| Date: | 05/29/1984 |
|---|---|
| Organization: | State Ethics Commission |
A Massachusetts Community Economic Development Assistance Corporation employee (CEDAC) is prohibited under § 4 of the conflict of interest law from acting as agent for a non-profit in which he serves as both an officer and board member in connection with an application submitted to CEDAC. As a CEDAC employee, he is also subject to the restrictions in §§ 6 and 23 of the law.
You are an employee in the Massachusetts Community Economic Development Assistance Corporation (CEDAC). CEDAC was created by G.L. c. 40H as a public instrumentality to provide technical assistance services to eligible non-profit organizations in economically distressed parts of the state. While CEDAC is within the Executive Office of Manpower Affairs (EOMA), it is not subject to the supervision or control of EOMA or any other department or agency of the commonwealth except as provided in chapter 40H. See G.L. c. 40H, § 3.
In order to obtain technical assistance from CEDAC, an eligible organization submits a written "Request for Technical Assistance." The application must set forth the history of the organization, describe its inability to secure the requested assistance from other resources and give the details of the proposed project to be assisted. The CEDAC staff then reviews the request and the CEDAC Board of Directors evaluates the proposed project according to the appropriate selection criteria. For example, the Housing Project Selection Criteria include:
Once the CEDAC Board approves the request, a contract is drawn up between CEDAC and the organization. The contract outlines, inter alia, the scope of the services to be provided. The technical assistance CEDAC can provide includes help in planning, organizing and implementing economic activity. For example, the assistance may include long-range planning, market research, business plan development, financial packaging, management training, or any combination of these or other related activities.
You also serve as an officer and Board member of a nonprofit corporation (ABC) which qualifies under CEDAC's enabling legislation as an "eligible organization." Both of your positions at ABC are unpaid. ABC is planning to submit a "Request for Technical Assistance" to CEDAC, in connection with an upcoming housing project.
What limits does G.L. c. 268A place on your rendering CEDAC technical assistance to ABC or acting on behalf of ABC?
You are subject to the restrictions set forth below.
As a full-time employee of CEDAC, you are expressly subject to the provisions of G.L. c. 268A. See G.L. c. 40H, § 3(d). For the purposes of applying Chapter 268A, the conflict of interest law, you are considered a state employee. Section 4(c) of Chapter 268A prohibits a state employee, otherwise than in the proper discharge of his official duties, from acting as agent or attorney for anyone other than the commonwealth or a state agency in connection with any particular matter[1] in which the commonwealth or a state agency is a party or has a direct and substantial interest. This prohibition recognizes that an employee's loyalty to the commonwealth may be diminished when the employee acts on behalf of a private party in connection with particular matters in which the commonwealth is a party. The potential for divided loyalty is even greater when the employee's private interests are advanced before the same agency which employs him. See, In the Matter of Louis L. Logan, 1981 Ethics Commission (40). Section 4 therefore prohibits such conduct without regard to whether the employee is in a position to exploit his public office.
ABC's application to CEDAC for technical assistance is a particular matter as defined in G.L. c. 268A, § 1(k). Accordingly, you may not act as ABC's agent in any respect concerning its application to CEDAC for technical assistance. Section 4 would prohibit you from acting as ABC's agent before any other state agency as well, although that section would not prohibit you from continuing your other activities for ABC which are not of direct and substantial interest to the state.
Section 6 of Chapter 268A prohibits a state employee from participating as such an employee in a particular matter in which a business organization in which he is serving as an officer, director, trustee, partner or employee has a financial interest.
The Commission has previously held that the term "business organization" includes non-profit organizations. See e.g. EC-COI-82-91. The non-profit ABC will have a financial interest in any services CEDAC provides because ABC would have to pay for equivalent technical assistance from the private sector. From the facts you present, it further appears that the CEDAC services ABC will request are critical to the successful completion of the housing project.
You state that you would not be involved in any aspect of the CEDAC staff review of the ABC request or its presentation to the CEDAC Board of Directors. You should be aware that § 6 prohibits your involvement in any discussions with or support work for the CEDAC staff or Board of Directors concerning the ABC application, as well as prohibiting your participation in the formal staff review or presentation before the Board.
In the event that the CEDAC Board approves the ABC application following the CEDAC staff review, a contract will be drafted to structure the relationship between CEDAC and ABC, as described above. That contract would constitute a particular matter under G.L. c. 268A, § 1(k). Due to your present positions in the ABC organization, your proposed participation as a state employee in the rendering of services to ABC, pursuant to the CEDAC-ABC contract, would fall within the proscribed activities under § 6. Section 6 does provide the following exemption:
Any state employee whose duties would otherwise require him to participate in such a
particular matter shall advise the official responsible for appointment to his position and
the state ethics commission of the nature and circumstances of the particular matter and
make full disclosure of such financial interest, and the appointing official shall thereupon
either:
(1) assign the particular matter to another employee; or
(2) assume responsibility for the particular matter; or
(3) make a written determination that the interest is not so substantial as to be
deemed likely to affect the integrity of the services which the commonwealth may
expect from the employee, in which case it shall not be a violation for the employee
to participate in the particular matter. Copies of such written determination shall be
forwarded to the employee and filed with the state ethics commission by the person
who made the determination, such copy shall be retained by the commission for a
period of six years.
Thus, only if you follow the disclosure provisions outlined above and obtain the requisite determination from your appointing official (a copy of which must be submitted to the Commission), would your services providing technical assistance to ABC be exempted from the § 6 prohibition. Your appointing official must make a good faith determination based on the specific facts of your situation. The needs of the agency and its credibility must be balanced with the purposes of the conflict law.
You are also subject to the standards of conduct set forth in § 23 of the conflict law. That section provides, in pertinent part, that no employee shall:
G.L. c. 268A, § 23 (¶2) (2) and (3).
You state that the Board of Directors at both ABC and CEDAC would be put on notice that you are a full-time CEDAC employee and an officer and Board member of ABC. Beyond this initial step, the loyalty ambiguities created by your multiple positions would require scrupulous adherence to the above provisions of § 23. As stated previously, you would be prohibited from interjecting yourself in any way into the technical assistance application process on behalf of either ABC or CEDAC; and in the event that your appointing official exempts you from the § 6 prohibition, your proposed role in the rendering of the technical services to ABC could not
Finally, G.L. c. 268A, § 23 (¶ 3)(1) prohibits a state employee from accepting employment or engaging in any business or professional activity which will require him to disclose confidential information which he has gained by reason of his official position or authority and from, in fact, improperly disclosing such materials[2] or using such information to further his personal interests, In your position on the CEDAC staff, you have access to the procedures and standards used by the CEDAC staff and Board of Directors to review an organization's request for technical assistance. You must therefore take great care to abide by the provisions of G.L. c. 268A, §23 (¶ 3) (1) in all of your dealings with ABC.
End of Opinion
