Opinion  EC-COI-91-4

Date:	02/14/1991
Organization:	State Ethics Commission

A state employee who serves as a member of the boards of directors for two private corporations may accept compensation and otherwise act in such positions because the companies' activities do not relate to any contract or other particular matter in which the Commonwealth or an agency thereof is a party of has a direct and substantial interest. Similarly, a state employee may provide consulting services to a quasi-public agency of another state where none of the agency's activities relate to a contract or other particular matter in which the Commonwealth is a party or has a direct and substantial interest.

Facts

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You were appointed in November, 1990 as the director of the  state lottery. In that capacity, you supervise and administer the  state lottery and serve as executive officer of the State Lottery  Commission (SLC). G.L. c. 10, s.26. Prior to your appointment, you  had business relationships with three separate organizations and  wish to know whether you may maintain those relationships outside  of your regular SLC work schedule.[1]   

1. Since 1988, you have served as a compensated member of the  board of directors of and occasional consultant to Pericomp  Corporation (Pericomp), which designs and manufactures equipment  for the testing of magnetic tape drives. Pericomp does not engage  in any business with either the SLC or any Massachusetts state  agency.  

2. You are an unpaid member of the board of directors and a  stockholder of Filemark Corporation (Filemark), a wholly owned  subsidiary of Pericomp. Filemark provides computerized file  management systems which involve the use of personal computers and  scanners. Filemark does not engage in any business with either the  SLC or any Massachusetts state agency.   

3. You serve as a technical computer consultant to the president  of a quasi-governmental agency of the state of New York, the New  York State Catskill Region Off Track Betting Corporation (OTBC).  The OTBC provides off-track betting services to the betting public  in the Catskill Region of New York State and has no relationship  with the SLC or with any Massachusetts state agency. You state that  the computer systems operated by both OTBC and SLC are provided by  the same supplier, General Instrument Corporation (GIC). You also  state that you were initially hired as a technical consultant by  the OTBC president in 1989.

Question

Does G.L. c. 268A permit you to retain your business  relationships with Pericomp, Filemark and OTBC while you serve as  director of the state lottery?

Answer

Yes, subject to certain conditions.

Discussion

As director of the state lottery, you are considered a state  employee for the purposes of G.L. c. 268A. See G.L. e. 268A,  s.1(q). Three sections of G.L. c. 268A are relevant to the  propriety of your after-hours activities.   

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The first, G.L. c. 268A, s.4, prohibits you from either receiving  compensation from or acting as agent for anyone other than the  commonwealth or a state agency in connection with any contract,  application, proceeding or other particular matter[2] in which the  commonwealth or a state agency is either a party or has a direct  and substantial interest. The second, G.L. c. 268A, s.6, prohibits  you from participating[3] in your official capacity as lottery  director in any particular matter which affects the financial  interests of an organization with which you have an employment or  director relationship. The third, G.L. c. 268A, s.23(b)(2),  prohibits you from using your official state position to secure any  unwarranted privileges or exemptions of substantial value for you  or anyone else. Based on these statutory provisions, we offer the  following advice.

  1. Pericomp

Your compensated director and consultant relationship to  Pericomp is permissible under G.L. c. 268A, s.4 since your  activities as you describe them do not relate to any contract or  other particular matter in which any commonwealth of Massachusetts  agency is either a party or has a direct and substantial interest.  Should the facts change and Pericomp propose to commence  applications, contracts or other particular matters with any  commonwealth of Massachusetts agencies, however, you should renew  your opinion request with us.   

Although there do not appear to be any current or prospective  matters coming before you as lottery director affecting Pericomp's  financial interests, you will be subject to the abstention  requirements of G.L. c. 268A, s.6 should such matters arise. To  comply with G.L. c. 268A, s.23(b)(2), you must conduct your  Pericomp activities entirely outside of your SLC work schedule and  must refrain from using SLC resources such as telephones,  computers, postage and personnel for your Pericomp work.

  2. Filemark

  The same principles which apply to you in your Pericomp  activities will also apply to you in your activities as a member  of the board of directors and stockholder at Filemark. In  particular, should Filemark seek to commence any dealings with  agencies of the commonwealth of Massachusetts, we recommend that  you renew your advisory opinion request.

  3. OTCB

Because your consultant activities to OTCB do not relate to  any particular matter in which a commonwealth of Massachusetts  agency is either a party or has a direct and substantial interest,  your OTCB activities as you describe them are permissible under  G.L. c. 268A, s.4, subject to the condition that your activities  be conducted entirely outside of your SLC work schedule and without  the use of SLC resources. G.L. c. 268A, s.23(b)(2). Your facts also  warrant discussion of two additional issues under G.L. c. 268A,  s.23.   

Section 23(b)(3) prohibits a state employee from conduct which  would cause a reasonable person to conclude that the employee is  likely to act as a result of undue influence of any person. This  conclusion can be dispelled through a written disclosure by the  employee relating the relevant facts to his or her state appointing  authority. To the extent that, in your official SLC capacity, you  will be dealing with GIC, which also supplies computer systems to  OTCB, there could be an appearance that your official activities  could be influenced by GIC's supplier relationship with OTCB. To  dispel this appearance, you should disclose to your SLC appointing  authority the relevant facts concerning your relationship with GIC.  See, In the Matter of George Keverian, 1990 SEC 460.   

Section 23(b)(1) prohibits a state employee from accepting  paid employment, the responsibilities of which are inherently  incompatible with the employee's public office. While your consultant responsibilities for OTCB do not appear to be  incompatible with your current duties as lottery director,  EC-COI-89-30, issues under s.23(b)(1) could arise if the scope of  the SLC jurisdiction were expanded to include off-track betting.  Should this occur we suggest that you renew your opinion request with us.[4]

[1] The Commission does not possess the authority to interpret  G.L. c. 10, s.26 and, in particular, whether your activities are  violative of the statutory requirement that the director of the  state lottery "shall devote his entire time and attention to the  duties of his office." You should pursue with the Attorney General  the interpretation of this requirement.

[2] "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. G.L. c. 268A, s.1(k).

[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. G.L. c. 268A, s.1(j).

[4] Given your pre-existing consultant relationship with OTCB,  it does not appear that your maintenance of that relationship is  "for or because of" any official acts as lottery director. G.L. c.  268A, s.3.