Opinion

Opinion EC-COI-85-32

Date: 04/23/1985
Organization: State Ethics Commission

An attorney who works in a state agency may conduct her own real estate business subject to certain limitations. In particular, she may not take any action as a state employee with respect to any property or person with whom she does, or expects to do, business, nor may her business receive a commission from the purchase or sale of state property unless certain special conditions have been satisfied.

Table of Contents

Facts

You are an employee of Department of Revenue (DOR). You presently are in the process of obtaining your real estate broker's license. Once you obtain the license, you plan to open a real estate office. The office would employ several salespersons on a commission basis who would show properties to prospective buyers or lessees. You personally would also be showing property during weekends and evening hours.

Question

What limitations would G.L. c. 268A impose on you in connection with your real estate business?

Answer

You will be subject to the following limitations.

Discussion

As a state employee you are subject to the provisions of G.L. c. 268A, the conflict of interest law. The sections of that law which are applicable to your question are §§ 4, 6, 7 and 23. Section 4 prohibits a state employee from being compensated by or 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. Your real estate business would be someone other than the state. Thus, this section would prohibit you from acting as agent for your business or for one of your employees or clients before any state agency in relation to particular matters in which the state is a party or is directly and substantially interested. Such matters would include, for example, application to state agencies for permits or licenses for your business or for its employees.[2] 

Section 6 provides in relevant part that a state employee may not officially participate[3] in any particular matter in which she or any business organization in which she is an officer, director or employee, has a financial interest. This section precludes you from taking any action in your DOR capacity in connection with any matter involving state taxes which you or your business owes, or property for which your business is acting as a broker. Should such a matter come before you, you must disclose the nature of the matter and the financial interest in it to the Ethics Commission and your appointing official. That official must then either:

  1. assign the matter to another employee;
  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. You must continue to refrain from official participation unless your appointing official makes the written determination described above.

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. You would have such a financial interest in any purchase or sale of state property if you or your business received a commission. There is, however, an exemption  to § 7 which is potentially available to you. Section 7(b) provides that the § 7 prohibition will not apply to:  

     . . . a state employee other than a member of the general court who is not
     employed by the contracting agency or an agency which regulates the activities 
     
of the contracting agency and who does not participate in or have official
     responsibility for any of the activities of the contracting agency, if the contract
     is made after public notice or where applicable, through competitive bidding,
     and if the state employee files with the state ethics commission a statement
     making full disclosure of his interest and the interests of his immediate family
     in the contract...

Thus if the contract for purchase or sale is made after public notice or advertisement, and as long as DOR is not the purchasing or selling agency and the other statutory conditions are satisfied, your financial interest in the contract would not be prohibited.

Finally, § 23 contains general standards of conduct applicable to all state employees. In particular you should be aware of two of its provisions. First, a state employee may not use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others. This section would be implicated if you were to  use information you obtained in your DOR position to secure business for  yourself. See e.g. EC-COI-84-131. Second, a state employee may not by his conduct give 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 kinship, rank or position of any party or person. This section would prohibit you, for example, from having private business dealings with taxpayers or employees over whom you have some official authority. See e.g. EC-COI-83-156.

 

End Of Decision

[1] G.L. c. 268A, § 1(k) defines "particular matter" 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, power, duties, finances and property.

[2] You are not precluded from representing yourself in obtaining your own broker's license because you are acting on your own behalf and not as agent for someone else. See e.g. EC-COI-85-28 (this citation refers to a previous advisory opinion issued by the Commission including the year it was issued and its identifying number. Copies of this and all other opinions are available for public inspection, with identifying information deleted, at the Commission offices.)

[3] G.L. c. 268A, § 1(j) defines "participate" 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."

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