82.08

OPINION NO. 82-8

An employee in the Codes Administration Division of the Department of Economic and Community Development (DECD) has requested an opinion as to whether he may, through a private business, provide picture framing services to his agency.

The Requestor is an employee of DECD's Codes Administration Division (the Division), which is responsible for administration of the industrial housing law relating to modular and mobile homes. The Division regulates approximately 50 manufacturers that ship such homes into the State, reviewing their plans and specifications and doing random inspections both at installation sites in Maryland and at out-of-State factory sites. The Division also approves and receives reports from private inspectors hired and compensated by manufacturers who are responsible for inspecting all such units shipped into Maryland.

The Requestor is the sole proprietor of a non-incorporated picture framing business (the Business). He has for many years provided framing services to DECD. He is well known within the Department as a provider of this service; he apparently did most of the substantial framing work in a large DECD public relations campaign several years ago. He is often a preferred contractor for these services, as his prices are usually low and he can respond very quickly and conveniently as he carries the work back and forth with him. The Requestor indicates that he has in the past dealt directly with the user office and learned of jobs through being contacted by the individual employees. He states that approximately 50% of his business is with the State and that all of his State business is with DECD.

In the past the Requestor's picture framing work has been done informally through purchase order contract. He has, as indicated above, dealt generally with the particular using office. His framing work for DECD has been substantial and he states that no one has ever suggested that there was anything improper about it. The present issue was aired within the context of a more formalized bidding process established as part of the State's new procurement procedures, which took effect on July 1, 1981. Under this procedure a Request for Proposal (RFP) is issued and persons included on a list of qualified suppliers may submit a written bid. Though contract award in this procedure may include other factors, price and timeliness are primary considerations. In the situation that gave rise to this request, the Business was the preferred bidder based on low price and delivery time. The award was made to the next highest bidder because of the ethics question raised by the Procurement Officer and DECD Counsel's office.

The primary issue raised here is the applicability of section 3-103(a) of the Ethics Law (Article 40A, §3-103(a), Annotated Code of Maryland, the Ethics Law). Section 3-103(a)(1)(i) prohibits an employee from having an interest in or employment with an entity that either has or is seeking contracts with his agency. The Requestor appears to be an owner/employee of the Business, and the firm quite plainly has done and is seeking to do business with DECD. Thus, we believe that the Requestor's relationship with the Business fits within the class of ownership and employment relationships prohibited by section 3-103(a)(1)(i).

Section 3-103(a)(1) of the Ethics Law provides for exception from its prohibitions "as permitted by regulation of the Commission where such interest is disclosed or where such employment does not create a conflict of interest or appearance of conflict." Though Commission regulations implementing this provision are still pending (see 8:26 Md. R. 2122, December 28, 1981), we have reviewed the situation presented here for possible application of the proposed exception criteria. We have, as a general matter, viewed this statutory exception provision as establishing an exception where the technical criteria of section 3-103(a)(1) are met, but where the circumstances clearly indicate that the relationship of a person's work to his outside activities is so remote as to make a conflict or appearance of conflict unlikely.

The Requestor here apparently does half of his private business with his agency. He is well-known in the agency and his physical presence at the agency's facility could represent an opportunity for advance knowledge of agency framing needs. Moreover, his ability to pickup and deliver in connection with his own travel to and from work appears to give him an advantage over his competitors not similarly situated. Under these circumstances, we do not believe that a conclusion that the possibility of a conflict of interest or the appearance of conflict is remote is appropriate here. We recognize that the Requestor's official duties in the Codes Administration Division do not involve his framing business. However, the conflict of interest provisions of the Ethics Law are also concerned with avoiding situations where public confidence is undermined by the ability or apparent ability of State employees and officials to use their official position to advance their private economic interests. In this situation a framing competitor or a member of the public would not be unreasonable in concluding that the Requestor is in a position to use his status as a DECD employee to gain a competitive advantage over others.

We therefore conclude that the employment and interest in a business that contracts or seeks to contract with an employee's agency as in the circumstances set forth here would constitute a violation of section 3-103(a)(1) of the Ethics Law. We do not believe that the situation here warrants either a broad interpretation to the prohibition or regulatory exceptions that would allow it. We note, however, that section 3-103(a)(1) specifically addresses contracts with one's own agency. We have held in other opinions that the Ethics Law does not prohibit relationships with the State as a general matter. (Opinion No. 81-40 and Opinion No. 80-12) We therefore do not believe, as the facts are presented here, that section 3-103(a)(1) of the Ethics Law would bar the Requestor from doing framing business with State agencies other than his own.

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

Date: February 10, 1982