80.20

OPINION NO. 80-20

The Maryland State Comptroller of the Treasury (the Comptroller) has inquired as to whether a conflict of interest is raised under the Public Ethics Law by a transaction involving the sale of property to Calvert County by a realty company of which he is a majority stockholder, where the transaction involved Federal funds processed through a State Executive Branch department. The Comptroller is, by virtue of his position, a member of the Board of Public Works. Further, the Comptroller's signature is affixed to all checks drawn on the Treasury of the State of Maryland.

The Comptroller indicates that a firm in which he is a majority stockholder and officer (the Firm) has been approached by Calvert County with regard to the potential purchase by the County of a substantial portion of land owned by the Firm. The land is situated along the Chesapeake Bay in Calvert County and is owned totally by the Firm. The Comptroller (with his wife) owns 77% interest in the Firm, and is also the Firm's President. He indicates that though State or Federal funds could possibly be involved in the purchase, he is not familiar with the County's precise funding plans. Officials of Calvert County, however, indicate that the County has applied for allocation of Federal funds under the Coastal Zone Management Act.

Commission staff are informed by personnel in the Department of Natural Resources (DNR) that the County's application is under the coastal zone energy impact program, under which 100% Federal funding is available to replace local environmental or recreational property that is rendered unavailable for such uses by construction of an energy facility. DNR personnel responsible for processing local applications for the Federal funds review for consistency with program goals and, if the Federal government approves the application, would be responsible for reimbursing the County with a State check. These personnel indicate that this site selection appears to be a good candidate for Federal funding. They do not believe that Board of Public Works' approval is required as no State funds are involved, and there are no present plans to bring the matter before the Board of Public Works.

Title 3 of the Maryland Public Ethics Law (Md. Code Ann., Art. 40A) sets forth several conflict of interest limitations on the activities of Maryland officials and employees. Particularly, §3-101 prohibits an official from participating (except in a ministerial or administrative way) in any matter in which he has an interest or in which certain entities with which he is connected are involved as a party; and §3-103(a) prohibits an official or employee from being employed by or having an interest in an entity that is under the authority of or has contractual dealings with his agency.

As to §3-103(a), it is our opinion that the facts as presented here do not bring this transaction or entities involved in it under the authority of or into a contractual relationship with the Comptroller's agency. Given the absence of State funding or any intention to bring the matter before the BPW, there would appear to be no basis for finding the Firm to be under BPW's authority. Nor do there appear to be facts supporting some particularized relationship that would bring the Firm under the authority of the Treasury Department headed by the Comptroller. We do not believe that signature by the Comptroller of checks drawn on the State Treasury is in itself a situation that would support this type of authority relationship between Treasury and the Firm.

Further, as to §3-101 of the Law, we do not believe that the affixing of the Comptroller's signature to a State check distributed in implementation of Federal or DNR approval would be a prohibited participatory act as contemplated in that section. The Comptroller's check-signing responsibilities appear to be the type of ministerial or administrative action specifically intended to be excluded from the disqualification mandate of §3-101. These responsibilities do not, as a general rule, appear to involve any substantive involvement by the Comptroller in the transaction.

It is therefore our conclusion that no present conflict of interest exists in the property sale transaction as currently contemplated. We specifically, however, do not address issues that would arise under either 3-101 or 3-103(a) should plans for the purchase be changed in such a way as to require approval by the Board of Public Works or more substantive involvement by the Office of the Comptroller of the Treasury.

Mr. Calvert was a member of the Commission when the 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