85.19

OPINION NO. 85-19

The Department of Health and Mental Hygiene (DHMH or the Department) has requested an opinion concerning whether an individual (the Member) may be a member of the State Board of Morticians (the Board) while also serving as an officer in the Maryland State Funeral Directors Association. The Member was appointed in the Spring of 1985 to fill the unexpired term of an individual who had resigned from the Board. He is the owner of a Maryland funeral home, and is appointed as a mortician member of the Board. He also serves as an officer of the Maryland State Funeral Directors Association (the Association). The Board consists of twelve members, nine of which must be morticians or licensed funeral directors. The remaining three include consumer members and the Secretary of DHMH (or his designee), who serves ex officio. The primary responsibility of the Board is the examination and licensing of morticians and funeral directors, apprentices, and funeral establishments. It has all of the usual hearing and enforcement authority vested in licensing boards, including enforcement responsibility as to a significant number of substantive limitations on licensed activities. The Board also has authority over miscellaneous aspects of the funeral business, including partnerships, a school of mortuary science and pre-need contracts.

The law establishing the Board (Health Occupations Article, Title 6) provides that its members are to be appointed by the Governor, with the advice of the Secretary and the advice and consent of the Senate. The Funeral Directors Association may be involved in the appointment process, though it does not have a specific statutory role. The Member indicates that many of the professional members of the Board are in the Association, which has about three-hundred funeral director members. This represents about 38 percent of the State's licensed directors. There is another association (the Funeral Directors and Morticians Association) and many licensees are not affiliated with an association. Apparently, the Association does not make formal appearances before the Board or act as a party in matters pending before the Board. The Member indicates, however, that the Board and the Association have a good informal working relationship and have cooperated on matters involving legislative action. The Association has a paid professional lobbyist who is registered (during the Session) with the Ethics Commission as both a legislative and executive branch lobbyist.

At the time of his appointment to the Board, the Member was serving as an officer of the Association. He currently holds an office which, in the normal course of events, would lead to the presidency. He indicates that his current position with the Association does not involve any specific responsibilities. He was apparently not sponsored specifically by the Association. As indicated in background materials submitted and prepared in connection with his appointment, and noted by the Member, his affiliation with and service as an officer of the Association was known in the context of his appointment review. After his appointment he submitted an Appointee Exemption Disclosure Form, but did not disclose his position with the Association. The Member, however, believes that his Association work was known when he was appointed and is a positive aspect of his service on the Board.

After the Member's appointment, an issue was raised regarding his dual service. Agency staff are concerned that the situation presents ethics issues, based on a prior Ethics Commission Opinion (No. 84-17) as well as a recent report on the Board from the Anti-Trust Division of the Attorney General's Office. This report did not address the specific issue of service by Board members as officers of private associations. It did, however, evaluate potential anti-trust liability where there are significant ties between regulatory boards and private associations, especially where a regulatory board takes action that may be viewed as outside its statutory mandate. The report directed the Board to take substantial regulatory and legislative actions that are now in process. Recognizing that the statute calls for industry expertise, and that appointees are likely to be at least members of an industry association, agency personnel nevertheless believe that service as an officer or a board member in a private association could present a conflict. They note that the Association's role is to be an advocate for industry and are concerned that this may not always be necessarily consistent with the Board's role of representing the public.

We have generally considered service as an officer or board member with a private association to be an employment relationship for purposes 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). We considered this issue in a general way in connection with the same Board and Association in our Opinion No. 84-17, but concluded that §3-103(a)(1)(i) would not apply since the office was held not by the Member but by his spouse. In this case the office is held by the individual, and in our view is employment covered by §3-103(a). It would be prohibited by the subsection (a)(1)(i) strict prohibition against employment with an entity regulated by one's agency if the Association is found to be subject to the Board's authority.

The Board and the Association interact very closely on legislative and regulatory matters, but apparently the Association does not make formal appearances before the Board, and has not been involved with any formal disputes with the Board. In Opinion No. 84-17 we concluded that under these circumstances the Association would not generally be viewed as a "party" involved in a "matter" for purposes of the §3-101 non-participation provision. Considering the different circumstances of this request, we conclude that this does not result in an authority relationship for purposes of §3-103. Nor do we believe that the fact that the Association's members are regulated by the Board brings the Association itself under the Board's authority for purposes of §3-103(a).

We therefore conclude that the strictly defined prohibition of subsection (a)(1)(i) does not apply here. The employment prohibition issue is thus whether the more general impairment provision of subsection (a)(1)(ii) would make holding both positions by the Member unallowable. We have treated this provision as a complement to subsection (a)(1)(i), designed to apply where the more technical contractual or authority relationships do not exist, but where the situation presents clear and serious concerns as to the ability of the individual to carry out his official duties impartially. Agency personnel have expressed concerns about the member's ability to act impartially and in the public interest where he is an officer in an association whose primary function is to be an advocate for the industry, asserting that these interests are not always necessarily identical. In evaluating this situation, however, we note that the Board's enabling law seems to clearly contemplate that regulated industry members fulfill a significant role on the Board.

In reviewing this particular situation we do not believe that being an industry association officer entails any substantially different industry bias than is already built into the statutory framework, especially considering how the two entities interact now. The Member indicates that the Association works in cooperation with the Board and that conflicts do not arise between it and the Board. Also, the Association does not appear as a party or in formal presentations to the Board. Given the clear statutory intention that regulation of this industry be accomplished through a Board that is significantly reflective of industry members, we do not believe that service as an officer in the industry association would result in impairment that is intended to be addressed by §3-103(a)(1)(ii).

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

Date: October 23, 1985