STATE ETHICS COMMISSION
A nonprofit organization comprised of State and local procurement and purchasing government employees (the "Organization") has requested advice regarding the application of the provisions of the Maryland Public Ethics Law (Md. Code Ann., State Gov't Title 15 (Supp. 2008)) (hereinafter "The Ethics Law") to its members who are State employees. Specifically, the Organization has asked about State employee participation in various activities related to a reverse trade show. #1 We advise that the provisions of the Ethics Law prohibit State employees from soliciting any gift, donation or sponsorship on behalf of the Organization supporting future reverse trade shows. We further advise that State employees who are members of the Organization may not use State time, equipment, facilities or other resources for activities that are related to the Organization's reverse trade show and involve seeking sponsorships from entities doing or seeking to do business with or otherwise regulated by the State.
The Organization held its first reverse trade show in October 2007 and plans to hold additional reverse trade shows in the future. A reverse trade show, in the context of this request, consists of government vendors and potential vendors visiting booths or tables set up by representatives of local and State government agencies, who provide information regarding government contracting and procurement processes. #2 The attendees pay a fee to attend the trade show and to access government exhibitors, including the procurement officials from various participating government agencies, who may also be members of the Organization.
The Organization's October 2007 reverse trade show attracted approximately three hundred attendees with more than forty State and local government agencies participating as exhibitors. Sponsors of the 2007 reverse trade show included private industry vendors, local government agencies and State agencies. The Organization anticipates offering similar sponsorship opportunities to vendors and government agencies to defray the cost of future events. The Organization also anticipates preparing a program booklet for the reverse trade show similar to the 2007 event. The booklets will include a listing of the Organization's members and their respective agency positions and contact information, information on event sponsors, advertisements, and other information about the Organization. Each reverse trade show attendee will receive a program booklet. The Organization's members organized the 2007 reverse trade show through a planning committee that handled the majority of the planning, preparation and solicitation of sponsors for the event. The Organization's 2007 reverse trade show revenues exceeded the show's cost and raised money for the Organization. These funds will be used for future Organization events. #3
The Organization, which is an Internal Revenue Code 501(c)(3) nonprofit entity, has approximately three hundred members. The members include public procurement employees serving throughout Maryland, including State employees from over thirty State agencies and county and municipal employees from several jurisdictions. Memberships are issued to individual employees rather than the agencies. Many of the government agencies not only pay for the employees' membership in the organization but also allow their employees to attend Organization meetings during their workday.
This request raises issues under two provisions of the Ethics Law. The first issue involves the application of the gift solicitation provisions of the Ethics Law (§ 15-501) to State employees' participation in the Organization's activities related to soliciting sponsorships from vendors and agencies for the reverse trade show. The second issue involves the application of the prestige of office provision of the Ethics Law (§ 15-506) to State employees' participation in activities related to the Organization's reverse trade show while using State time, equipment, facilities and resources.
Section 15-505(a) of the Ethics Law prohibits State officials and employees from soliciting gifts. This provision contains broad language which, the Commission has consistently advised, applies to the solicitation of any gift by an individual State employee for the employee or another, including a private organization or charity. #4 Section 15-505(b) of the Ethics Law also prohibits a State official or employee from accepting gifts from entities or persons that do or seek to do business with their agency, engage in activities regulated by the agency, have financial interests that could be affected in a particular way by the individuals, or who are regulated lobbyists. #5 Also at issue in this matter is § 15-506, which prohibits State officials or employees from intentionally misusing their public position for their own private gain or for the private gain of another.
In Opinion 90-7, we addressed the issue of a State employee's involvement in activities related to the securing of donations and memberships for a private museum from entities that had a regulatory relationship with his agency. #6 In that matter, we determined that a member of the Public Service Commission was prohibited from participating in the solicitation or acceptance of any memberships, or other contributions to a private art museum from utilities or others subject to his Commission's jurisdiction. The State official involved in that opinion was also a member of the board of directors of the private art museum at issue and the museum employed his spouse. We also opined that, as long as the State official remained a board member to the museum, the museum should not accept any contributions or memberships from entities that have a business or regulatory relationship with the official's State agency. We also addressed the prestige of office concerns by noting the State official at issue "would need to take care to avoid any situation where it could be suggested that he is soliciting gifts or using his position to advance the interest of the private entity."
We have also addressed the application of the provisions of the Ethics Law to State agencies seeking sponsorship or donations for an agency program from a private entity (See Opinions 94-6 and 94-13). #7 We have advised various State agencies that agencies may seek private contributions or donations for legitimate agency or inter-agency programs provided that certain State procedures and processes are followed. Any request for donations by a State agency solicitation pursuant to a legitimate agency determination should be broad and not specifically focused on vendors, regulatees or other special category entities in order to avoid the appearance of any improper pressure to donate or the giving of any special sponsorship benefit. Also, State employees involved in regulatory or procurement matters should not be involved with any agency program solicitation. Solicitation of any entity with a pending or foreseeable procurement matter should be avoided. State agencies must advise any potential donor that a donation does not result in any special access, treatment or fiscal benefit to the donor. State agencies should also temper the recognition of donors' support with fairness and impartiality. Finally, there should be no personal benefit to any State employee or official from donations received as part of an established agency program and the State agency should adhere to regular processing, accounting and procurement procedures in the event that donation funds are collected. #8
Unlike the discussions above, involving the application of the Ethics Law to State agencies sponsoring events or programs with assistance of private entities, the Organization's request for advice presents the reverse question of a nongovernmental entity planning a trade show that arguably benefits both the potential vendors to government agencies and the government agencies through information exchange, but also results in the Organization receiving a financial benefit from the show. The concern relates to the impact of the solicitation of sponsorship activities by State employees.
We advise in response to the first issue presented that State employees whether or not members of the Organization are prohibited from soliciting any sponsorship, contribution or other donation for any future reverse trade show from entities that do business with, seek to do business with or are regulated by their agency or any other agency of the State. This broad solicitation prohibition is necessary in order to avoid any appearance to the public of a misuse of the prestige of public office by any State employee on behalf of the Organization. The State employees who are or would be members of the Organization also have State duties related to procurement and purchasing for their agencies. Therefore, the restrictions set forth in this opinion follow prior advice regarding the nonparticipation of procurement employees in any donation or sponsorship solicitation.
In response to the second issue, State employees should not use any State resources, such as State computers, email accounts or State time for activities related to the sponsorship and funding of the Organization's future reverse trade shows. Any potential sponsor, vendor or attendee receiving an email or correspondence from a State account, or including State office contact information, could easily interpret the exchange to mean that the Organization's reverse trade show, or other activity, is a State-sponsored event, which is not the case in this matter. #9
We recognize that the Organization provides beneficial training, educational and professional advantages to its members, which have an overall positive effect on the State and local agencies that employ these individuals. The provisions of the Ethics Law were established to assure the general public that the impartiality and independence of judgment of State officials and employees will be maintained. #10 We determine that the advice set forth in this opinion is consistent with our purpose of preserving the trust and confidence of the public in those individuals who conduct the day-to-day business of State government.
Robert F. Scholz, Chair
Julian L. Lapides
Janet E. McHugh
Jacob Yosef Miliman
Paul M. Vettori
Date: October 30, 2008
#1 The Organization is a local chapter of a national association. The Organization is primarily focused on providing training and educational opportunities to its members and also promotes professionalism among public purchasing employees.
#2 Reverse trade shows have been held by public procurement professional organizations in Florida, Oregon, Louisiana, Illinois, Colorado and Tennessee.
#3 The Organization initially intended to use some of the profits realized from the reverse trade show to pay for individual members of the Organization to attend various training seminars and conferences. After this advice request began, the organization changed its designated allocation of funds to ensure that money generated from the trade show is not used to provide direct benefits to individual members of the Organization.
#4 Section 15-505(a)(2) of the Ethics Law prohibits a State official or public official from directly soliciting or facilitating the solicitation of a gift, on behalf of another person from an individual regulated lobbyist described in § 15-701(a)(1) of the Ethics Law.
#5 Subtitle 7 of the Ethics Law sets forth registration, reporting and other requirements for lobbyists in Maryland.
#6 The State Ethics Commission's formal advisory opinions are available for review through COMAR at http://www.dsd.state.md.us/comar
#7 In Opinion 94-6, the Commission outlined prior formal advisory opinions involving the application of the gift and prestige of office provisions of the Ethics Law regarding private payment of travel and related expenses for State officials and employees. The Commission "recognized in evaluating the circumstances of these gifts that they can in some very limited situations be gifts to an agency, and that establishment of an agency relationship with a private entity may be a matter of agency policy and management determination." The Commission advised State agencies to avoid direct solicitations of contributions from individuals or entities that have significant regulatory or contractual relationships with the agency. The Commission noted particular concerns related to agency solicitations where the donor may have a compliance issue or procurement matter pending with the agency.
#8 Procedures for the acceptance of gifts and grants (excluding Federal grants) by Executive Branch agencies are set forth in Department of Budget and Management Procedure 02.01.08.
#9 The solicitation of State vendors by State employees presents obvious Ethics Law issues. The solicitation places the vendor in an uncomfortable situation. As noted in Opinion No. 113 of the Board of Ethics, the predecessor to the State Ethics Commission, which dealt with the issue of a supervisor requesting loans from other employees, the Board stated, "Regardless of the motive behind a request for money from a supervisor to one under his authority, the request in the worst of circumstances puts the employee in an untenable position and in the best of circumstances injects an uncomfortable and unprofessional factor into the work situation."
#10 Section 15-101 of the Ethics Law sets for the legislative findings and policy of the law and charges the State Ethics Commission to liberally construe to the law to accomplish the purpose assuring the citizens that their confidence and trust in government, State employees and State officials shall be maintained.