An opinion has been requested concerning whether and to what extent the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) impacts on affiliations and activities of the Dean of the University of Maryland Dental School (the Requestor or the Dean) with private entities that may be involved in Dental School activities and procurements.
The Requestor has been the Dean of the University of Maryland Dental School (the Dental School) since July 1975.As Dean, he is the chief executive and administrative officer of the School and reports directly to the Chancellor of the University of Maryland at Baltimore (UMAB). His duties include responsibility to develop and implement a planning system for the School; to ensure the establishment, implementation and monitoring of a comprehensive School-wide system to evaluate the School's mission and goals, programs of education, research and service; to represent the Dental School on policy-making bodies of the campus; and to review and approve all grant and contract applications prior to submission to appropriate campus offices. The Dean also advises the Chancellor and has authority as a policy-maker with regard to specifications for and negotiation of contracts involving his School.
This opinion request grows out of plans by the Dental School for renovation of the Dental School building and the purchase of new dental equipment, and the Requestor's previous professional dealings with one of the prospective bidders, the J. Morita Corporation, one of the world's largest manufacturers of dental equipment. This corporation has dealings with the Human Performance Institute, an entity organized by an American dentist who has spent his professional life in Japan and has designed a simulator for the teaching of dental students. The Institute conducts research on dental practices, equipment and drugs, and also operates several dental clinics in Japan. The J. Morita Corporation is at this time the sole manufacturer of the simulator, the basic approach of which is to apply the use of performance logic in teaching dental students.
The Dean indicates that as Dean he frequently receives calls from alumni, manufacturers' representatives and others with ideas about the teaching of dentistry and the testing and evaluation of dental equipment. Additionally, his duties and responsibilities as Dean include a constant review of the mission of the Dental School and an evaluation of its teaching capabilities. First introduced to the dental simulator by an alumnus, the Dean met with the developer and became interested in its use as a teaching tool. When the J. Morita Corporation offered a gift of the simulator to the School for the purposes of evaluating it as a dental education tool, the School agreed to accept the gift with conditions which included training conducted by the Human Performance Institute in Japan. The School was to provide the necessary renovation and related equipment (which involved an investment of approximately $150,000) and assign faculty to research the use of the simulator.
The Agreement under which Morita provided ten simulators and related equipment to the School also called for the Dental School to use the simulators and equipment as part of the School's educational program for four years and to provide Morita with periodic reports on the equipment. The American affiliate of the Human Performance Institute was to assist the Dental School in the design of the facilities and physical placement of the equipment, and also to participate in the evaluation of the equipment. The Dean describes his involvement in the Agreement as to go to Japan along with the Senior Associate Dean to receive the training on the simulator from its developer at the Human Performance Institute. The University paid for his airfare, but while he was in Japan the Human Performance Institute paid for his accommodations. Also, the J. Morita Corporation may have paid for some of his travel and housing expenses in Japan, since he visited Morita's manufacturing plant while he was there.
The Dean has also been involved with the World Health Organization (WHO, a United Nations Organization) on its expert panel to review and evaluate on its behalf the development of the third world alternative dental health care program that included the use of the simulator. The Dean believes he was asked to serve on the panel because the Dental School was one of two schools in North America to use the simulator and the human performance technology, and was in fact officially identified by WHO as a collaborating center and world headquarters for the study of human performance in dentistry. The Dean indicates that when he travels for WHO that agency provides the airline tickets and a per diem for living expenses. In summarizing the Dean's relationship with these entities, he indicates that he has never received any other compensation for any of his activities related to the J. Morita Corporation, the Human Performance Institute or the WHO. He also states that he has no financial interest in J. Morita Corporation or the Human Performance Institute and does not serve on any of their boards or committees.
The issue presented here was raised because the School is considering replacing all the dental equipment at the School, including the equipment in the 200-plus chair public clinic operated as a teaching situation for the students. The current equipment used in the School and the clinic was purchased in 1970, and according to the Dean, the philosophy for delivery of dental care has changed since 1970. The modern training involves the use of dental assistants (e.g. "the four hands method") with the patient in a supine position. According to the Dean, extensive renovation is required to the clinics because of this approach. Given the need for compatibility of the pre-clinic training tools with the clinic equipment, additional simulators may be part of the equipment purchase because they are thought to provide students with a setting similar to working on patients in the clinics.
This procurement process began in March 1983 with a review committee that communicated with eight major equipment manufacturers, including J. Morita. The manufacturers were informed of this potential equipment purchase and invited to attend an initial briefing and tour the School's facility. Three of the largest dental equipment manufacturers, including J. Morita, attended these sessions. Apparently these companies were aware of the Dental School activity in the design and specifications of dental equipment using simulators and performance logic, and its work with the Human Performance Institute. According to the Dean, they each apparently viewed the project as a challenge and as an opportunity to work with the School in the potential design of revolutionary new dental equipment which could greatly facilitate the delivery of dental care. The three manufacturers have been involved during the subsequent years in development and refinement of the general specifications. The Dean believes that specifications can be developed that will permit the submission of bids from several suppliers.
After the first committee completed its work and submitted a report, a smaller committee made up of faculty and administrators was appointed to develop precise specifications for each type of equipment necessary for the Dental School. This committee's role was to make more detailed recommendations that would be further considered within the Dental School and the UMAB campus administration. Budget requests are then submitted to the Chancellor's Office and prioritized and put in a package for UMAB. The entire campus budget is presented to the Central Administration for the University of Maryland in College Park, a University-wide list of priorities is established by the Board of Regents, and the complete budget submitted to the Governor's Office and ultimately to the Legislature.
If the Dental School's request is included in the State Budget it would then be competitively bid through the normal UMAB procurement process. The specifications, however, would initially be provided through the Dental School and the administration of the Dental School would be involved in the bid and selection process. The Legal Assistant in the Chancellor's office has expressed the University's expectation the by the time the request is approved and bid, there would be manufacturers other than J. Morita prepared to bid on the simulator portion of the request. She has also advised that the procurement section of UMAB would probably resist any attempt to purchase the equipment on a sole source basis, and also said that the nature of the University system (with tenured faculty participating on the committees) helps to insure an independent review.
We have also received the views of the University's Vice President for General Administration and of the UMAB Chancellor. The Vice President expressed his view that the Dean did not have an employment relationship with the J. Morita Corporation of the other entities, and that the general contacts with Morita were the type of professional activities encouraged by the University. He advised that the Deans of professional schools are encouraged by the administration to seek out such grants and gifts for the University. The Vice President expressed the view that the Dean had built in adequate safeguards in the review and procurement process to prevent it from being biased. The UMAB Chancellor has also described the Dean's past activities as within his duties and consistent with University policy.
As this situation is described to us, we do not believe that it would be prohibited by the Ethics Law. A preliminary consideration here is whether any of the Dean's activities constituted outside employment to which §3-103(a) of the Law may apply. Section 3-103(a)(1)(i) bars employees and officials from being employed by or having an interest in an entity that is under the authority of or has contractual relationships with their agency. Section 3-103(a)(1)(ii) bars employees and officials from having outside employment which impairs the impartiality and independence of judgment of the official or employee. We have consistently said that service on the operational board or committee of a private entity, even when it is not compensated, constitutes an employment relationship for the purposes of the §3-103(a) employment provisions of the Ethics Law. However, in this situation we do not believe that any of the Dean's activities with the J. Morita Corporation, the Human Performance Institute, and the World Health Organization involve his private employment with any of these entities, either directly or through service on a board or other involvement.
This is because the Dean's sole involvement with these entities appears to have been in his official capacity as Dean, in negotiating with J. Morita Corporation and the Human Performance Institute to receive a gift of dental equipment from Morita, and in the training and design consideration regarding the use of the Morita equipment. He has received no compensation from either entity. Also, his relationship with the WHO was in his capacity as Dean, given the School's selection by WHO as a Collaborating Center for the Study of Human Performance in Dentistry. In our view, none of these activities resulted in private employment with J. Morita, the Institute or the WHO.
We do, however, believe that this situation suggests a need for the University to have more specific written guidelines regarding travel expenses. We have in several prior Opinions dealt with issues where employees engaged in official activities with entities that had contractual relationships with their agency. (See, for example, our Opinions No. 80-5, No. 82-28, No. 83-33, and No. 85-26.) In each of these we advised that no compensation could be provided, and that all expenses and travel should be completely within applicable agency and State regulations and procedures.
Given the significance of this relationship and the potential procurement, we recommend that the agency take care to include in the written agreements any provisions for the company's payment of travel or other expenses. School officials should ensure that travel is approved and compensated through the University travel procedures, and that direct payments are not made to the Dean or other employees traveling pursuant to the arrangements between the University and J. Morita, the Institute or WHO.1
Since we view the Dean's activities with these entities as part of his official duties, we also do not believe that any of the other Ethics Law provisions apply here, as a technical matter, to the facts as presented. These include: 1) the §3-101 bar against participation in matters where one has an interest or which involve as a party an entity with which one has certain business relationships, 2) the §3-104 prohibition against the use of the prestige of one's office for one's own economic benefit or that of another, and 3) the restriction in §3-107 against the use of official information for private economic gain. All of these could present issues or appearance questions where a high-level official participates in competitive procurement actions that involve private entities with which he must deal on a regular operational basis. These problems can be addressed in part by ensuring that the individual's official dealings continue to be on an "arm's length" basis, and do not lead to private economic relationships. As long as this is done, the situation would not appear to result in application of these provisions of the Ethics Law. The University may, of course, wish to take some of the considerations addressed by these provisions into account in evaluating whether as a policy matter the Dean should play any major role in future procurement of this equipment.
Thomas D. Washburne, Chairman
Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: December 10, 1986
1 We wish to advise, however, that even where these arrangements are in place, great care and consideration should be undertaken in the procurement setting. Unless bid documents call for provisions of travel and other expenses by bidders, officials involved in procurement actions should not be receiving such benefits from bidders or potential bidders in agency contract actions. See our Opinion No. 81-46 for an example of a situation where acceptance of travel expenses was not allowed.