You work for the State Treasury of the Commonwealth. You have been asked to serve on the Board of Directors (Board) of a credit union (ABC). You would also serve on the Auditing Committee (Committee) of the ABC.
You ask whether you may accept these positions without violating the state conflict of interest law, G.L. c. 268A.
The Commission concludes that you may, subject to certain limitations.
In rendering this opinion, the Commission has relied on the facts as you have stated them and has not made any independent investigation of those facts. As treasury employee, you are a state employee as defined in s.1(q) of the conflict law. Section 4 of that statute prohibits you from receiving compensation from or acting as agent or attorney, regardless of compensation, for anyone other than the Commonwealth in relation to a "particular matter"[1] in which the state is a party or has a direct and substantial interest. Since you are not compensated as a member of the Board you would not be prohibited by this section from accepting that position. However, you must avoid acting as agent or attorney for the ABC in regards to any matters in which the state is a party or has a direct and substantial interest. Although the Commission cannot speculate as to all matters of this type which may come before you as a Board member, we note, for example, that pursuant to G.L. c. 171, s.16, certain loans taken out by the Board require the approval of the Commissioner of Banks. You would be precluded from acting as an agent for the ABC in connection with any such loan. See, EC-COI-79-122. Section 17 of G.L. c. 171 prescribes that at least once every three years the Committee shall authorize an audit of the ABC. The individual or firm conducting the audit, as well as the manner in which the audit is conducted, are subject to the approval of the Commissioner of Banks. In fact, the ABC has an outside auditor examine the books on a monthly basis and his report is reviewed by the Committee and must be approved by the Board. The ABC also annually has a C.P.A. firm conduct an audit and, subject to Committee review and Board approval, this is submitted to the Commissioner of Banks. The state clearly has a direct and substantial interest in the audits conducted or authorized by the ABC. Therefore, although you may participate as a member of the Committee in its internal activities concerning these audits, you must avoid any representation to the Commissioner of Banks or any state agency that you are an agent of the ABC in relation to these audits. This would include, for example, any signatory approval by you on any submission to the Commissioner of Banks concerning any ABC audit or appearance before the Commissioner or any member of his staff regarding an audit.
Section 6 prohibits you from participating in any particular matter in which the ABC has a financial interest. You state that the only contact between the Treasury Department and the ABC is the direct deposit of the payroll checks of state employees who authorize that their checks be so deposited. The Treasury Department is empowered by G.L. c. 29, s.31, to make such deposits when state employees have expressly authorized it to do so and the Department does not choose which banks are available to state employees for this service. The deposit of those checks is a particular matter in which the ABC has a financial interest. As long as you are an ABC Board member, you must refrain from participating as a treasury employee in that or any particular matter in which the ABC has a financial interest. Should such a matter arise, s.6 requires that you advise the official responsible for your appointment and the Commission of the nature of the particular matter and ABC's financial interest in it. Your appointing official must then either assume responsibility for the matter himself, assign the matter to another employee, or make a written determination that the interest is not so substantial as to affect the integrity of the services which the state may expect from you. Copies of this determination must be sent to you and to the Commission.
Therefore, you may become a member of both the Board of Directors and the Auditing Committee of the ABC, subject to the limitations outlined above.
End Of Decision
