Opinion  EC-COI-81-149

Date:	11/17/1981
Organization:	State Ethics Commission

A part-time Department of Mental Health employee may maintain outside employment with other agencies and private entities, subject to certain restrictions. As a special state employee, the individual may have a financial interest in contracts with agencies such as DSS or DPW if they do not participate in or have official responsibility for those agencies’ activities and file the required disclosure under § 7. However, the employee may not receive compensation derived from a DMH contract with a private vendor, as this would create a prohibited financial interest in a contract with their own agency unless an exemption is obtained. The employee may accept compensation related to referrals if they do not participate in or have responsibility for those referrals and the matter is not pending in DMH.

Facts

You currently work part-time for the Department of Mental Health (DMH) as (title omitted). While employed by DMH, you have had other part-time employment arrangements with the Department of Social Services (DSS), from whom you have also received case referrals, and ABC Center (Center), a private vendor which receives DMH funds. These latter arrangements have involved various methods of payment.

Question

You ask whether you may continue to pursue these various employment arrangements while maintaining your part-time status with DMH without violating the conflict of interest law, G.L. c. 268A.

Answer

The Commission concludes that you may, subject to the conditions discussed below.

Discussion

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. As a part-time employee of DMH at the (location omitted), you are a state employee as that term is defined in G.L. c. 268A, s.1(q). Since your position with DMH allows you to engage in private employment during normal working hours, you are a "special state employee" as that term is defined in s.1(o). Section 7 prohibits you from having a direct or indirect financial interest in a contract made by a state agency in which the commonwealth or a state agency is an interested party. However, as a special state employee, you are prohibited from having such an interest only where you participate^[1] in or have official responsibility^[2] for any of the activities of the contracting agency, provided that you must file, with the Commission, a statement making full disclosure of your interest in any state contract.

In response to your first question, you indicate that you have performed psychological assessments for clients of the Center and been paid with funds the Center received from DMH. Under the provisions of s.7, this employment arrangement is illegal because you have an indirect financial interest in a contract made by DMH, a state agency, with the Center, and you participate in the activities of DMH, the contracting agency, in your position as (title and location omitted) Therefore, you can be exempted from the provisions of s.7 under s.7(e) only if you file the required disclosure with the Commission and the Governor with the advice and consent of the Executive Council exempts you. See, EC-COI-81-106. In those instances where you have performed psychological assessments for private clients of the Center and were reimbursed by Medicaid, which is under the authority of the Department of Public Welfare (DPW), you do not violate s.7. Although you have a financial interest in a contract made by a state agency, DPW, since you do not participate in or have official responsibility for any of the activities of DPW, this employment arrangement is permissible. See, EC-COI-81-129 and 130. This analysis also applies where you have worked with a client of DSS and received payment from a DSS account. Since you do not participate in or have official responsibility for any of the activities of DSS, your financial interest in the DSS contract does not violate s.7.

Additionally, the provisions of s.4(a) apply to you. Section 4(a) prohibits you from receiving or requesting compensation from anyone other than the commonwealth or a state agency in relation to any particular matter in which the commonwealth or a state agency is a party or has a direct and substantial interest.^[3] As a special state employee, you are prohibited from receiving such compensation only in relation to a particular matter in which you have participated or which is or within one year has been the subject of your official responsibility or which is pending in your state agency. Referral decisions by a state agency are particular matters of direct and substantial interest to the commonwealth. However, as a special state employee under the provisions of s.4(a), you may accept referrals from state agencies and reimbursement from a private source, if you do not participate or have official responsibility for the referral decision and the matter is not one that is pending in DMH. If the referral is not made by a state agency, but by a private source and you receive reimbursement from a private source, the matter is not of direct and substantial interest to the commonwealth and does not constitute a violation of s.4(a). See, EC-COI-81-105.

Lastly, you ask whether you violate G.L. c. 268A where your business partner, a former state employee, works for a private vendor and is reimbursed by state funds. Since the partnership does not receive any part of the state funds and you are not a party to the contract between your partner and the vendor, your partnership does not represent a violation of G.L. c. 268A.^[4]

Decision

In conclusion, as a special state employee, you may have an interest in a state contract as long as you do not participate in or have official responsibility for any of the activities of the contracting agency and you file a statement disclosing your interest with the State Ethics Commission or you file the disclosure and receive an exemption from the Governor. Moreover, you may receive compensation from a private entity in connection with a particular matter of direct and substantial interest to the commonwealth or a state agency as long as you do not participate in or have official responsibility for the matter and it is not pending in DMH.
 

End Of Decision

[1] For the purposes of G.L. c. 268A, "participate" is defined as participate in agency action or in a particular matter personally and substantially as a state ... employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation or otherwise. G.L. c. 268A, s.1(j).

[2] For the purposes of G.L. c. 268A, "official responsibility" is defined as the direct administrative or operating authority, whether intermediate or final, and either exercisable alone or with others, and whether personal or through subordinates, to approve, disapprove or otherwise direct agency action. G.L. c. 268A, s.1(i).

[3] For the purposes of G.L. c. 268A, "particular matter" defined as 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. G.L. c. 268A, s.1(k).

[4] This conclusion is based on your representation that the partnership would not receive state funds. Should the partnership acquire state funds, then the result of this opinion might be altered. G.L. c. 268A, s.s.5, 7. You may request further guidance from the Commission should such a situation arise.