85.06

OPINION NO. 85-6

The Department of Public Safety and Correctional Services (DPSC) has inquired as to whether a correctional classification counselor employed at a Maryland correctional facility (the Employee) may have a private business as a bail bondsman.

This request was presented by the General Counsel of DPSC on behalf of the Department. The request involves an individual who works at the correctional facility (the Facility) as a classification counselor. Basically, the Employee's duties in the Facility involve her working directly with inmates, providing counseling regarding the functioning of individuals within the correctional system. She may advise inmates and otherwise participate in official decisions regarding the level of their security placement in the facility, their work assignment, and family or other leave. She may be involved in parole decisions and "establish contacts with outside social and legal agencies when needed in an inmate's case." According to the General Counsel and the warden of the Facility, the Employee in her duties has access to significant amounts of information from FBI and State criminal justice information systems. Her responsibilities apparently also include testifying in federal and State courts regarding escape cases and inmate suits, as well as before the State's Inmate Grievance Commission.

The Employee's private activity involves her ownership and management of a bail bond business that bears her name. The entity was incorporated in the State of Maryland. The Employee is an incorporator and member of the Board of Directors, and is listed as the entity's resident agent. Basically, bail is an amount of money deposited with a criminal court where a defendant is temporarily released pending trial, the money to be returned on the appearance of the bailed person at trial. A bail bond is a form of insurance where a surety undertakes to produce the accused or forfeit a fixed sum of money. Rule 4-217 of the Maryland Rules defines a surety as "a person other than the defendant who, by executing a bail bond, guarantees the appearance of the defendant." A surety may be compensated or uncompensated. A surety insurer means "any person in the business of becoming, either directly or through an authorized agent, a surety on a bail bond for compensation." The Employee's bail business is licensed by the State Insurance Commissioner, and authorized to write bonds through a private surety company.

The Employee is the sole stockholder of the business. In addition to her corporate and ownership affiliations with it, she also performs administrative duties, including preparing reports for the Insurance Commissioner and the private insurance agency. According to the Employee, her daughter is the manager of the business, and the person involved in the day-to-day operation of the business. The Employee indicates she may write some bonds during her evening and off hours, but she states that this does not bring her into direct contact with the bailee, as the bondsman's concern is with the financial status of the indemnitor, and his collateral and ability to pay if the defendant fails to appear for trial. Though some investigation may be required to produce the defendant if he fails to appear, the Employee's business is not licensed as a detective agency. The firm hires a bounty hunter to find the defendant in order to avoid having to pay the amount due under the bond. According to the Maryland State Police Licensing Division, bail bondsmen are not generally licensed as detective agencies.

The Employee has both an employment and interest relationship with her bail bond business.1 Section 3-103(a)(1) of the Public Ethics Law (Article 40A, §3-103(a)(1), Annotated Code of Maryland, the Ethics Law) prohibits an employee or official from being employed by or having an interest in an entity that is under the authority of or contracts 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)). The Employee's relationship with her bond business would therefore be covered by §3-103(a)(1) if the entity had regulatory or contractual relationships with her agency, or if her employment relationship with it were viewed as impairment of her impartiality or independence of judgment. The entity's primary interface appears to be with the court system or with the Insurance Commissioner, and it does not contract with DPSC. The firm apparently does not engage in investigative activities that would require licensing by the Maryland State Police, though it may have activities in detention facilities that are regulated by DPSC.

It is not clear whether this situation would come within the strictly worded prohibition of §3-103(a)(1)(i). In our view this issue need not be resolved, however, as we believe disposition of this inquiry can be based solely on application of the more general inconsistent employment provision of §3-103(a)(1)(ii). We have viewed this provision as a complement to the strict contractual and authority provisions of subsection (a)(1)(i), designed specifically to deal with situations where these relationships do not exist, but where the total circumstances present relationships between State and private activities that raise real concerns about the ability of an employee to carry out his State duties impartially. In this situation there appear to be few direct relationships between the business and the agency. However, the Employee in her State position has very sensitive duties involving a client population that is in and out of the criminal justice system and thus could very well be also involved in her private business activity. It would be possible that inmates, parolees, or probationers (all under the continuing authority of DPSC) could be customers of the bail bond company.

Moreover, the Employee indicates that the business of a bail bondsman is developed primarily by word of mouth. This particular circumstance raises issues under another provision of the Law, §3-104, which prohibits an official or employee from using the prestige of his office for his own benefit or that of another. We believe that the situation presented here is similar to that presented in our Opinion No. 84-22, involving employees of the Clerk of the Court who anticipated they would establish private process service businesses through "word of mouth." Here, as there, it is difficult to visualize how the "word of mouth" within a population that overlaps significantly with her agency population would not include identification of her official position "on the inside" as a significant factor. This will be especially true as her business develops and more of the individuals she has bonded work their way through the criminal justice system to a correctional facility.

This situation also presents issues under other provisions of the Law that could be of concern in view of this overlap in clientele between the Employee's private and DPSC duties. For example, the §3-101 participation provisions could be at issue if she were to be involved with inmates who had been her bond clients. Issues could also arise under §3-107, given her access to significant non-public information that could be relevant to bonding decisions. These provisions and the limitations of §§3-103(a)(1)(ii) and 3-104 are specific limitations in implementation of the express legislative finding in §1-201(b) of the Ethics Law that the conduct of the State's business should not be "subject to improper influence or even the appearance of improper influence." In interpreting these provisions, we have not generally applied the Law's conflict of interest provisions to absolutely bar activities merely because some potential abuse was possible in a particular situation. We believe, however, that this request presents the type of situation where real conflict of interest concerns are raised that could be held by reasonable members of the public as contemplated in §1-201(b) of the Law.

The Employee here fills a sensitive and important position that involves her personal interaction with a population of individuals within the correctional system that could very well also have been served by her bond business. As she bonds more and more individuals over a period of years, it will become increasingly difficult for her to perform her official duties without encountering individuals or relatives with whom she has had private bond dealings. Monitoring of this situation, either by her or her agency, to avoid conflicts of interest will be extremely difficult, given the fluid nature of this population. Under all of these circumstances, we believe that continued maintenance of her private business would be inconsistent with the impairment provisions of §3-103(a)(1)(ii) and the prestige provision of §3-104, and would also present significant issues under other provisions of the Law. At our consideration of this request, the Employee indicated that she would surrender her license and discontinue writing bonds. We agree that she should terminate or sell the business entirely, and should do this within 90 days of Commission action on this request. The business, if sold, should not carry her name and she should provide the Commission with documentation of this action as soon as it is complete.

Herbert J. Belgrad, Chairman
   Reverend John Wesley Holland
   Betty B. Nelson
   Barbara M. Steckel
   Thomas D. Washburne

Date: June 19, 1985

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1 See our Opinions No. 84-22, No. 84-14, No. 84-12, No. 83-34, and No. 83-28 for examples of Opinions dealing with relationships of individuals to sole proprietorship business entities.