An advisory opinion has been requested as to whether a Program Director at the Potomac Center (Department of Health and Mental Hygiene, DHMH) may serve as a consultant providing training services to employees of private care providers funded by DHMH.

This request was presented by the Chief of Evaluation and Training in the Mental Retardation and Developmental Disabilities Administration (MRDDA). It involves a Program Director (the Employee) employed at the Potomac Center (the Center), a State facility that provides residential care to profoundly and severely retarded adults. The Employee's duties involve service as an assistant director responsible for program matters, and include general administrative and supervisory responsibility for various aspects of the Center's activities. He has some responsibilities for supervising and training Center clinicians who work directly with patients. The Employee in connection with his prior duties as a program specialist developed significant skills in managing disruptive behavior (including self defense); he thus may devote a small part of his time to training DHMH employees in these skills at Potomac Center as well as other DHMH facilities.

The Employee has been requested to provide this training on a consultant basis to employees of private provider agencies funded almost entirely by MRDDA funds. These entities are private nonprofit corporations that provide day-care and residential services comparable to those provided at Potomac Center to individuals who may or may not be Center residents. As the private providers may offer complementary services that are not available at the Potomac Center, residents of the Center may go to a private facility for day-care services. The private provider agencies are almost fully funded by State funds, under agreements that specifically include money for hiring consultants to provide training to employees. The Employee's private work would thus be funded from these MRDDA sources.

Though he notes that his State facility and the private provider facility may serve the same patient population, the Employee indicates that he would not see or be directly involved with private provider clients; his outside consultant duties would involve the facility's employees only. He also states that he does not have duties at the Potomac Center that bring him into contact with or involve the private providers, as his State duties are confined to the Potomac Center setting. He does indicate, however, that, though he is not on the interdisciplinary teams that make referrals of clients for private day-care services, his duties as Program Director may involve supervision of persons who are on the teams.

The issue raised by this request is application of the outside employment provisions of §3-103(a) of the Public Ethics Law (Article 40A, §3-103(a), Annotated Code of Maryland, the Ethics Law). Subsection (a)(1)(i) of this provision prohibits an official or employee from having an interest in or being employed by an entity that is under authority of or contracts with his agency. The private care providers are both regulated by and substantially funded by DHMH and MRDDA, and we believe that these entities, rather than the Center alone, must be viewed as the Employee's agency for purposes of §3-103(a)(1)(i). It is thus our conclusion that this section prohibits the Employee's proposed private activities on behalf of the private care providers. The issue, then, is whether the Ethics Commission's outside employment exception regulations would apply to allow this activity notwithstanding its coverage by the technical criteria of subsection (a)(1)(i). See COMAR 19A.02.01 (9:15 Md. R. 1517 (July 23, 1982)).

These regulations, which became effective on August 2, 1982, were developed pursuant to introductory language in §3-103(a), which provides that the prohibitions of subsection (a)(1) apply "except 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." This exception provision was added to the Ethics Law in 1981 partly based on the recommendation of the Commission that flexibility be added to the absolute prohibitions in §3-103(a), to avoid situations where a violation would result from purely technical application of the elements of §3-103(a) even where there is no conflicting relationship between the private interest or employment and official duties. In developing exception criteria implementing the employment portion of this provision, we sought to define the circumstances where the relationship between an employee's official duties and private employment are so remote that the possibility of a conflict of interest or the appearance of conflict is unlikely.

If all of these regulatory standards of remoteness are met then employment would be allowable, despite the existence of authority or contractual links between an individual's State and private employers. The criteria include findings that:

A. The State duties do not significantly impact on the outside employer or a contract between the outside employer and the agency.

B. The employee is not directly supervised by a person whose duties significantly impact on the outside employer or a contract between the outside employer and the agency.

C. The employee does not supervise a person whose duties significantly impact the outside employer or a contract between the outside employer and the agency.

D. The employee is not affiliated with the specific unit in the agency that exercises authority over or contracts with the outside employer.

E. The employee has complied with other relevant sections of the Ethics Law.

F. The outside employment involves no non-ministerial duties significantly relating to the agency's authority over the employer.

G. The employee's duties do not involve negotiating or carrying out a contract between the agency and the outside employer (except for broad fixed reimbursement contracts).

H. The private compensation is not directly funded by the State contract.

I. The specific employment circumstances do not otherwise create a conflict of interest or the appearance of a conflict.

In some instances (items B, C, D and F) even where a problem is raised under the criterion, the outside activity may be allowed, if the Head of the employee's agency determines that the proposed private activity would not result in a conflict or appearance of conflict that would impair the credibility of the agency, and the Commission concurs with that view. Also, some of the exception criteria deal with relationships between official and private activities that are closer than others. For example, item A requires a finding that the individual's State duties do not significantly impact on the private employer, and item H deals with the issue of whether the private compensation is directly funded by a contract with the individual's State agency.

In reviewing the proposed outside activity presented in this request, we believe that it raises, at a minimum, issues under both items A and H. First, the Employee, as a supervising program director, works with other Center personnel who are responsible for decisions to refer Center patients to private care providers; he would also generally be involved in programmatic decisions that would impact the program of care for patients, including decisions regarding use of private care. Second, as most private care providers are fully funded by MRDDA (with training funds specifically included), the Employee's compensation would be directly funded by the contract with his agency, thus presenting a problem under item H of the criteria.1

Item I further requires a finding that the specific employment circumstances presented in a particular request do not otherwise create a conflict of interest or the appearance of conflict. We have not, however, applied this criterion to the Employee's situation, as we believe that resort to items A and H fully disposes of this request, and that the exception criteria cannot, as a consequence, be applied to establish that the proposed activity is remote from the Employee's State job or to rule out the likelihood of a conflict of interest or appearance of conflict. We therefore conclude that the prohibitions of §3-103(a) apply to bar the employment by the Employee with private care providers as proposed.

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

Date: September 22, 1982


1 We do not here address the application of this item if payment were to be arranged from some private source of funds for the private care provider. Though this was suggested it was purely speculative, and we believe it should be addressed in an appropriate, actual, fact situation.