Opinion  EC-COI-85-39

Date:	05/14/1985
Organization:	State Ethics Commission

The chief financial officer of a municipal housing authority will be subject to certain restrictions when he leaves to begin employment with a real estate management corporation. Specifically, he will be prohibited from receiving compensation from the corporation in relation to contracts he awarded to the corporation as a housing authority employee. Further, if he becomes a part-time consultant to the housing authority, he must limit his consulting to 60 days per year if he also wants· to receive compensation from the corporation in connection with any matters pending before the authority.

 

Facts

You are an official of the ABC Housing Authority.^[1] In that capacity you are the ABC's chief financial officer. As chief financial officer you personally participate in the award and implementation of all contracts.

You are planning to accept a full-time position with DEF, a corporation engaged in real estate management.   DEF has various contracts with the ABC to manage ABC projects. Each contract DEF has with the ABC includes a provision for renewal at two-year intervals unless terminated at the option of either party. Part of your compensation package would include the receipt of stock. However, you indicate that you will not receive this stock until the two-year contracts you participated in on behalf of ABC with DEF have expired. In addition to your full-time position with DEF, you may also be offered a part-time consultant position with the ABC.

Questions

1. What restrictions does G.L. c. 268A place on you as a former municipal employee?

2. What limitations does G.L. c. 268A place on your performing consulting services for the ABC?

Answers

1. You are subject to the restrictions of G.L. c. 268A, §§ 18(a) and (b).
2. You are subject to the restrictions of G.L. c. 268A, § 17.

Discussion

Status as a Former Municipal Employee

Upon leaving municipal employment, you will become a former municipal employee for the purposes of the conflict-of-interest law, G.L. c. 268A, § 1 et seq. The applicable provision to your situation is § 18. Section 18(a) permanently prohibits a former municipal employee from acting as agent for, or receiving compensation from, anyone other than the same city in connection with any particular matter^[2] in which the city is a party or has a direct and substantial interest and in which he participated^[3] as a municipal employee while so employed.

Contracts awarded to DEF are particular matters under G.L. c. 268A § 1(k). Each contract award you made as the assistant administrator of ABC will fall within the § 18(a) prohibition. As a DEF employee, § 18(a) will prohibit you from receiving compensation from DEF in relation to the contracts that you participated in as an ABC employee. Section 18(a) will also prohibit you from acting on behalf of DEF in relation to the ABC contracts which you awarded.

The § 18(a) prohibition on receipt of compensation includes any money, thing of value or economic benefit conferred on or received by any person in return for services rendered by himself or another. See, EC-COI-85-22. Thus, any compensation including the stock which you receive from DEF should not include fees received by DEF from the ABC contract. To avoid being in violation of § 18(a), DEF assets from the ABC contracts you participated in should not be reflected in the stock which you will receive.

Section 18(b) establishes an independent limitation on your post-employment appearances before municipal agencies. This provision relates to those particular matters in which you did not personally participate but which were nonetheless under your "official responsibility"^[4] as assistant administrator and chief financial officer of the ABC. Under § 18(b), for a one-year period following the completion of your ABC services, you may not personally appear on behalf of DEF before any municipal agency in connection with particular matters which were under your official responsibility during the previous two-year period. Included within the § 18(b) prohibition would be decisions or determinations made by other ABC employees and which were under your official responsibility.

Status as a consultant to the ABC

In the event that you enter into a consulting contract with the ABC, the provisions of § 17 would apply.^[5] According to G.L. c. 121B, § 7, any person who performs professional services for a housing authority on a part-time or consultant basis is considered a special municipal employee for the purposes of the conflict-of-interest statute. Under § 17, as a "special municipal employee," you will be prohibited from receiving compensation from anyone other than the city and from acting as an agent for anyone other than the city in relation to any particular matter in which a municipal agency is a party or has a direct and substantial interest if the matter is one in which you have either participated or have had official responsibility for as a special municipal employee. If you serve more than sixty days in any three hundred sixty-five day period, the prohibition will apply to any matter pending in the ABC. Thus, in order to act on behalf of DEF on matters with the ABC (other than those matters in which you have participated or have had official responsibility for), you would have to limit your annual consulting contract with the ABC to sixty days.

A final point should be made with respect to calculating your days served for the purpose of the sixty day limit. If you serve for part of a day performing services under your arrangement with the ABC, you will be considered as having served for a complete day.^[6] See, EC-COI-80-31. The statute recognizes that special municipal employees whose service in a one-year period exceeds sixty days are likely to possess and exercise influence with respect to their agency's actions. G.L. c. 268A, § 17 therefore prohibits such employees from privately dealing with any matter pending in their municipal agency.

 

End of Decision

^[1] ABC is a municipal agency for the purposes of G.L. c. 268A. See G.L. c. 121B, § 7.

^[2] 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, powers, duties, finances and property."

^[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, county or municipal employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation or otherwise.

^[4] G.L. c. 268A, § 1(i), defines "official responsibility'' 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."

^[5] In your opinion request, you state that you would not have a financial interest in DEF's contracts with the ABC. As long as your compensation from DEF is not attributable, either directly or indirectly, in DEF's contracts with the ABC, you would not have a prohibited financial interest in a ABC contract under G.L. c. 268A, § 20.

^[6] You should keep accurate time records of your ABC services.