Date: | 08/01/2006 |
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Referenced Sources: | 2006 State Ethics Commission Rulings |
How the conflict of interest law, G.L. c. 268A, §§ 4, 17 and 11 apply to private consultants and attorneys who provide government services.
Date: | 08/01/2006 |
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Referenced Sources: | 2006 State Ethics Commission Rulings |
How the conflict of interest law, G.L. c. 268A, §§ 4, 17 and 11 apply to private consultants and attorneys who provide government services.
This advisory explains how the conflict of interest law, General Laws Chapter 268A, applies to consultants and attorneys who personally perform services for state, county and municipal government.
The definition of a public employee in the conflict of interest law is very broad. It includes:
a person performing services for or holding an office, position, employment or membership in a [state, county, municipal] agency, whether by election, appointment, contract of hire or engagement, whether serving with or without compensation, on a full, regular, part-time, intermittent, or consultant basis.(1)
Public employee status is most easily attributed where an individual (e.g., attorney or consultant) personally undertakes to perform and does personally perform services for a public agency. In such situations, more often than not, an individual is a public employee for the purposes of the conflict of interest law.
Determining the public employee status of an employee or member of a corporation or other business organization, including a law firm, which contracts or agrees with a government agency to perform services is more complicated. Employees of a corporation or business organization do not become public employees simply because the corporation or business organization has a contract with a public entity. Nor is the corporation or business organization, e.g., a law firm, itself a municipal employee. In some instances when a private business contracts with a government agency, however, an employee, officer or partner of the business who actually performs services for the government agency will be a public employee for purposes of the conflict of interest laws. The Commission has developed and applies a multi-factor analysis for determining whether a particular individual performing the services is a public employee.
The factors considered by the Commission include, but are not limited to the following:
No one factor is dispositive; rather the Commission will balance all of the factors based on the totality of the circumstances.
Due to the broad definition of public employee in G.L. c. 268A and the application of the multi-factor analysis, otherwise private attorneys who personally provide legal services to a public entity are public employees under the conflict of interest law, and subject to its restrictions. (3)
Note that a consultant may be able to work on more than one project and/or for more than one agency, if the consultant has a single contract which by its scope allows such an arrangement.
For further advice on determining if a consultant or attorney is a public employee and on applying the factors listed above, please contact the Ethics commission.
A consultant or attorney who becomes a public employee by personally providing professional services to a public entity is subject to all of the restrictions of the conflict of interest law concerning bribes, gifts and gratuities, self-dealing and nepotism, the standards of conduct and post-employment. A partner of such a public employee also may be subject to restrictions. (4) For additional information about these restrictions, see the Commission's website at www.mass.gov/ethics.
In terms of the impact on the private practice of a consultant or attorney, the most important consequences of public employee status come through the application of §§ 4 and 7 (state), §§ 17 and 20 (municipal) and §§ 11 and 14 (county). (5) These sections restrict the consultant's or attorney's ability both to represent ("act as agent or attorney for") and be compensated by anyone other than the public entity in any matter involving the public entity (§§ 4, 17 and 11) (6) and to have a financial interest in more than one contract at a time with the public entity (§§ 7, 20 and 14). In addition, the consultant's partners are restricted from acting as agent or attorney for anyone other than the public entity in any matter involving the public entity in which he participates or has participated or has official responsibility as an employee of the public entity under §§ 5(d) (state), 12(d) (county) and 18(d) (municipal). These restrictions do not apply to the consultant's employees or associates with whom he is not in partnership.
For a so-called "regular" public employee, i.e., one who does not qualify as a "special" public employee as discussed below, these restrictions greatly curtail the extent to which an individual can work or be compensated as a consultant or attorney outside of his or her employment by a public entity. For example, a regular municipal employee is subject to § 17 restrictions on providing services to private parties with regard to any particular matter in which the same city or town - not just his own department -- is a party or has a direct and substantial interest. (7)
Sections 4 and 11 likewise restrict state and county employees, respectively, from doing work for, or receiving pay from, private parties.
The purpose of § 20 is to prevent public employees from using their position to obtain contractual benefits from the government, and to avoid the public perception that they have an "inside track" on such opportunities. Under § 20, a "regular" town employee may not have a contract with the same town agency by which he is employed. He generally would have to comply with the many restrictions of § 20(b) to maintain an interest in a contract with a town agency other than the one by which he is employed. (8) To contract to privately provide part-time (500 or fewer hours per year) services to another town agency, for example, a regular town employee would have to comply with disclosure requirements and obtain approval from the board of selectmen.
Similar restrictions apply to "regular" state employees under § 7. (9) The restrictions of § 14 applicable to "regular" county employees are substantially different. (10)
The conflict of interest law seeks to balance the need of government to attract qualified public employees with the need to protect the integrity of government. In order to achieve that balance, the law places less strenuous restrictions on employees who work less than full-time for public entities and who, thus, may be designated "special" public employees. Special public employees include employees who hold positions for which no compensation is provided and employees whom the voting body for the public entity has classified as special employees because their positions allow them to hold other jobs during normal working hours or because they work a limited number of hours for the public entity. (11) In order to be a "special" employee, state and county employees must meet one of these criteria; municipal employees must, in addition, be designated as "special" municipal employees by selectmen, the city council or aldermen. In a municipality with a population of more than 10,000, selectmen may not be special municipal employees; if the population is 10,000 or fewer, selectmen are automatically special municipal employees.
The restrictions imposed by c. 268A on private professional activity by public employees are greatly reduced where the public employee has "special [public] employee" status. For example, with regard to providing private services, a special municipal employee is subject to § 17 restrictions only with regard to any particular matter in which he participated at any time as a municipal employee, or which is, or within one year has been, a subject of his official responsibility, (12) or which is pending in his own agency.
If he serves as a public employee on sixty days or fewer (13) during a 365-day period, a special employee even can act as an agent or attorney for, and receive compensation from, a private party in a matter pending before his own agency, provided that he has not participated in the matter and it is not, and in the previous year was not, a subject of his official responsibility.
The restrictions of §§ 4 and 11 are similarly relaxed for special state employees and special county employees respectively.
Special employee status also makes it significantly easier for public employees to have more than one contract with different agencies within the same public entity. Thus, simply by filing a disclosure with the town clerk under § 20(c), a special municipal employee may contract to provide professional services to a municipal agency other than his own if he does not participate in its activities or have official responsibility for them.
A special municipal employee may even have a financial interest in a contract with his own agency if he discloses his interest in the contract and also obtains approval from the selectmen, city council or board of aldermen under § 20(d).
Section 7(d) and (e) set forth analogous procedures for special state employees, with disclosure instead to the Commission and approval instead by the governor. For special county employees, however, there is no provision permitting employment with their own county agency. Section 14(c) only permits a special county employee to contract with a contracting agency if he does not participate in or have official responsibility for its activities and if he files a disclosure with the Commission and receives the approval of the county commissioners.
In summary, special public employee status makes it possible for public employees who are professionals to privately practice their profession within their employing public entity's jurisdiction, even with respect to matters involving or of interest to their employing public entity, with certain reasonable and limited restrictions (as described above). This includes attorneys in private practice who are public employees only by virtue of their personally providing services to a public entity. By imposing on special public employees only these limited restrictions, G. L. c. 268A protects the public interest in avoiding conflicts of interest without unduly discouraging public service by privately practicing professionals.
This Advisory is intended to summarize the State Ethics Commission’s advice concerning compliance with the conflict of interest law and is informational in nature. It is not a substitute for advice specific to a particular situation, nor does it mention every aspect of the law that may apply in a particular situation. Public employees can obtain free, confidential advice about the conflict of interest law from the Commission’s Legal Division by submitting an online request on our website, by calling the Commission at (617) 371-9500 and asking to speak to the Attorney of the Day, or by submitting a written request for advice to the Commission at One Ashburton Place, Room 619, Boston, MA 02108, Attn: Legal Division.