An advisory opinion has been requested as to whether a veterinarian in the Department of Agriculture (DAGR) may establish a private laboratory to provide lab testing services to veterinarians. We advise the Requestor that establishment of a laboratory as described by him would not violate the Public Ethics Law, as long as he conforms its operations to ethics requirements and he does not provide services to veterinarians operating within the geographical area of the DAGR unit to which he is assigned.
The Requestor is a Veterinarian III (Laboratory Option) who is head of a laboratory in the Animal Health Section of the Department of Agriculture's Office of Animal Health and Consumer Services. The laboratories in DAGR are established in implementation of the Department's mandate to protect the health of domestic animals in the State from all contagious or infectious diseases. (Agriculture Article, §3-101, Annotated Code of Maryland.) More particularly, the Animal Health Section's responsibility is to control and eradicate livestock and poultry diseases that could result in economic danger to the producers, and that, because of their transmissibility to humans, present a hazard to the human population. The DAGR laboratories make disease diagnoses based on samples or animals submitted; they do various lab tests; and they perform autopsies.
The Requestor maintains that there is a distinction in veterinary activities between large and small animal practices, with very few mixed practices where a vet would be dealing with both large animals and with small animals. Most of the labs' work involves large animals. Requests for lab tests must be presented to the lab by a veterinarian. The labs do not accept test specimens or animals directly from the owner. Reports, however, would be transmitted to both the owner and the veterinarian. There are a few tests (for example, for equine fever) which must be done by a DAGR Animal Health Lab or a private lab specially certified and inspected by DAGR.
As to small animals, the Requestor indicates that even though the basic chemistry and biology of these activities is similar for the different classes of animal, the machines generally must be set up and calibrated differently in order to test the same condition in different animals. Moreover, small animals are tested for some things (distemper, for example) that do not occur in large animals. Nevertheless, the State Veterinarian indicates that though the agency's major thrust is in farm animals, the Department does do testing for small animal veterinarians. A fee is charged for the service which tends to be lower than at a private lab facility. During 1986, the Department provided testing for approximately 4,200 dogs and cats, and 309,000 cattle, horses, poultry and swine.
This request involves the Requestor's interest in establishing a private lab in his home that would provide testing services to veterinarians treating small animals. He says that his plan would involve the major investment in the primary piece of testing machinery (est. cost of $50,000--$60,000) and hiring of a technician to do the testing. He would be the supervisor and manager, working evenings and week-ends. The machinery involved accepts a sample, processes the test and produces a computer print-out of the results. The Requestor would need to monitor the machinery and keep it properly calibrated for the appropriate tests.
The private lab work proposed by the Requestor would be marketed solely to veterinarians serving the small animal population and would not be marketed under his name. He would market by mail both in Maryland and surrounding states, using a list available through the state veterinary medicine associations. These lists, including that of the Maryland Association, identify whether a practice serves small or large animals, and the Requestor would market only to those serving small animals. This type of lab service, he says, can be and usually is done by mail. He says he would not be involved in actually diagnosing or treating an animal. His report regarding the chemical or biological test results would be transmitted for use by the treating veterinarian.
The type of test lab contemplated by the Requestor is a general laboratory that is not subject to regulation or certification by the Department of Agriculture. Private labs are apparently regulated by DAGR only when they are doing official statutorily required tests. According to the Requestor, vets in small animal practices, who do not have general access to the DAGR lab system, usually have their lab work done at a general medical lab. This often involves mailing of samples to a variety of places anywhere in the United States, or to one of a few local large medical laboratories (licensed by the State Department of Health and Mental Hygiene) that has a veterinary section. The Requestor would not receive test samples from the large animal practitioners with whom he deals in his DAGR work. As noted, some of the large animal testing is required to be done by the State lab. Also, since the State lab testing is without charge, large animal veterinarians are unlikely to want to use a private fee charging lab.
This request raises issues under the financial interest and employment and prestige provisions of §3-103(a)(1) and 3-104 of the Public Ethics Law. Section 3-103(a)(1)(i) prohibits an official or employee from being employed by or having an interest in an entity that is under his authority or that of his agency, or that has or is seeking contracts with his agency. The Requestor would have a sole proprietorship business in which he would have both an employment and interest relationship. The lab, however, would not be contracting with DAGR, nor does it appear to be licensed by this agency. The State Veterinarian indicates that as long as the process involves only providing test results to veterinarians and not any actual diagnoses, it would not be covered by the Agriculture Article's definition of the practice of veterinary medicine. He says that the existing labs that currently service the small animal veterinary practices are licensed by DHMH and not viewed as within the jurisdiction of the Board of Veterinary Examiners.
We do not believe, under these circumstances, that the Requestor's private endeavor would have the kinds of relationships with his Department that would bring it within the strict prohibition of §3-103(a)(1)(i). We have some concerns, however, as to whether this activity would result in impairment addressed by the general provision of §3-103(a)(1)(ii). This section is a complement to the strict prohibition in subsection (a)(1)(i); it bars any other employment that would impair the individual's impartiality or independence of judgment in carrying out his State duties. In considering application of this provision, we have sought to determine whether there are relationships between the private activity and State duties that present conflict concerns despite the absence of contractual dealings and regulatory authority. The question has also been whether the individual has public duties that would be expected to be impacted by the existence of the private employment. Generally consideration of these kinds of situations has focused on the following criteria:
1) that the activity was out-of-State or in a different geographic jurisdiction than the employee's agency or duties;
2) that it involved a subject matter or direction different from the employee's duties;
3) that it was not the type of undertaking that the person might be expected to do as part of State duties; and
4) that it did not involve individuals or matters with which the person would be interacting or impacting in his State job.
Our concern here is that the Requestor would be marketing his services to Maryland veterinarians who are regulated by his Department, and who could be using the services of his State Lab, although this appears to be limited activity. Also, he would be performing laboratory tests that are, at least to some extent, similar to those he performs for the State. He could in some circumstances be viewed as competing with his State agency, but at a higher cost to the animal owner. We note also, however, that the Department's small animal work, though it exists, does not represent the major bulk of its laboratory activities. The State lab does not handle a significant amount of the lab work done for small animal veterinarians in the State, nor, apparently, it is interested in expanding this activity.
The State Veterinarian has expressed some concern about appearance of conflict here, given the similarity in the type of work anticipated in the Requestor's private and official activities, and the fact that the Requestor is known to veterinarians in the State through his official position. He recognizes, however, that the Requestor would not be doing any tests regulated by the Department and that he would therefore be unlikely ever to be in a situation where Departmental regulation would be required. It also appears that the State lab does not make referrals to labs, keep lists of available private laboratories or otherwise assist veterinarians or owners in acquiring lab services.
In reviewing these circumstances against the impairment criteria set forth above, we think that operating this type of business without some constraints would present conflicts and appearances of conflict intended to be prevented under the Ethics Law. This is particularly true because of the potential for marketing to some in-State veterinarians with whom the Requestor could interact in his State job, and the similarity of activities. While we believe that this could result in some appearance issues, however, we do not find that the population overlap or the similarity in activities is sufficient to warrant a finding of impairment of impartiality, provided that the Requestor excludes from his private lab work Maryland veterinarians within the geographical area served by the laboratory unit to which he is assigned. In our view this approach would allow him to avoid interactive dealings with veterinarians served by both his private and State labs, and would minimize the potential for appearance of conflict.
We have also considered issues presented by the Requestor regarding the prestige provision of §3-104 of the Law. This section prohibits employees from using the prestige of their State position for their own economic gain or that of another. We have generally said that this provision applies to prevent acceptance of fees for activities that would normally be part of State duties or that otherwise flow directly or immediately from a State position. We have also said, however, that more than common subject matter is necessary to support a finding of intentional use of prestige. In considering application of this provision to the Requestor's proposed activity, we conclude that his private lab, if operated as he proposes, would not bring him within this provision.
The Requestor indicates that he would not be marketing himself as a person or referencing his State position or duties, and that he has substantial graduate work and non-State experience that qualify him for his private work. Moreover, he would anticipate establishing his lab under a business name that would not refer to him in any way. He also indicates that he would not be doing any private work using State time or materials, or receiving any referrals from his agency. He would have a private employee to handle all the day-time inquiries and work and would be investing in his own equipment. Given these assurances, we do not believe that the Requestor's private business would involve improper use of his State position as contemplated in §3-104 of the Law.
In summarizing, we advise the Requestor and his Department that his proposed private lab would not come within the strict prohibition of §3-103(a)(1)(i) as long as it continues not to require DAGR certification or licensing. Nor, to the extent that he operates consistently with the standards of this Opinion, and avoids interaction with private veterinarians within the geographical area served by his State lab, would his activity be viewed as likely to impair his impartiality or independence of judgment in violation of §3-103(a)(1)(ii). Also, we do not believe that his private work would come within the proscription of §3-104 of the Law, as long as he markets his services and operates his Lab in the manner described.
Barbara M. Steckel, Chairman
William J. Evans
Reverend John Wesley Holland
M. Peter Moser
Betty B. Nelson
Date: May 14, 1987