Opinion  EC-COI-83-112

Date:	08/16/1983
Organization:	State Ethics Commission

Section 7 allows a state employee to work for a vendor and be paid from state funds where his clients receive public assistance, and his rate of pay is set by the Rate Setting Commission.

Facts

You are employed as a staff psychiatrist at the ABC Mental Health Center (ABC) under a blanket contract with the state Department of Mental Health (DMH). Under that arrangement, you provide coverage in the hospital’s emergency unit four days a week. You have been offered part-time work at the DEF counseling Center (DEF) under an 07 contract between GHI corporation (GHI) and DMH. If you accept that position, you will be one of three part-time psychiatrists from which clients can choose; the fee which you will be paid is set by the Rate Setting Commission (RSC); forty-eight percent of clients in the area receive public assistance of some kind, and it can be arranged for you to see this clientele.

Question

May you accept the part-time position at DEF while you continue to work under a DMH 03 blanket contract?

Answer

Yes, provided you comply with certain restrictions.

Discussion

       As a staff psychiatrist at ABC, you are considered a state employee for purposes of the conflict of interest law^1/; this is so even though you serve there under a blanket contract because your work there is regular and frequent, and you are paid directly by the state for your services.^2/ Section 7 of G. L. c. 268A states: A state employee who has a financial interest, directly or indirectly, in a contract made by a state agency, in which the commonwealth or a state agency is an interested party, of which interest he has knowledge or has reason to know, shall be punished [by a fine, or imprisonment, or both]. Your contemplated employment with GHI would give you an indirect financial interest in the contract between GHI and DMH, since you would be paid out of the 07 contract monies. Such a financial interest would ordinarily be prohibited by the paragraph quoted above. However, you may structure your working arrangement with DEF so as to qualify for an exemption which is contained in §7, which reads: This section shall not apply to a state employee who provides services . . . to a recipient of public assistance, provided that such services. . . are provided in accordance with a schedule of charges promulgated by the. . . rate setting commission and provided, further, that such recipient has the right under law to choose and in fact does choose the person or firm that will provide such services. . .The rate which GHI will pay you is that set by the RSC; the clients at DEF will have a choice among three psychiatrists. As long as you serve clients who are receiving public assistance, you will comply with this exemption and may be paid out of the DMH 07 contract funds.

End of Decision

DATE AUTHORIZED: August 16, 1983

^1/G.L.c. 268A, §1(q)

^2/ See EC-COI-83-9