Opinion

Opinion EC-COI-84-6

Date: 01/30/1984
Organization: State Ethics Commission

A state employee can also serve on the board of directors of a private company that contracts with state agencies without violating the conflict of interest law but is subject to the restrictions under §§ 4, 6 and 23(b)(2).

Table of Contents

Facts

You are employed on a full-time basis in a state agency (ABC). In that capacity, you serve as liaison to the Legislature, lobby on behalf of the ABC's legislative priorities, and represent the various divisions of ABC before the General Court. You are responsible for preparing and filing legislative proposals each year and developing support for each bill. You have minimal, if any, official responsibility for adjudication, rulemaking, policy, or ministerial matters coming before the individual divisions of ABC.

You have been asked to serve as a member of the Board of Directors of DEF (DEF), a Massachusetts Chapter 156B business corporation. DEF provides consulting services to various state agencies, as well as representing private clients as agents and/or expert consultants before various agencies and regulatory boards. The positions of President and Treasurer of this corporation are filled by two of your brothers. The legal affairs of DEF, including those regulated by ABC, are handled by a private law firm in Boston. You would not be compensated for your services as a director, nor have any ownership or financial interest in the corporation, nor perform any services as an employee or consultant.

Questions

1. Does G.L. c. 268A permit you to serve simultaneously as a state employee and as a Director of DEF?

2. Does G.L. c. 268A restrict the kinds of consulting services DEF may engage in?

Answers

1. Yes, subject to the conditions discussed below.

2. No.

Discussion

As an employee of ABC, you are a state employee as defined in G.L. c. 268A, § 1(q), and are therefore covered by the conflict of interest law. As such, you are prohibited by § 6 from participating[1] as an ABC employee in any "particular matter"[2] in which your immediate family,[3] or a business organization for which you are a director has a financial interest. That section further provides that when your duties would otherwise require you to participate in such a matter you must file with your appointing official and the Commission a written disclosure of the nature and circumstances of the particular matter and the financial interest involved therein. Your appointing official may then either assign the matter to another employee, assume responsibility for the matter himself or make a written determination that the financial interest involved is not so substantial as to affect the integrity of your service as a state employee. Copies of that determination must be sent to you and the Commission.

Accordingly, under § 6 you will be prohibited from participating as an ABC employee in any particular matter in which DEF has a financial interest unless you were to receive the written determination from your appointing official described above. The enactment of general legislation is specifically excluded from the definition of "particular matter" by § 1(k). However, the enactment of special legislation has been interpreted by the Commission and Attorneys General to be a "particular matter."[4] Thus, § 6 would prohibit you from making recommendations or otherwise participating in the enactment of special legislation which would affect your own, your brothers' or DEF's financial interests. See, e.g., EC-COI-80-13. You would also be prohibited under § 6 from participating in such determinations as the approval of matters pending in ABC involving DEF. Section 4 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 in which the
     commonwealth or a state agency is a party or has a direct and substantial interest.

     b.  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.

You are already in compliance with paragraph (a), since you state that you would not be compensated as a director of DEF. With respect to paragraph (b), you would be prohibited from acting as agent or attorney for any non-state party in connection with a particular matter in which the state or any state agency is a party or has a direct and substantial interest. Thus, § 4(c) would prohibit you from representing one of the corporation's clients before a state agency or regulatory board, e.g., a private health care provider in a determination of need or licensing proceeding before the Department of Public Health. Acting as an agent or attorney for DEF before ABC, any of its subdivisions, or any state agency in connection with a proceeding, application, contract, etc. would also constitute a violation of § 4(c). Acting as an agent for either the corporation or its clients means signing their contracts, acting as their advocates in application processes, submitting their applications, presenting supporting information on their behalf to ABC or any other state agency, or representing them in any way before a state agency. EC-COI-83-78. Your involvement as Director in the formulation of general issues of policy, however, would not be precluded under § 4, inasmuch as" 'particular matter' is not intended to include general issues of policy but rather focuses on types of activity which involve making decisions and exercising judgment." EC-COI-83-18; Graham v. McGrail, 370 Mass. 133, 139-140(1976).

You should also be aware that G.L. c. 268A, § 23 imposes restrictions on your outside activities. In particular § 23(¶ 2) (2) prohibits you from using or attempting to use your official position to secure unwarranted privileges for yourself or others. For example, you would violate this section by using your position as a means of obtaining special treatment of any DEF matters in ABC. Likewise, you should avoid giving reasonable basis, by your conduct, for the impression that any person can improperly influence or unduly enjoy your favor in the performance of your official duties (e.g., a fellow Director of DEF).

The conflict of interest law would not place restrictions on the types of consulting services in which DEF may engage due to your status as a state employee. Regardless of whether you make the position as a Director, however, you are subject to the § 6 restrictions on official actions (which would affect your own or your brothers' financial interests) in your state job, as discussed above.

 

End of Decision 

[1] 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).

[2] 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).

[3] "Immediate family" is defined as "the employee and his spouse, and their parents, children, brothers and sisters." G.L. c. 268A. § 1(e).

[4] See EC-COI-82-169; 82-32; 80-13; see also Attorney General Conflict Opinion Nos. 101,451,578. Special, as opposed to general legislation, is distinguished by the particularity of the scope and pure of the act's provisions. See, Sands, 2 Sutherland Statutory Construction § 40.01 et seq. (4th ed 1973)

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