81.37

OPINION NO. 81-37

The Executive Director (the Director) of the Maryland Arts Council (the Council) has requested an advisory opinion concerning the extent to which he or other Council staff may participate in any Council grant or other supported activity which may involve their relatives.

The Maryland Arts Council is established pursuant to Article 41, § 396 et seq., Annotated Code of Maryland. It is a part of the Department of Economic and Community Development (DECD) and its general responsibility is to distribute grant funds (primarily Federal) for the furtherance and expansion of arts programs. By tradition, the Council has awarded approximately half of its grant funds to major arts institutions, including the Baltimore Symphony Orchestra, Center Stage, the Walters Art Gallery, the Baltimore Museum of Art, the Baltimore Opera Company, and the Baltimore Ballet; it has indicated an intention to continue this pattern of funding. The Council also provides grants for small established and developing arts institutions, individual artists, community arts development, museum conservation and acquisition, and technical assistance grants, as well as fund-raising grants to local arts groups. It also acts as the pass-through agency for special grants by the Legislature or other State agencies. Non-grant programs include support for an Artists in Education program, a folk-life program, an arts resource center, and technical and consulting services.

The Council employs an Executive Director, whose responsibilities include assisting grantees in raising funds and developing programs, as well as provision of technical assistance. The Executive Director also exercises general administrative supervision over the Council's entire program. The Council also employs an Assistant Director and ten staff members, and appoints artists and citizens to panels in six major arts areas: music, literature, dance, theatre, visual arts, and children's events. Where an arts program requires special consulting services, upon the recommendation of panelists and staff, special jurors will be appointed. Council members, panelists and jurors visit grant sites and perform grant evaluations; all of these individuals receive a per diem or other set compensation for these services.

The general issue in this request is raised by circumstances relating to professional activities of the Director's spouse, who is an actress and drama teacher. She has performed at Center Stage at a time when it was the recipient of an ongoing Council grant. Later, she taught a course in theatrical exercise at Goucher College. Although the Council made no grants to Goucher, it did provide grants to several local arts groups which did appear at the College. Currently, the Director's spouse is serving as a Council juror, making recommendations on behalf of the Council for theater scholarships to the State Scholarship Board based upon auditions. She will be compensated by the Council for her services. The Director's spouse may also be involved in teaching at the School for the Performing Arts in Baltimore, which, though currently not a grant recipient, could apply for funds in the future.

The Director indicates that the Council staff and panelists suggested to the Council that his wife be selected as a juror. He states that he did not participate in any way in his wife's selection; he indicates his only involvement with his wife's employment as a juror is to concur in the hiring contract prior to transmitting it to the DECD. The Director informed the Commission that initial selection of jurors is made primarily by Council program officers in the particular arts field. He further states that decisions on grant awards are made by the Council itself, though grant development work, as well as monitoring and evaluation, are staff responsibilities.

The question presented here is the extent to which his spouse's professional dramatic activities in Council-supported or conducted programs (or similar activities of the relative of a staff member) places the Director (or other Council staff) in a real or apparent conflict of interest under the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law). Since this request does not involve an employment or financial interest held by the Director himself (raising a question under § 3-103(a) of the Ethics Law) 1 and there appear to be no facts indicating that he improperly used the prestige of his office (§3-104 of the Ethics Law), the issues here relate to the non-participation provisions in § 3-101 of the Ethics Law. This section prohibits an official or employee from participating officially, except in a ministerial or administrative way, in any matter in which he or any of the listed relatives2 has an interest, or which involves as a party an entity with which a listed relative is employed or is negotiating or has any arrangement regarding prospective employment (Ethics Law, 3-101(a), 3-101(a)(2) and 3-101(a)(3)).

We believe that the activities the Director identifies as part of his responsibilities do, as a general matter, constitute matters as contemplated by § 3-101 of the Ethics Law. In our Opinion No. 80-17 (see fn1), we relied on interpretations under the Code of Ethics (predecessor to the Ethics Law, see COMAR Title 19) in defining a matter to include a proceeding, application, claim, contract or other such particular matter. Following this approach, we believe that both the contractual hiring action relating to his spouse's Council employment, and the grant approval and administration actions constitute matters for purposes of § 3-101. Further, we believe that the Director's potential participation in these actions would be substantive, not ministerial. His concurrence in a contract is a substantive action since it signifies his official approval of and concurrence in the execution of the contract as written; such concurrences are generally relied upon by reviewing personnel as representing the official agency action on the subject contract.

Also, his provision of technical assistance and fund-raising advice, and his monitoring and evaluation activities are non-ministerial actions as contemplated by § 3-101, as these activities involve the Director's use of his judgment, professional expertise and discretion.3 Further, as we discussed in our Opinion No. 80-17, we believe that "participation" includes acting through approval, decision, recommendation, or rendering of advice. Thus, we also believe that the Director's participation in grant development is covered by § 3-101 even though the final decision is made by the Council.

Thus we conclude that § 3-101 of the Ethics Law requires the Director to disqualify himself from participating in the type of matters described if his spouse has an interest in them or if they involve as a party an entity with which his spouse is either employed or has or is negotiating a contract of employment. Applying this principle to the types of situations presented here, we advise the Director and Council staff to disqualify themselves from participation in any grant where a listed relative is directly employed by the grantee. Thus they should not participate in any way in a grant to an arts institution at the time when a listed relative is performing there. As a recipient of salary or other remuneration the source of which could be the Council grant, the relative could be viewed as having an indirect interest in the grant; and in any case, the relative would be an employee of an entity that is a party to the grant agreement. This same principle would also apply in other situations, for example, if a grant is made to the School for the Performing Arts and the Director's spouse is employed as a teacher at the School. It would not apply, however, where a person is employed by an entity, such as in the Goucher College situation, where grants are not made to the entity itself but to other groups affiliated with the entity.

The disqualification provisions of § 3-101 also apply to situations where a listed relative has an employment or contractual relationship with the Council, as with the service by the Director's spouse as a Council juror. In our Opinion No. 81-2, we indicated that the State Ethics Law does not have a nepotism provision that flatly bars the hiring of relatives of incumbent State employees. We also concluded there, however, that the provisions of § 3-101 could apply in such situations where participation in hiring, promotion, or other supervisory or personnel matters regarding a relative could bring an official into violation of the disqualification provision of the section. Decisions to select his spouse as a juror, to establish her salary and the scope of her responsibilities, and to recommend (by contract concurrence) that a contract with her be executed by the DECD, all constitute participation in a matter the results of which will clearly accrue to the economic benefit of the Director's spouse. We therefore advise the Director not to participate in such matters in any way, if they arise in the future.4

The Director indicates that the arts community in Maryland is comparatively small and he does not wish his employment with the Council to become an impediment to his spouse's professional advancement. We agree that the Ethics Law was not intended to be an obstacle to legitimate activities and relationships of officials or their spouses. However, we believe that the disqualification provisions of § 3-101 reflect a recognition by the Legislature that to avoid conflicts of interest or the appearance of conflict officials and employees must not participate in matters in which they or close relatives have an interest.

The Director indicates that the Council is involved in a wide range of activities involving many art groups and individuals in Maryland. He states that potential conflict of interest situations such as those described here are infrequent and that he has established a policy for his staff to disqualify themselves from such matters. Also, the Director indicates that his Deputy can act for him, thus avoiding potential conflicts of interest on his part without unfairly impeding his spouse's pursuit of her career. We urge the Director to continue to be sensitive to the concerns expressed in the Ethics Law that officials avoid situations which could result in either a conflict or the appearance of conflict of interest, and, as set forth in this Opinion, to continue to require disqualification by himself and Council staff where matters involve their own interests or those of relatives covered by § 3-101 of the Law.

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

Date: October 15, 1981

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1 In our Opinion No. 80-17 we addressed the question of whether a spouse's interest or employment should be attributed to the official for purposes of § 3-103(a) of the Ethics Law. We concluded that in the absence of some evidence of control or direct involvement by the official, a spouse's interests or employment need not necessarily be viewed as those of the official. We do not believe the facts here present a situation intended to be addressed in § 3-103(a).

2 § 3-101 applies by its terms to an official's "spouse, parent, minor child, brother, or sister...."

3 See Supervisor of Elections v. County Comm'rs., 200 Md. 114 (1952), for a discussion of ministerial duties.

4 Section 3-101(b) of the Ethics Law allows participation (after disclosure) by an otherwise disqualified official where he is the only person authorized to act. The Council has a staff of at least ten, however, and the Director has indicated that he has a deputy director who is fully authorized to act instead of him in any matter. The provision of § 3-101(b) would thus appear not to apply and § 3-101(a) would operate to preclude his participation in such matters.