00.03

OPINION NO. 00-03

Ethics Commission advice has been requested as to whether a conflict of interest results from the employment by an individual (the Requestor) as an Industrial Development Representative in the International Trade unit of the Department of Business and Employment Development in view of the Requestor's recent election to the Presidency of the Baltimore City Council. We advise that as the City and its citizens have substantial and significant interactions with the Requestor's State agency, this dual employment would be inconsistent with the employment prohibition of the Public Ethics Law.

The Requestor has been employed with the Department of Business and Economic Development since 1992 in the Department's International Division, providing counseling and assistance to Maryland minority companies engaged in manufacturing and service industries to assist in developing market strategies for international expansion. According to the Department, the primary international focus of the position has been Africa and the Caribbean. The Requestor also has had responsibilities for developing trade shows and working with foreign government officials, and has participated in professional panels and export development seminars. She was a member of the Baltimore City Council representing a district at the time she initially took this position. However, neither she nor any one in the Department raised any ethics questions or consulted with the Ethics Commission at the time. The Commission was not aware of the dual affiliation. The Requestor was recently elected to the Presidency of the Baltimore City Council, and this request was presented a few days before she was to be sworn in. She continues to serve in the agency's International Division, a unit in the Department's Division of Business Development.

According to the Director of the Division of Business Development, the Requestor's duties continue to focus on the agency's efforts to help Maryland firms, including some in Baltimore City, sell their products and services on the international marketplace. He advises that she works one-on-one with companies assigned by him or her immediate supervisor, helping them undertake activities that would position them better in the international market. She may coordinate with the agency's overseas offices to liaison with them on a company's behalf. The Director notes, however, that the Requestor does not participate in the decision process by which a company may receive financial or other support from the State or the Department. Apparently she works with about 20 to 30 client companies, primarily from the Eastern Shore and Prince George's County,¹ though possibly about 20 percent of her clients are Baltimore City companies. According to the Director, this client workload will continue for the Requestor, whose position has been changed to part-time to accommodate her increased responsibilities with the City now that she is President of the City Council. Other duties, including particularly her involvement in recruitment and related work in connection with overseas trade shows, have been deleted from her position, as have duties involving serving as deputy manager of the office and supervising the work of other trade specialists.

The City of Baltimore and the Department of Business and Economic Development have significant and substantial interactions. As the State's largest City, Baltimore is a major target of economic development activities and businesses that are located in the City are frequently involved with development projects involving collaboration between the City and DBED to provide subsidies and other economic assistance. Frequently DBED assistance to a business would pass through the City, which becomes the grantor to the business. Also, even a DBED grant directly to a business may involve a situation where the City is expected to take action in connection with a project. In her prior role on the City Council the Requestor would have had some involvement with legislative aspects of economic development activities in the City. The Council has a subcommittee on economic development (chaired by another member). Also, the Council takes legislative action on a variety of legislative issues that relate to economic development matters pending in the City.

In her new position as President of the Council the Requestor would be expected to have a more substantial involvement with managing the Council's consideration of these types of issues, and to be a much more visible advocate for City plans and priorities. Moreover, by virtue of her position as Council President, the Requestor serves as Chairman of the City's Board of Estimates. This Board is charged with the responsibility for formulating and executing the fiscal policy of the City. The Board prepares a proposed Ordinance of Estimates including both operating and capital budgets, which are to include estimates of revenues from all sources including the State. Further, the Board of Estimates is responsible for awarding all contracts and supervising all purchasing in the City involving expenditures of over $25,000. It would thus be anticipated that the Requestor would have a role in a variety of fiscal and spending decisions of the City that would relate to economic development matters in which the City would be collaborating with the State through her Department. The President of the City Council as Chairman of the Board is its presiding officer and sets its agenda.

This request involves application of the outside employment provisions of §15-502 of the Ethics Law (State Government Article, §15-502, Annotated Code of Maryland) and its exception provisions. This section of the Law prohibits an employee from being employed by an entity that contracts with or is under the authority of their agency (subsection (b)(1)), and from having any other employment that would impair their impartiality or independence of judgment (subsection (b)(2)). For purposes of the strict employment prohibition of subsection (b)(1), the Law specifically defines the term entity to include government units, and this definition was included in the 1995 code revision process specifically to reflect the Commission's long-standing interpretation of this provision to apply to employment with county, municipal and other levels of government.

The Commission in reviewing questions presented regarding holding of elected office by State employees has consistently advised that service in an elected position would constitute employment with the local jurisdiction that could come within the limitations of §15-502. This was suggested in our first opinion on this subject (No. 80-2; opinions published in COMAR, Title 19A) in which the general advice was that political activity (including running for office) is generally permitted for State employees, but that service in the office would be employment possibly covered by the Law's employment limitations. In a later opinion involving a hearing examiner for the Public Service Commission, the individual was advised that his service on the Baltimore County Council would not be permitted, given the nature of the person's constituent responsibilities as an elected member of the County's governing body, as well as the sensitivity of his Public Service Commission duties (No. 85-13). This advice was based largely on application of the Law's employment impairment section, as it was not clear that there were direct regulatory or contractual relationships between the County and the PSC. A similar approach was taken in a subsequent informal advice matter where a tax assessor in a local office was advised he could not serve, if elected, on the Town Council in a jurisdiction that was within the geographical area served by his assessments office.

Also, in an informal situation more like the one at issue here, an individual employed by the Maryland Environmental Service was advised that he could not, if elected, serve on the governing body of a municipality that contracted with the MES for his agency's operation of the municipality's water treatment and sewer system. This was based on the conclusion that the contractual relationship brought the situation within the strict employment prohibition and in large part on our concerns with the individual's responsibilities as a member of the jurisdiction's governing body to avoid involvement in and accountability for its dealings with his agency under its contract. Another informal situation involved an employee of the Comptroller's Office who serves on the Baltimore City Council. This was found to be permissible based on the fact of his assignment in his official duties to responsibilities solely in another county jurisdiction, and that it did not appear as a Councilman that he would have any particular concerns with the State Comptroller's Office.

We note further that this approach to employment by elected officials in other units of government is not unique to the Ethics Commission's prior actions. In the 1999 Session of the Maryland General Assembly §15-513 of the Law was amended to bar members, candidates and members-elect of the General Assembly, with certain exceptions, from receiving earned income from Executive units of State government or from political subdivisions of the State. The Legislature thus has recognized the significant kinds of conflicts that can occur when elected officials have other government employment affiliations. This limitation was created for legislators, even though they are part-time and unlike other State officials and employees are not generally barred from other employment situations even where a conflict exists.

Our previous formal and informal advice is based on application of the general principles applied in interpreting the outside employment provisions of the Law, that we believe apply in the present situation. The Requestor's service on the City Council and subsequently as its President (compensated at $80,000 per year) is in our view employment with the City. Given the City's significant and substantial interactions with her agency, including a variety of grant and contractual relationships, the Requestor's service with the City Council plainly comes within the strict prohibition of subsection (b)(1). Moreover, the impairment provision of the Law has been interpreted to apply in situations where an employment relationship would involve interactions with populations served by one's State agency or general involvement in activities relating to the State agency programs and job duties, even where strict contract and regulatory relationships are not present. We believe that it is unavoidable that the Requestor's activities in the context of her duties on the Council and as Chairman of the Board of Estimates would involve her generally in activities relating to interactions with the State's economic development programs and agency. Moreover, her City constituents and businesses and campaign contributors in the City could also be entities engaged in development acti-vities with her State agency generally or even with the Requestor's particular unit within the agency.

Under the circumstances presented by the Requestor and in view of the Law and our previous advice, we must conclude that both the strict employment and impairment provisions of the Law apply to bar the Requestor's elected service with the City while she is an employee of DBED.² Although the strict employment prohibition of subsection (b)(1) does include exception language contained in §15-502(c), this provision only allows the Commission to grant an exception in accordance with Commission regulations when it determines that a situation that would otherwise be a conflict under the language of the section would not present a conflict of interest or appearance of conflict. The Commission's exception regulations (included in COMAR 19A.02.01) consider the relationships between an individual's State agency and duties and the secondary employment. The regulations also take account of the nature of the secondary duties and whether they entail any interaction with the State agency or duties. The application of these criteria must be carefully evaluated when secondary employment comes within the prohibition, in view of the statutory exception criteria language that there not be a conflict or appearance of conflict. The goal in allowing an exception is ensure that any relationships between State and private functions are sufficiently remote that a conflict or appearance of conflict is unlikely.

In the situation presented here, we are unable to conclude that these relationships are sufficiently remote to support allowance of an exception. We recognize, based on the Director's description of the Requestor's duties in the International Division, that she can to some substantial degree be shielded from official involvement with DBED's interactions with the City, and may have limited occasion to deal directly with the City in connection with her official duties. She is in the Business Development Division, however, and colleagues in other units as well as supervisors up the line have direct responsibilities relating to the City. If she is assigned to work with City businesses she may come into contact with businesses having significant contact with her or City government, and depending on the entity's relationship with the City or City government this could positively or negatively impact on the business. Additionally, local governments and businesses often compete for DBED assistance, and those not from the City could have concerns about the impact on them of the DBED employment of a senior elected official from the City.

More importantly, the Requestor here has significant and substantial responsibilities as the presiding officer of the City's governing body and its primary fiscal entity with regard to matters in which her State agency would also have significant interests and possibly direct contractual or grant involvement. As the elected official responsible for providing legislative leadership within the City, the Requestor would necessarily encounter decision making and practical duties regularly that would relate to the City's economic development program and likely entail interaction with her State agency employer. She would also be expected to play a key role in coordination in these types of projects with the City's executive branch, and be accountable to constituents in a variety of policy issues relating to economic development issues in the City. The expectation that she could successfully avoid any matters relating to her State Department is, we believe, unrealistic.

Moreover, even assuming that she could successfully disqualify herself from these matters (and also avoid Baltimore City located clients in her State job), the statutory criteria require a finding that there is no appearance of conflict. In this regard, we are not convinced that complex recusal and reorganization of duties in connection with either employment would satisfy the concerns presented by this situation. We have not in applying the regulatory criteria treated them as technical requirements that could be avoided by drawing artificial lines within job duties and creating functional distinctions that are often transparent to the public whose interest is to be protected by the Ethics Law requirements. We have also declined to create functional distinctions that may be in place in the factual circumstances of a particular point in time, but can change in a moment. This, in our view, is of particular concern given the dynamic and substantial relationships between the Requestor's agency and a political subdivision of which she is one of the key elected officials.

In summary, we believe that the Requestor's simultaneous employment with both the Department and the City is within the §15-502 employment prohibition of the Public Ethics Law. The regulatory exception considerations permitted under this section require our consideration of the total circumstances of a situation to ensure that there is no conflict or appearance of conflict. Given the significance of Baltimore City in the State's economic development picture, and the Requestor's key position as a principal elected official, we are simply unable to make the statutory finding that the situation presents no conflict of interest or appearance of conflict. We therefore conclude and so advise the Requestor and her agency that the dual employment presented here is prohibited by the strict employment limitation and the impairment provision of the Public Ethics Law.³

Charles O. Monk, II, Chair
   Dorothy R. Fait
   Michael L. May
   April E. Sepulveda

Date: April 12, 2000

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¹ We note that information regarding Prince George's County clientele was provided by her new counsel subsequent to her meeting with the Commission. In our view, however, this information does not change our opinion regarding the Ethics Law application to this situation as discussed below.

² These concerns would have been present when the Requestor's position was limited to City Council membership. Our advice, however, was not requested at that time, and issues arising under the Ethics Law have not been known until the current request. Our advice in response to Requestor's inquiry is prospective only.

³ We are aware that advice has been provided by the Director of Legislative Reference for Baltimore City that he believes the City's ethics law presents no conflict under its provisions. Apparently no opinion has been issued by the Baltimore City Board of Ethics. We do not interpret local ethics requirements. Local provisions, though required to be similar to the State Law, need not specifically track the State requirements, and therefore it is possible that application may differ even in the same factual situation.