Opinion  EC-COI-84-117

Date:	10/16/1984
Organization:	State Ethics Commission

A member of a board of selectmen is prohibited under § 17 of the conflict of interest law from acting on behalf of trusts for which he serves as trustee and beneficiary regarding property development matters before any town boards.

Facts

You are a member of the Board of Selectmen of a Town (Town). You are also a practicing attorney with law offices in the Town. You have developed land and built houses in the Town in the past and will be building more homes and condominiums in the future. To conduct this development business, you have set up two real estate trusts. The ABC Trust name you and another individual as trustees, with your wife and the individual as the trust's beneficiaries. Your wife and son, you and another individual are listed as trustees of the DEF Trust, with you and your wife as beneficiaries.

Question

Does G.L. c. 268A allow you to deal with the Town or any of its boards on behalf of either of these trusts?

Answer

 No.

Discussion

As member of the Board of Selectmen, you are a municipal employee for the purpose of G.L. c. 268A and are therefore subject to that law's provisions. Section 17(c) prohibits a municipal employee from acting as the agent or attorney for anyone other than the town or a municipal agency in connection with any particular matter^[1] in which the same town is a party or has a direct and substantial interest. Applications to various town boards for sewer permits or abatements, zoning changes, variances, etc. constitute particular matters for Chapter 268A purposes. Because town boards will be making determinations on such applications, they are considered particular matters in which the town is a party. Alternatively, "it is hard to hypothesize a 'particular matter' involving municipal action in which it can be said with assurance that the municipal interest is indirect or insubstantial," Braucher, Conflict of Interest in Massachusetts, in Perspectives of Law: Essays for Austin Wakeman Scott 1,16(1964). The remaining issue under § 17(c), then, is whether you are "acting as the agent or attorney for anyone other than the town" by dealing with the town or any of its boards on behalf of the two trusts.

A trust is a fiduciary relationship with respect to property in which one person, the trustee, holds legal title to the trust property subject to enforceable equitable rights in another, the beneficiary. See, generally, 1 Scott on Trusts § 2.3 (3d ed. 1967). In other words, a trust is essentially a legal device where one or more persons manage property for the benefit of others. A trustee's legal duties are imposed by law and arise "because of a manifestation of an intention of the settlor to create the relation and to impose the duties and of the trustee to assume the duties." Id. at § 2.8. The beneficiaries have the ownership interest in the property. At its core, a trust is a legal device which represents the separation of legal and equitable tide in property.

A trust is therefore a distinct legal entity. This fact distinguishes your interest in a trust from other property interests you may have which do not have a separate legal identify. For example, § 17(c) would not prohibit you from appearing before municipal boards in relation to issues concerning your own house. The rationale is that you cannot be your own "agent or attorney." Agency assumes the presence of a principal and an agent, and an attorney is defined as "one who acts on behalf of another." Black's Law Dictionary 117 (5th ed. 1979). Where you are representing your own property interest, and that interest does not have a legal identity apart from you, the separate identity of the advocate envisioned in the terms "agent" and "attorney" is lacking.^[2]

As a trustee, however, you are acting on behalf of another. As the legal representative of the trust, any appearances before municipal boards are on behalf of that trust, a distinct legal entity. Regardless of whether you and immediate family members are the sole beneficiaries of that trust, such appearances fall within the purview of the § 17(c) prohibition. You would be acting as the agent or attorney for someone other than the town or a municipal agency (the trust) in connection with a particular matter in which the same town is a party or has a direct and substantial interest (sewer permits, zoning changes, etc.).

Moreover, you do not qualify for any exemptions under § 17. As a member of the Board of Selectmen in a town with a population greater than five thousand persons, you do not qualify as a special municipal employee.^[3] See G.L. c. 268A, § 1(n). Similarly, your position as selectman negates the applicability of the fiduciary exemption^[4] to your situation. Your duties as a trustee do qualify you as a fiduciary. However, your election to office puts the final requirement out of the exemption, approval by your appointing authority, out of reach. See, District Attorney for the Hampden District v. Grucci, 1981 Mass. Adv. Sh. 2125, 2128 n. 3; EC-COI-84-3 [discussing the unavailability for the § 19 exemption procedure, which requires a determination by an appointing official, to an elected official]. The Commission therefore concludes that § 17(c) prohibits you from dealing with any municipal boards on behalf of either trust while you remain an elected Board of Selectmen member.

End Of Decision  

^[1] For the purpose 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).

^[2] Compare EC-COI-83-24 [state employee is prohibited by G.L. c. 268A, § 4 (state equivalent to § 17) from acting as agent on behalf of his private consulting firm in its efforts to obtain state contracts).

^[3] Paragraph 5 of G.L. c. 268A, § 17 provides the following exemption for special municipal employees: "A special municipal employee shall be subject to § 17 paragraphs (a) and (c) only in relation to a particular matter (a) in which he has at any time participated as a municipal employee, or (b) which is or within one year has been a subject of his official responsibility, or (c) which is pending in the municipal agency in which he is serving. Clause (c) of the preceding sentence shall not apply in the case of a special municipal employee who serves on no more than sixty days during any period of three hundred and sixty-five consecutive days.

^[4] The "fiduciary exemption" contained in G.L. c. 268A, § 17 ¶ 7 reads as follows: "This section shall not prevent a municipal employee, including a special employee, from acting with or without compensation, as agent or attorney for or otherwise aiding or assisting members of his immediate family or any person for whom he is serving as guardian, executor, administrator, trustee or other personal fiduciary except in those matters in which he has participated, or which are the subject of his official responsibility: provided, that the official responsible for appointment to his position approves.