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A county board member may participate in a development proposal affecting a business the board member does business with provided that he complies with sections 23 and 13.
You are the chairman of a County Board (Board). You are also president of a real estate agency. A Corporation (Corp.) has a proposal before the Board involving a parcel of land owned by the county. In order for the Corp. to conform with the City's zoning requirements, they need the county land for additional parking. The Corp. will, also develop a "Park and Ride" as part of their parking area for the benefit of the county. The land on which the Corp. is to build their restaurant is owned by the XYZ Agency. Your agency uses XYZ as a rental referral agency to handle all requests which you receive for rentals. XYZ pays you a referral fee if they rent an apartment to a referred customer. XYZ has a desk and telephone in your office which they staff three hours a day. The telephone is owned and paid for by XYZ and is answered "XYZ Agency." Neither company is formally associated with the other nor do you have any ownership interest in their company. You have no joint stationery or business cards that list your affiliation. However, you and XYZ indicate in your real estate listings in the newspaper that you are an affiliate of each other. You indicate that the reason for advertising this affiliation is because your firm only handles commercial and residential real estate sales.
What limitations, if any, does G.L. c. 268A place on your participation as a county board member in the Corp's proposal?
You may participate in the Corp's proposal.
As a board member of the County you are a county employee and therefore are subject to the conflict of interest law, G.L. c. 268A and, in particular, §§13 and 23.
Section 13 prohibits in pertinent part a county employee from participating as such an employee in a particular matter in which to his knowledge he, his immediate family or partner, a business organization which he is serving as officer, director, trustee or partner has a financial interest. Whether you may participate as county board member in discussions or the vote on the Corp's proposal is determined by the nature of your business relationship with XYZ. If you were considered a partner of XYZ you would be prohibited by §13 from participating in the Corp. proposal. The Commission has held in previous opinions that a partner is any person who joins with another, formally or informally, in a common business venture. See EC-COI-84-78./ The substance of the relationship is what counts, not the terms the parties use to describe the relationship. Additionally, if a group creates a public appearance of a partnership (for, example by linking their names on a letterhead, business cards and business listing), they may be treated as partners even though they may not, in fact, share profits. The substance of your arrangement with XYZ does not constitute a partnership. You do not share letterhead or business cards. Your only public affiliation is through a real estate listing which indicates that your firms are affiliated. The only reason you advertise such affiliation is because your firm only handles commercial and residential real estate sales whereas XYZ complements your business by providing rental services.
Further, previous Commission opinions have held that an occasional payment constitutes a fee for services arrangement rather than a sharing of profits. Here, the referral fee you receive from XYZ is more akin to a fee for services. XYZ maintains its own telephone line in your office and identifies itself to callers as "XYZ Agency." For these reasons, the affiliation you have described will not be viewed as a partnership within the meaning of the statute and the provisions which affect the interests and activities of partners will not be applicable.
You should also be aware that §23,/ which contains general standards of conduct applicable to all public employees, is relevant to your situation. Section 23(2)(3) prohibits one 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 kinship, rank, position or influence of any party or person. In order to dispel any improper impression by your conduct as a county board member in the Corp's proposal, you should disclose to the Board your relationship with XYZ before participating in the matter.
1/This citation refers 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.
2/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.