Opinion  EC-COI-85-30

Date:	04/02/1985
Organization:	State Ethics Commission

A full-time state employee who wishes to start a business is subject to several restrictions under the conflict of interest law. He may neither perform work on referrals from a state agency, nor act as the agent of his business in seeking contracts with state agencies. He may have a financial interest in a state contract only if he qualifies for an exemption under § 7. Once he leaves his state position, he may not work privately on matters which previously came before him in his state position.

Facts

You are a member of the Massachusetts Historical Commission (MHC). Pursuant to G.L. c. 9, § 26C and 27C and 950 CMR 71.00 et seq: Procedures to Protect the Historic and Archaeological Properties of the Commonwealth, the MHC works with state agencies to protect historic properties which may be adversely affected by a proposed project. If a state agency determines that a project will have an effect on a historic property, the agency must notify the MHC. G.L. c. 29, § 27C. Within thirty days, the MHC executive director will determine whether the project will have an adverse effect on a historic property, 950 CMR 71.07(2), and will thereafter consult with the state agency over alternative steps to eliminate or mitigate the adverse effect. Id. The MHC also issues certifications which enable restoration expenditures to qualify for historic preservation investment tax credits. Id.

You are also the owner and president of ABC, a development corporation. You are interested in pursuing two development proposals in a municipality either individually or through ABC. The first involves the acquisition, redevelopment and restoration of a vacant building owned by the municipality. The property has been designated an historic landmark by the municipality and is listed in the National Register of Historic Places. You have been tentatively selected by the municipality, following public advertisement and submission of proposals, to acquire the property from the municipality and to redevelop and restore the building in accordance with municipal standards and criteria. Your restoration expenditures may be eligible for historic preservation investment tax credits and, as such, will require certification from the MHC. In addition to the building project, you are proposing to develop an adjacent building.

Questions

What limitations does G.L. c. 268A place on the proposed development activities while you serve as an MHC member?

Answer

You will be subject to the limitations set forth below.

Discussion

As an MHC member, you are a state employee for the purposes of G.L. c. 268A. EC-COI-85-19.^[1] Because you serve without compensation as an MHC member, you are also treated as a "special state employee" under G.L. c. 268A and are subject to fewer restrictions than those with which a full-time state employee must comply.

Two kinds of restrictions apply to you. The first, addressed under § 6, limits your official MHC actions. Under § 6, you may not officially participate^[2] in any particular matter^[3] in which either you, your partners or any business organization for which you serve as an officer has a financial interest. Examples of restricted matters would include MHC certifications allowing historic preservation investment tax credits and proceedings to determine whether a project developed by your employer adversely affects historic property. Should such a matter come before MHC, you must refrain from participation, notify your appointing official and make full disclosure of such financial interest; 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 you in which case it shall not be a violation for you to participate in the particular matter. Copies of such written determination shall be forwarded to you and filed with the Commission.

The second kind of restriction is addressed by G.L. c. 268A, § 4(a) and (c) and limits your outside activities as a developer. Under § 4, as applied to you as a special state employee, you may not receive compensation from or act as agent or attorney for a non-state party in relation to any particular matter in which you have either participated or which falls within your official responsibility^[4] as an MHC member. The agency determination of whether a project may have an adverse effect on historic property is a "particular matter" which falls within your official responsibility, EC-COI-84-19, as is the issuance of a certificate allowing investment tax credits. You are therefore required by § 4 to avoid appearing before the MHC or otherwise acting as agent or attorney for ABC or any other non-state party with respect to these matters. You are also prohibited from receiving compensation in relation to these matters, even if someone else represents ABC in the MHC determination or certification process. Under § 5(d), any partner you might have is similarly prohibited from acting as agent of a non-state party in those proceedings. To avoid placing either you or any partner in violation of § 4 or § 5, the partnership should retain for the MHC proceedings an agent or attorney who does not have an ownership interest in the partnership.^[5]

 

^{End of Decision} 

^[1] These citations refer to previous advisory opinions issued by the Commission. Copies of these and all other advisory opinions may be obtained at the Commission's offices.

^[2] For purposes of G.L. c. 268A, § 1(j) "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."

^[3] 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."

^[4] For purposes of G.L. c. 268A, § 1(i) "official responsibility" is defined as "the direct administrative or operating authority, whether intermediate of final, and either exercisable alone or with others, and whether personal or through subordinates, to approve, disapprove or otherwise direct agency action."

^[5] On a prior occasion you reviewed with the Commission your status as a former municipal employee. (citation omitted). To the extent that you now plan to submit proposals to your former agency, you should be aware that G.L. c. 268A, § 18 and § 23 may impose limitations on your activities beyond those  previously described. You may renew your advisory opinion request if you need any clarification on your status as a former municipal employee.