An Employee in the Drug Abuse Administration (DAA) has requested an opinion on whether he may, as President of a private firm, enter into a lease agreement with the Maryland Department of General Services (DGS), for rental of commercial space in the State office building where his offices are located.
The Employee is a Division Chief in the Drug Abuse Administration (part of the Department of Health and Mental Hygiene (DHMH)) His office is located in the O'Conor Building at 201 West Preston Street. The Employee is also President of a minority business (the Business) that has entered into a lease agreement with DGS for the rental of certain commercial space in the O'Conor building. The Business is to use the space for a boutique that would retail gift and personal items. No drug or other items in any way regulated or controlled by DAA or DHMH are expected to be carried.
The subject lease (which has been approved by the Board of Public Works and executed by both parties) is between the Business and the Department of General Services. It was developed as a result of the Business' response to an invitation for bids issued by DGS in 1977. Negotiations were conducted with the Business partly in the interest of attracting a minority business to the space. The Employee indicates and DGS staff confirm that all of the negotiations were conducted on the Business' behalf by another individual, then President of the firm. The Employee was not involved in any way until the contract was signed, by which time he had become President of the firm. Though his involvement with the firm was known by DGS staff, they were not aware of his status as a State employee until January, 1980, at which time they suspended action implementing the contract pending the resolution of this opinion request.
Implementation of the lease will involve contacts with DGS by the Business and presumably by the Employee, though he indicates that he expects primary responsibility for managing the shop will be by other members of the firm, none of whom are State employees. It should also be noted that implementation of the lease will result in displacement of certain offices in the DAA.
It does not appear that any provisions of the Public Ethics Law are directly applicable to this situation. Section 3-101 of the Law prohibits officials from participating in matters in which they or business entities with which they are related have an interest; and section 3-103 prohibits officials from being employed by or having an interest in an entity regulated by or having contractual dealings with their agency. Neither §3-101 nor §3-103 per se prohibits an employee from having dealings with the State. There do not appear to be any likely matters involving the Business or its interests in which the Employee would be likely to participate in as an employee of DAA; nor does the Business appear to be subject to the authority of or in a contractual relationship with either DAA or DHMH. The fact that the employee's agency will be impacted by the implementation of the lease seems to be purely coincidental, and, of course, the impact would be the same with any lessee. In any case, we do not believe that this connection can be viewed as bringing the Business within the authority of or into a contractual relationship with either DAA or DHMH.
Nor does the §3-104 prohibition against use of the prestige of one's office for private benefit seem to be an issue here. Though some concern was expressed that the Employee's status as a State employee was not set forth early in the negotiations, the fact that he was not in any way involved in the negotiations would tend to militate against a finding that he improperly used his State position for his own benefit. He certainly must take care in the Business' dealings with DGS in implementing the lease to refrain from any actions that could be viewed as improper use of his State office. However, even in this situation it is difficult to see how his position in DAA would provide him with inside information or other status or advantage that could be used by him to better the Business' position over any comparable entity in violation of §3-104.
We therefore conclude based on the facts presented that the Employee's proposed actions on behalf of his private firm in connection with the lease with the State would not present a conflict of interest in violation of the provisions of the Public Ethics Law. Though other issues have been raised, none of them appear to be within the proscriptions of the Public Ethics Law. The Employee should, of course, take care not to take advantage of his location in the same building to divert official time to the running of the Business. This, however, is a matter between him and his supervisor, and he has indicated that management of the shop will be the responsibility of others in the firm. In any case, no per se prohibition is established under the Public Ethics Law, nor does the situation raise appearance questions that would raise concerns under the legislative findings set forth in section 1-102 of the Law.
Mr. Calvert was a member when this as was considered and decided, but resigned prior to the issuance of the formal opinion.
Herbert J. Belgrad, Chairman
William B. Calvert
Jervis S. Finney
Reverend John Wesley Holland
Barbara M. Steckel
Date: June 13, 1980