Opinion  EC-COI-83-117

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

An employee of a housing authority may not receive a rental subsidy administered by the authority because he would have a financial interest in a contract made by his own municipal agency.

Facts

You are a full-time maintenance employee of the ABC Housing Authority (Authority) and are interested in receiving a housing subsidy from the Authority through the Section 8 program. Under the Section 8 program, the Authority enters into a "Housing Assistance Payments Contract" (Contract with a landlord while the landlord enters into a lease with an eligible tenant. The tenant then owes a share of the rent under the lease to the landlord, with the balance of the total rent paid by the Authority under the Contract. See, 42 U.S.C. § 1437(f).

Question

Does G.L. c. 268A permit you to receive a housing subsidy from the Authority while you remain a full-time Authority employee.

Answer

No.^[1]

Discussion

As a maintenance employee of the Authority, you are a municipal employee for the purposes of G.L. c. 268A. See, G.L. c. 121B § 7.^[2] As a municipal employee, you are prohibited by G.L. c. 268A s.20 from having a financial interest in a second contract made by the City of ABC (City) or an agency of the City, including the Authority. Since, under the terms of the Contract, a portion of your rental obligations to your landlord would be assumed by the Authority, you would have a financial interest in a second municipal contract in violation of § 20. See, EC-COI-83-63; 81-189; 81-167.

None of the exemptions of s.20 apply to your situation. Under G.L. c. 268A § 20(b), full-time municipal employees may now qualify for second municipal contracts upon satisfying several conditions.^[3] While your financial interest in the Contract would appear to satisfy the "public notice" requirements, your employment with the Authority, the contracting agency, precludes your eligibility for this exemption.

Section 20(e) also exempts the financial interest of municipal employees in municipal contracts in connection with the improvement or rehabilitation of their residences. However, you would not qualify for this exemption because your contractual financial interest is in relation to a rental subsidy, as opposed to residential improvement or rehabilitation.

The fact that the conditions imposed by the federal government under the Section 8 program are not as strict as those imposed by G.L. c. 268A § 20 does not diminish the Commission's statutory obligation to enforce the provisions of G.L. c. 268A. While G.L. c. 268A was modeled after its federal counterpart, 18 U. S. C. 201 et seq, there are significant differences in the statutes' treatment of multiple contractual financial interests by government employees. Moreover, it does not appear that Congress intended to pre-empt the application of state law in implementing the Section 8 program. Compare, EC-COI-83-30.^[4]
 

End Of Decision 

^[1] Although the Commission does not customarily render advisory opinions over municipal conflict of interest inquiries, the question which you pose is of statewide application and therefore appropriate for an opinion. This formal opinion will also provide a consistent interpretation to an area of law which has become the subject of uncertainty. See. e.g... Regulations Prescribing Standards of Conduct for Public Officials and Employees of Housing and Redevelopment Authorities issued by the Department of Community Affairs in August 1977.

^[2] As a full-time employee, you do not qualify as a special municipal employee under G.L c. 268A § 1(n) and thereby become eligible for certain exemptions under the law; nor has the City Council expressly clarified your position ass special municipal employee.

^[3] The § 20 prohibition does not apply (b) to a municipal employee who is not employed by the contracting agency or an agency which regulates the activities of the contracting agency and who does not participate in or have official responsibility for any of the activities of the contracting agency, if the contract is made after public notice or where applicable, through competitive bidding, and if the municipal employee files with the clerk of the city or town a statement making full disclosure of his interest and the interest of his immediate family: and if in the case of, contract for personal services;

1.  the services will be provided outside the normal working hours of the municipal employee,
2. the services are not required as part of the municipal employee's regular duties. the employee is compensated for not more than five hundred hours during a calendar year.
3. the head of the contracting agency makes and files with the clerk of the city or town a written certification that no employee of that agency is available to
   perform those services as part of their regular duties, and
4. the city council, board of selectmen or board of aldermen approve the exemption of his interest from this section.

^[4] The principles expressed in this opinion would be applicable to other Authority employees as well. To avoid undue hardship, particularly with respect to those employees who may have relied upon previous regulations permitting their rent subsidy arrangement. the Commission will apply the provisions of § 20 on a prospective basis only to those employees who are not currently receiving rent subsidies from the Authority under the Section 8 program.