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City and Town Managers- Explanation of the conflict of interest law

Information about how the conflict of interest law applies to city and town managers, including restrictions placed on them while on the job, after hours and after leaving public service.

Conflict of Interest Law Questions and Answers

The conflict of interest law (Chapter 268A) covers all municipal employees, whether elected or appointed, full or part-time, paid or unpaid. The law also regulates the activities of former employees and partners of current and former employees.

The purpose of the conflict law is to ensure that your private interests do not conflict with your public obligations. The law is broadly written to prevent you from becoming involved in a situation which could result in a conflict, or even give the appearance of a conflict.

The following is a summary of the six sections of the conflict law which cover all municipal employees. Specific examples are provided for municipal managers.

Prohibited Actions Affecting Financial Interests (Section 19)

The law recognizes that your objectivity can be compromised when you act on matters in which you, or a family member or close business associate, have a financial stake. To discourage "self-dealing", the law prohibits you from participating in a particular matter in which you or any of the following have a financial interest:

  • your immediate family;
  • your partner(s);
  • a business organization in which you serve as an employee, officer, director, trustee or partner (including a non-profit organization);
  • and any person or organization with whom you are negotiating or have any arrangement concerning prospective employment.

For example, as a municipal manager you should not award a contract to your brother's company nor should you act on competing applications. You are also prohibited from participating in any discussion or recommendations to the Board of Selectmen or City council on contracts or other matters affecting your immediate family members.

  • In a 1982 enforcement case, the Commission found an executive director of a local Housing Authority in violation of this section of the law by participating in his agency's decisions to deposit funds in a credit union of which he served as director.

A "particular matter" is defined by statute to include almost any proceeding, application, request for determination, contract, claim, finding, decision or controversy which might come before you. The definition refers to specific matters and proceedings rather than general issues. Section 19 does not apply if the particular matter involves a determination of general policy and your interest is shared with a substantial segment of the population of the town. Setting local water or sewer rates, for example, would fall under the exemption of general policy.

There is another exemption under section 19 available to appointed municipal employees including municipal managers. You may act on a matter in which you, a family member or your business has a financial interest, provided that you receive written permission from your appointing authority prior to taking any action. For example, the law prohibits you from hiring your sister or participating in any salary matters concerning your sister (including union negotiations). But if you receive written permission before you take any action affecting your sister's financial interest, you may participate despite the conflict.

Prohibited Financial Interest In Municipal Contracts & Multiple Jobs (Section 20)

In general, section 20 prohibits a municipal employee from holding more than one paid town position and having a financial interest in a contract with the municipality. For example, if you have responsibility over approving town expenditures and contracts, you are prohibited from having a financial interest in a contract with any town agency.

There are a number of exemptions to this general rule (available mostly for part-time employees), which cannot adequately be explained in this summary of the law. Please be sure to ask the Ethics Commission or your town or city counsel for advice concerning section 20.

Restrictions After Hours (Section 17)

The law limits what you may do for someone other than the municipality you work for, in other words what you may do on the side. This section is designed to protect the municipal employee and municipality from the problems resulting when people "serve two masters."

While you are a municipal employee, you cannot act as agent or attorney for a private party before the town, even if you are not paid. Similarly, you cannot be compensated by a private party in relation to any "particular matter" in which any agency of the same municipality is a party or has a direct and substantial interest.

For example, if you were a lawyer in private practice, being a full-time manager would preclude you from representing a client before any municipal agency. In addition, if you had an ownership interest in a development company, you could not represent your company before town boards.

  • The Commission in September 1982 found a selectman in violation of this section by acting as the agent for a private party in connection with the sale of property which was the subject of foreclosure proceedings by his town. The selectman paid a $1,000 civil penalty for the violation.

The law also restricts the activities of business partners of municipal employees. Your partner may not act as agent or attorney for anyone other than your town in connection with a particular matter in which you participate or which is subject to your official responsibility. For example, your business partner could not act as agent for any applicant of a contract which has to be negotiated through your office.

Misuse Of Official Position (Section 23)

The Standards of Conduct provide a general code of ethics for all public employees.

The conflict law prohibits you from using or attempting to use your official position to secure an unwarranted privilege or from giving a reasonable basis for the impression that you can be improperly influenced in the performance of your official duties. The law also prohibits you from disclosing confidential information obtained on the job and from accepting outside employment which will impair your independence of judgement in the exercise of your official duties.

  • In a 1982 case the Commission found Lowell's city manager to have violated section 23 by asking a developer whose hotel project was under consideration by the city to make arrangements for his Florida vacation and by accepting "VIP" treatment and direct billing privileges from the developer's Florida hotel. The Commission found the city manager, by his actions, to have given the developer the impression that he could be improperly influenced in the performance of his official duties.
  • In another case in 1983, the Commission found a selectman to have violated this section of the law by accepting golfing privileges at a local golf club extended to him because he was a selectman. Other example of violations include running a private business out of your public office, and using town resources such as stationery, phones and copiers for political campaigns.

Restrictions On Accepting Gifts (Section 3)

Extra payments, gifts or privileges offered because of (but not necessarily to influence) your official actions are prohibited. In other words, it is illegal to request or accept anything of "substantial value" for anyone with whom you have had or are likely to have official dealings (absent some family or social relationship which otherwise explains the gift) even if the motivation for the gift is to express gratitude for a job well done or to foster goodwill. The courts and the Commission have deemed "substantial value" to be $50 or more, in most cases. Some state and municipal agencies have implemented a stricter standard which prohibits receiving gifts of any kind.

  • In February 1983, the Commission found a Stoneham selectman to have violated this section of the law by receiving financial assistance, in the form of loans and loan guarantees, from a developer whose site plans were subject to approval by the board of selectmen. The selectman paid a civil penalty of $1,000 and an additional $900 forfeiture of the economic advantage he gained as a result of the violation.

Restrictions After You Leave Government Service (Section 18)

The conflict law aims to prevent the "revolving door syndrome". It prohibits former employees from deriving unfair advantages by improperly using friendships and associations formed or confidential information obtained while serving the government. The law is not designed to prevent you from using general expertise developed while a municipal employee. Rather, it focuses on particular matters you worked on while a municipal manager.

If you participated in a particular matter as a municipal manager you can never become involved in that same matter for a private party after you leave municipal service. If you had official responsibility for a particular matter as manager, even if you did not actually participate in it, you may not appear personally before any municipal agency on behalf of a private party in connection with that matter for one year after leaving government.

For example, if you negotiated a contract with a computer company to provide computer services for your town, you cannot leave town government and work for the company on the same contract you had responsibility for; you can, however, work for that company on other projects and you could also work for the company on town contracts proposed and awarded after you left your position.

"Special Municipal Employee" Designation (Sections 17 and 20)

For your information, some municipal employees can be designated as "special municipal employees" by the board of selectmen or city council. By virtue of this designation, sections 17 and 20 of the law apply less restrictively.

An employee may be designated on formal vote by the board of selectmen or city council at any time as a special municipal employee provided:

  • the employee is not paid; or
  • he holds a part-time position which allows him to engage in other employment during normal working hours; or
  • he was not paid by the municipality for more than 800 hours during the preceding 365 days.

All employees holding the same office or position must be treated equally, having the same classification as special municipal employee. For example, if one member of a school committee is classified as a special, all members should be so classified. Typically, the "special" category would include members of boards and commissions or individuals serving part-time on a consultant basis. Municipal managers, as full-time professional administrators, are not eligible for designation as "special municipal employees."

Advisory Opinion

This summary presents a brief overview of the conflict law and suggests activities which you, as a municipal manager, must avoid. It is not a comprehensive review. You may call the Ethics Commission's Legal Division at 371-9500 for particular advice on the conflict law, as well as seek an advisory opinion from your town or city counsel. As of April 1986, the Commission regularly reviews town counsel opinions on the conflict law.

If you have a question about your own activities, we urge you to request an opinion from your local counsel or directly from the Commission prior to engaging in the activity in question.

If you have questions about others' activities in your town or city, urge them to use our opinion process or seek advice from the town or city counsel. In addition, complaints may be filed with our Enforcement Division in person, by phone (at the same number listed above) or by letter. The identity of complainants is kept confidential.


ISSUED : May 26, 1987