Opinion

Opinion EC-COI-85-15

Date: 02/26/1985
Organization: State Ethics Commission

A developer who also serves as an unpaid member of a state board is a special state employee. He may neither submit private proposals on property under the control of his board, nor officially participate in decisions in which he has a financial interest. He may seek development financing from other state agencies following his compliance with the disclosure provisions of § 7(d).

Table of Contents

Facts

You are a member of the ABC state agency. You also are engaged in the business of real estate development. In that regard you would like submit proposals to certain public agencies, including the Massachusetts Turnpike Authority, the Massachusetts Bay Transportation Authority, and the Massachusetts Port Authority to acquire and improve real estate owned by those agencies. Prior to July 1984 you were the director of the XYZ, a municipal agency. You state that you never participated there in any activities connected with the properties you would now like to acquire. Both your spouse and her father are state employees although neither of them, to your knowledge, plays any role in the disposition of real estate property by state agencies.

Question

What limitations does G.L. c. 268A place on you in regard to your proposed activities?

Answer

You are subject to the following limitations.

Discussion

A. Limitations on your activities by virtue of your state employee status

As a member of the ABC, you are a state employee for purposes of G.L. c. 268A, the conflict of interest law. EC-COI-83-19. However, because ABC members are not compensated for their services, you are considered a special state employee. The statute generally applies less restrictively to special state employees. The sections of the law relevant to you in your state capacity are §§ 4, 6, 7 and 23.

Section 4 provides in pertinent part that a state employee may not accept compensation from or act as agent or attorney for anyone other than the commonwealth 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. Special state employees are subject to these prohibitions only in relation to particular matters in which they have at any time participated as state employees or which are or within one year have been the subject of their official responsibility. Thus, you must refrain from submitting proposals on any properties which are under the control of or otherwise connected with the ABC.

Section 6 prohibits a state employee from participating as an employee in any particular matter in which he, his immediate family or partner or a business organization in which he is serving as officer, director, trustee, partner or employee has a financial interest.[2] Should such a matter come before the ABC, you should advise your appointing official and the Commission of the nature and circumstances of the particular matter and your financial interest in it. Your appointing official shall then 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.

Issues under § 6 would arise, for example if you were considering developing property which was also under consideration by the ABC.

Section 7 prohibits a state employee from having a financial interest, directly or indirectly, in a contract made by a state agency, in which the Commonwealth or a state agency is an interested party. Ordinarily, problems might arise under this section if, for example, you were to seek development financing either in the form of loans or bond issuances from a state agency such as the Massachusetts Housing Finance Agency or the Massachusetts Industrial Finance Agency. Both loans and bonds constitute contracts for purposes of § 7. See e.g. EC-COI-83-147; 84-11.[3] However, because of your special state employee status, you qualify for an exemption under § 7(d). Under § 7(d), following your written disclosure of your financial interest with the Commission, you may seek development financing or otherwise have a financial interest in contracts made by state agencies other than ABC.

Finally, § 23 contains general standards of conduct applicable to all state, county and municipal employees. These standards address not only actual conflict situations but also those which might create the appearance of conflict of interest. Section 23 (¶ 2)(2) provides that a state employee shall not use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others. Section 23(¶ 2)(3) prohibits a state employee from by his conduct giving reasonable basis for the impression that any person can improperly influence or unduly enjoy his favor in the performance of his official duties, or that he is unduly affected by the kinships, rank, position or influence of any party or person. Problems might arise in this regard if you were to use or give the impression of using your ABC position to further your personal business interests.

B.  Limitations on your activities by virtue of your status as a former municipal employee

As a former municipal employee, you are subject to  G.L. c. 268A, § 18 which contains two relevant restrictions. Section 18(a) prohibits a former municipal employee from acting as agent or attorney for or receiving compensation from anyone other than the same city or town in connection with any particular matter in which the city is a party or has a direct and substantial interest and in which he participated  as a municipal employee. This means, for example, that you may not submit a proposal to the XYZ for development of a parcel of property which you were responsible for taking by eminent domain during your tenure there. Since you state that you never participated in any activities connected with the properties for which you now seek to submit proposals, this section is not implicated. Section 18(b) provides that a former municipal employee may not, for one year from the time his municipal employment has ceased, appear personally before any agency of the city as agent for anyone other than the city in connection with any particular matter in which the city is a party or has a direct and substantial interest and which is under his official responsible as a municipal employee at any time within a period of two years prior to the termination of his employment. You will note that this prohibition focuses on matters that were the subject of your official responsibility even if you did not personally participate in them. Thus, you are now restricted, until July 1985, from personally appearing before any municipal agency, as agent for someone other than the City, in connection with any matter which was the subject of your official responsibility from July 1982 to July 1984. Finally, you should be aware that, as a former municipal employee, you may not use confidential information acquired in the course of your employment to further your personal interests. G.L. c. 268A, §23(¶ 3).

 

End Of Decision 

[1] For purposes of G.L. c. 268A, § 1(k) "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 and petitions of cities, towns, counties and districts for special laws related to their governmental organizations, powers, duties, finances and  property.

[2] We note that the ABC enabling statute also prohibits members from having any financial interest in any property to be included in, or any contract for property or materials to be furnished or used in connection with, a project.

[3] These citations refer to prior advisory opinion  issued and their identifying number. Copies of these and all other advisory opinions are available for public inspection, with identifying information deleted, at the Commission offices.

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