Opinion  EC-COI-85-58

Date:	07/16/1985
Organization:	State Ethics Commission

An executive director of a municipal housing authority who is also the incorporator and officer of a corporation may not receive compensation from the corporation or act as the corporation's agent in matters in which the municipality or its agencies are parties or have a direct and substantial interest.

Facts

You are the Executive Director of a Housing Authority (Authority) in ABC municipality. You are also an incorporator and an officer of the Corporation (Corporation), a non-profit corporation established by the Authority. Likewise, every other incorporator, director and officer of the Corporation is also a member and/or officer of the Authority. However, you state that the two entities are separate and distinct organizations. i.e., the Corporation is not an arm of the Authority. You further state that the motivation behind establishing the Corporation was to create an entity which could reach beyond the boundaries of the Authority's jurisdiction, as regulated by HUD and EOCD, to manage properties and provide technical assistance to developers/owners in producing housing in ABC through programs other than public housing programs.

Question

As Executive Director of the Authority, what limitations does the conflict of interest law place on your ability to work for or hold an office in the Corporation?

Answer

You will be subject to the following restrictions.^[1]

Discussion

"Municipal employee" is defined in G.L. c. 268A, § 1(g) as "a person performing services for or holding an office, position, employment or membership in a municipal agency, whether by election, appointment, contract of hire or engagement, whether serving with or without compensation, on a full, regular, part-time, intermittent, or consultant basis..." Section 7 of G.L c. 121B states that "for the purposes of chapter two hundred and sixty eight A, each housing and redevelopment authority shall be considered a municipal agency..." As Executive Director of the Housing Authority, you are therefore a municipal employee subject to the provisions of the conflict of interest law.

Section 17(a) of the conflict law prohibits you from being compensated by anyone other than the ABC or one of its agencies in connection with any particular matter^[2] in which ABC is a party or has a direct and substantial interest This provision does not preclude you from being an officer of the Corporation, since you state that such positions are unpaid. On the other hand, § 17(a) would prohibit you from being paid by the Corporation for rendering technical assistance to individual owners and developers on matters of direct and substantial interest to ABC. Such particular matters would include not only applications being submitted to the Authority (i.e., the municipal agency which employs you), but also any matters of direct and substantial interest to any other ABC agencies (e.g., applications for financing or licensing). 

Section 17(c) prohibits you from acting as agent or attorney for anyone other than the ABC or one of its agencies in connection with any particular matter in which ABC is a party or has a direct and substantial interest. Thus, § 17(c) would prohibit you from representing a developer or owner before a municipal agency or regulatory board, e.g., before the planning board or zoning board of appeals in ABC. Acting as agent or attorney for the Corporation before any ABC agency in connection with a proceeding, application or contract, would also violate § 17(c). For the purposes of the conflict law, acting as agent for either the Corporation or the individuals it assists means signing their contracts, acting as their advocate in application processes, submitting their applications, presenting supporting information on their behalf to the Authority or any other municipal agency in ABC, or representing them in any way before such a municipal agency. See EC-COI-84-6; 83-78.^[3]

Stated differently, § 17 reflects the maxim that a person cannot serve two masters, by restricting what you as a municipal employee may do "on the side." Its broad prohibition acknowledges that whenever an employee works for private interests in matters in which the ABC also has an interest, there is a potential for divided loyalties, influence peddling, the use of insider information and favoritism - all at the expense of the ABC.

To summarize, § 17 would prohibit your proposed technical assistance to developers/owners on housing issues, whether paid or unpaid. Because this section's restrictions are limited to "particular matters, however, your involvement as a Corporation officer in the formulation of general issues of policy would not be precluded. EC-COI-83-18; Graham v. McGrail, 370 Mass. 133, 139- 140 (1976).

You should also be aware of the standards of conduct guidelines contained in § 23^[4] of the conflict law. Section 23 provides that no municipal employee shall:

1. accept other employment which will impair his independence of judgment in the exercise of his official duties (G.L. c. 268A, § 23(¶ 2)(1)];
2. use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others [G.L. c. 268A, § 23(¶ 2)(2)];
3. by his conduct give a 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, position or influence of any party or person [G.L. c. 268A, § 23(¶ 2)(3)];
4. accept employment or engage in business activity which will require him to disclose confidential information which he has gained by reason of his official position, nor use such information or materials^[5] to further his personal interest [G.L. c. 268A, § 23(b)(3)].

For example, you would violate § 23(¶ 2)(2) by using municipal space, supplies, time or personnel for Corporation business. Similarly, you would violate § 23(¶ 2)(1) if your service as an officer in the Corporation unduly influenced your decision-making processes as Executive Director of the Authority. You should bear these § 23 guidelines in mind in pursuing your duties as Executive Director to avoid even the appearance of a conflict.

End Of Decision

^[1] The scope of this advisory opinion is limited solely to giving you advice concerning your own prospective conduct, whether your solicitations in the past violated the conflict law cannot be addressed in an advisory opinion.

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

^[3] These citations refer to prior Commission conflict of interest opinions including the year they were issued and their identifying numbers. Copies of advisory opinions (with identifying information deleted) are available for public inspection at the Commission offices.

^[4] On July 9, 1985, the Supreme Judicial Court ruled that the Commission does not possess the jurisdiction to enforce G.L. c. 268A, § 23. The discussion contained above is based on prior Commission rulings and is intended to provide guidance to you and your appointing official.

^[5] These materials are defined as "materials or date within the exemption to the definition of public records as defined by G.L. c. 4, § 7."