Opinion  EC-COI-83-25

Date:	02/22/1983
Organization:	State Ethics Commission

A  state agency head is advised about the restrictions in §§ 6, 7 and 23 of the conflict of interest law in connection with a contract involving the state agency and a partnership in which the state employee serves as a partner, where the day to day administration of the contract has been delegated to a company in which the state employee formerly served as an officer.

Facts

You were recently appointed to the head of state agency ABC. As such, you are responsible for administering and enforcing provisions of law relative to certain state and municipal matters. These provisions also involve funding from federal agency DEF.

You are also a partner in a Partnership which has a financial interest in a contract made by ABC. ABC has previously delegated the day to day administration of the contract to GHI, a private corporation for which you formerly served as an officer.

Because of your position at ABC, you intend to propose that the Partnership's contract utilize a public agency, JKL, which would delegate the day to day administration of the contract to GHI. ABC's only role in this transfer would be the approval of the contract between DEF and JKL. This and any other decisions in this matter would be delegated by you to the assistant head of ABC. You also would withdraw as general partner and relinquish any responsibility for management of the Partnership.

Question

1.  Will the proposed course of action regarding transfer of the Contract satisfy G. L. c. 268A and, if so, during what time period must this transfer be accomplished?

2.  May you participate either as a general or limited partner in the Partnership after the transfer?

Answer

1. Yes, but you must comply with the conditions set forth below. You should proceed with your proposed course of action during the next 30 days.

2. Assuming that you comply with these conditions, you may participate as a general and/or limited partner.

Discussion

a) Section 7

As ABC head you are a "state employee" as defined in the conflict of interest law. G.L. c. 268A, § 1(q). As such, you are subject to § 7 of that law which prohibits a state employee from having a financial interest in a contract made by a state agency. As a general and/or limited partner in the Partnership, you have a financial interest in the Contract. As long as ABC, a state agency, is a party to that Contract, you are prohibited from having a financial interest in it.

Once you complete the transfer you propose, neither ABC nor any other state agency will be a party to the Contract. You will therefore no longer have a financial interest in a contract made by a state agency and the prohibition of § 7 will not apply. This transfer should be completed within thirty days of your receipt of this opinion.

 b) Section 6

Section 6 of G.L. c. 268A prohibits you from participating in a particular matter_^[1] in which you or a business organization in which you are serving as a partner has a financial interest. Should such a matter come before you, you must advise your appointing official and the Ethics Commission of the nature and circumstances of the particular matter and make full disclosure of the financial interest. Your appointing official must then either:

1. assign the matter to another employee;
2. assume responsibility for it himself; or
3. make a written determination that the interest is not so substantial as to be deemed likely to affect the integrity of the services which the Commonwealth may expect from you, giving copies to you and to the Commission.

The approval by ABC of the Contract between DEF and JKL is a particular matter in which both you and the Partnership have a financial interest. Therefore, you must comply with the procedures outlined in § 6 when that matter comes before you at ABC and refrain from any participation in that matter unless your appointing official makes and files a written determination pursuant to § 6.

c) Section 23

Section 23 of the conflict law provides general standards of conduct applicable to all state employees. Section 23(d) prohibits the use or attempted use of your official position to secure unwarranted privileges or exemptions for yourself or others. Section 23(e) proscribes conduct which gives reasonable basis for the impression that any person can improperly influence or unduly enjoy your favor in the performance of your official duties.

The authority you exercise over local matters is very broad. Similarly, GHI, which serves as day-to-day administrator of contracts awarded by ABC, is subject to your authority. The exercise of your public authority over GHI or JKL while each of those agencies administers your private partnership's contract, as well as your prior employment by the latter, would give reasonable basis for the impression that GHI or JKL would unduly enjoy your favor as ABC head and would raise questions concerning the credibility and impartiality of your treatment of those agencies.

The provisions of § 6, discussed above, address these concerns in matters in which you or a business organization in which you are a partner have a financial interest by requiring disclosure to your appointing official and requiring that official to take some action. This procedure should also be used by you in connection with matters involving GHI and JKL. Therefore, you should disclose to your appointing official your private relationship with these two agencies and your public responsibilities affecting them. That official should then either

1. assign that responsibility to another employee,
2. assume the responsibility himself, or
3. make a written determination, like that in § 6, that the interest is not substantial enough to affect you in the performance of your official duties.

 

End Of Decision  

 

^[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, § 1(k).