82.16

OPINION NO. 82-16

An opinion has been requested of the Commission as to whether a Trustee of the Maryland Environmental Trust (MET) may receive compensation for his services in connection with a study conducted by the MET under a Federal grant.

The Requestor is a Professor of Law at the University of Maryland School of Law; he also serves as a Trustee of the MET. He indicates that he teaches property, land planning and environmental law, and that as a result of his academic reputation in the field of water resources and the Chesapeake Bay, he has been involved in several grants awarded through the University. The Requestor states that he was approached by the Federal Environmental Protection Agency to conduct a historical study of pollution control on the Chesapeake Bay. The grant was processed through the MET for administration in order to expand the MET's budget base; a portion of the overhead paid under the Federal grant would be payable to the MET, and under its statute, retained by it for use for MET purposes.

At the time this request was considered, the Requestor indicated that the grant was in progress and was approximately two-thirds to three-fourths finished. Other staff have been paid on a salaried basis. The Requestor had not been reimbursed at all for his services as principle investigator. He anticipated that a certain portion of his services would be viewed as a contribution to the MET to help the agency make the "match" required by the grant. He requested advice as to whether he could be compensated for the remainder of his services. His relationship with the State in this endeavor would be that of a private contractor consultant.

The Requestor indicated that he was responsible for preparing preliminary contract documents, including the sole source proposal. The contract was processed through the Department of Natural Resources, MET's parent Department. Under the law establishing the MET, it would appear that the agency's Trustees have the authority to make preliminary contract decisions in matters such as this, though in this particular situation all MET involvement was by the Executive Director. No action regarding the contract was taken by the Board of Trustees or by the Requestor in his capacity as a Trustee. The Requestor indicated that his dealings with the State of Maryland regarding the contract were with the Executive Director of the MET.

The issue presented here is whether §3-103(a)(1)(i) of the Public Ethics Law prohibits the Requestor's acceptance of reimbursement under this contract (Article 40A, §3-103(a)(1)(i), Annotated Code of Maryland, the Ethics Law).1 Section 3-103(a)(1)(i) of the Ethics Law prohibits an official from being employed by or having an interest in an entity that has or is seeking a contract with his agency.2 Section 1-201(d) of the Ethics Law defines "business or business entity" to include "any entity, regardless of form." We believe that this broad definition is intended to include in various provisions of the Law many business types of relationships with the State whether they are through formally organized entities or otherwise. Thus, we have viewed this term as including not only corporations and partnerships, but also sole proprietorships, private one-person consulting operations, and business activities involving management and ownership of rental property. We therefore believe that a person's provision of services as a private contractor/consultant as presented here constitutes an ownership relationship with an entity (i.e., a private consulting business) as contemplated in §3-103(a) of the Ethics Law.

Further, where this provision of services is by contract with an individual's State agency, we believe that it fits within the section 3-103(a) prohibition against having an interest in an entity that contracts with one's agency. While we do not doubt the Requestor's integrity or his positive motives in directing this project to MET, we believe that his receipt of payment for services rendered in connection with the contract would bring it and him within this interpretation of the prohibition of §3-103(a) of the Ethics Law. His contractual relationship with his agency as a consultant would constitute an interest in an entity having a contract with his agency. Moreover, it should be noted that §1-102(b) sets forth the purposes of the Law as dealing with situations that present "even the appearance of improper influence." Regardless of the Requestor's motivation, we believe that developing and setting up a contract with one's agency and directly benefiting from it financially presents an appearance problem intended to be prohibited by the Ethics Law. For this reason we conclude that this situation represents one of the types of activities intended to be barred by §3-103(a), and the Requestor may not accept the reimbursement.

We have also considered the exemption provisions allowed for members of boards and commissions pursuant to §2-103(h) of the Law, and conclude for these same reasons that they are not appropriately applied to allow exemption in this situation.

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

Date: May 10, 1982

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1 Though issues may have been raised regarding application of the disqualification and use of prestige provisions of the Ethics Law, we do not believe that there are sufficient facts suggesting application of these provisions to warrant further discussion of them here.

2 As amended, Ch. 796, Laws of 1981, effective June 1, 1981. Though additions were made to §3-103(a) in 1981, including a prohibition against any employment that would impair an individual's impartiality or independence of judgment, the substantive provisions cited and discussed here are the same as those in effect when this request was presented and considered, prior to June 1, 1981. Since this matter can be resolved without considering this additional provision, it is not being addressed here.