An opinion has been requested as to whether a Program Director (the Employee) for Project H.E.L.P. in the Department of Human Resources (DHR) may serve on the House of Ruth Board of Directors, if the entity receives funding from another DHR program.
This request is presented by DHR counsel on behalf of the Employee, who serves in DHR's Social Services Administration as Director of the Project H. E.L.P. program. Project H.E.L.P. is a Statewide advocacy project on child abuse and neglect. It is not a direct service agency, but is an administrative staff support program. The Employee indicates that he does not work directly with clients; he works with local social services departments in program development, training, policy development, and identification of resource materials. His program is budgeted only in the DHR budget as personnel and administrative costs. There are no grant or other contract funds available through the Project.
The Employee has been asked to serve on the Board of Directors for the House of Ruth, which is a Baltimore City shelter for battered spouses and their children. He was approached, he says, because he is a personal friend of its past president. He states also that he does have qualifying experience; he has a Masters in Social Work and has worked in the field of domestic violence and child abuse for five years. The Employee's role on the Board would apparently involve a commitment of approximately 10 hours per month, reviewing and approving administrative decisions and doing committee work, including fund-raising. He would serve as a Board Member only and does not anticipate being its President. The House of Ruth is a private entity funded partly by a $54,000 purchase-of-service agreement with DHR. It provides a variety of services to adult abused women and their children, including shelter, 24-hour crisis intervention services, and counselling and support services at the shelter.
The House of Ruth's DHR grant is from the State's battered spouse program, which is a specific line item in the DHR budget. It is managed by the Director of the agency's Protective Services Division, who is also the Employee's immediate supervisor. The total State program is $187,000, which is allocated to qualifying applicants by a panel including the Division Director and others in DHR. (The Employee is not on the panel.) Applicants are evaluated based on program management, geographic need, services provided, community support, and program costs. Most applicants meet minimum requirements to receive some funding, which is then allocated based on the most important needs of the various entities. The final allocation decisions are made by the Secretary of DHR based on the panel's recommendation. Currently eleven entities are funded by the program. The House of Ruth grant from DHR ($54,000) represents under 25% of its total budget.
The Division Director indicates that the House of Ruth purchase-of-service agreement does not interface with Project H. E.L.P., except in that she is its DHR program manager and also the Employee's supervisor. She states that the private service providers (such as the House of Ruth) submit a line item budget detailing how the State funds are to be applied to program costs. Entities are accountable to the Department and provide monthly expenditure reports and quarterly program evaluation reports. The House of Ruth/DHR agreement is signed by the President of the entity's Board of Directors; otherwise the Division Director states that all of her contacts with it are through its Executive Director and other staff.
The Division Director does not believe that the Employee's service on the House of Ruth would present any problems for the program. She says there is little likelihood that there would ever be any direct relationship or program activity between it and the Project. She notes that the House of Ruth and other battered spouse programs do serve abused children who are with a battered parent in the shelter, and that occasionally written materials on child abuse problems developed or acquired through Project H.E.L.P. may be provided to the participants in the battered spouse program. These entities, including the House of Ruth, may also participate in symposia developed by the Employee in the child abuse area. The Director does not believe that these general contacts would impact on program content or funding. She states that even if an entity were to seek additional funding specifically to create or expand a child abuse service, Project H.E.L.P. would not be involved or impacted, since it is solely an administrative program with no grant or contract program funds.
This request requires our consideration of the outside employment provisions of §3-103(a)(1)(i) of the Public Ethics Law (Article 40A, §3-103(a)(1)(i), Annotated Code of Maryland, the Ethics Law), and application to these circumstances of our recently issued exception regulations.1 Section 3-103(a)(1)(i) bars an official or employee of the State from being employed by an entity that contracts with his agency. The House of Ruth/DHR purchase-of-service agreement is clearly with the Employee's agency. Also, consistent with several Commission opinions regarding individuals serving as noncompensated board members, his service on the entity's board of directors would be an employment relationship as contemplated by §3-103(a) of the Ethics Law. (See our Opinion No. 82-43 and other Opinions cited therein.) This activity would thus be prohibited by the §3-103(a)(1)(i) bar against employment with an entity that contracts with one's agency, unless it comes within the exception regulations authorized in the introduction to §3-103(a)(1). (COMAR 19A.02.01, 9:15 Md. R. 1517 (July 23, 1982).)
These exception regulations implement statutory language that allows otherwise prohibited employment "where such employment does not create a conflict of interest or the appearance of conflict. " The regulations list several criteria defining circumstances where a private activity is so remote from an agency program that a conflict or appearance of conflict is unlikely. Two of the criteria could raise issues in the circumstances present here. Item B addresses an employee's being directly supervised by a person who is responsible for the agency's contract with the private entity; and item D deals with the employee's assignment to the unit of his agency that manages the agency/private entity contract. The Employee's situation comes under both of these items, since he is in the Protective Services Division and is also directly supervised by the Division Director, who manages the DHR/House of Ruth agreement.
The exception regulations, however, provide that the employment may still be allowed, even if a stated relationship does exist, if the Head of the Employee's agency indicates that the employment would not impair the agency's credibility. Agency representatives participated in our consideration of this request and indicated that "we have reviewed *the Employee's* responsibilities as our employee and believe that there would be no conflict of interest and no appearance of conflict that would impair the credibility of the agency."
We have also evaluated this request in view of the other exception criteria, and we do not believe that the employee's service on the House of Ruth Board raises issues under these criteria.2 Based on this review and the agency comments, we conclude that the proposed activity may be excepted from the prohibition of §3-103(a)(1)(i), and that his service on the Board is allowable as proposed.
Herbert J. Belgrad, Chairman
Jervis S. Finney
Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: November 16, 1982
1 As Project H.E.L.P. does not appear to relate to the House of Ruth's program, there would appear to be little likelihood of a problem under the Ethics Law inconsistent employment provisions (§3-103(a)(1)(ii)) or the §3-101 disqualification provision. The Employee should, of course, be aware that he may not participate in any official DHR matter involving the House of Ruth, should such a situation arise.
2 The Employee should be aware, however, that two of the criteria (items F and G) deal with his substantive involvement, in his private capacity, with the agency private entity contract. He should therefore avoid duties on the Board that could be construed as involvement in carrying out the DHR purchase-of-care agreement with the House of Ruth.