82.55

OPINION NO. 82-55

An advisory opinion request has been presented concerning whether an employee of the Regional Planning Council (RPC) may engage in private consulting activities with the Central Maryland Health Systems Agency (CMHSA).

The Employee is a Planner IV with the Economic Research and Information Systems Division of the RPC. His skills are in data processing and analysis; he indicates that his job involves creation of demographic and economic data estimates for internal RPC use, provision of socioeconomic data to the public upon request, and provision of technical assistance to local member jurisdictions' planning staffs and functional agencies. The RPC is a planning agency covering Baltimore City and Anne Arundel, Baltimore, Carroll, Harford, and Howard Counties, and is described in the Maryland Manual as "in effect a council of local governments with State participation." (1981-82, pp. 272-3.) The RPC was established by Act of the Legislature and its authority and responsibilities set forth in Article 78D, Annotated Code of Maryland. It is composed of 23 members representing the respective counties, several State agencies and four members appointed by the governor.

The RPC responsibilities include preparation and adoption of a suggested general development plan, which may be adopted by any unit of government within the area; conducting research and studies; providing advice and recommended standards to units in the area; and developing recommended capital improvement methods. Any development in the area affecting more than one unit must be reviewed by the Council, the unit agency or body responsible for the proposed development may proceed without RPC approval. The Council also does substantial work with census data for the area, and is described by its Executive Director as the central repository in the region for this population information.

The Employee proposes to engage in outside employment providing data processing services to the CMHSA, a health planning agency covering the same geographical area as the RPC. The CMHSA is a private nonprofit entity established pursuant to the Health-General Article, §19-110, Annotated Code of Maryland, and in implementation of the Federal National Health Planning and Resources Act of 1974 (42 U.S.C. §3001). Under this Federal law, health systems agencies develop health systems plans and annual implementation plans, and review and approve certain proposed uses of Federal funds in the region. The agencies also carry out advisory functions to the State Health Planning and Development Agency regarding conformance of hospitals and related institutions to the comprehensive health plan, certificates of need, and review of new institutional health services. See COMAR 10.24.01.

According to CMHSA personnel, the Employee's services to it would involve his use of hard copy census information as well as other health information, loading specific data elements selected by CMHSA to develop a computer data base. The entity, apparently due to fund cutbacks, has no data processing division or capability. CMHSA staff indicate that there is currently no public entity working with health information specifically required by the local health systems agencies. Only general demographic, socioeconomic and population information is acquired by CMHSA from the RPC from the materials it makes available to the public. The entity staff has had some informal information dealings with the Employee, asking him questions about demographic data generally made available through RPC, and has also had occasion to deal with him at meetings. The CMHSA staff member is aware of his computer expertise and says he has been recommended to her by several sources. The Employee states that he would be doing the work on his own computer.

The Executive Director of RPC and the Employee's immediate supervisor have both expressed reservations about this proposed outside employment. CMSHA is described as a spin-off from the RPC, established in response to the Federal Law's preclusion of the RPC as a health planning agency. The CMHSA is a formal part of RPC's population committee based on its need for population information managed by the RPC. The Executive Director indicates that in recognition of the need for coordinating planning functions, a mutual benefit agreement between the two entities was developed several years ago. The agreement involved coordination of Federal A-95 clearances,1 as well as a clause regarding RPC performance of statistical work for CMHSA. Work was apparently never done under this provision since CMHSA had its own data processing capability. RPC personnel view the inclusion of their comments in the Federal grant review process as establishing a binding obligation to coordinate data activities, though it is not clear whether a formal contractual agreement between the parties is in effect.

The Executive Director has thus expressed his concerns over the Employee's doing this work, since it is conceivably the type of data activity that would be done by the RPC under contract. Providing these types of contractual services for both public and private entities is a source of RPC revenue used to maintain its program. The Executive Director is not aware of any request from CMHSA to RPC to do this type of work. CMHSA staff indicated, however, that the entity is extremely short of funds for this type of effort, and that the request to the Employee is based on the view that other sources for this service would be out of their range of affordability.

This request raises issues under the outside employment provisions of §3-103(a)(1) of the Public Ethics Law (Article 40A, §3-103(a)(1), Annotated Code of Maryland, the Ethics Law). This section prohibits an employee from having a financial interest in or being employed by an entity that is under the authority of or contracts with his agency (subsection (a)(1)(i)), or from having any other employment relationship that would impair an individual's impartiality or independence of judgment (subsection (a)(1)(ii)). RPC "authority" over CMHSA appears to be limited to required advice and comment in connection with Federal A-95 clearance review. Also, the status of the mutual benefit agreement is unclear. Though the agency personnel believe that the CMHSA Federal grant documents result in a requirement that the entity come to RPC for its data work, the information presented was insufficient to clarify whether this actually constitutes a contract between the Employee's agency and his proposed outside employer for purposes of §3-103(a)(1)(i).

However, we do not believe that it is necessary for us to resolve these questions regarding the precise legal relationships of these two entities, as it is our view that the very existence of these issues brings this situation squarely within the inconsistent employment prohibition of subsection (a)(1)(ii) of §3-103. This provision was added to the Ethics Law in 1981 in part based on our recommendation to the Legislature that authority was needed to deal with situations that present a conflict of interest but do not involve the technical contractual or authority relationships of subsection (a)(1)(i). We have considered the provision several times and have generally viewed it narrowly, evaluating whether a relationship between official duties and outside activities raised clear and serious concerns about the employee's ability to impartially perform his State duties. (See our Opinions No. 82-37 and No. 82-21, and Opinions cited therein.)

We believe that the circumstances presented by the Employee bring his proposed activities within the proscription of §3-103(a)(1)(ii). Whatever the official contractual or authority relationship between RPC and CMHSA, there is plainly some interaction, based on CMHSA's participation on the RPC population committee and the intentions and views expressed in connection with the Federal grant review process. Officials of the RPC, the Employee's State supervisors, appear to be convinced that the agency should be the CMHSA's primary source for this type of service. The data and the nature of the work involved are the same or related, and the Employee would be a likely person to do the work for RPC if a request were presented to it by CMHSA. Thus we believe that for the Employee to compete with his agency to provide these types of services would be inconsistent with the Ethics Law.

We wish to clarify that we do not conclude that all entities requiring this service, and who could request it from RPC, need necessarily be barred as potential private clients for the Employee. However, where there is a clear pre-existing affiliation and other official connection between the State agency, the Employee's duties, and the private employers as set forth here, we believe that the relationship between official duties and outside activities raises the types of concerns intended to be addressed by subsection (a)(1)(ii). We therefore advise the employee that his provision of services to the CMHSA as described in his request would be a violation of the inconsistent employment provisions of §3-103(a)(1)(ii) of the Ethics Law.2

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

Date: December 15, 1982

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1 OMB Circular A-95 establishes a process for coordinating review by various planning and other agencies involved in federally-funded projects.

2 We specifically do not comment on the application of subsections (a)(1)(i) and (a)(1)(ii) if the RPC were to refuse to do CMHSA work or to otherwise disassociate itself from the entity, as our communications with the RPC have drawn such a strong statement of concern from the agency staff regarding this situation.