81.01
OPINION NO. 81-1
An official of the Natural Resources Police, Department of Natural Resources (DNR), has requested advice from the Commission on two issues: 1) whether a Natural Resources policeman may be a co-mortgagor on a boat used for oyster harvesting; and 2) whether a Natural Resources policeman may patrol an oyster bed leased by his adult son.
This request arises out of circumstances that have been investigated and reviewed in detail by DNR, involving two actions taken by a member of the Department's Natural Resources Police (the Policeman). The first of these actions occurred in December 1977 and involved the Policeman's co-signature of a mortgage on a boat to be used by his adult son for oyster harvesting. The Policeman became a joint tenant in the boat and indicated that he took this action to assist his son who was only 18 and just getting started in the oystering business. The second action occurred in May 1978 and involved the Policeman's assistance to his wife in obtaining a lease to an oyster bed to be used by his son in his oyster harvesting business. The Policeman indicated that he was contacted by the seller of the lease because he had, the prior summer, indicated to the seller that he or his family would be interested in the lease if the seller decided to retire.
The Department of Natural Resources considered these circumstances in the context of two complaints filed with it under DNR regulations. These complaints alleged a conflict of interest relating to the Policeman's assistance in obtaining the oyster bed lease and his joint tenancy and co-mortgagor interest in the boat. A conflict of interest was alleged in view of his responsibilities for enforcing natural resources laws in the area of the oyster bed leased by his wife and owned by his son. The DNR investigated these allegations and, in a Departmental report filed with the Chief of the Natural Resources Police in May 1979, concluded that the Policeman's joint ownership of the boat was a conflict of interest under DNR regulations. The report also found that certain aspects of the natural resources law were not being enforced against the oyster bed worked by the Policeman's son, but noted that these aspects of the law were also not enforced against beds worked by other persons.
Following submission of this report, the DNR determined that an advisory opinion would be requested from the State Ethics Commission concerning these circumstances. It has taken no further action on the complaint filed with it pending receipt of an advisory opinion under the State Ethics Law. The Policeman's wife has, however, in response to the original complaint, transferred the oyster bed lease to her son. Further, the Policeman filed papers with the mortgagee of the boat seeking approval of the transfer of his interest in the boat to his son. Due to a misfiling by the mortgagee this request had not been acted upon at the time the Commission initially considered this matter. We have been informed that the interest transfer has since been approved and that the Policeman no longer holds any ownership interest in the boat.
In considering this case, we wish to make it clear at the outset that we do not sit as a board of review of an agency's actions under its own regulations. We do not propose to re-investigate or attempt to second guess the agency's actions in connection with its investigation and report. The Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) section 1-103 specifically contemplates that provisions of law or regulation more stringent than the Ethics Law continue in effect. State agencies such as DNR thus may adopt or continue in effect additional or stricter conflict of interest provisions as they deem appropriate, and may, of course, take any allowable personnel or other actions required to implement and enforce these provisions.
Thus, this Commission will not review the findings of the Natural Resources Police investigation; those intra-departmental findings must be dealt with as the agency sees as fit and proper. This Commission will address itself solely to issues raised by these circumstances as they relate to the provisions of the Ethics Law.1 The provisions of the Ethics Law that are relevant to this situation are §§3-103(a) and 3-101. Section 3-103(a) of the Ethics Law is a general interest and employment limitation that prohibits an official or employee from having an interest in an entity that is subject to his own authority or that of his agency. The boat used by the Policeman's son and owned by both of them as joint tenants is clearly subject to the authority of DNR and of the Policeman. Both the boat and the son's oystering activities are regulated by DNR pursuant to the Natural Resources Article, Title 4 (Fish and Fisheries), Subtitle 10 (Oysters and Clams), Annotated Code of Maryland.
Further, we believe that the Policeman's joint tenancy constituted an interest in an entity as contemplated by §3-103(a) of the Ethics Law. Section 3-103(a) prohibits the holding of interests in certain entities. Section 1-201(m) of the Ethics Law defines "interest" to include any "legal or equitable economic interest owned or held directly or indirectly jointly or severally...." Though the holding of an interest in a piece of real or personal property need not always be viewed as an interest in an entity, we believe that an interest in property that is the primary resource of a business operation regulated by an employee's agency does constitute an interest in an entity that is prohibited by §3-103(a) of the Ethics Law. Therefore the Policeman's continued holding of this interest would be viewed as inconsistent with this provision. However, in view of that the Policeman's good faith effort to divest himself of his ownership interest in the boat, and his eventual success in doing this, we believe that his past interest raises no continuing problems under the Ethics Law.
Moreover, we do not believe that the Policeman's continued debt obligation constitutes an interest prohibited by §3-103(a). Having transferred his right and title as a joint tenant in the boat to his son, all that the Policeman retains is a liability for the debt on the boat, which liability can be released only by the mortgagee. Under these circumstances the Policeman acquires a status similar to that of a guarantor of the debt. Any economic interest the Policeman retains is not in the property of which he disposed; it arises from his status as a co-mortgagee/guarantor and from the contract under which he is bound. We therefore conclude that in the circumstances set forth here, and absent any other considerations, the mere existence of a mortgage on a piece of property does not constitute an interest under the Ethics Law.
Nor do we believe that the continued holding of the lease by the Policeman's son constitutes an interest prohibited by §3-103(a) of the Ethics Law. This section limits outside employment and interests only of officials and employees of the State; it would control the activities and interests of relatives of officials and employees only where the official or employee himself exercises some direct control over and could expect some direct economic benefit from the interest. For example, in its Opinion No. 80-17, the Commission found that the mere employment of a spouse by an entity doing business with an official's agency did not in itself create in the official an interest in his spouse's employer. In this situation the Policeman indicates that after his initial contact with the seller of the lease, he has not been involved in any way in his son's oystering business. He stated that he does not go on the boat and does not receive any income or other economic benefit from the business. Under these circumstances, we do not believe that the lease held by his son can be sufficiently attributed to the Policeman to constitute an interest in him that would be prohibited by §3-103(a) of the Ethics Law.2
While the absolute prohibitions of §3-103(a) do not generally reach the holdings of relatives, the disqualification provisions of §3-101 of the Ethics Law do deal with activities involving the interests and employment of relatives of officials and employees. Section 3-101(a) prohibits an official or employee from participating, except in the exercise of an administrative or ministerial duty, in any matters in which the official or employee or his "spouse, parent, minor child, brother, or sister" has an interest, or which involve as parties certain entities with which he or any of the listed relatives are connected.
The Policeman here has law enforcement responsibilities involving general patrol as well as acting with regard to specific alleged or actual violations of the natural resources laws. He carries out enforcement functions on a regulatory and enforcement program managed by his agency, DNR. According to facts developed in DNR's investigation and by the Policeman at the Commission consideration of this request, his patrol area includes the oystering property leased and harvested by his son. In fact, it appears that the original complaint filed with DNR grew out of a dispute with other lease holders who raised issues concerning the Policeman's enforcement activities regarding his son's property. We believe that in circumstances such as this an official carrying out enforcement responsibilities as part of a defined regulatory program is subject to the proscriptions of §3-101(a) to the extent that he or any of the listed relatives have interests in businesses or entities directly subject to his enforcement jurisdiction.
The Policeman's duties in his patrol area include responsibility for participation in matters involving enforcement of actual or potential natural resources law violations by any person or entity within this area. Because the failure to act can be viewed as within the concept of participation, we believe that in circumstances such as these substantively defined enforcement responsibilities constitute matters in which the Policeman may not engage if he or any of the listed relatives has economic interests in activities subject to his enforcement and within his patrol area. We have in the discussion above concluded that the Policeman does not currently have an interest in the boat or his son's oystering business. Further, both the boat and the lease are now being held solely by the Policeman's son, who is an adult. The list of relatives whose interests would be of concern under §3-101 includes minor children of officials or employees, but does not reach the holdings of adult children. As a technical matter, then, the participation prohibitions of §3-101 do not apply to the Policeman's activities so long as the interests continue to be held solely by his adult son.
However, in reviewing the application of §3-101 to the holdings and relationships of the other listed relatives (including siblings and parents), we believe that the exclusion of adult children may have been an inadvertent legislative oversight. We have addressed this question in our annual report to the Legislature, since there appears to be little purpose in addressing activities involving interests of the other listed relatives while excluding those of adult children. Pending any legislative action, however, we urge the DNR and the Natural Resources Police to evaluate these circumstances very carefully both as to this Policeman and as to other members of the Natural Resources Police whose relatives may be engaging in activities in areas subject to their enforcement authority. The Department should consider, for example, establishing a policy of not assigning officers to patrol or other responsibilities that would involve their authority over economic interests held by any close relatives. The agency should take account of the legislative policy set forth in §1-102 of the Ethics Law that the "people have a right to be assured that the impartiality and independent judgment of public officials and officers will be maintained." The concern is expressed that the public "confidence and trust is eroded when the conduct of the State's business is subject to improper influence or even the appearance of improper influence."
We recognize that the DNR may wish to employ enforcement personnel who are familiar with activities on the water and whose presence in water resource areas may be reflected by ties to persons engaged in business activities on the water. However, we believe that this approach should be consistent with the policies expressed by the Legislature in the Ethics Law. The public should be able to expect that Law enforcement activities be conducted impartially and without the potential of special treatment for near relatives whose activities are closely and specifically subject to the control of the enforcement officer. The type of situation and concerns that gave rise to the initial DNR complaint, for example, could probably be attributed to the fact that the Policeman's official enforcement responsibilities included areas in which two of his close relatives were involved in commercial activities subject to his agency's jurisdiction. We believe that these types of concerns are those intended to be addressed by the Public Ethics Law, and therefore recommend that the agency take steps to avoid the assignment of officers to patrol responsibilities involving the economic interests of their near relatives.
Herbert J. Belgrad, Chairman
Jervis S. Finney
Reverend John Wesley Holland
Barbara M. Steckel
Date: March 10, 1981
1 Many of the actions involved here occurred prior to the effective date of the Ethics Law and could therefore have raised issues under the Code of Ethics administered by the Board of Ethics (see COMAR, Title 19). As the basic circumstances, including, as a technical matter, the Policeman's joint ownership of the boat, continued past the effective date of the new law we believe that review under the currently effective provisions is more appropriate. We have therefore confined our review to application of the Ethics Law to this situation.
2 The Policeman's spouse transferred her interest in the lease to her son prior to the effective date of the Ethics Law. In any case we believe that the reasoning applied to the son's interest would also be applicable to the spouse's holding.
