An opinion has been requested concerning whether §3-101 of the Ethics Law (Article 40A, §3-101, Annotated Code of Maryland, the Ethics Law) applies where the head of an agency within the Department of Licensing and Regulation has discussed future employment with an entity regulated by his agency.
The head of an executive agency (the Manager) indicates that he has recently engaged in discussions regarding future employment with a business entity (the Entity) subject to the regulatory authority of the agency. The business entity is subject to very comprehensive agency regulation. The Manager originally inquired as to the disclosure process under §3-101(b) of the Ethics Law, assuming that he would be required to take official non-ministerial actions regarding the Entity.
The Manager has subsequently indicated, however, that most daily actions likely to be taken with regard to the Entity could be taken by his staff. These types of matters would include, for example, auditing such firms, receiving and reviewing financial reports, and approving products for sale. The Manager states that he would not get involved in these matters, but was concerned if a situation of serious impact should develop that would require higher level management participation. He indicates, however, that he is not aware of any such matter currently pending in the agency relating to the Entity. Moreover, he indicates that the agency's enabling statute provides for appointment of a Deputy, and further specifically provides that "in the absence or disability of the *agency head* for any reason, the Deputy *agency* head shall exercise all of the powers and duties vested by law in the *agency* head."
The issue raised here is application of §3-101 of the Ethics Law to this situation. The Manager indicates that he has had "serious discussions" with the Entity regarding future employment. A first question is whether this is sufficient to be viewed as within §3-101(a)(3), which deals with a business entity with which an official "is negotiating or has any arrangement concerning prospective employment." We believe that the circumstances here do present a situation covered by §3-101(a)(3). We recognize that there may be circumstances concerning future employment, such as receipt of an unsolicited contact from a prospective employer, which may not constitute "negotiation" as contemplated in §3-101. This situation, however, goes substantially beyond such preliminary contacts to involve two-way communications and discussions that could result in interests and motivation of an official toward a private entity that would interfere with his objectivity in dealing with the Entity in his official capacity.
We therefore conclude that the Entity is covered by §3-101(a)(3), which bars the Manager's non-ministerial participation in any matter in which the Entity is involved as a party, unless the situation comes within §3-101(b). This provision of §3-101 would permit otherwise improper participation where the official involved is required by law to act or is the only person authorized to act, provided the nature and circumstances of the conflict are disclosed. In this case, however, there would appear to be ample authority vested in another party to act with regard to matters involving the Entity.
We therefore believe that this situation would be covered by our Opinion No. 81-37 involving the Maryland Arts Council. In that case the official was advised to avoid any participation in matters involving his spouse, since his Deputy Director was fully authorized to act in his stead. We advise the Manager here that he should disqualify himself from any matters involving the Entity for as long as he is involved in employment negotiations or has any arrangement for future employment with the Entity.
Herbert J. Belgrad, Chairman
Jervis S. Finney
Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: May 10, 1982