| Date: | 11/08/1984 |
|---|---|
| Organization: | State Ethics Commission |
The Massachusetts Technology Park Corporation is advised that §§ 6 and 23(c) of the conflict of interest law apply to employees of private member corporations that donate employee services to the MTPC as well at to MTPC board members whose corporations donate services to the MTPC
You are the general counsel for the Massachusetts Technology Park Corporation (MTPC), a recently established public instrumentality of the commonwealth. See G.L. c. 40J, §§1-11. One goal of MTPC is to establish and operate educational centers containing design, fabrication and testing facilities and equipment for post-secondary academic and training programs in the field of semi-conductor and micro-electronic technologies. Id., § 1.
MTPC is governed by a twenty-three-member unpaid board of directors. Eight of the members appointed by the governor are chief executive officers or officials of businesses involved in the design and manufacture of semi-conductor or micro-electronics components or products. Id., § 3. The MTPC enabling statute establishes a fund for the purpose of financing the costs of operating a training center in semi-conductor and micro-electronic technologies. Id., § 5. Participating businesses and institutions are expected to provide, at no charge to MTPC, support to the center in the form of equipment, machinery, and qualified individuals for training purposes. Id., §§ 5, 6(b)(4). The MTPC executive director serves as the chief liaison officer to the participating businesses and institutions in order to enhance their support of and participation in the activities of the center. Id., § 7.
Pursuant to G.L. c. 40J, §§ 5,6, two participating corporations have arranged for the MTPC to use the services of their employees. The first, ABC, has loaned DEF to MTPC on a full-time basis for two years. During this period, ABC will continue to pay for DEF's salary and fringe benefits. The second, GHI, has loaned JKL on a full-time basis for one year. Although, under the current arrangement, MTPC will reimburse GHI for JKL's salary and have GHI assume the fringe benefit costs, you will soon be requesting GHI to donate JKL's salary.
Both ABC and GHI are represented by individuals on the MTPC board of directors, and MTPC expects to receive substantial charitable contributions from both corporations.
1. Do the loan arrangements between ABC, GHI and MTPC place DEF or JKL in violation of G.L. c. 268A?
2. What limitations does G.L. c. 268A place on the ABC and GHI representatives to the MTPC board of directors?
1. Although the loan arrangements do not inherently violate G.L. c. 268A, certain conditions must be satisfied.
2. The members of the boards of directors will be subject to the limitations set forth below.
1. MTPC is a state agency for the purpose of G.L. c. 268A, and its directors, officers and employees are "state employees" under that law. See, G.L. c. 40J, § 3; EC-COI-83-41.[1] Although DEF and JKL will not be technically on MTPC's payroll, they will nonetheless be regarded as state employees for G.L. c. 268A purposes, because they are performing services on a full-time basis for a state agency and are supervised and evaluated by the executive director of a state agency. See, EC-COI-81-117.
As a state employee, DEF is subject to the relevant sections of G.L. c. 268A. The first, G.L. c. 268A, § 4(a), prohibits him from receiving compensation from any non-state party 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, unless the receipt of compensation is provided by law for the proper discharge of his official duties. DEF would not be in violation of this section by virtue of his receiving his salary and fringe benefits from ABC, a non-state party, because the arrangement is authorized under the MTPC enabling statute, G.L. c. 40J, §§ 5,6 and is therefore consistent with the proper of his official duties. See, EC-COI-84-110.[3]
Under the relevant provisions of G.L. c. 268A, § 6, DEF may not participate,[4] in his MTPC capacity, in any particular matter in which ABC has a financial interest. Should a matter affecting ABC's financial interest come before him, he must refrain from participating in the matter and advise the official responsible for appointment to his position and the Commission of the nature and circumstances of the particular matter and make full disclosure of such financial interest; the appointing official shall there upon either:
Based upon the information you have provided, it does not appear likely that matters affecting ABC's financial interest would come before DEF. However, should such a situation arise, the § 6 disqualification and notice procedures must be followed.
The final relevant section is G.L. c. 268A, § 23 ¶ 3 which prohibits state employees from improperly disclosing confidential information acquired as the result of state employment. The point of this paragraph is that, despite the overlapping private and public interests which come into play in implementing the MTPC enabling statute, DEF is a state employee, and his loyalties must remain with the state as long as he provides services to the state.
The provisions of G.L. c. 268A which were previously discussed in DEF's situation will also apply to JKL. Two additional points should be made, however.
1. For the purposes of G.L. c. 268A, § 4(a), it is irrelevant whether MTPC actually pays for JKL's salary or if GHI decides to donate JKL's services. If the state pays for JKL's salary, then § 4(a) is not at issue because JKL's compensation would not, in fact, be derived from anyone other than the commonwealth. If JKL's services are donated by GHI, then, like DEF, his receipt of compensation from GHI would be provided by law for the proper discharge of his official duties.
2. Because you expect that matters affecting GHI's financial interest may regularly come before JKL, thereby triggering the § 6 disqualification and notice process, JKL's appointing official may wish to formalize the permission for JKL to participate in the matters by filing a written determination with the Commission. Given the expectation of frequent participation by JKL and GHI matters, an annual written determination to the Commission would satisfy the purposes of G.L. c. 268A.
Under G.L. c. 268A, § 6, members of the MTPC board of directors must refrain from participating in any particular matters in which, in relevant part, a business organization for which they serve as an officer or employee has a financial interest. This disqualification is emphasized in the MTPC enabling statute, G. L. c. 40J, § 3 which provides
The provisions of chapter two hundred and sixty-eight A shall apply to all directors,
officers and employees of the corporation except that the corporation may purchase
from, sell to, borrow from, contract with or otherwise deal with any organization in
which any director of the corporation is in any way interested or involved; provided,
however, that such interest or involvement is disclosed in advance to the directors
and recorded in the minutes of the proceedings of the corporation; and provided,
further, that no director having such an involvement may participate in any decision
relating to such organization.
The two members of the MTPC board of directors from ABC and GHI are therefore disqualified from participating in any decision or other particular matter in which, respectively, ABC or GHI have a financial interest. Consistent with G.L. c. 268A, § 6 and c. 40J, § 3, advance notice of the matter must be submitted to the MTPC board of directors and the Commission. Following disclosure, G.L. c. 40J, § 3 precludes their further participation in the matter. The four-part procedure outlined in your advisory opinion request[5] would satisfy the purposes of G.L. c. 268A, § 6.
End Of Decision
