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Self-Dealing and Nepotism- Conflict of Interest Law Restrictions (G.L. c. 268A, sections 6, 13 and 19)

Participating as a public employee in a matter in which you, your immediate family, your business organization, or your future employer has a financial interest is prohibited. 

A public employee may not participate in any particular matter in which he or a member of his immediate family (parents, children, siblings, spouse, and spouse's parents, children, and siblings) has a financial interest.  The employee also may not participate in any particular matter in which a prospective employer, or a business organization of which he is a director, officer, trustee, or employee has a financial interest. Participation includes discussing as well as voting on a matter, and delegating a matter to someone else.

A financial interest may create a conflict of interest whether it is large or small, and positive or negative. In other words, it does not matter if a lot of money is involved or only a little. It also does not matter if you are putting money into your pocket or taking it out. If you, your immediate family, your business, or your employer have or has a financial interest in a matter, you may not participate. The financial interest must be direct and immediate or reasonably foreseeable to create a conflict. Financial interests which are remote, speculative or not sufficiently identifiable do not create conflicts.

Neither general legislation nor home rule legislation are "particular matters" for purposes of the conflict of interest law. A state employee can participate in general legislation and home rule legislation even if she has a financial interest in such legislation, but state legislators and constitutional officers must file a disclosure if the matter will substantially affect their financial interests, and any state employee must file a disclosure if a reasonable person would think that the employee could be improperly influenced.

A public employee whose official duties do not require her to participate in a particular matter may comply with the law by simply not participating in the particular matter in which she has a financial interest. She need not give a reason for not participating.

An appointed public employee may also comply with the law by filing a written disclosure about the financial interest with his appointing authority, and seeking permission to participate notwithstanding the conflict. If a state employee's duties would require him to participate in a matter in which he has a financial interest, this is the procedure he should use. The appointing authority may grant written permission to participate if she determines that the financial interest in question is not so substantial that it is likely to affect the integrity of the employee's services to the state. Otherwise, the appointing authority will assign the matter to someone else, or do it herself. Participating without disclosing the financial interest is a violation. Elected employees cannot use the disclosure procedure because they have no appointing authority.

Regulatory exemptions . The Commission has created exemptions permitting public employees to participate in particular matters notwithstanding the presence of a financial interest in certain very specific situations when permitting them to do so advances a public purpose.  The exemptions are listed in the Commission's regulations.

Overview

Issues arise under these sections of the law when a matter comes before a public employee in which the public employee, his immediate family members, business partners, business organization (including non-profit organizations which engage in business) with which he is affiliated, or a business organization or individual with whom he is negotiating or has an arrangement concerning future employment, has a financial interest. The financial interest or self-dealing sections of the conflict of interest law apply differently to municipal employees than they do to state and county employees. In addition, there are certain exemptions under these sections of the law that are available to appointed public employees that are not available to elected officials.


Please note that sections 6, 13 and 19 encompass any financial interest without regard to its size. The financial interest, however, must be direct and immediate or reasonably foreseeable. Financial interests that are remote, speculative or not sufficiently identifiable do not require disqualification under sections 6, 13 and 19.

General Rule for State and County Employees, Section 6 and Section 13

G.L. c. 268A, section 6 prohibits a state employee from participating in a particular matter if he, an immediate family member , or a partner has a financial interest in the matter. A state employee also may not participate in a matter if he is an officer, director, trustee, partner or employee of a business organization and the business organization has a financial interest in the matter. Finally, if a state employee is negotiating with or has an arrangement with a person or organization concerning future employment, he may not participate in a particular matter if the person or organization has a financial interest in it. G.L. c. 268A, section 13 includes the same prohibitions for county employees.

State and County Employees Duty to Disclose Financial Interest

Under sections 6 and 13, if a state or county employee's duties would otherwise require him to participate in a matter affecting his financial interest, or the financial interest of his immediate family member, business partner or business organization with which he is, or is seeking to be affiliated, he is required to fully disclose to his appointing authority and the State Ethics Commission, in writing, all relevant facts surrounding the particular matter and the financial interest. Upon receiving the written disclosure, the appointing authority must either: (1) assign the particular matter to another employee, or (2) assume responsibility himself, or (3) make a written determination that the employee may participate because the financial interest is not so substantial as to affect the integrity of the employee's service to the Commonwealth or the county. Copies of this written disclosure and written determination by the appointing authority must be forwarded to the employee and to the State Ethics Commission. This written disclosure and written determination must be completed prior to any participation in the matter. If the employee is not otherwise required to act in any given matter, he may simply abstain and it is not necessary to make any disclosure.

General Rule for Municipal Employees, Section 19.

Under G.L. c. 268A, section 19, a municipal employee may not participate in a particular matter in which, to his knowledge, he or certain persons or entities with whom he is related has a financial interest. Those persons or entities include: immediate family members, partners, any business organization in which he is serving as an officer, director, trustee or employee, or any person or organization with whom he is negotiating or has an arrangement regarding future employment.

Exemptions for Municipal Employees, Section 19(b)(1).

Under section 19(b)(1), if, prior to participating in the particular matter at issue, an appointed municipal employee files a written disclosure with his appointing authority, of the relevant facts concerning a conflict of interest, the appointing authority, in his discretion, may give the municipal employee a written determination that the conflict is not so substantial as to affect the integrity of his services to the municipality. If the appointed municipal employee receives this determination prior to participating, then he may participate in the particular matter.

In addition, a municipal employee may participate in a particular matter despite having a financial interest if the matter involves a determination of general policy and the interest is shared with a substantial segment of the town's population.

Additional Information

"Immediate Family" includes the public employee, his/her spouse, and their parents, children, brothers and sisters. See G.L. c. 268A, section 1(e).

"Participate" includes not only a final vote or decision on a matter, but also any investigation, recommendation or rendering of advice. See G.L. c. 268A, section 1(j).

Particular Matter" is 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. See G.L. c. 268A, section 1(k).

"Financial Interest" is not defined by the conflict of interest law. However, the Commission has interpreted the restrictions of the conflict of interest law to apply in any instance when private financial interests are directly and immediately affected, or when it is reasonably foreseeable that the financial interests would be affected.

Business Organization" For purposes of the conflict of interest law, all for profit organizations and non-profit organizations which engage in substantial business activities are considered business organizations.

State Employees - Self-Dealing and Nepotism Examples

Example of violation : The chief administrative officer of a state agency, who has a balance of 900 hours in accumulated sick leave, proposes a plan by which the agency will pay employees for accumulated sick leave.

Example of violation : An employee of the Massachusetts Cultural Council is also the director of a non-profit corporation dedicated to increasing art in public spaces. The non-profit applies to the Council for a grant, and the employee participates in rating the applications received for that grant.

Example of violation : A state employee promotes his son to a position under his supervision.

Example where there is no violation : Proposed legislation under consideration by the State Senate will amend the General Laws with respect to insurance coverage of ocean front property. A State Senator owns ocean front property in Cape Cod. The Senator can discuss and vote on the legislation because it is general legislation, but must file a disclosure because the legislation will substantially affect her financial interest.

Example where there is no violation: A state licensing board is required by its enabling legislation to have members with various specified affiliations, including members licensed by the board, and members involved in providing training required for licensure.  Board members wish to participate in board discussions about imposing a continuing education requirement on licensees. Compliance with the proposed requirement will cost every licensee several hundred dollars per year. Board members who are licensees and who provide training required for licensure may participate in the determination of the continuing education requirement notwithstanding their financial interests in that matter, because it is a determination of general policy. 

Municipal Employees - Self-Dealing and Nepotism Examples

Example of violation : A school committee member's wife is a teacher in the town's public schools. The school committee member votes on the budget line item for teachers' salaries.

Example of violation : A member of a town affordable housing committee is also the director of a non-profit housing development corporation. The non-profit makes an application to the committee, and the member/director participates in the discussion.

Example : A planning board member lives next door to property where a developer plans to construct a new building. Because the planning board member owns abutting property, he is presumed to have a financial interest in the matter. He cannot participate unless he provides the State Ethics Commission with an opinion from a qualified independent appraiser that the new construction will not affect his financial interest.

Example where there is no violation : An appointed member of the town zoning advisory committee, which will review and recommend changes to the town's by-laws with regard to a commercial district, is a partner at a company that owns commercial property in the district. Prior to participating in any committee discussions, the member files a disclosure with the zoning board of appeals that appointed him to his position, and that board gives him a written determination authorizing his participation, despite his company's financial interest. There is no violation.

Example where there is no violation:  A municipal Shellfish Advisory Board has been created to provide advice to the Board of Selectmen on policy issues related to shellfishing.  The Advisory Board is required to have members who are currently commercial fishermen.  A board member who is a commercial fisherman may participate in determinations of general policy in which he has a financial interest common to all commercial fishermen, but may not participate in determinations in which he alone has a financial interest, such as the extension of his own individual permits or leases.

 

County Employees - Self-Dealing and Nepotism

Example of violation : The chief administrative officer of a county agency, who has a balance of 900 hours in accumulated sick leave, proposes a plan by which the agency will pay employees for accumulated sick leave.

Example of violation : An employee of the county information technology department is also the director of a software company. The software company responds to a county request for proposals, and the employee participates in rating the responses to the RFP.

Example of violation: A county employee promotes his son to a position under his supervision.

Example where there is no violation : An appointed member of a county commission wishes to participate in discussions about imposing a county-wide tax. The member will himself be subject to the tax. Prior to participating in any commission discussions, the member files a disclosure of his financial interest with his appointing authority, and the appointing authority gives him a written determination authorizing his participation, despite his financial interest. There is no violation.

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