82.15

OPINION NO. 82-15

A request for an opinion has been received concerning the extent to which the amended Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) restricts outside employment by employees of the State Board for Higher Education (the SBHE) at Maryland institutions of higher education.

This request, which was presented by the SBHE on behalf of its professional staff, is for a review and update of policies established by the Board of Ethics (the Commission's predecessor agency) under the Code of Ethics in its Opinion No. 99 (Title 19 COMAR, Code of Ethics and Opinion No. 99). In this Opinion the Board held that employees of the SBHE were prohibited by Article III, § 3 of the Code from being employed by an institution of post-secondary education subject to the SBHE's jurisdiction.

The authority and jurisdiction of the SBHE is substantially the same now as it was when the original request was considered by the Board of Ethics. It has broad responsibility for the growth and development of post-secondary education in the State. The SBHE:

1) prepares and maintains the Statewide master plan for the post-secondary education;
2) develops guidelines for tuition and fees, for faculty and administrative salaries, and management of financial aid programs;
3) annually reviews, makes recommendations, and participates in development of a consolidated operating budget for the State post-secondary institutions;
4) administers the State's program of aid to private institutions of higher education;
5) approves all proposals for new programs and major changes in existing programs in the State's institutions;
6) grants approval to operate to all public and private institutions of post-secondary education, based on an institution's ability to meet SBHE standards;
7) reviews and approves programs for eligibility for Federal veterans' funding; and
8) coordinates and monitors the State's equal educational opportunity programs.

The SBHE has a small staff of approximately 20 professional employees. According to SBHE personnel, most of the professional staff members are academics, who have advanced degrees and teaching experience in various academic fields. The agency's inquiry relates to employees who may wish to have part-time outside employment teaching at post-secondary educational institutions. The issue is raised solely with regard to persons who would be involved in classroom teaching of one or two courses in the individual's academic field. There is apparently no suggestion in this context of these individuals being employed in management or policy-making positions at the institution. However, the SBHE's professional employees may be expected, as a general matter, to be involved in their official duties in policy or guideline development or other program activities impacting on a broad range of post-secondary institutions.

This request does not involve specific employees or fact situations about which precise guidance can be given. Rather, it calls for general policy direction regarding the continued application of principles established by the Board of Ethics. Opinion No. 99 was issued in implementation of Article III, § 3 of the Code of Ethics, which prohibited officials and employees from engaging in

outside employment which may result in conflicts between the private interests of the officer or employee and his official State duties and responsibilities or which impairs or could reasonably be expected to impair his independence of judgment in the exercise of his official duties.

The Board generally applied this provision broadly, and in its Opinion No. 99 reiterated its "consistent opinion that employment of a regulator by a regulated entity creates an unacceptable risk of impairment of judgment." The Board thus concluded that SBHE employees could not accept teaching positions at institutions of higher education subject to the regulatory authority of their agency.

The Ethics Law, as amended in the 1981 Session of the General Assembly, also includes outside employment prohibitions. Section 3-103(a)(1)(i) prohibits outside employment by an official or employee with any entity that is under his own authority or that of his agency. In our view this provision creates a general bar to employment by SBHE employees by educational entities subject to the agency's broad regulatory authority. However, it should be noted that this Commission has had the occasion to consider proposed secondary employment by State officials and employees with State agencies other than their primary employer. We have concluded in these situations (see Opinion No. 81-7) that the term "entity" as used in § 3-103(a) does not include a State agency. Thus, the strict prohibitions of § 3-103(a)(1)(i) would not apply where the employment is with a State institution, such as a State university or community college. Given the SBHE's extensive authority over all post-secondary institutions, however, employment with a private institution would appear to fit within the language of § 3-103(a)(1)(i) and would generally be forbidden.

The Ethics Law, however, as now written allows exceptions from this general prohibition where the Commission, by regulation, determines that such employment does not create a conflict of interest or appearance of conflict. The Commission is currently considering regulations implementing this provision (see 8:26 Md. R. 2122 (December 28, 1981)) that could, depending on the circumstances of a particular employee's State job responsibilities and his proposed outside employment, allow the private activity despite the general prohibition in § 3-103(a)(1)(i).

Section 3-103(a)(1)(ii) of the Ethics Law further bars any other employment relationship that would impair the impartiality or independence of judgment of an official or employee. The Commission has considered this provision in its Opinions No. 81-45, 81-41, and 81-28 and generally read it narrowly. We concluded in our Opinion No. 81-28, for example,

that the more narrowly drafted final version of the Ethics Law inconsistent employment provision must be viewed as requiring a narrower reading of the prohibition than followed by the Board of Ethics....
...[We] believe that it should be read primarily as a complement to the provisions of § 3-103(a)(1)(i). We view it as primarily covering those situations where the authority or contractual relationships of § 3-103(a)(1)(i) may not be met, but where the relationship between official duties and outside activities gives rise to clear and serious concerns as to the ability of the official or employee to engage in the outside activity and still maintain his impartiality and independence of judgment in carrying out his State responsibilities.

Applying these provisions to the employees of the SBHE, we believe, as a general matter, given the breadth of the agency's jurisdiction and the size of its staff, that employment at entities subject to SBHE authority would be prohibited. The agency's authority over post-secondary educational institutions is substantial, and the subject employees are professional staff likely to be involved in matters of policy and substance impacting on their outside employer. We believe, however, that the Ethics Law was intended to allow more flexibility than was the case under the Code of Ethics. For example, the Law would allow employment where the relationship of the employee's private activity and his official duties clearly indicates that there would be no conflict of interest or appearance of conflict, and that there would be no impairment of impartiality or independence of judgment.

We therefore advise SBHE employees that their secondary employment at an educational institution subject to SBHE authority is generally barred by § 3-103(a) of the Ethics Law. However, if the facts of a particular employment situation indicate that it would fit within the Commission's exception criteria, and clearly would not result in impairment of impartiality or independence of judgment, an opinion should be requested of the Commission as to whether the general prohibition would apply. 1

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

Date: March 29, 1982

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1 It should be noted that even if the outside teaching employment by SBHE employees would not be flatly prohibited by section 3-103(a) of the Law, application of section 3-101 must also be considered. This section prohibits participation by an employee in any non-ministerial matter which involves as a party a business entity with which the individual is employed or has a contract. To the extent that an outside employing institution is covered by section 3-101, then an SBHE employee would be required to disqualify himself from participation in a matter involving the institution.