An advisory opinion request has been received concerning whether the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) prohibits a member of the board of trustees for a community college from being affiliated in law practice with a private attorney providing services to his Board.
This matter was presented to us by the Chairman of the State Board for Community Colleges, an entity that has general Statewide responsibility for community colleges, establishing overall policies for their operation. (Education Article, §16-104, Annotated Code of Maryland.) The State Board, however, does not exercise direct control over particular community college boards or the operations or programs of the colleges. Local boards are appointed by the Governor and are fully authorized (under Education Article, §16-203) to hire and fix the salaries of college personnel, acquire and manage college property, apply for and accept grants and gifts, and to sue and be sued. The local board also establishes and implements all educational programs and procedures within the college, subject to minimum State Board standards.
The Chairman's inquiry to the Commission originally dealt with the circumstances presented by a particular individual who was serving as a member of a local board. The individual was also affiliated with a private attorney who was hired under contract to his board to serve as its legal counsel. Subsequent to our consideration of this request, but before a final decision was made, the individual resigned his board position, citing his wish to avoid the appearance of conflict of interest. We have therefore not made any specific determination as to whether this particular situation would or would not be prohibited by the Ethics Law. The Chairman's request does raise some general questions, however, and we believe that persons serving on or considering service on a local board should be made aware of potential application of the Ethics Law to their private affiliations and activities. This Opinion is therefore being issued to provide general future guidance to members of local boards that are professionals affiliated with a partnership practice or professional association.
While the Ethics Law includes several provisions that regulate the conduct of State employees and officials,1 we believe that the provisions of particular importance here are the prohibitions set forth in §§3-103(a) and 3-105. Section 3-103(a)(1) prohibits an official or employee from being employed by or having a financial interest in an entity that is under his or his agency's authority or that has or is negotiating a contract with his agency (subsection (a)(1)(i)), or from having any other employment that would impair his impartiality or independence of judgment (subsection (a)(1)(ii)). An official or employee is also prohibited under §3-105 from being employed by an entity that contracts with the State (for an amount in excess of $1,000), if his duties and responsibilities involve matters significantly relating to the subject matter of the contract.
We have consistently held that community colleges are executive agencies in State government,2 and that their employees and members of their boards are subject to the conflict of interest and other provisions of the Ethics Law. We have also on several occasions considered private affiliations with professional practices, organized either as partnerships or professional associations. We have concluded, for example, that a partnership is a business entity, as that term is broadly defined in §1-201(d) of the Law and used in §3-103(a) (see Opinions No. 80-23 and No. 80-19); that being a partner constitutes holding an ownership interest in an entity (Opinion No. 80-19); and that relationships with a medical professional association and law practice organized as a professional association resulted in both employment and interest relationships subject to §3-103(a) of the Law (Opinions No. 80-6 and No. 80-3, respectively). p
Our Opinions have also dealt specifically with situations where a private practice entity was involved in contractual relationships with an individual's agency. Opinion No. 80-3, for example, involved a member of the Maryland Industrial Development Financing Authority (MIDFA) who was an attorney affiliated with a private law practice organized as a professional association. We concluded that negotiations of financing arrangements by members of his firm on behalf of MIDFA applicants constituted negotiation of a contract, and that the individual's private practice therefore involved employment and interest relationships that were forbidden by §3-103(a). Also, in our Opinion No. 80-6, we considered the relationship of a physician to a professional medical association that proposed to enter into a contract to provide medical services for the facility of which the physician was superintendent. We found that this relationship with an entity over which the physician would have such significant official responsibility was the very type of situation intended to be addressed by §3-103(a).
Based on all of these interpretations, which reflect our analysis of the Ethics Law as well as principles developed by the Board of Ethics (our predecessor agency), it is our opinion that a member of a local community college board who is an attorney or other professional may not be affiliated, as a partner, as a member of a professional association, or as an employee of a private practice that contracts to provide services to his Board. We believe that these affiliations would present concerns very similar to those presented in our Opinion No. 80-6. The local community college boards have significant policy and operational authority and responsibilities for management of the college. In addition to responsibility for negotiating and executing the contract for legal and other professional services, the boards have continuing responsibility for the conduct of their college's affairs, which may involve review, evaluation and action on matters being handled by the contracting entity. In our view this type of involvement brings a board member's affiliation with the private practice squarely within the prohibition of §3-103(a) of the Law, and could also raise substantial issues under §3-105.3
Further, as a general matter, we do not believe that disqualification from participation in specific matters is sufficient to overcome the bar established in §3-103(a). We have in the past viewed the §3-101 disqualification provision and the §3-103(a) employment and interest restrictions as separate provisions addressing different concerns as to the conduct and activities of officials of the State (see Opinions No. 80-3 and No. 83-1). We have therefore not generally accepted disqualification as a "cure" for violations under §3-103(a). Moreover, given the substantial nature of a local board's authority, it is not clear to us that disqualification would necessarily be a practical solution. Nor do we believe, as a general matter, that the exception established in §3-103(a) adopts this approach. This exception provision was intended to allow flexibility to avoid technical application of a prohibition where there is no conflict of interest or appearance of conflict. Our regulations implementing this exception (COMAR 19A.02.01 and 19A.02.02) were not drafter to be a series of purely technical criteria that could be avoided by disqualification, but as indicators by which to measure actual or potential conflicts of interest.
We believe that this approach is especially appropriate in view of the purposes of the Law, set forth in §1-102, to assure the public of the impartiality of public officials, recognizing that the public may not be in a position to know or understand how reorganization of duties or nonparticipation actually serves to avoid a conflict or appearance thereof. Thus, while we recognize that there may in the future be particular or unique circumstances where the exception criteria of §3-103(a) may be applied, our general guidance to members of local community college boards is that they may not engage in professional practice as an employee, partner, or formal associate of a firm or individual that contracts to provide legal services to their board.4
Herbert J. Belgrad, Chairman
Jervis S. Finney
Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: September 28, 1983
1 See §§3-101 (non-participation), 3-103(c) (contingent representation), 3-104 (use of prestige), 3-106 (solicitation and acceptance of gifts), and 3-107 (misuse of confidential information).
2 See for example, our Opinions No. 81-10, No. 80-21 and No. 80-9. Unless otherwise specifically cited to the Maryland Register, citations are to Commission Opinions published in COMAR Title 19A.
3 While there may be some circumstances under which outside practice with a person or firm not specifically contracting with a local board would be a violation of the inconsistent employment provision of §3-103(a)(1)(ii), we do not deal with that situation here. This Opinion is to provide general future guidance for individuals whose affiliation is with a private entity that provides contractual services to a board.
4 New or prospective board appointees should be aware of the appointee exemption set forth in §3-103(a)(2)(iii) of the Law. This exemption may be applied, however, only as to conflicting interests or employment held at the time of appointment, and fully disclosed in connection with the appointment to the appointing authority, the Ethics Commission, and (if required) to the Senate. (See our Opinions No. 82-35, No. 81-39 and No. 81-38.)