| Date: | 11/09/1989 |
|---|---|
| Organization: | State Ethics Commission |
A member of the General Court who is also an attorney would be subject to section 4 if he were to become "of counsel" to a large law firm which either currently or potentially represents clients before state agencies. Unless the Legislator is deemed to have "partner" status at the private law firm, the section 4 restrictions will not apply to other attorneys in the law firm.
You are a member of the General Court and also an attorney. Outside of your legislative schedule, you are interested in pursuing the private practice of law as "of counsel" to a large law firm. The firm either currently or potentially represents clients before state, county and municipal agencies.
1. How does G.L. c. 268A apply to your activities as an attorney?
2. How does G.L. c. 268A apply to the activities of other attorneys in a law firm for which you serve on an "of counsel" basis?
You and the other law firm attorneys will be subject to the limitations set forth below.
As a member of the General Court, you are a state employee for the purpose of G.L. c. 268A. Section 4 of G.L. c. 268A generally prohibits state employees from receiving compensation from relation to any particular matter[1] in which the Commonwealth or a state agency is a party. For example, s.4 applies to all criminal proceedings in which the Commonwealth is a party and to all civil matters in which the Commonwealth or a state agency is a named party or has a direct and substantial interest. Section 4 also applies to certain proceedings before municipal agencies such as special education determinations where the state extensively regulates the subject area. As a member of the General Court, however, you are subject to s.4 in the following limited way:
A member of the General Court shall not be subject to paragraphs (a) or (c). However, no member of the General Court shall personally appear for any compensation other than his legislative salary before any state agency, unless:
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(1) the particular matter before the state agency is ministerial in nature, or
(2) the appearance is before a court of the Commonwealth, or
(3) the appearance is in a quasi-judicial proceeding.
For the purposes of this paragraph, ministerial functions include, but are not limited to, the filing or amendment of: tax returns, applications for permits or licenses, incorporation papers or other documents. For the purposes of this paragraph, a proceeding shall be considered quasi- judicial if:
(1) the action of the state agency is adjudicatory in nature; and
(2) the action of the state agency is appealable to the courts; and
(3) both sides are entitled to representation by counsel and such counsel is neither the attorney general nor the counsel for the state agency conducting the proceeding.
G.L.c. 268A, s.4(5).
In construing the provisions of s.4 as they apply to members of the General Court, three points should be noted:
(1) The restrictions of s.4 apply to compensated outside activity. Uncompensated representational activities, such as representing constituents in their dealings with government agencies, are not prohibited under s.4. EC-COI-79-68.
(2) The restrictions of s.4 apply to personal appearances, as opposed to receiving of compensation in connection with a matter. In EC-COI-87-27, the Commission concluded that conduct proscribed under personal appearance included any oral and written communication intended to influence a governmental body.
(3) The restrictions of s.4 apply only to certain categories of matters, depending on the forum of the legislator's personal appearance, the nature of administrative proceeding and the degree of discretion which must be exercised in connection with the matter. Because you have posed your question in general terms, we cannot provide specific advice to you. By way of example, however, the Commission has deemed the following matters to be subject to the s.4 prohibition for legislators: EC-COI-86-12 (appearance before state parole board); EC-COI-85-40 (representing client in sale of land to a state agency); EC-COI-83-59 (representing applicant for a common carrier license before the state Department of Public Utilities).
On the other hand, the Commission has held that the following matters are not subject to the s.4 legislative restrictions: EC-COI-85-82 (representing client in adjudicatory proceedings before the state Industrial Accident Board); EC-COI-82-137 (representing plaintiff in court action against MBTA); EC-COI-79-86 (filing license or permit applications on behalf of a client before a state agency). Once you have identified the specific matters on which you intend to make a personal appearance, we will provide guidance to you with respect to those matters.
If you were to consult for or represent for compensation a state agency in your private law practice, you would have a financial interest in an employment contract made by a state agency. Under G.L. c. 268A, s.7, a state employee is prohibited from having a financial interest in a contract made by any state agency, unless an exemption applies. As a member of the General Court, you are eligible for an exemption under G.L. c. 268A, s.7(paragraph c).[2] The s.7(paragraph c) exemption is restricted, however, to certain contracts in which the legislator's proprietary interests in the contracting corporation do not exceed 10% of the total proprietary interests therein, and which are awarded through competitive bidding. While s.7(c) would appear to be appropriate for permitting minority shareholder legislators to have a financial interest in contracts for the sale of goods by their companies to a state agency, the exemption does not appear to extend to personal service contracts with state agencies. See, EC-COI-84-108.
Further, you will need to establish safeguards with the firm to insure that your firm compensation as "of counsel" is not attributable to contracts which the firm has with any state agency. EC-COI-85-9; 89-5.
You also ask how G.L. c. 268A applies to your
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announcement of your relationship with the law firm. Under G.L. c. 268A, s.23(b)(2), you may not use your legislative position to secure for yourself or others any unwarranted privilege or exemption of substantial value. For example, you may not use resources provided to you as a legislator such as word processors and legislative support staff to conduct your private law firm activities. EC-COI-85-29. Additionally, you should not use legislative resources to announce your relationship to the firm. By issuing a legislative press statement announcing your relationship with the firm you may risk creating the appearance that your practice of law is a governmentally endorsed or supported activity. See, EC-COI-84-127; In the Matter of Byron Battle, Public Enforcement Letter 89-4; In the Matter of Elizabeth Buckley, 1983 SEC 157. We therefore recommend that you arrange for your announcement to be made on law firm stationery, rather than through an official legislative press statement. We see no violation of s.23 in your firm's announcing accurately your status as a member of the General Court.
For the purposes of this opinion, we will assume that, in your capacity as "of counsel" to the firm, you will not be a partner for G.L. c. 268A purposes. You should be aware that we recently stated in EC-COI-89-5, "[b]ecause arrangements such as "Of Counsel" do not have a uniformly accepted meaning among law firms, the Commission will examine the substance of the relationship between an attorney and a firm to determine whether the appearance of a partnership exists. See, EC-COI-83-81; 82- 68." EC-COI-89-5. The Commission conclusion will rest on such factors as the terms of public announcements, the appearance and designation of an attorney's name on the firm's letterhead, and the terms of the "of counsel" arrangement with the firm. As long as you do not have "partners" in the firm by virtue of your nation with the firm, the partners will not be subject to the restrictions of G.L. c. 268A, s.5(d). Under s.5(d), your partners are prohibited from representing clients in particular matters in which you either participate or which are within your official responsibility as a member of the General Court.
To the extent that G.L.c. 268A, s.4 prohibits you from engaging in certain personal appearances, the restrictions of s.4 do not apply to other firm attorneys. In EC-COI-85-40, the Commission advised a legislator that
"... [t]he relevant restrictions of s.4 apply only to your compensated personal appearances before state agencies, and not to appearances by your employees. The limitation of the s.4 legislator restrictions reflects a concern over potential influence which the legislator could exercise in face-to-face dealings with state agencies over which the legislator has budgetary and legislative power. The potential for such influence is diminished, however, when an employee of the legislator, as opposed to the legislator himself, makes a personal appearance, and the statutory scheme under s.4 does not extend the legislator prohibitions to others. Therefore, your associate's paid representation of your client would not place you in violation of s.4. EC-COI-85-40, p. 3.
The same result would apply to firm attorneys, irrespective of your status within the firm.[3]
