An advisory opinion has been requested as to whether a conflict of interest results under the Maryland Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) when the architectural firm of a member of the State Planning Commission (the Member) enters a contract with the Department of General Services (DGS) for the design of a State multi-service center.
The State Planning Commission (the Planning Commission) is an advisory board to the State Planning Department (the Department). The Department is responsible for approval and planning of capital construction projects in the State, and in connection with this responsibility its Secretary serves as one of three Department Secretaries on the Executive Management Board (EMB). The other members are the Secretaries of Budget and Fiscal Planning and General Services. The Department was and continues to be the lead agency in the development and implementation of the multi-service center concept. The Department also has continuing responsibility for review and approval of any changes or amendments to contracts for capital construction projects such as multi-service centers.
The EMB was established by the Board of Public Works. Its role is to be the coordinator and act as a user agency for the construction of State facilities designed to serve more than one user agency (multi-service centers). The EMB is chaired by the Secretary of State Planning and its staff provided by the Department. It works with DGS (much as any user agency would work) in developing specifications, evaluating proposals and otherwise processing procurement actions for the construction of State multi-service centers. It makes recommendations to DGS, which is the contracting authority for most State construction projects (except for highways).
Apparently the State Planning Commission is only remotely involved in the multi-service center program. It serves as an advisory board to the Department on general policy matters, making recommendations to the Secretary as to major issues and directions taken by the Department. The Member indicates that the Planning Commission received a consultant's report on the multi-service center concept, as it does with most major Departmental activities. He says, however, that the Planning Commission itself did not take any action preparing a report or providing recommendations regarding the program. He states that it would not, in any case, be involved in the review of specific contracts or other matters implementing Department policy.
The Member is an owner/employee of the architectural engineering firm. He indicates that the firm has about 20-25 employees and has two divisions, private and public. He states that he is totally involved in efforts relating to private clients and was unaware that the public division was bidding on a State multi-service center project. As the bidding process and the contract execution was primarily a DGS operation, the firm's personnel involved in the project were unaware of the Department's involvement until after selection, when the Department staff person assigned to EMB began to participate in substantive meetings with user agencies. This project is now under construction; though the design phase is over, the architect-engineering firm will continue to have some limited responsibilities until the project is complete. Another project is also in the early stages of development, but has been held up (for reasons unrelated to this request). The firm is interested in bidding on this project if possible.
The Ethics Law provisions that are relevant here are sections 3-104, 3-101 and 3-103(a). Section 3-104 prohibits the intentional use of one's prestige of office for his own benefit or that of another. Based on the facts set forth concerning the involvement of the firm in the multi-service center, a conclusion that the Member intentionally misused the prestige of his office would not appear to be warranted. However, both the Member and the Secretary should be sensitive to this situation and take care to avoid any circumstances that could give rise to an appearance of impropriety.
Sections 3-101 and 3-103(a) of the Ethics Law set forth disqualification and interest and employment prohibitions, respectively. Section 3-101 prohibits an official's participation in a matter in which he or certain relatives have interests or in which he or certain business or other associates are involved as parties. The Commission has, in prior cases, followed a relatively narrow approach to the concept of "matter," requiring more than general policy development and decision-making for a situation to be considered as a "matter" under section 3-101. (See, e.g., Opinions No. 80-17 and No. 81-5) Under this construction the likelihood of a section 3-101 situation arising seems limited, since the Planning Commission has not involved itself in particular implementing actions under the multi-service center program. In any case, given the breadth of activities on which the Planning Commission advises, if such a situation did arise, the Member could disqualify himself without impairing his ability to carry out his State Planning Commission responsibilities. We therefore conclude that as the circumstances currently exist there is no violation of section 3-101 of the Ethics Law.
The last issue, then, is whether section 3-103(a) of the Ethics Law applies in this situation. Section 3-103(a) prohibits an official from being employed by or having an interest in an entity that is under the authority of or has contractual dealings with his agency. The Member has both an employment and ownership interest in his firm, which in turn has a contractual relationship with the State. The contract, however, is with DGS. Neither his immediate agency nor the parent agency, the Department, are parties to the contract, though the Department, at least, was substantially involved in its development and would be involved in any subsequent changes to it. Though there are substantial economic interests involved here, and appearance questions could be raised, the provisions in section 3-103(a) do not appear to deal with situations where an official's agency is heavily involved in a contract without actually being a party to it.
Thus we conclude that the participation of the Member's firm in the multi-state service center program would not constitute a violation of section 3-103(a) of the Ethics Law. Since neither the Member nor his immediate agency (the Planning Commission) are involved in the multi-service center contracts, we believe that the relationship presented in these circumstances is sufficiently remote and indirect as not to raise serious concerns under the policies set forth in the Ethics Law. However, the Member, other members of his firm, and Commission and Department officials should be sensitive to this situation and take great care that the member be screened from any involvement in contracts impacted by the Department.
Herbert J. Belgrad, Chairman
Jervis S. Finney
Reverend John Wesley Holland
Barbara M. Steckel
Date: May 4, 1981