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Opinion

Opinion EC-COI-89-15

Date: 06/19/1989
Organization: State Ethics Commission

An unpaid member of a state authority is a special state employee. He may retain his membership on the board of overseers of an institution that falls under the jurisdiction of his state authority because, in this case, the overseers do not have management authority over the institution, but instead have advisory authority. Therefore, the employee's status as a board member does not require his abstention under section 6, although proper disclosures under section 23 could be necessary in certain instances. As a special state employee, he must avoid acting as agent or attorney for the institution in connection with anything under his official responsibility at the authority.

Facts

You are currently under consideration for appointment to a state authority (Authority). Some of the Authority's powers include issuance of bonds and loans to participating institutions. In your private capacity, you currently serve on the board of overseers (Board) of a institution (ABC), a corporation which falls within the jurisdiction of the Authority. The Board is comprised of over 100 members who are elected by the ABC board of trustees. The Board meets annually ad is expected to provide service through participation in ABC committees; to seek to increase community support and understanding of ABC's mission and to maintain a close familiarity with the goals and progress of ABC. Board membership is intended to be broadly representative of the communities and groups, served by ABC. The Trustees have the general management and control of overall property affairs and funds of ABC, and are also responsible for the election of officers and trustees of ABC. Members of the Board may participate in advisory subcommittees established by the Board of Trustees but do not exercise management authority.

Question

Does G.L. c. 268A permit you to serve as a member of the Authority while also retaining your membership on the ABC Board?

Answer

Yes, subject to the conditions set forth below.

Discussion

1. Jurisdiction

We conclude that the Authority is a "state agency" within the meaning of GL. c. 268A, s.1(p)[1] and you will become a state employee within the meaning of G.L. c. 268A, s.1(q)[2] through your membership. The definition of state agency includes "any independent state authority ... [or] instrumentality ... but not a agency of a county, city or town." G.L c. 268A, s.1(p). The Authority's enabling statute expressly identifies the Authority as a public instrumentality ad states that the exercise of the Authority's powers shall be deemed to be the performance of a essential public function. Although the enabling statute and the legislative history surrounding the enactment of the Authority are silent as to the proper characterization for G.L. c. 268A purposes, we regard the Authority as a state agency under G.L. c 268A. This conclusion is based on the fact that the Authority members are appointed by the governor and exercise a statewide jurisdiction over institutions throughout the Commonwealth. This result is consistent with the Commission's application of state agency status to other independent state authorities and instrumentalities. See, EC-COI-81-119 (regional transportation authority); In the Matter of Henry Doherty, 1982 State Ethics Commission 115 (Massachusetts Bay Transportation Authority); In the Matter of Louis Logan, 1982 State Ethics Commission 40 (Massachusetts Technology Park Corporation). It is the commonwealth, rather than any county or municipality, which appears to be the "level of government to be served by the agency in question." Buss, The Massachusetts Conflict of Interest Law:. An Analysis, 45 B.U.L. Rev. 299,310 (1965); EC-COI-83-63. In view of your uncompensated status as a Authority member, you are also considered a special state employee under G.L. c. 268A, s.1(o). As a special employee, you remain subject to many prohibitions under G.L. c. 268A but are eligible for exemptions permitting your private dealings with certain state agencies.

2. Limitations on Your Official Activities

Under G.L. c. 268A, s.6, a state employee must abstain from official participation[3] in any particular matter[4] in which "a business organization in which he is serving as officer, director, trustee, partner or employee ... has a financial interest." Based on the information you have provided, we conclude that s.6 will not require your abstention from participation as an Authority member in matters affecting ABC's financial interest because your status as a member of the Board does not rise to the level of officer, director, trustee, partner or employee of ABC. See, EC-COI-89-12 (member of board of advisors is not a relationship covered by s.6); ad 82-145 (hospital corporator is not a officer, director, trustee, partner or employee). In EC-COI-89-l2, the Commission observed The Commission has previously stated that it will not be bound by the title of the position one holds within a business organization, but rather will examine the substance of the position. For example, in EC-COI-87-10, the Commission concluded that a savings bank corporator exercised management functions sufficiently similar to a director so as to be regarded as a director for G.L. c. 268A

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purposes. See also, EC-COI-8O-43 (relationship between attorneys will be treated as partnership where attorneys share ownership assets and liabilities, even absent a formal partnership agreement). Based on the information you and the Hospital provided, however, we conclude that your board of advisor responsibilities are not comparable to those of a corporate officer or director. This conclusion is based on the fact that those corporate officer and director functions are already performed by other individuals, and on the Hospital's intent to establish the board of advisors as a community-based sounding board, rather than as a decision-making management board. The principles expressed in EC-COI-89-l2 are equally applicable to members of the Board because ABC's corporate officer and director functions are performed by other individuals, and the overseers are primarily a community-based sounding board. Should a matter come before you in which ABC has an interest, the provisions of G.L.c. 268A,s.23 will apply. Under s.23, a state employee may not use his official position to secure unwarranted privileges or exemptions of substantial value for others, and must also avoid creating the reasonable appearance of undue favoritism towards others due to the existence of private relationships. To dispel any appearance of undue favoritism towards ABC, you must disclose in writing to your appointing authority the relevant facts concerning your official responsibilities and private relationship with ABC whenever a matter involving ABC comes before Authority. Of course, should you decide to abstain from any participation in such matters, no such disclosure is required.

3. Limitations on Your ABC Activities

Section 4(c) places restrictions on the outside activities of state employees. Specifically, s.4(c) prohibits a state employee from acting as the agent or attorney for a non-state party in connection with any application, proceeding, determination or other particular matter in which any state agency is either a party or has a direct and substantial interest. As a special state employee, however, the restrictions of s.4 apply only to matters within your official responsibility at the Authority. For example, if ABC has an application pending before the Authority, you may not act as ABC's agent or spokesperson in connection with that application. You would not be regarded as ABC's agent by participating in in-house discussions as a member of the board of overseers. See, EC-COI-83-145; 82-45. On the other hand, you must avoid appearing before the Authority on behalf of ABC, which would include signing, in your representative capacity, any documents or correspondence directed to Authority officials, or making phone calls to Authority members or employees.

[1] "State agency," any department of a state government including the executive, legislative or judicial, and all councils thereof and thereunder, and any division, board, bureau, commission, institution, tribunal or other instrumentality within such departments ad any independent state authority, district, commission, instrumentality or agency, but not an agency of a county, city or town.

 

[2] "State employee," a person performing services for or holding an office, position, employment, or membership in a state agency, whether by election, appointment, contract of hire or engagement, whether serving with or without compensation, on a regular, part- time, intermittent or consultant basis, including members of the general court and executive council. No construction contractor nor any of their personnel shall be deemed to be a state employee or special state employee under the provisions of paragraph (o) or this paragraph as a result of participation in the engineering and environmental analysis for major construction projects either as a consultant or part of a consultant group for the commonwealth. Such contractors or personnel may be awarded construction contracts by the commonwealth and may continue with outstanding construction contracts with the commonwealth during the period of such participation; provided, that no such contractor or personnel shall directly or indirectly bid on or be awarded a contract for any construction project if they have participated in the engineering or environmental analysis thereof.

 

[3] "Participate," 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] "Particular matter," 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

 

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governmental organizations, powers, duties, finances and property.

 

[5] You have indicated that, aside from your ABC work, you are involved in private development. While none of the restrictions of s.4 would appear relevant to your real estate development work, you may renew your opinion request with us if you wish to receive further guidance on this point.

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