Procedural History


The Petitioner filed an Order to Show Cause on May 27, 1982
alleging that the Respondent, Henry M. Doherty, had violated s.7
of M.G.L. c. 268A, the conflict of interest law. The Respondent
filed an Answer which denied any violation of the law and which,
in addition, raised defenses based on the asserted
unconstitutionality of the Commission's enforcement action and on
other legal grounds.

The Petitioner filed a Motion for Summary Decision and
submitted a brief in support thereof on August 25,1982. Pursuant
to notice, a hearing on the motion was conducted on August 25,1982
before Commissioner David Brickman, a duly designated presiding
officer. See, M.G.L. c. 268B, s.4(c). The parties thereafter filed
posthearing briefs and presented oral argument before the full
Commission on October 19,1982. In rendering this Decision and
Order, the four participating members of the Commission have
considered the evidence and arguments presented by the parties.


II. Findings of Fact


1. Mr. Doherty is the Assistant Director of Recreation at the
Metropolitan District Commission (MDC).

2. Mr. Doherty's working hours at the MDC are from 8:45 am.
to 5 pm., Monday through Friday, and he earns $21,010 per year from
the MDC.

3. Mr, Doherty is also employed by the Massachusetts Bay
Transportation Authority (MBTA) as a Car Cleaner. He began working
for the MBTA in May, 1960.

4. Mr. Doherty's working hours at the MBTA are from 12 am. to
7 am., Sunday through Thursday, and he earns $22,308 per year from
the MBTA.


III. Decision


For the reasons stated below, the Commission concludes that
Mr. Doherty is in violation of M.G.L. c. 268A, 87 by having a
financial interest in a contract made by a state agency.


A. The MBTA as a state agency


Section 7 prohibits a state employee from having a financial
interest ". . . directly or indirectly, in a contract made by a
state agency in

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which the commonwealth or a state agency is an interested party "
Mr. Doherty admits that he is a state employee under M.G.L. c.
268A, s.1(q) by virtue of his position with the MDC but denies that
the MBTA is a state agency under M.G.L. c. 268A, s.1(p).

For the purposes of M.G.L. c. 268A, "state agency" is defined
as

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 instrumeritality, within such
department, and any independent state authority, district,
commission, instrumentality or agency, but not an agency of
a county, city or town. M.G.L. c. 268A, s.1(p). (emphasis
added)

The MBTA's enabling legislation, M.G.L. c. 161A, s.2, defines it
as a body politic and corporate and a political subdivision of the
Commonwealth which has the power to hold property, to sue and be
sued and to prosecute and defend actions relating to its property
and affairs. The language of M.G.L. c. 161A, s.2, clearly
establishes the MBTA as an "independent state authority" and, as
such, it is within the aforementioned definition of state agency.
This conclusion is consistent with previous Commission and Attorney
General Advisory Opinions. The Commission has included transit
authorities comparable to the MBTA in structure as state agencies.
Commission Advisory Opinions EC-COI-81-119 and 79-91 define
regional transit authorities (RTA) as state agencies. The statute
creating RTAs, M.G.L. c. 161B, s.2, uses language identical to that
found in the enabling legislation of the MBTA. Moreover, Attorney
General Conflict Opinions Nos. 795 and 823 specifically conclude
that the MBTA is a state agency for the purposes of M.G.L. c. 268A,
s.1(p).


B. Mr. Doherty's financial interest in the MBTA contract


Mr. Doherty contends that his financial interest in the MBTA
contract does not violate M.G.L. C. 268A, s.7, and he raises four
arguments in Support of his position.

1. Mr. Doherty initially maintains that M.G.L. c. 268A, s.7
was not intended to cover contracts entered into prior to the
enactment of M.G.L. c. 268A in 1962. However, the Commission finds
no support for this contention in either the plain language of s.7
or in the outside sections which accompanied the enactment of
M.G.L. c. 268A. See, St. 1962 c. 779, s.s.1 et seq. Absent a
specific grandfather or saving clause reflecting a legislative
intention to exempt preexisting contracts from the prohibitions of
s.7, the Commission cannot infer an intent to have s.7 operate
prospectively. To the contrary, s.7 established a procedure for
employees to divest a prohibited financial interest within thirty
(30) days after they learn of the actual or prospective violation.
M.G.L. c. 268A, s.7(a).[1] Accordingly, when M.G.L. c. 268A
was enacted, Mr. Doherty had the opportunity under the statute to
resign from one of his state positions and divest his financial
interest.

2. Mr. Doherty also argues that an employment contract is
distinguishable from other contracts for "goods" or "services"
which are prohibited under s.7. This argument is also without merit
for several reasons. First, a contract for personal services is
viewed as a contract of employment within the s.7 prohibitions.
Buss, The Massachusetts Conflict of Interest Statute: An Analysis,
45 B.U.L. Rev. 299, 368, 372(1965). Second, the Commission
considered and rejected this distinction in 1980. Pursuant to this
determination the Commission has consistently found that contracts
for personal services fall within the purview of s.7. EC-COI-80-
118, 80-97 and 80-88
. Third, since the policy behind s.7 is to
prevent state employees from using their positions to influence
the awarding of state contracts in a way: beneficial to themselves,
Mr. Doherty's interpretation is too limited and defeats the
legislative intent of this section.

3. Mr. Doherty also contends that he is not in violation of
s.7 since his salary under the second contract is not derived from
the treasury of the Commonwealth. To support this contention Mr.
Doherty cites M.G.L. c. 30, s.21 which prohibits a person from
receiving more than one salary from the treasury of the
Commonwealth. He


Page 117

maintains that because his MBTA salary does not constitute a
"salary from the treasury of the Commonwealth," his compliance with
M.G.L. c. 30, s.21 satisfies the requirements of M.G.L. c. 268A,
s.7.

The Commission finds, however, that the scope of the s.7
prohibition is significantly broader than the restrictions of c.
30, s.21 and prohibits state employees from having a financial
interest in a state contract irrespective of whether the contract
funds pass through the treasury of the Commonwealth. Moreover, in
a recent Advisory Opinion, the Commission concluded that a state
employee's violation of s.7 required his divestiture of a
prohibited financial interest in a state contract notwithstanding
his compliance with M.G.L. c. 30, s.21. See, EC-COI-82-102.

4. Mr. Doherty further contends that the Order to Show Cause
does not allege facts which forms violation of s.7. Specifically,
he contends that the Commission's proceeding is premised on the
time which he accepted the MBTA position in 1960, prior to the
enactment of M.G.L, c. 268A in 1962. However, it is clear from both
the Petitioner's argument and para. 8 of the Order to Show Cause
that the focus of this proceeding is on Mr. Doherty's present
financial interest in the MBTA contract and not on his conduct in
1960.[2] The Commission finds that the Order to Show Cause
sufficiently notified the parties that Mr. Doherty's present
financial interest was at issue in the adjudicatory proceedings.
Mr. Doherty does not contend that he lacked a reasonable
opportunity to prepare and present argument on this issue, and the
Commission notes that the issue was fully briefed and argued by the
parties. See, M.G.L. c. 30A, s.11. Compare, Aristocratic Restaurant
of Massachusetts, Inc. v. Alcoholic Beverages Control Commisison

(No. 1), 374 Mass. 547,551(1978); Golden Grain Macaroni Company v.
F.T.C.,
472 F.2d 882, 886 (9th Cir., 1972).


C. Affirmative Defenses

1. Ex Post Facto


Mr. Doherty alleges that the enforcement of M.G.L. c. 268A,
s.7 in this instance operates as an ex post facto law as applied
to him. To support his position, he argues that the Commission is
seeking to punish him under a penal statute for past activity which
was legal before the enactment of M.G.L. c. 268A. The Commission
finds this argument without merit. The United States Supreme Court
has held that a law is not characterized as ex post facto where it
seeks to regulate current conduct rather than to punish an
individual for past activity. De Veau v. Braisted, 363 U.S. 144,
160 (1960). In the instant case, the Commission is not addressing
Mr. Doherty's conduct prior to 1962, but, as stated above, is
addressing his ongoing activity. Furthermore, Mr. Doherty's
argument characterizing M.G.L. c. 268A as a penal statute for the
purposes of the Commission's proceedings has been rejected by the
Supreme Judicial Court in Opinion of the Justices, 375 Mass. 795,
819 (1978). The Commission has also rejected the applicability of
the ex post facto prohibition to its proceedings by noting that it
is not applicable to administrative proceedings, such as the
Commission's, which involve the imposition of civil sanctions. In
the Matter of George A. Michael
, Adjudicatory Docket No. 137,
Decision and Order pages 27-28 (September 28,1981).


2. Laches


Mr. Doherty also argues that the Commission is barred from
pursuing this matter on the basis of laches. He maintains that he
has relied to his detriment on the Commonwealth's failure to notify
him that he was in violation of the law for the past nineteen (19)
years.

The defense of laches is not available to defendants where the
proceeding is brought by an authorized public agency to enforce the
laws of the Commonwealth. Board of Health of Holbrook v. Nelson,
351 Mass. 17 (1966). Mr. Doherty attempts to distinguish Holbrook
on the grounds that the Commission proceeding represents an attempt
by the Commonwealth to "entrap" him. He further argues that the
Commonwealth owes a higher standard of duty to its employees in
this instance. However, Mr. Doherty offers no proof of his
allegation of entrapment and fails to cite any authority for his
position on the duty owed by the Commonwealth. Moreover, even if
laches were available as a defense, it was

Page 118

incumbent upon Mr. Doherty to prove that the Commission knew of the
violation and thereafter waited several years before enforcing the
law against him. Mr. Doherty failed to meet his burden of proof on
this issue. Compare, Gates v. Department of Motor Vehicles, 94 Cal.
App. 3d. 921 (1979).


3. Statute of Limitations


Finally, Mr. Doherty argues that the Commission is barred from
enforcing the law by the statute of limitations. He supports his
argument by maintaining that the Commission is seeking to enforce
against activity dating back to 1960. As stated earlier, this
enforcement proceeding is premised on ongoing activity. Therefore
the Commission finds that the statute of limitations is not a
relevant factor in this proceeding.


IV. Order


On the basis of the foregoing, the Commission concludes that
Henry M. Doherty is in violation of M.G.L. c. 268A, s.7. Pursuant
to the Commission's authority under M.G.L. c. 268B, s.4(d), the
Commission orders that Mr. Doherty cease and desist from such
violation and pay the civil penalty as set forth below. In arriving
at these sanctions for a violation of M.G.L. c. 268A, the
Commission has carefully considered certain mitigating factors
raised by Mr. Doherty, specifically, the fact that he entered into
his employment arrangement with the MBTA prior to the enactment of
M.G.L. c. 268A and the inaction of other law enforcement agencies
subsequent to the law's enactment. While these factors do not
excuse Mr. Doherty's violation of M.G.L. c. 268A, they do furnish
a basis for the Commission's decision to impose a less-than-maximum
penalty in this case.[3] Accordingly, the Commission orders Henry
M. Doherty to:

1. Cease and desist from violating M.G.L. c. 268A, s.7 by
terminating one of his employment arrangements with the state.

2. Pay $100 (one hundred dollars) to the Commission as a civil
penalty for having a financial interest in a contract made by the
MBTA in violation of M.G.L. c. 268A, s.7.

The Commission directs Mr. Doherty to comply with these orders
within fourteen days of receipt of this Decision and Order.


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


[1] This provision states that "(Section 7) shall not apply
(a) to a state rnployee who in good faith and within thirty days
after he learns of an actual or prospective violation of this
section makes full disclosure of his financial interest to the
contracting agency and terminates or disposes of the interest."

[2] The second sentence of para. 8 of the Order to Show Cause
contains the Petitioner's allegation that, "[Mr. Doherty] has a
financial interest [in the MBTA contract] in violation of s.7 of
G.L. c. 268A." The preceding sentence within para. 8 identifies the
MBTA contract which Mr. Doherty accepted in 1960. The acceptance
of the contract in 1960, however, is not an element of the s.7
violation.

[3] Through this Adjudicatory Decision, the Commission
intends to put state officials and employees on notice that s.7, in
general, prohibits employees from holding two state jobs and that
violations of s.7 will be prosecuted and enforced through cease and
desist orders as well as civil fines. Because this is the first
Commission Adjudicatory Decision involving a violation of M.G.L.
c. 268A, s.7, the commission concludes that a minimum fine together
with a cease and desist order is an appropriate sanction. However,
subsequent cases based upon comparable violations of s.7 will be
subject to a more substantial civil fine.

End Of Decision