| Date: | 01/09/1984 |
|---|---|
| Organization: | State Ethics Commission |
A corporation does not violate § 7 of the conflict of interest law by entering into contracts with multiple state agencies because a corporation is not considered a state employee for conflict of interest law purposes.
You are an attorney employed by ABC (ABC), a private corporation. ABC currently has a contract with DEF (DEF), a state agency. ABC is considering contracting with other state agencies.
What limitations does the state conflict of interest law, G.L. c. 268A, place on the ability of ABC to contract with other state agencies?
None, although restrictions may apply to certain ABC employees, as explained below.
Section 7 of G.L. c. 268A, the state conflict of interest law, limits the circumstances in which a "state employee" may have a financial interest in a contract made by any state agency. Unless a "state employee" is able to qualify for one of the exemptions in § 7, he or she is prohibited from having a financial interest in a state contract. The conflict of interest law defines "state employee," in relevant part, as "a person performing services for or holding an office, position, employment or membership in a state agency, whether by election, appointment, contract of hire or engagement, whether serving with or without compensation, on a full, regular, part-time intermittent or consultant basis." G.L. c. 268A, § 1(q).
The definition of "state employee" has not been interpreted to include corporations contracting with the state. See, e.g., Atty. Gen. Conf. Op. No. 756. And, it is generally not interpreted to include an employee of a corporation or vendor which contracts with the state. See, e.g., EC-COI-83-94. However, both the Commission and the Attorney General have held that such an employee is covered by the definition if the terms of the contract indicate that a particular individual's services are being contracted for. In Attorney General Conflict Opinion No. 854, a 50% stockholder in a corporation was specifically named in a contract between that corporation and a state agency. The state agency could cancel the contract if he failed to perform the duties designated. The Attorney General concluded that under these circumstances the individual was a state employee for the purposes of G.L. c. 268A. In Commission advisory opinion EC-COI-80-84, the Commission concluded that the partners in a law firm were "state employees" because the contracting state agency specifically contemplated that each of the firm's partners would work on the project for the state.
In this case, the contract between the ABC and the DEF does not make ABC a state employee. Therefore, § 7 does not prevent ABC from contracting with other state agencies. However, any ABC employees specifically named in that or any other contract between the corporation and a state agency may be considered state employees and, as a result, subject to the conflict of interest law. Because the application of that law is based on many different factors, the Commission is unable to detail what restrictions might apply at this time. Individual ABC employees should feel free to contact the Commission for guidance in the future.
End of Decision
