An employee in the Department of Natural Resources (DNR) has requested our opinion as to the propriety of his establishing a part-time business of wetland license and permit application assistance to private contractors and waterway property owners.
The Employee indicated in his appearance before the Commission that he had been approached both by individual landowners and contractors acting on behalf of landowners, to provide license and permit preparation assistance related to structures planned to be erected on State waterways. His efforts on behalf of these individuals or contractors would include: site inspection, development of detailed sketches, completion of all applications for licenses and permits from the Army Corps of Engineers and the State of Maryland, and provision of technical assistance regarding compliance with county grading sediment controls. The applications would be signed and submitted by others; the Employee's responsibilities would end when he provides the application package to the landowner or contractor.
In addition to permits from Federal or local entities, construction in State waterways must be licensed or permitted by the State. The Commission has reviewed the State's wetlands control program which appears to have two different procedures, reflecting classification of such property into two categories. Wetlands areas include all areas affected by the rise and fall of the tide, unaffected by storm and wind, which support aquatic vegetation. State wetlands consist of all wetland areas lying below the mean high tide, and are viewed as being held by the State in trust for the public. As action regarding State-owned property may be taken only by the Board of Public Works, a license to construct in these areas must ultimately be issued by the Board of Public Works. Structures to be built in private wetlands areas (which include areas meeting the general criteria but not below the mean high tide) are permitted by DNR directly, under its general land use regulations. However, even though the final licensing authority for State wetlands lies with the BPW, initial processing of applications pertaining to structures on either type of waterway is the same. Permit and license requests are filed with the Wetlands Division of the Water Resources Administration in DNR. This Division does preliminary technical evaluation and review, including site inspections and conduct of hearings. With regard to State wetlands, an evaluation report is submitted with recommendations to the Board of Public Works. For other applications, the final action is taken by the Water Resources Administrator.
The Employee is an engineering associate in the Shore Erosion Control Program of the Capital Programs Administration of DNR. He is thus involved in a program which provides State financial assistance to private land owners wishing to construct bulkheads on wetlands property. For individuals whose funding applications are accepted, the Employee and his Office provide permit or license drafting assistance, including preparation of drawings and participation in appearances before the Wetlands Division (DNR) and, for State wetlands, the BPW. Where the Shore Erosion Control Program is seeking a license or permit in connection with a project it is funding, it applies and appears on the same basis as any other citizen. Wetlands Division procedures and the substantive regulations and standards required to be met by applicants are generated primarily by the Water Resources Administration and the Wetlands Division. The Employee indicates that his proposed outside employment would be unlikely to involve individuals that would be expected to participate in the program managed by Shore Erosion Control. He believes that individuals who are far enough along in their construction effort to be seeking license or permit drafting assistance have already arranged for financing for the project and are not likely to be seeking assistance from the Shore Erosion Control program.
The provision of the Ethics Law that is relevant to this situation is section 3-103(a), which prohibits an employee from being employed by or having an interest in an entity subject to the authority of his agency. The Employee here expects to be employed by (1) individual landowners, or (2) contractors, in preparing license or permit applications for submission to the Water Resources Administration in DNR. Though licenses for State Wetland areas are ultimately issued by the BPW, we believe that the significant involvement and responsibility of the Water Resources Administration in developing evaluations and recommendations for the BPW makes entities interested in these licensing activities "subject to the authority of" the Water Resources Administration (WRA) as contemplated by §3-103(a). This is especially so as DNR's recommendations are generally adopted by the BPW. Persons seeking permits for private wetlands construction directly from the WRA would, of course, also be "subject to the authority" of that Administration.
Further, it is our opinion that entities subject to the authority of WRA are also subject to the authority of the Department of Natural Resources and thus of the "agency with which the Employee is affiliated." We believe this to be so even though the Employee is assigned to a different Administration (Capital Programs) within DNR than the one that has direct responsibility for processing wetlands applications. This view is consistent with the general position adopted by the Board of Ethics under the Code of Ethics that in situations involving an employee's "agency" the prohibition applied to State agencies as "indivisible entities."
Though we believe that there are circumstances where an entity within an agency (such as an autonomous regulatory board) could be viewed as a separate agency for conflict of interest purposes, we agree with the general principles enunciated by the Board, especially in situations such as the one presented here. The Water Resources Administration and the Capital Programs Administration are sub-units composed of regular employees of an integrally interrelated Department. These Administrations deal with natural resources problems that may be expected to relate to the same subject matter (as is the case here where both have responsibilities for protection of State and private wetlands.) Both are in the direct chain of authority answerable to the same Departmental management on matters of both substance and administration.
Further, in addition to common personnel and policy-making at upper management levels, interaction between these sub-units at the staff level would also be expected. It would not be unreasonable to expect that the Employee would, as a result of these contacts, be in a position to further the interests of private clients by virtue of his "inside" knowledge and understanding of the people and procedures in WRA involved in processing licenses and permits, and his possible increased accessibility to this process by virtue of his DNR employment1. In view of the legislative finding set forth in §1-102(b) of the Law, that the public confidence is eroded where the conduct of the State's business is subject to even the appearance of improper influence, we believe that in situations such as this the principle, or parent, Department should be viewed as the Employee's agency for purposes of §3-103(a).
It is therefore our view that the outside consulting activities proposed by the Employee would constitute employment by an entity subject to the authority of his agency. We believe this to be true whether his dealings are with the landowners directly or through a contractor. In either case, the Employee would be directly involved in site inspection, development of drawings, and preparation of actual license or permit applications being submitted to his agency. Arguably, there are circumstances where employment as a subcontractor to an intervening entity between an employee and the real party in interest (such as a business corporation, developer, or other primary party) would sufficiently insulate an employee from the party who is legally bound by the actions of his agency. In this situation, however, it appears that the Employee will be so directly involved in preparation of materials being submitted directly to his agency without further action by an intermediary (such as a contractor), that he must be held to be "employed by" the landowner license or permit applicant, whether he is hired by a contractor or directly by the landowner.
Under these circumstances, it is our view that the Employee's proposed outside activities would be prohibited by section 3-103(a) of the Law, to the extent that they involve provision of license or permit drafting and related technical assistance in connection with permit applications being submitted to the Maryland Department of Natural Resources, for issue either by the DNR itself or by the Board of Public Works on DNR's recommendation.
Mr. Calvert was a member of the Commission when this case 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: September 10, 1980
1 Section 3-104 of the Law prohibits the intentional use of the prestige of one's office for one's personal gain or that of another. As there are no facts presented here to indicate the Employee's intentional use of the benefits of State employment for himself or another, we do not make a determination under this section. However, we believe that the matters discussed here are relevant to an interpretation of the concept of an employee's agency in §3-103(a) as it implements the legislative policy of §1-102 of the Law.