OPINION NO. 80-5
The Port Administrator of the Maryland Port Administration (MPA) has asked whether service by an MPA employee (the Employee) on the Board of Directors of a private organization as a representative of MPA would violate the Maryland Public Ethics Law. This request involves §3-103(a) of the Law, which prohibits employment by a State employee by any entity under authority of, or having or negotiating a contract with his agency. The Commission finds that the situation presented by the Port Administrator is not a conflict of interest under §3-103(a) of the Law as long as the facts clearly indicate that the Employee's service on the Board is part of his official MPA responsibilities.
The Port Administrator has informed Commission staff that the MPA, in connection with its responsibilities for management of the Port of Baltimore, has for many years been working with private groups (such as the Council of Churches, the Pilots Association, etc. to establish a Seafarer's Center (the Center). The Center is a non-profit, predominantly volunteer, entity organized to provide services to crews of ships calling at the Port of Baltimore; the services range from provision of religious services to letter-writing and telephone facilities, to information services on shopping and other facilities in Baltimore. The MPA has been significantly involved in setting up the Center, and intends to provide it with space, free of charge, at the Dundalk Marine Terminal, by lease or other agreement.
The subject Employee has been involved as the MPA representative in the establishment of the Center, and has been asked to serve on the Center's Board of Directors representing the MPA. The Port Administrator indicates that the Employee would be assigned to serve on the Board as part of his official duties; he would serve only so long as he continues to be an MPA employee; and would make clear that any positions taken by him as a Board member reflect official policy of the MPA. He would not receive any compensation, reimbursement or other remuneration from the Center for services rendered it by him.
The provision of the Public Ethics Law most likely to apply to this situation is §3-103(a), which prohibits employment by a State employee by any entity under authority of or having or negotiating a contract with his agency.1 Though the Center does not appear to be regulated by MPA, using MPA's property may bring it "under the authority of" the MPA, and it appears that some contractual relationship is likely to result from the arrangement under which MPA space is made available to the Center. The employee would therefore be covered by §3-103(a) if in his service on the Center's Board he is viewed as being "employed by" the Center as contemplated by that section.
In its Opinion No. 80-4, the Commission addressed the application of the term "employed by" in §3-103(a), applying the legislative statement of policy in §1-102 of Law, and adopting an "approach relying on the substance of the employee's relationship with the outside entity...." In that case, we found that a relationship involving a position of trust in which an individual would reasonably be expected to have a commitment or loyalty to the private entity constituted prohibited conduct under §3-103(a). Applying the same principles to the situation here, however, results in a different conclusion; an employee serving with a private entity solely as a representative of his State agency would be presumed to owe his loyalty and service to only one master: his State agency.
It is thus our view that participation in private activities by employees as official representatives of their agencies does not constitute "employment" prohibited by §3-103(a) of the Public Ethics Law, as long as the facts clearly support a determination that the activities are part of the employee's official duties.2 In the situation presented by the Port Administrator, the Employee's service on the Board is to be as MPA's representative, continuing the responsibilities in which he has been involved for MPA over the years, and there does not appear to be any personal relationship or potential benefit accruing to the Employee by virtue of his membership on the Center's Board. We therefore find that the Employee's service on the Center's Board of Directors would not violate §3-103(a) of the Law. However, the ground rules of his participation should be clearly set forth: his appointment and service should be at the pleasure of the Port Administration;3 it should be made clear that his actions on the Board reflect the officially defined policy of the MPA; and it should be clear that no compensation, reimbursement or other remuneration be provided to him in connection with his service to the Board.
We also wish to make clear that this opinion reflects our views only as to the application of the Public Ethics Law to the situation presented by the Port Administrator. We do not presume to advise in any way as to considerations arising under the corporation laws (if the Center is incorporated) or principles of liability attaching to officers of non-corporated entities which may be of interest to the MPA in connection with this situation. The Port Administrator may wish to seek advice from his legal counsel concerning such issues.
Herbert J. Belgrad, Chairman
William B. Calvert
Jervis S. Finney
Reverend John Wesley Holland
Barbara M. Steckel
Date: March 18, 1980
1 Section 3-105 also prohibits employment by entities having contracts with an employee's agency, the subject of which would be within the employee's official duties. The subject matter of the Center's lease would be within the employee's duties as long as he continues to be MPA's representative in its dealings with the Center. However, §3-105 applies to contracts obligating the State to pay out in excess of $1,000. Arguably, if the leased value of the space exceeds this amount, then §3-105 would apply here. Since the case appears to be resolvable on other grounds, it does not seem to be necessary to reach this question.
2 The same principles would apply to §3-105.
3 The MPA may want to suggest that this Board position be officially designated as the "Maryland Port Administration" position. If this is not possible under the legal provisions under which the Center is organized, a less formal "liaison" or "ex officio" participation may be preferable.