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The president of a corporation which has service contracts with state and municipal agencies asks whether it would violate the Conflict of Interest Law if he or she were elected to the General Court and retained his or her interest and position with the company.
You are seeking election to the General Court. You are also President of a corporation, the stock of which is owned by you (1/3) and your parents (2/3). The corporation has service contracts with state and local agencies. You ask whether it would violate the provisions of the state’s Conflict of Interest Law, General Laws Chapter 268A, for you to retain your interest and position with this company should you be elected.
The State Ethics Commission does not normally render opinions hypothetically. However, since the provisions of the Conflict of Interest Law may affect your decision whether to continue seeking elective office, the Commission will respond to your request. In rendering this opinion, the Commission has relied upon the facts as you have stated them and has not made any independent investigation of those facts.
If you are elected a state senator, you would be a state employee as that term is defined in § 1(q). Section 7 prohibits a state employee from having a direct or indirect financial interest “in a contract made by a state agency.” Section 7(c) exempts a member of the General Court from this absolute prohibition provided that the contract is made by an agency other than the General Court or either branch thereof, “if the direct or indirect interests of the member and those of his immediate family in the corporation… with which the contract is made to not in the aggregate amount to ten percent of the total proprietary interest therein, and the contract is made through competitive bidding and the legislator files with the State Ethics Commission a statement making full disclosure of his interest and the interest of his family.” Since the corporation is wholly owned by you and your parents, you will not be able to take advantage of this exemption. Accordingly, should you be elected, within thirty days you would have to terminate or dispose of your financial interest in the corporation’s service contracts with state agencies (see §7(a)). However §7 would not restrict you from having a financial interest in the corporation’s contracts with municipal agencies.