Opinion  EC-COI-83-27

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

The superintendent of a state agency under the Department of Mental Health may accept a position with an entity that contracts with DMH subject to the restrictions of §§ 4, 6, 7 and 23 of the conflict of interest law. 

Facts

You are a psychiatrist and the full-time head of ABC, a facility of the Department of Mental Health (DMH). As ABC head, you act under the general direction of the Commissioner of DMH, and your duties include:

1. directing all activities at ABC (professional, administrative and maintenance operations);
2. developing the institution's program, and the operating policies and procedures necessary to implement it;
3. conferring with the DMH Commissioner and his staff on problems, new methods and policies;
4. attending medical staff meetings, coordinating the work of various ABC departments and supervising the medical care of patients;
5. inspecting the work of ABC departments, and investigating the condition of and recommending improvements in ABC's physical plant;
6. supervising the training program for technical and professional personnel, giving lectures and conducting classes for students and advising them on these and special research projects;
7. planning and directing research activities of the institution;
8. public relations, including attending meetings, giving lectures and preparing and presenting papers;
9. preparing ABC's budget, disbursements and annual report; and
10. other administrative tasks, such as personnel duties, patient admissions and interviews with patients' relatives.

ABC currently has agreements under which it serves as a teaching hospital for DEF University and GHI University, and a similar agreement has recently been signed by ABC and JKL University; you signed the latter agreement on (date omitted) on behalf of ABC, and that program will start in the near future. Under the DEF and GHI agreements, you are a clinical assistant professor at both medical schools (uncompensated) and give lectures to students and faculty. Under the JKL agreement, you will have similar duties and will not be compensated separately by JKL for those duties. JKL has also offered you the position of Chairman of a Department (the Department). This offer was not part of the agreement mentioned above but was made prior to the execution of that agreement. If you accept this position, you will not leave your ABC position to do so, but rather you will hold the two posts concurrently. The offer would require you to commit twenty to twenty-six hours a week to administrative, supervisory and academic duties at JKL. The salary for the position would be x and would not derive either directly or indirectly from any state funds, but rather would come entirely out of teaching funds of JKL School of Medicine.

The Department encompasses certain clinical, educational and research activities and these activities are carried out at various health care institutions including a DMH facility and a municipal facility of the City of Boston. As envisioned in the offer, your JKL duties would include:

1. administrative and academic management of a department and division;
2. clinical conferences and staff supervision at a hospital;
3. reorganization of a service at a hospital;
4. planning and negotiating for development of inpatient and pay hospital services for adolescents at a DMH facility which would result in much more extensive involvement by the JKIL there; and
5. development of ABC as a major site for clinical, educational and research activities of the Department. 

You would have authority to decide the amount of time that various Department activities could and should be carried out at the various institutions. In addition to all the above, you would have the option of maintaining a clinical practice as part of a group practice referred to as the "fully funded full-time plan of the Department." Although some of the units at which you would supervise JKL faculty and staff are funded by the state or are state agencies under contract with the Department, you would not be providing psychiatric or other services under any state contracts. Further, you state that JKL would not be compensating you for any duties which you were already obligated to perform (and were compensated by the Commonwealth to perform) as head at ABC.

Since your receipt of the JKL offer, you have communicated with the Commissioner of DMH by letter in an effort to establish the conditions under which he would approve your concurrent service as ABC's head and the Chairman of the JKL Department. The terms set forth by the Commissioner are as follows:

1. You must designate a senior clinician as Clinical Director of ABC;
2. Your compensation from the Commonwealth for your ABC duties would be reduced to four-fifths (4/5) of your full-time salary;
3. You would be expected to work a minimum of 32 hours a week directly for ABC, of which an average of 25 hours a week as a minimum would be during usual business hours and either at ABC or engaged in activities directly related to the performance of your responsibilities as Superintendent;
4. Whenever not on-site at ABC you would be expected to be readily available by electronic page or telephone for all but approximately 15 hours a week; and
5. You must obtain written approval from the State Ethics Commission. You have not accepted the JKL offer, pending the receipt of this opinion.

Question

1. Does G.L. c. 268A permit you to accept the JKL position while remaining the head of ABC?

2. If the answer to (1) were no, and you resigned your ABC position to accept the JKL position, would G.L. c. 268A preclude your fulfillment of any of the JKL responsibilities described above?

Answer

1. Yes, with certain restrictions.

2. In view of the answer to (1), it is unnecessary to reach this question.

Discussion

In your current position at ABC, you are a state employee as that term is used in the conflict of interest law. G.L. c. 268A, §1(q). If you were to comply with the terms set forth by the DMH Commissioner, in particular that which reduced your ABC hours to 32 a week (of which only 25 would be during usual business hours), you would become a special state employee, as defined in G.L. c. 268A, § 1(o)(2)(a),^[1] and thereby subject to more lenient treatment under some provisions of that statute.  

     Section 4 of G.L. c. 268A states:

     (a) No state employee shall otherwise than as provided by law for the proper discharge of
     official duties, directly or indirectly receive or request compensation from anyone other than
     the commonwealth or a state agency, in relation to any particular matter^[2] in which the
     commonwealth or a state agency is a party or has a direct and substantial interest. 

     (c) No state employee shall, otherwise than in the proper discharge of his official duties, act
     as agent or attorney for anyone in connection with any particular matter in which the
     commonwealth or a state agency is a party or has a direct and substantial interest.

     A special state employee shall be subject to paragraphs (a) and (c) only in relation to a
     particular matter (a) in which he has at any time participated^[3] as a state employee, or 
     (b) which is or within one year has been a subject of his official responsibility,^[4]or (c) which
     is pending in the state agency in which he is serving...

With respect to § 4(a), you have stated through your attorney that JKL will not compensate you to perform any services called for in its contracts with state agencies or facilities. You have also stated that JKL will not compensate you separately for duties which may arise from the JKL-ABC affiliation agreement (e.g. for teaching duties if you are named a clinical professor pursuant to that agreement). Avoidance of such compensation will, to some extent, keep you within the bounds of § 4(a).

However, the restrictions of § 4(a) have wider application to the facts you have presented. For example, among the JKL duties you will be expected to perform are the planning and negotiating for the development of certain services at a DMH facility, and the development of ABC as a major site for JKL Department activities; incidentally, you also would decide the allocation of JKL activities among various health facilities - (including ABC). To the extent that these responsibilities relate to DMH facilities such as ABC, your decisions on these matters will constitute particular matters of direct and substantial interest to DMH, a state agency, and you may not be compensated by JKL in relation to them.

Moreover, § 4(c) will prohibit you from acting as JKL's agent in dealing with the Commonwealth in these matters, i.e. in dealing with officials at DMH, in relation to agreements or contracts between those entities and JKL. Although the arrangements between JKL and those entities might generally be characterized as cooperative enterprises which are established for mutual benefit, nevertheless these agreements must be negotiated at arm's length to assure that the best interests of each party are protected. For that reason, § 4 prohibits you from acting as the agent for JKL in these matters while you remain employed by DMH. This is true despite your anticipated status as a special state employee of DMH: the exemptions contained in the statutory excerpt cited above are inapplicable, since the matters at issue are pending in the state agency (DMH) in which you serve and, in the case of the JKL-ABC agreement, you have already participated in the matter as ABC's representative.^[5] 

     Section 6 of G.L. c. 268A states:

     Except as permitted by this section, any state employee who participates as such employee
     in a particular matter in which to his knowledge he, his immediate family or partner, a
     business organization in which he is serving as officer, director, trustee, partner or
     employee, or any person or organization with whom he is negotiating or has any
     arrangement concerning prospective employment, has a financial interest, shall be
     punished by a fine of not more than three thousand dollars or by imprisonment for not
     more than two years, or both.

     Any state employee whose duties would otherwise require him to participate in such a
     particular matter shall advise the official responsible for appointment to his position and
     the state ethics commission of the nature and circumstances of the particular matter
     and make full disclosure of such financial interest, and the appointing official shall
     thereupon either;

          (1)  assign the particular matter to another employee; or

          (2)  assume responsibility for the particular matter; 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 the
          employee, in which case it shall not be a violation for the employee to participate in the
          particular matter. Copies of such written determination shall be forwarded to the state
          employee and filed with the state ethics commission by the person who made the
          determination. Such copy shall be retained by the commission for a period of six years.

Following preliminary discussions with JKL, you were offered a position at JKL pursuant to a letter written on (date omitted). At least as of that date, JKL is an "organization with whom [you are] negotiating. . . concerning prospective employment." Thus, unless you follow the procedures described in the second paragraph of § 6,above,^[6] you may not participate as a state employee in any particular matter in which JKL has a financial interest.^[7] For instance, if the ABC-JKL agreement affects the financial interests of JKL in some way, you may not participate in it on behalf of ABC unless you have first received written permission from the DMH Commissioner.^[8]

Section 7 of G.L. c. 268A prohibits a state employee from having a direct or indirect financial interest in a state contract. However, since you have indicated that none of your JKL salary will derive directly or indirectly from state contract monies, your proposed course of action will comply with § 7.

Finally, § 23 contains general standards of conduct applicable to all public employees. Under § 23(a), you may not accept other employment which will impair your independence of judgment in the exercise of your official duties. The Commission has used this provision sparingly to prohibit outside employment, and has done so primarily to forbid outside employment with an entity which the public employee regulates in his public position.^[9] In view of the fact that your position vis-a-vis JKL, and that §§ 4 and 6 will prevent you from acting for both parties in those situations where their interests are most likely to diverge, the Commission does not consider your acceptance of the JKL offer to be prohibited by § 23(a).

     Section 23(b) and (c) state that no public employee shall

     (b) accept employment or engage in any business or professional activity which will require
     him to disclose confidential information which he has gained by reason of his official
     position or authority.

     (c) improperly disclose confidential information acquired by him in the course of his official
     duties nor use such information to further his personal interests. The Commission cannot
     speculate as to circumstances that may arise and warrant application of these provisions,
     but nevertheless sets them forth here to serve as general guidance. ^[10]

Section 23(d) prohibits you from using or attempting to use your official position to secure unwarranted privileges or exemptions for yourself or others. Again, the Commission cannot address here every hypothetical situation which might implicate this provision. Nevertheless, based upon the information provided with your opinion request, the Commission draws your attention to several areas in which you must be careful to observe § 23(d):

1. in allocating your time and resources, as ABC superintendent, among the students and staff of JKL, DEF and GHI you must scrupulously avoid granting unwarranted consideration to JKL interests, over those of DEF and GHI and
2.  to a large extent, your acceptance of the JKL position under the DMH Commissioner's terms will require you to self- police your adherence to those terms (e.g. with regard to the number of hours per week in which you are fulfilling ABC responsibilities); and you must take care to meet those obligations fully.^[11]

     Finally, § 23(e) states:

     [No state employee shall] by his conduct give reasonable basis for the impression that any
     person can improperly influence or unduly enjoy his favor in the performance of his official
     duties, or that he is unduly affected by the kinship, rank, position or influence of any party
     or person. 

As mentioned in the discussion of § 23(d) above, you must scrupulously avoid the appearance of any favoritism toward JKL over other institutions with which ABC is associated. To do otherwise would give reasonable basis for the impression that your employment relationship with JKL improperly influenced your performance of official duties at ABC.^[12]

End Of Decision 

^[1] "Special state employee, [means] a state employee. . . (2) who is not an elected official and (a) occupies a position which. . .by the terms of the contract or conditions of employment, permits personal or private employment during normal working hours." G.L. c. 268A. § 1(o)(2)(a).

^[2] "Particular matter" means 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).

^[3] "Participate" means participate in agency action or in a particular matter personally and substantially as a state, county or municipal employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation or otherwise. G.L. c. 268A. § 1(j).

^[4] "Official responsibility" means the direct administrative or operating authority, whether intermediate or final, and either exercisable alone or with others, and whether personal or through subordinates, to approve, disapprove or otherwise direct agency action. G.L. c. 268A. § 1(i).

^[5] For reasons similar to those explained in Ethics Commission Compliance Letter No. 81-21 (July 30, 1981). pp. 9-10, and in precedent cited therein, the tenth paragraph of § 4 is also inapplicable to your situation.

Section 4(c) would not prohibit you from acting as JKL agent if it were in the proper discharge of your official [DMH] duties to do so. Since the DMH Commissioner is your appointing official and sets the terms of your employment, he would have to make the necessary determination of your duties. Cf. EC-COI-83-20. If you were to resign from DMH to take the JKL position, § 5(a) would still prohibit you from acting as JKL agent or receiving JKL compensation in relation to the JKL-ABC agreement, because you already have participated in that agreement on ABC's behalf. This prohibition would apply for the duration of the ABC- JKL agreement which you signed.

^[6] Your letter requesting an advisory opinion is confidential, under G.L. c. 268B, § 3(g), and therefore does not constitute public disclosure for the purposes of G.L. c. 268A, § 6. Neither does the correspondence between you and the DMH Commissioner which you attached to your request since it makes no mention of the pending agreement between ABC and JKL nor your role in that agreement. The Commission utilizes standard forms for § 6 disclosures and determinations, which are publicly available pursuant to G.L. c. 268B. § 3(d) and (e). 

^[7] This advisory opinion is intended to address only the prospective application of G. L. c. 268A to your actions,

^[8] Although the Memorandum of Agreement between JKL and ABC makes reference to financial requirements (Item 5.0) it is unclear from the face of that document what those financial matters might be. Should you need clarification of this § 6 application. you should seek further advice from the Commission.

^[9] See, e.g., EC-COI-81-151: 81-133; 80-17: Compare, EC-COI-81-137.

^[10] Although G.L. c. 268A. § 23 is now applicable only to current state employees, c. 612 of the Acts of 1982 (effective March 29, 1983) will amend that section, making subsections 23(b) and (c) applicable to former state employees as well. Should you leave your DMH position, you should consult the amended text of those provisions.

^[11] Among the ABC responsibilities which you called to the attention of the DMH Commissioner in your letter to him, you included consultation with public groups, attendance at meetings. delivering lectures and preparing and presenting papers at various conferences. The Commission notes that it has previously interpreted § 23 as prohibiting the receipt of any honoraria or outside (non-state) compensation for such activities, if they are part of one's official state duties. See EC-COI-82-22; 80-28.

^[12] In essence, this opinion concludes that you may accept the chairmanship of the JKL Department as long as you observe all of the restrictions outlined in this discussion. Nevertheless, the Commission seriously questions whether, as a practical matter, it will be possible for you to observe faithfully these restrictions, i.e., to avoid, in both positions, involvement in matters which touch on the interests of both employers. The Commission also is concerned that the multiplicity of your outside professional commitments may jeopardize the fulfillment of your ABC responsibilities, but notes that this is a matter to be addressed primarily by your appointing official (the DMH Commissioner) in his supervisory capacity, rather than by the conflict of interest law.