An opinion has been requested as to whether an employee of the Institutional Advancement Division (IA) at the University of Maryland at College Park (UMCP) may, through a solely-owned private company, enter into a contract with the Athletic Department at UMCP.
The Employee is the media supervisor in the Creative Services unit of the Office of Institutional Advancement. According to the Vice Chancellor for Institutional Advancement, he does all film, electronic, video and slide work for projects within the responsibility of the Creative Services unit. Most of his work is within regular work hours of 8:30 A.M. to 4:30 P.M. and his primary skill is video. The Vice Chancellor says that, in addition to general public relations work, the unit does fee work for other units within the University, including public relations consulting type services. Institutional Advancement does not, however, directly work with the Athletic Department in generating materials such as highlight and recruiting films. The Vice Chancellor indicates that the unit does the 60-second spot about the University which is used by networks at half-time of televised sports events, but describes this as a piece designed to promote the University generally, done independently of the Athletic Department.
According to this official, IA has never competed for Athletic Department work, such as the highlight films, and the Employee has never been assigned to undertake activities relating to athletics in connection with his IA duties. He is generally known around campus as IA's video expert, however. Also, the Vice Chancellor indicates that he could be assigned to do shots of sports events if IA wanted athletics pictures for its general public relations program. Apparently if these types of shots were needed, IA would generate the copy itself, though it could request copies of materials from the Athletic Department. Additionally, if the Athletic Department had a dispute over the quality of a film vendor's product it might look to the Employee as the University's expert to provide it evaluative advice.
The products at issue here are highlight films of UMCP basketball and football games. The films are shot from the press box and used for recruitment and general public relations regarding these teams. These films have in the past been acquired on an informal basis, but, according to the Acting Associate Athletic Director, given the anticipated contract value (in excess of $25,000), a formal competitive bidding process was instituted for the football highlight film to be shot during the 1986 Fall season. A Request for Proposals (RFP) was published in the summer of 1986, and apparently the response to the RFP was good, with several proposals received from reputable entities coming within the University's expected price range. The contract would be executed by the University's Athletic Director, as the Athletic Department has procurement authority independent of the University's main campus.
The Employee is the owner and operator of Motionmedia, Inc., an entity incorporated in the State of Maryland to direct and produce motion pictures and videos and to provide related services to the advertising, motion picture, and other industries. The request submitted on behalf of the Employee states that he originally sought film-making business with the Athletic Department, and through the informal process then in place, was awarded the contract for the basketball highlights film. He states that he has never had any dealings with the Athletic Department or its procurement activities through his official position in Institutional Advancement. This highlight film work with the University's Athletic Department is described as representing the dominant amount of his private entity's business.
As to this past activity, the Athletic Department spokesman indicates that the Employee did "a very good job," and submitted a "first-rate product at a reasonable price." Part of this could be attributable to his presence on campus, and his feel for and commitment to the University. According to the legal office attached to the Chancellor's office, when the final voucher for payment on the Spring contract came in, a question was raised in the Chancellor's office about ethics concerns of a University employee contracting with the University. In the meantime, the Employee had talked to the football coach about doing the football film, and submitted an informal written proposal. When the Department decided to follow the formal procurement process, he was originally included among those to receive a bid package. Based on advice from the Chancellor's office, however, his firm was deleted from the list.
Though most of the university staff involved here point to the significant autonomy and separate funding of the Athletic Department as factors in this situation, they also recognize that Institutional Affairs does public relations for the whole College Park campus, including the Athletic Department. For example, Athletic Department personnel indicate that IA is involved in coordinating with the Department when athletic events tie in with general University public relations (examples are Parents Day at football games and Homecoming). This view is also taken by the University Vice President for Administration (and the designated ethics contact). He points to the recent public relations matters arising from the death of a student athlete, and the role played by IA in this issue, which arose out of Athletic Department activities and programs. This official's initial reaction to the situation was that it should probably not be allowed. The Athletic Department may be a largely autonomous unit of the University, he says, but IA is not autonomous from the Athletic Department.
Section 3-103(a)(1)(i) of the Public Ethics Law (Article 40A, §3-103(a)(1)(i), Annotated Code of Maryland, the Ethics Law) prohibits an official or employee from being employed by or having a financial interest in an entity that contracts with his agency. This request presents issues under the exception regulations to these outside employment and financial interest prohibitions. The Employee is the sole owner of and provider of services to an incorporated business with which he would therefore have both an employment and interest relationship. Given the anticipated size of this contract alone, it is likely that the value of his interest or income to be received from it exceeds the $1,000 threshold to be a financial interest. (See definition of financial interest, §1-201(m) of the Ethics Law.) The business would be contracting directly with a unit within the University. As we have generally said that the whole University is the agency for purposes of §3-103(a)(1)(i) (see our Opinions No. 83-1 and No. 82-35), the interest and employment prohibitions of §3-103(a)(1)(i) must be applied here unless an exception can be allowed.
In reviewing application of the exception provision, we do not believe that the establishment by the Employee's business of contractual relationships with the University as proposed can be allowed under the criteria developed by us pursuant to statutory exception language set forth in §3-103(a). Basically, this language allows exception from the prohibition in accordance with Commission regulations, where the relationship would not result in a conflict of interest or appearance of conflict. Our regulations are published at COMAR 19A.02.01 (outside employment exception) and 19A.02.02 (financial interest exception). Their approach is to set forth general guidance criteria for assuring that an outside employment or interest relationship is so remote from the individual's agency activities and official duties that the possibility of a conflict or appearance thereof is remote.
The criteria include, for example, consideration of possible impact by the employee on his outside employer or interest, and also the relationship of the employee to supervisors, other employees, or the unit of his agency that impact on his outside employer or interest. Given the nature of the Employee's past duties, the fact that IA does not appear to have authority over the Athletic Department's purchase of these film services, and the historical absence of IA involvement in this aspect of the Department's activities, we do not find a current direct relationship between the Employee's official duties and his outside activities.
The regulatory criteria, however, also include a provision for consideration of the nature of the individual's private duties in relationship to his State agency, providing, for example (in COMAR 19A.02.01.03F and 19A.02.02.03G), that the employee's outside employment or financial interest should involve no substantive non-ministerial duties significantly relating to the entity's contractual dealings with the employee's agency. Also, in 19A.02.02.03I of the criteria regarding financial interests, exception is not allowed where the State contracts with the entity exceed 20% of its annual income, or 1/3 of its capitalized value, or a dollar value at or above $5,000. Also in the employment exception criteria at 19A.02.01.03H, exception is disallowed where private compensation to an employee is directly from the State contract.
In our view, issues are presented under several of these items dealing with the nature of the Employee's responsibilities in the private activity. As the sole owner and operator of Motionmedia, he does have responsibility for negotiating and implementing the contract, its value exceeds the limit of $5,000, and the University contracts represent most of the entity's business. Also, he would be directly compensated through the contract. We note, also, in considering the general circumstances of this situation, that the Employee is known on campus as an IA employee and would be at athletic events doing the same kind of thing he does as an employee. Also, the Athletic Department spokesman says that part of his appeal is his being a part of the campus.
Under all of these circumstances, we are unable to conclude that the relationships between the Employee's private activity and his agency are sufficiently remote to meet the statutory criteria that there is not a conflict of interest or appearance of conflict. This conclusion is consistent with other Opinions dealing with application of the §3-103(a)(1)(i) prohibition and its exceptions. For example, in our Opinion No. 82-8 we found that the Law prohibited a situation involving an individual's convenient availability to market services to his agency. In fact, the Commission's consistent view has been that employees may not have private businesses that provide services or products directly to their own agencies. We therefore advise the Employee that the contractual relationship proposed by him with the University would be inconsistent with §3-103(a)(1)(i) of the Ethics Law, and that the exception regulations may not be applied to overcome this bar.
Thomas D. Washburne, Chairman
Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: November 6, 1986