Opinion  EC-COI-84-58

Date:	05/08/1984
Organization:	State Ethics Commission

A bank officer may serve as an unpaid appointee in a state position which involves the supervision of financial investment, subject to certain limitations. Under §6, he may not participate as a state employee in investment decisions where his bank is a potential recipient of those funds. However, his status as bank officer, standing alone, would not give him a financial interest in investments his state board makes with the bank.

Facts

You are an officer of a bank (Bank). You expect to be appointed to a state position^1/ which, among other things, involves supervision over the investment of certain monies. You anticipate that the Bank will be the potential recipient of some of these investments.

Question

What limitations does G. L. c. 268A place on your serving in this position?

Answer

You will be subject to the limitations set forth below.

Discussion

Upon your appointment to the position, you will be a state employee for the purposes of G. L. c. 268A. See G. L. c. (citation omitted).^2/ As a state employee there are two sections of G. L. c. 268A which are relevant to your situation.

1. Section 7

   This section prohibits state employees from having a financial interest, directly or indirectly, in a contract made by a state agency. While the investments under your supervision of the Board would constitute a contract within the meaning of §7 see, EC-COI-83-113, your status as a Bank officer, standing alone, would not ordinarily give you a financial interest in investments which in your state position you would make with the Bank. Moreover, even if you had an ownership interest in the Bank which exceeded one percent, see G. L. c. 268A, §7 ¶2, the statute creating your position expressly allows its holders to make investments in which they have an interest or involvement. G. L. c. (citation omitted).^3/ Therefore, the investment of funds with the Bank would not place you in violation of §7.

2. Section 6

   This section prohibits your participation^4/ in your appointed position in any particular matter5/ in which, in relevant part an organization in which you serve as an officer has a financial interest. For example, if the people serving in your position were considering investing funds with the Bank, you would be disqualified by §6 from participating in the decision or vote. Participation includes not only voting but also involvement in discussions relating to the decision or vote. When such matters arise, the safest course would be for you to leave the room. See, Graham v. McGrai1, 370 Mass. 133, 138 (1976). In addition to your disqualification from participating in the matter, you are subject to further requirements under both G. L. c. 268A, §6 and the agency's enabling statute.^6/

   Section 6 requires you to disclose in writing to the State Treasurer and the State Ethics Commission the nature of the matter before you and the Bank's financial interest in the matter.^7/

End of Decision 

DATE AUTHORIZED: May 8, 1984

^1/ (Statutory language omitted).

^2/ In view of your unpaid status, you would also be a “special state employee” for the purposes of G. L. c. 268A. See, G. L. c. 268A, §1 (o). However, the answers to the question which you pose do not turn on your status as a special state employee.

^3/ (Statutory citation and language omitted).

^4/ For the purposes of G. L. c. 268A, "participate" is defined as participate in agency action or in a particular matter personally and substantially as a state employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation or otherwise. G. L. c 268A, §1 (j).

^5/ 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).

^6/ You are required by (citation omitted) to disclose the Bank’s interest or involvement in advance to the others serving with you in the position.

^7/ A copy of disclosure form is enclosed.