81.43

OPINION NO. 81-43

An opinion has been requested from a professor at the University of Maryland concerning whether professors at the University may attend a seminar sponsored and fully funded by an entity doing business with the University.

The Chairman of the accounting faculty at the University of Maryland's College Park campus has requested advice concerning whether members of his Department may attend an accounting seminar offered by the firm of Coopers & Lybrand, Certified Public Accountants (C&L). Coopers and Lybrand is a partnership that has a large contract with the State to provide accounting and auditing services. It also has several less sizeable contracts with the University, and, given its experience with State work, can be expected to continue its bidding and contractual efforts in the future.

The location of the seminar is Philadelphia, Pennsylvania, and it would involve faculty members from colleges and universities in Maryland, Delaware and Pennsylvania. Four University of Maryland faculty were invited. The subjects of the seminar include: accounting ethics and problems of soliciting business, computer auditing, the Federal Corrupt Practices Act, and estate planning. C&L staff expressed their hope that the seminar would be an opportunity for faculty to exchange views on the topics presented. They acknowledge, however, that the seminar serves various college/company relations purposes for the firm (including the goal of exposing faculty to the services available from C&L), recognizing that this might be useful for future firm business. C&L staff also indicate that the seminar represents a service type of activity routinely provided to the firm's clients. All costs of the seminar, including transportation and meals, are paid by C&L. Invited faculty participate as attendees only; they do not make any presentations or serve as panel members in the seminar.

The issue raised here is whether the expenses related to this seminar may be accepted under section 3-106 of the Public Ethics Law (Article 40A, §3-106, Annotated Code of Maryland, the Ethics Law). This section prohibits acceptance by State employees and officials of gifts from any person who, among other things, has or is seeking to do business with their agency, or whose economic interests could be impacted (in a manner different from the public generally) by the official's or employee's official actions. A gift is defined in section 1-201(p) to include the "transfer of anything of economic value regardless of the form without adequate and lawful consideration." We believe that C&L's payment of transportation and food expenses for State employees under these circumstances constitutes the transfer of a thing of value, without adequate or lawful consideration. We therefore conclude that these proffered expenses are "gifts" as contemplated by the Ethics Law definition as set forth on the definition in section 1-201(p).

Further, we believe that these expenses are gifts covered by the prohibitions set forth in section 3-106(a). In addition to its primary State contract with the State Comptroller, C&L has several contracts with the University of Maryland. Moreover, C&L staff indicate that based on the firm's State experience and interest, they could reasonably anticipate continued efforts to do business with this and other State agencies. Personnel from the firm acknowledge that at least one purpose of the seminar is to familiarize faculty members with the firm and favorably dispose them to do future business with C&L. Even though these particular faculty do not appear to have contract responsibilities that would be expected to impact on C&L's economic interests, the firm clearly seeks to do business with their agency, and appears to believe that their favorable views would be of value.

We therefore believe that the transportation and other expenses offered in connection with the seminar are gifts the acceptance of which would be prohibited by section 3-106 of the Ethics Law unless they fit within an exception established in subsection 3-106(b). This provision establishes exceptions to the general rule, if it is determined that a gift would not impair the employee's impartiality or independence of judgment, or, if of significant value, give the appearance of doing so or being intended to do so. One of these exceptions (subsection (b)(1)) applies to meals and beverages generally; another (subsection (b)(4)) excepts food, transportation and related expenses in connection with an employee's participation as a speaker or panel member at a conference or seminar.

These faculty members are apparently not involved in the contract process generally or with C&L's contracts in particular. Thus, we believe that C&L's general promotion interests are insufficient to bring this situation within the preliminary determination language of subsection (b). Moreover, if the meals and beverages are considered separately, we believe that the meals can be viewed as "insignificant" in value, thus taking them out of the final proviso language in subsection (b). Since it is evident, also, that the employees will be participating as attendees only, rather than as speakers or panel members, it is our view that only subsection (b)(1)'s exception for meals and beverages would apply here. As there is no other basis in the Law that would support exception of transportation expenses, we conclude that these professors may accept the proffered meals, but not the transportation or any other expenses.

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

Date: December 1, 1981