Opinion  EC-COI-82-115

Date:	08/19/1982
Organization:	State Ethics Commission

Section 6 issue regarding an officer of a Bank in the commonwealth who is also a member of the Massachusetts Home Mortgage Finance Agency. 

Facts

You are a member of the Massachusetts Home Mortgage Finance Agency (MHMFA) Board. The MHMFA participates with various banking institutions throughout the Commonwealth in providing mortgages at reduced rates to eligible low and middle-income households. It recently sent solicitations to banks throughout the Commonwealth inviting them to participate in a mortgage program funded by a new bond issue, by applying on or before July 27, 1982. The total requested in the applications which have been received is less than the amount of available mortgage money in this program. The MHMFA Board will allocate funds to all eligible banks which have applied and which meet the previously-established program criteria.
 

You are also an officer of a Bank in the commonwealth, (the Bank) for which you are paid a monthly fee and per meeting of a Bank internal Committee, of which you are a member. The Security Committee is responsible for making recommendations to the full Board on prospective home mortgage loans. You are also a depositor of the Bank, and a relative is and has been an employee of the Bank for (x number of) years. On (date) 1982, the Bank voted to participate in the MHMFA mortgage program. You abstained from that vote and related discussions. The Bank is the only bank to apply from that geographic area. If it is included in the mortgage program, you will refrain from any vote in your role as a Bank officer on the acceptance of the MHMFA allocation and subsequent votes with respect to eligible mortgage applicants. Neither you nor any member of your immediate family will derive any financial benefits from this program.
 

In your capacity as MHMFA Board member, you will refrain from participating or voting on any application to the Bank. You have advised the Governor, your appointing authority, of the above facts in writing.

Question

Does G.L. c. 268A impose any further restrictions on your actions?

Answer

No, but you must file a public disclosure form under s.6.

Discussion

The applicable provisions of G.L. c. 268A are s.4, which dictates in what non-state interests and activities you may take part, and s.6, which regulates the 
actions you may take in your state position.

Section 4 prohibits you from being compensated by, or acting as agent for, the Bank in relation to any particular matter^[1] in which the Commonwealth or a 
state agency is a party or has a direct and substantial interest. Although the MHMFA bond issue and allocation of proceeds among banks are "particular matters" within s.4, your compensation as a Bank officer does not derive from the state mortgage money allocation; it is not paid to you in relation to the bond issue and allocation because you have not participated in those matters as a bank officer. For these reasons, your actions comply with s.4, as long as you in no way act as the Bank's agent vis-à-vis the state in these matters. See EC-COI-81-87. Under s.6, unless you are exempted n writing by the Governor (your appointing authority), you may not [participate as a state employee] in a particular matter in which [you]...[or] a business organization in which [you serve] as officer, director, trustee, partner or employee...[have] a financial interest...

You have already notified the Governor of the situation, as required by s.6.^[2] Since you have indicated that you will not participate or vote on the Bank's application to MHMFA in your role as a MHMFA Board member, your conduct will comply with s.6. If other banks were competing with the Bank for the same mortgage allocations, you would also be prohibited from participating or voting on the applications from the competing banks. See EC-COI-81-118. However, since you have indicated that the Bank was the only institution to apply from its area and that the total amount applied for by all banks combined was less than the amount available, there is no competition with the Bank for these funds, and you may participate and vote on applications other than the Bank's.
 

Section 23 sets forth general standards for avoiding the appearance of conflict and the inappropriate use of one's public position. Because you are avoiding participation in both sides of this particular matter and fully disclosing the situation, your conduct will not violate s.23.

^[1] For the purposes of G.L. c. 268A, "particular matter" is 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).
 

^[2] Because opinion requests are confidential under G.L. c. 268B, s.3(q), your letter to the Commission cannot serve as public disclosure which must be filed with the Commission under s.6; instead you should complete and file the enclosed s.6 disclosure form which the Commission utilizes for this purpose.
 

End Of Decision