| Date: | 12/08/1981 |
|---|---|
| Organization: | State Ethics Commission |
A former state employee may, as the president of a private company, receive compensation from the private company because the compensation would not be in connection with the particular matter in which he participated while serving as a state employee. The particular matter in which he participated as a state employee is no longer valid.
You are presently Director of the XYZ Center at the ABC Institute Previously, you were a Management Counselor With the ABC Center for DEF and, as such, you prepared for a private party a feasibility study of a financial proposal for a new business involving permanent homes. That party has offered you the position of President in the new company.
You ask whether you may resign From ABC and accept this offered position without violating the state conflict of interest law, G.L.c.268A.
The Commission concludes that you may.
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. The Center for DEF is within the ABC School of Business Administration and offers technical business assistance to both the private and public sectors. In July of 1979, a private party requested the Center's assistance in preparing a study of the financial prospects of a company he intended to organize. This study was to be used by him and his associates in the presentation they would make to banks in their efforts to seek start-up funding. You completed the study in early August of 1979 and presented it to his party. Following this, you met with the party's accountant regarding the preparation and processing of federal Farmer's Home Administration Loan applications. Your last contact with the party in December at 1979 and all your efforts in regard to this project were tasks routinely undertaken by the Center. The private party was unable to obtain funding for his company from 1979 to the present. In June of 1981, you made it known that you would be leaving your present ABC position for the private sector. The party learned of your availability from a third party and has asked you to become President of the company if he succeeds in securing the necessary funding. You state that because of changes in the industry involved, your study is no longer valid and that the Farmer's Home Administration Loan is no longer involved.
Upon leaving Your ABC position, you will become a former state employee for purposes of the conflict of interest law. As such, s.5(a) of that law prohibits you from appearing as agent for or receiving compensation from anyone other than the commonwealth in connection with a particular matter [1] in which the state is a party or has a direct and substantial interest and in which you participated as a state employee. The study at issue would be a "request for a determination" and, thus, a particular matter as defined in G.L.c.268A. Clearly, you participated in this particular matter as a state employee. However, your participation involved preparation of a study to be used in the efforts to seek funding. The study did not concern a choice of what industry might best support a successful business venture, nor how best to organize or operate the internal workings of the business. As President of the new company, you will not be filling a position which you proposed. In fact, your compensation in this position is contingent upon successful capitalization of the project and because of changes in the industry involved you indicate that your study could not even be used to support the efforts to procure this capitalization. Therefore, your compensation as President will not be in connection with a particular matter in which you participated as a state employee. See EC-COI-81-116. As long as you are not compensated by anyone other than the commonwealth in connection with efforts to secure financial capital based on the study you prepared while employed by the DEF you will not violate this section. Section 5(b) prohibits you for one year from appearing personally before the state or any state agency as agent for anyone other than the commonwealth in relation to any particular matter in which the state is a party or has a direct and substantial interest and which was within your official responsibility during the last two years of your state employment. This would include any matter over which you exercised authority, either personally or through subordinates, and the restriction applies only to appearances before the state or state agencies in relation to those matters.
In conclusion, the conflict of interest law does not prohibit you from accepting the position you have been offered.
End Of Decision
