Opinion  EC-COI-84-87

Date:	07/17/1984
Organization:	State Ethics Commission

A member of the state Designer Selection Board, although a special state employee, is prohibited under section 7 of the conflict of interest law from acquiring a financial interest in a design contract with a local housing authority because the contract is funded by the Executive Office of Communities and Development under procedures approved by the Designer Selection Board, unless the member can first obtain an exemption from the Governor, with the advice and consent of the Executive Council, and files a disclosure with the State Ethics Commission.

Facts

You are a member of the state Designer Selection Board (DSB), an eleven-member body within the Executive Office of Administration and Finance. G.L. c. 7, § 30C. The DSB has jurisdiction over the selection of all designers, programmers, and construction managers performing design services in connection with public building projects and capital facility projects undertaken by state agencies and certain building authorities. G.L. c. 7, § 30D. The DSB also has jurisdiction over the procedures promulgated by any state agency for the selection of designers, programmers and construction managers by any housing authority. Id. Your firm (Firm) would like to apply to a local housing authority (LHA) to perform certain architectural and engineering work. These services would be funded by the state Executive Office of Communities and Development (EOCD) through a contract between EOCD and the LHA. Applications from interested firms will be forwarded to a three-member selection board within EOCD. That board will select three unranked finalists from which the LHA will make its choice(s). This procedure within EOCD is subject to the jurisdiction of the DSB and has been approved by it. If your Firm is chosen by the EOCD selection board and, subsequently, by the LHA, a contract will be entered into between the Firm and the LHA. 

Question

May your Firm, if selected by the LHA, enter into a contract funded by EOCD while you are a member of the DSB?

Answer

No, unless you secure an exemption from the Governor, with the advice and consent of the executive council.

Discussion

 As a member of the DSB, you are a state employee as defined in the state conflict of interest law, G.L. c. 268A, § 1 et seq., and as a result, are subject to the provisions of that chapter. See, EC-COI-81-75. Section 7 of G.L. c. 268A prohibits a state employee from having a financial interest in a contract made by a state agency. The arrangement between EOCD and the LHA, through which EOCD will provide the funds for the LHA to pay for the architectural and engineering services is a contract for the purposes of § 7. Therefore, if your Firm were to be compensated under that contract, you would have a financial interest in a contract made by a state agency in violation of § 7.^[1] Because you are a part-time state employee as a member of the DSB, you qualify for special state employee status under § 1(o) of the conflict law thereby making available certain exemptions to you. There is an exemption from § 7 available to a special state employee who neither participates^[2] in, nor has official responsibility^[3] for any of the activities of the state agency making the contract. See G.L. c. 268A, § 7(d). Because of the broad powers of the DSB over state agency construction projects generally, and the DSB's jurisdiction over the EOCD selection board procedures to be used in this case, you participate in or have official responsibility for activities of the EOCD as a member of the DSB. In particular, in EC-COI-81-75, the Commission recognized that although local housing authorities possess some flexibility in the selection process, the DSB retains effective control of the process. Therefore, you do not qualify for this exemption.^[4]

Another exemption exists for special state employees unable to satisfy the condition of non-involvement in the activities of the contracting agency. In order to qualify for this exemption, you must file a disclosure of your financial interest in the EOCD-LHA contract with the Ethics Commission and receive an exemption from the Governor, with the advice and consent of the Executive Council. See, G.L. c. 268A, § 7(e). Only if you fully comply with this exemption will you be permitted to have a financial interest in the funding arrangement between EOCD and LHA.

End Of Decision

^[1] The Commission assumes that your ownership interest in the Firm is greater than one percent.

^[2] 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, county or municipal employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation or otherwise. G.L. c. 268A, § 1(j).

^[3] For the purposes of G.L. c. 268A, "official responsibility" is defined as the direct administrative or operating authority, whether intermediate or final, and either exercisable alone or with others, and whether personal or through subordinates, to approve, disapprove or otherwise direct agency action. G.L. c. 268A, § 1(i).

^[4] There is another exemption to § 7 which contains this same limitation, so that is also unavailable to you. See G.L. c. 268A, § 7(b).