85.13

OPINION NO. 85-13

A hearing examiner at the Public Service Commission (PSC) has requested an opinion as to whether he may serve as an elected member of the Baltimore County Council.

The Public Service Commission is established in Article 78, Annotated Code of Maryland. It has regulatory authority over all public utilities and similar entities in the State. It has jurisdiction, for example, over gas and electric companies, telephone companies, radio common carriers, taxicab companies (in four jurisdictions, including Baltimore County), private water and sewer companies, telegraph companies, intrastate bus services and courier services. It issues certificates of convenience and necessity, establishes rates and routes, and hears customer complaints as to matters such as billing disputes and service termination.

The PSC consists of five full-time Commissioners appointed by the Governor for a five-year term. All final decision authority is vested in the Commission. The law and PSC procedures, however, provide for significant adjudication activities to be done by hearing examiners. The Hearing Examiner Division includes eight examiners who constitute a separate organizational unit reporting directly to the Commission. A particular case will be delegated to an examiner by the Commission and the Chief Hearing Examiner. The case is heard in its entirety by the examiner. The parties to the proceedings usually include a representative of the Office of Peoples Counsel, the Commission Staff Counsel, and the applicant (or complainant and respondent), also usually represented by counsel.

Factual evidence, including expert testimony, is presented at the hearing. Very often expert testimony is pre-filed and the hearing consists of cross-examination. Oral argument may be presented and briefs filed. A hearing may last from one to ten days. The Hearing Examiner presides over the hearing, ruling on motions, admission of evidence and other procedural aspects of the case. The Hearing Examiner prepares and files a written proposed order, which becomes the final order unless it is appealed within thirty days. If the order is appealed, the Commission reviews it based on the record; it does not take additional testimony. The Commission may adopt or modify the order, or refer it back to the Hearing Examiner for the taking of additional evidence.

The Requestor is a PSC hearing examiner who wants to run for a seat on the Baltimore County Council. The position is a part-time position carrying a compensation of $20,000 per year, plus a vehicle for official business. Baltimore County is a charter county organized pursuant to Article 25A, Annotated Code of Maryland. It has an elected County Council and County Executive. The Council has budget authority and zoning authority, and otherwise these two entities appear to reflect the traditional split between legislative and executive functions. According to the Requestor and the PSC's Chief Hearing Examiner, the County does not appear as a party in matters before the Commission, even though it could be impacted by decisions as a purchaser of gas, electric and telephone service. Both of these individuals believe that potential conflict can be resolved by assuring that the Requestor is not assigned cases that would impact on Baltimore County. They do not believe that this would present an operational problem, since there are seven other hearing examiners. Also, apparently the more controversial and substantial rate cases involving Baltimore Gas and Electric and C&P Telephone are often heard by the PSC itself rather than a hearing examiner.

The PSC Chairman, however, has expressed some concern about the appearance of conflict, primarily because elective office calls for particular loyalties and responsiveness to constituents, who could potentially be impacted by PSC decisions. He points out that a person making rate decisions can make himself very popular or unpopular with constituents who are impacted by the decisions. There is also apparently a more generalized concern by the PSC that though the Requestor could apparently be insulated from matters that would impact Baltimore County constituents, this could present an administrative problem if more than one hearing examiner were to take a local elected office. There is also concern that the public would not necessarily be aware of steps taken to disqualify him from these matters, and his service in a local elected office could be viewed a politization of the PSC. The PSC as a body has not taken a formal position on the request.

The Ethics Commission considered the Requestor's inquiry concerning political candidacy informally, and he was advised of prior Opinions that have found the Public Ethics Law does not bar an employee from running for office (No. 80-2) or from serving in Maryland General Assembly (No. 82-34).1 The question presented in this Opinion, then, is whether his service on the County Council, if he is elected, would be an employment relationship barred by §3-103(a) of the Public Ethics Law (Article 40A, §3-103(a), Annotated Code of Maryland, the Ethics Law). This section bars employment with an entity that contracts with or is under the authority of an individual's agency (subsection (a)(1)(i)), and also prohibits any other employment relationship that would impair his impartiality or independence of judgment (subsection (a)(1)(ii)). Though State agencies are excluded from the concept of "entity" in subsection (a)(1)(i), we have generally treated local governments as entities where employment could come within the bar of this provision (Opinion No. 84-2). There does not, however, appear to be any authority or contractual relationship here that would bring employment with Baltimore County within this strict prohibition.

The second provision in §3-103(a), however, is more general, and we have viewed it as intended to apply as an inconsistent employment provision in situations where the strictly defined relationships are not present. The provision has been applied where the circumstances raise clear and serious concerns about the individual's ability to carry out his State duties impartially. In the situation here, the Requestor's duties as a hearing examiner with the State's utilities regulator could possibly impact on Baltimore County as a customer of a utility, and also on individual citizens in the County who would be his constituents. The question in our view is whether these relationships bring this employment within the inconsistent employment bar, as a general matter, or whether a conflict could be avoided by assurances that he would not be assigned cases that would impact directly on Baltimore County or its citizens.

The Public Service Commission is a very sensitive agency in State government. It has substantial economic authority over very significant business interests that impact on all of the State's citizens. The Requestor's proposed outside employment would be with a large and complex governmental entity. Though part-time, the position involves significant political and policy-making responsibilities, and carries with it a salary in the $20,000 per year range. Moreover, his constituents in this position could be individuals impacted by decisions of his agency. We recognize that the Requestor and his supervisor believe he can avoid assignments involving the entities likely to be of concern to Baltimore County and his constituents. However, we believe that evaluation of a person's duties under §3-103(a)(1)(ii) must be of the duties and responsibilities likely and expected to devolve upon him in the normal course of his agency's operations. The entities whose cases the Requestor would have to avoid would seem to represent a significant part of the agency's workload, and we do not believe that an agency should be put to the chore of reorganizing its program and operations in such a substantial way in order to accommodate private activities of its employees. As noted above, the PSC itself has recognized that concerns could be raised if other hearing examiners were to undertake such activities.

Also, given the nature of these two employers, and the two positions that the Requestor would hold, we believe that this situation creates appearances of conflict that are addressed in §1-201 of the Ethics Law and intended to be avoided through application of §3-103(a) and other provisions of the Law. Disqualification from particular matters by the Requestor, no matter how carefully applied, is unlikely to be known to the public, and his relationship to the County could be relied upon by parties to the agency's controversial matters to question the credibility of agency decisions. Also, constituents who are aware of the Requestor's PSC position could be expected to call upon him for assistance in their grievances with either the agency or regulated utilities. The pressure for him to be responsive in these situations is likely to be strong, raising possible issues under the Law's provisions barring the private use of prestige of office (§3-104) and use of confidential information (§3-107).

The potential for concern under these provisions of the law has generally not been viewed by us as a basis for absolutely prohibiting a private relationship, and we have always looked carefully to a person's duties in applying the inconsistent employment bar of §3-103(a)(1)(ii). However, we believe that the inherent nature of these entities and the Requestor's proposed elective position presents the type of impairment against which these provisions were intended to guard. We therefore advise the Requestor that his service on the Baltimore County Council would be prohibited by the inconsistent employment provision of §3-103(a)(1)(ii) of the Law and raise serious issues under other provisions.

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

Date: August 5, 1985

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1 It should be noted that the Opinion in No. 82-34 particularly reflected our view of the relationship between the executive and legislative branches as this is addressed in the Ethics Law.