Opinion  EC-COI-89-29

Date:	09/20/1989
Organization:	State Ethics Commission

A special state employee who is also a private attorney may participate as a state employee in the re-sale of property previously purchased by his state agency from a former legal client of the special state employee. The employee must abstain from participating in particular matters that affect his own financial interests or those of his immediate family, partners, or associates.

Facts

You are a member of state agency ABC. You are also a private attorney and have represented Mr. X and his company in real estate transactions. Although at one time you served as clerk for Mr. X's company, you have resigned from that position.

Recently, the ABC purchased some property from Mr. X's company. You did not represent Mr. X's company in the transaction and received no remuneration in connection with the transaction. You state that the transaction was a straight purchase with no mortgages or other interests retained by Mr. X or his company.

Pending before the ABC is an offer from Mr. Z to purchase the same property. Neither Mr. X or his company has any financial connection with Mr. Z. You have filed a letter and documents with your appointing official pursuant to G.L. c. 268A, s.23(b)(3) disclosing your prior relationship with Mr. X.

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Question

Does G.L. c. 268A permit you to participate as an ABC member in the sale of this property?

Answer

Yes, subject to certain restrictions.[1]

Discussion

1. Jurisdiction

We conclude that the ABC is a "state agency" within the meaning of G.L. c. 268A, s.1(p)[2] and you are a state employee within the meaning of G.L. c. 268A, s.1(q)[2] through your membership in the ABC. The definition of state agency includes "any independent state authority ... [or] instrumentality but not an agency of a county, city or town." G.L. c. 268A, s.1(p). The ABC's enabling statute expressly identifies the ABC as a public instrumentality, and we have previously regarded the ABC to be an agency subject to G.L. c. 268A. (citations omitted). Although the ABC's enabling statute preceded the enactment of G.L.c. 268A and is silent as to the proper characterization of the ABC for G.L. c. 268A purposes, we have consistently treated agencies similar to the ABC as state agencies for G.L.c. 268A. (citations omitted). While there are organizational provisions in the ABC's enabling statute which could arguably suggest that the ABC is analogous to a regional municipal district, and therefore a municipal agency, EC-COI-82-25, we deem controlling the fact that the commonwealth is required under the enabling statute to assume any deficit incurred by the ABC.

In view of your uncompensated statute as an ABC 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 prohibitions under G.L. c. 268A but are eligible for exemptions permitting your private deals 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[4] in any particular matter[5] which affects the financial interest, in relevant part, of either the employee or any business organization for which the state employee serves as officer or employee. Based on the information you have provided, we conclude that s.6 does not require your abstention from participation as an ABC member in the proposed sale of this property to Mr. X. The proposed sale is between the ABC and Mr. Z and does not affect the interests of Mr. X's company. Inasmuch as the previous sale by Mr. X's company to the ABC was a straight sale with no mortgages or other interests retained by Mr. X, as a prior owner he does not have a financial interest in the subsequent proposed sale. Moreover, even assuming that Mr. X's company could be regarded as having a financial interest in the sale, your relationship with Mr. X does not appear to be one which is covered by s.6. As long as you refrain from serving as clerk, you are not an officer of the corporation.[6]

Although your prospective participation in the conveyance is permissible under G.L. c. 268A, s.6, you must observe the safeguards of s.23 to avoid any actual or apparent undue favoritism. Specifically, to dispel any appearance of favoritism, you must disclose to your appointing officials the relevant facts concerning your relationship with Mr. X and the property in question GI. & 268A, b(b)(3)must also avoid using your official position to grant any unwarranted privileges of substantial value to anyone in connection with the conveyance decision. G.L. c. 268A, s.23(b)(2). To satisfy the provisions of s.23(b)(2), you should base your decision as an ABC member on objective standards, as opposed to your personal connections with respect to the property.[8]

3. Limitations on your private activities

While not directly posed by your opinion request, G.L. c. 268A, s.4 places some restrictions on your activities as private attorney. Specifically, s.4 prohibits your either representing or receiving compensation from a non-state party in connection with any matter which is within your official responsibility as an Authority member. For example, if Mr. X has any matters pending before the ABC, you must continue to refrain from representing Mr. X or receiving compensation from Mr. X in connection with those matters.

 

[1] This opinion is intended to provide prospective guidance to you and is not intended to evaluate the propriety of conduct which has already occurred.

[2] "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 and any independent state authority, district, commission, instrumentality or agency, but not

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an agency of a county, city or town.

[3] "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 full, regular, part-time, intermittent or consultant basis, including members of the general court and executive council.

[4] "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.

[5] "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 governmental organizations, powers, duties, finances and property.

[6] Your status as attorney performing legal services for Mr. X does not appear to make you an "employee" of Mr. X for G.L. c. 268A, s.6 purposes. See, EC-COI-83-34. Should you find that your attorney duties for Mr. X increase and comprise a more substantial part of your time, you should seek and receive written permission from your appointing official to participate in matters affecting Mr. X pursuant to G.L. c. 268A, s.6(3).

[7] We note that you have complied with the s.23(b)(3) disclosure requirement. Contrary to your wish that the disclosure be confidential, however, G.L. c. 268A, s.24 requires that your disclosure be open for public inspection. You must therefore notify your appointing official accordingly.

[8] Because your participation is permissible, there is no need to address whether a "rule of necessity" could be invoked to permit your participation where one of the ABC members is sick. Compare, EC-COI-82-10.