80.27

OPINION NO. 80-27

The Commission has received a request for advice as to whether an individual (the Requestor) may serve on the State Employment and Training Council (established under the Comprehensive Employment and Training Act (CETA) Amendments of 1978) if his private company has contractual dealings with a local CETA Sponsor.

The Requestor was appointed by the Governor to the State Employment and Training Council (the Council). The Council was established by Executive Order (01.01.1979.15) pursuant to Article II, §24 of the Maryland Constitution and Article 41, §§15, 15CA, Annotated Code of Maryland, implementing the Federal Comprehensive Employment and Training Act Amendments of 1978 (29 U.S.C.S. §801, et seq.). It is located organizationally in the Training and Employment Office of the Department of Human Resources and the 1980 Budget Book describes its responsibilities as follows:

As an advisory body, the State Employment and Training Council facilitates coordination by reviewing program plans, sharing information and recommending improvements; however, it has no administrative authority over prime sponsors or state agencies.

This description of the Council's duties is consistent with those set forth in the Executive Order and the authorizing Federal statute. The Council provides advice and the recommendations to others responsible for implementing the CETA program. With regard to the comprehensive employment and training plans, for example, the Council is one of several entities to which a prime sponsor1 submits its plan for review and recommendation. The comments and recommendations must be considered by the prime sponsor; final plan approval, however, is by the U.S. Secretary of Labor.

The Requestor's private employer has a contractual relationship with the Baltimore CETA sponsor, the Mayor's Office of Manpower Resources, for a training program to provide training and employment for approximately 600 people over a 12-month period. This contract will represent a part of the Baltimore CETA program's implementation of the comprehensive plan that is reviewed and commented upon by the Council. The Requestor indicates that the Council has organized its work into several committees; he serves on the Publications Committee working on putting together the Council's report, and not on the committee that is reviewing plans. He indicates that he would disqualify himself from any decisions by the full Council involving a plan in which he is involved.

A threshold question raised by this request is whether the Council is an "executive agency" under §1-201(k) of the Maryland Public Ethics Law (Md. Code Ann., Art. 40A, the Law). As a member of the Council the Requestor would be a public official subject to the Law's conflict of interest provisions if he is appointed to an executive agency in accordance with §1-201(z)(1)(i) of the law. "Executive agency" is defined in the Law to include "a commission, board, agency, or other body in State government, which is established by law...." The Council is established by constitutional and statutory authority, in fulfillment of a Federal statute requiring the establishment of a State organizational structure under the CETA program. The question is whether an agency established by Executive Order meets the "established by law" criteria of §1-201(k) of the Law.

In response to a request from the Ethics Commission, the Attorney General has recently dealt with the issue of the status of Executive Order agencies. In an opinion dated July 25, 1980, the Attorney General stated that

to refer to a public body in the State government as being "established by law" would ordinarily mean that the body is created by a law passed by the General Assembly, by a legislative rule, or by an executive order having the force of law.2.

In another opinion cited in his July 25, 1980 Opinion, the Attorney General considered the status of the Governor's Commission on Law Enforcement and the Administration of Justice (LEAJ). The LEAJ was established by Executive Order citing the same Maryland constitutional and statutory authority; like the Council, it was established in implementation of Federal statute. The Attorney General found that the Executive Order establishing LEAJ was issued pursuant to statutory authority, was consistent with that authority, and that it "has the force and effect of law and can therefore be regarded as equivalent to a statute passed by the General Assembly." 62 Opinions of the Attorney General 771 (1979).

Applying these opinions, we conclude that the Council is an executive agency in State government that is "established by law" as contemplated in §1-201(k) of the Law. As an appointee to the Council, the Requestor is therefore a public official subject to the conflict of interest provisions of Title 3 of the Law. The particular conflict of interest provision of concern here is §3-103(a), which prohibits an official from being employed by or having an interest in an entity that is subject to the authority of his agency.3. As the Requestor has an employment relationship with his private firm he would be impacted by application of §3-103(a) if his firm is found to be subject to the authority of the Council.

It is our view that the facts here do not present the type of authority relationship intended to be covered by §3-103(a) of the Law. The Council's duties are purely advisory; the Budget Book flatly states that it does not have authority over prime sponsors. Though the purely advisory status of the Council does not exclude it entirely from the coverage of the Law,4 we believe that reference to entities "subject to authority" of an official's agency was intended to narrow the application of the strict prohibitions of §3-103(a). An agency whose only role is to advise and recommend may have some impact on an entity, but if it has no actual power of decision, then the entity need not be viewed as subject to its authority for purposes of §3-103(a).

It should be noted, however, that though the inability of an advisory body to make a final determination as to an entity may exclude relationships with the entity from the strict prohibitions of §3-103(a), members of advisory bodies continue to be bound by other conflict of interest provisions of the Law. For example, employment by an entity whose activities may be subject to review by advisory body, would not, in itself, be prohibited for a member of the advisory body. However, the member would be prohibited by §3-101 of the Law from participating, even in an advisory role, in a matter being considered by the advisory body that involves the member's employer. The member would also be prohibited by §3-104 of the Law from using his position on the advisory body to influence the actual decision-maker as to matters involving his employer, and by §3-107 of the Law from using confidential information obtained through his official position to benefit his private employer.

Applying these principles to the total circumstances presented by the Requestor, we conclude that this private employment with a firm contracting with the Baltimore CETA sponsor does not come within the proscription of §3-103(a) of the Law. The Council is a purely advisory body and, in addition, is only one of several entities making recommendations regarding proposed CETA plans. It is also relatively far removed from the ultimate decision-maker, the U.S. Department of Labor. Also, the Requestor's employer is actually one step removed from the Council's purview; he is employed, not by the prime sponsor whose plans are being reviewed by the Council, but by another entity contracting with the prime sponsor. Further, the specifics of his private employer's activities are not likely to be reviewed by the Council; the Requestor indicates that the Committee reviewing the plans expects to consider general program direction and other substantive issues of the plans, but not to inquire into the specific contracting decisions made by prime sponsors in plan implementation.

Taking all these circumstances together, we conclude that the Requestor's private employer is not subject to the authority of the Council. As we have discussed above, however, the fact that this conclusion excludes him from the strict §3-103(a) prohibition does not excuse the Requestor from compliance with the other conflict of interest provisions of Title 3 of the Law. This would include the §3-101 prohibitions against his participation in matters before the Council that involve his private employer.

Herbert J. Belgrad, Chairman
   Jervis S. Finney
   Reverend John Wesley Holland
   Barbara M. Steckel

Date: December 22, 1980

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1 A "prime sponsor" can be the State, or a unit or combination of units of local general government or certain existing grantees serving rural areas.

2 65 Opinions of the Attorney General 352 (1980).

3 As there is clearly no contractual relationship here between the Requestor's employer and his State agency, this Opinion does not deal in any way with the §3-103(a) prohibitions relating to entities having contractual relationships with an official's agency.

4 As discussed above, the application of the Law to appointees of executive agencies would appear to reflect an intention to bring such entities within the scope of the Law without regard to the specific character of their State responsibilities. Further, the Board of Ethics under the Code of Ethics consistently held that entities having only advisory responsibilities were nevertheless subject to the proscriptions of the Code. (Title 19 COMAR, Opinions 50 and 63.) We can find no evidence that the new Law was intended, as a general matter, to reject this approach.