An opinion has been requested concerning the extent to which the provisions of the Public Ethics Law (Article 40A, Annotated Code of Maryland) could impact on potential future outside employment or business activities of a county State's Attorney. This individual does not have a specific activity immediately planned. He indicates, however, that as a new official he would like to have guidelines to follow in determining whether outside activities would be appropriate. We advise the official that for the reasons discussed below the Ethics Law could possibly limit outside activities, but that the extent and nature of the impact, if any, would depend upon the specific facts relating to the particular activity.
This request is presented by the State's Attorney for one of the State's metropolitan counties. He was elected to this Office in 1986, and prior to this had been engaged in the private practice of law. The Requestor indicates that while in private practice he organized several corporations and worked in putting together several ventures involved in real estate development in the County. In connection with this work he undertook to serve on the Board of Directors or otherwise as an officer of some entities, and also became a stockholder in some. The projects included activities relating to civil legal matters, such as seeking development projects, applying for zoning, and seeking public or other financing for such projects.
The Office of the State's Attorney is established in Article V of the Maryland Constitution, which provides for an attorney for the State in each county and Baltimore City, who is to perform the duties and receive the compensation prescribed by the General Assembly. Article 10, §34, Annotated Code of Maryland provides that the "State's Attorney for each county and the City of Baltimore shall, in each county or city, prosecute and defend, on the part of the State, all cases in which the State may be interested, subject to the provisions of *the State Prosecutor law*." The section regarding the Requestor's particular county further provides that the State's Attorney may not, during his term of office, "engage in the private practice of law in any matter whatsoever." Under this mandate, the Requestor indicates, the State's Attorney is responsible for prosecuting all crime in the county, and has wide discretion to prosecute and investigate crimes.
This view of the Office's responsibilities is confirmed in Sinclair v. State, a leading Court of Appeals case dealing with a conflict of interest of a State's Attorney. The court in this case indicates that this "office, which exists by virtue of the Maryland Constitution, is of great significance as, regarding criminal prosecutions, its occupant is vested with much of the sovereign power of the State.... It is clear that state's attorneys in this State have very wide and largely unreviewable discretion as to whether or not to pursue the prosecution of criminal offenses." Quoting from another case, the court notes that the State's Attorney's "decision is controlling and he is accountable for it to no one other than the electorate." 278 Md. 243, 252-3 (1976). The subject matter that could come within the prosecuting authority of the State's Attorney is thus extremely broad. Prosecutions that could involve businesses or their officers include conspiracy, embezzling, credit card offenses, a variety of frauds, corporate misrepresentation, and bad checks.
The Requestor indicates that he has discontinued his outside business activities but would like to have guidelines so that he could evaluate employment or business activities that he may want to consider in the future. He is not in a position to provide details as to the nature or scope of the possible activities, but gives as examples (based on his past experience) such activities as real estate development and board service with financial institutions. In responding to requests for opinions under §2-104 of the Ethics Law, we generally provide advice only in response to relatively specific fact situations where it is possible to identify potential applications of the Law. In this case, because there are no existing opinions addressing the general issues that may face a State's Attorney, we believe an opinion would be appropriate. Since this request here is so very generally stated, we cannot provide specific advice, but we can give some general guidance as to the issues that must be considered under the Ethics Law regarding possible private activities by the Requestor and other State's Attorneys.
The primary issue of concern would be the prohibition in §3-103(a)(1)(i), which bars an official from being employed by or having a financial interest in an entity that is subject to his or his agency's authority or that has contractual dealings with the agency. This provision would apply if the Requestor holds a partnership interest or holds stock or other economic interests that meets or exceeds the Law's $1000 financial interest criteria. (See §1-201(m).) It would apply if he provides services to an entity that constitute employment. Moreover, we have said in prior Opinions that service on the board of directors of an entity constitutes an employment relationship even if there is no compensation.1 Thus the Requestor's service on a board or in a similar capacity, as well as his employment with or holding of a covered interest, would be within this proscription if the entity meets the authority or contract criteria.
In applying the authority criteria, it is possible, given the breadth of the authority of the State's Attorney, that any business or economic enterprise could potentially at some point in time be under the authority of his agency. In a similar situation involving the Property Tax Assessment Appeals Board (Opinion No. 80-19) we advised that the fact that any property could potentially be within the Board's jurisdiction did not mean that all property ownership for investment purposes was forbidden. The Administrator of the PTAB was advised that he could be involved with real property investment as long as the property was not the subject of an appeal before the Board.
The question here is whether this type of approach could be appropriately applied to this situation given the substantial discretion in and real sensitivity of the position held by the State's Attorney. This is particularly a problem given the fact that the State's Attorney's discretion extends to determinations not to prosecute as well as to affirmative actions. If an enforcement matter were to arise involving an entity with which he was affiliated, even if he disqualified himself and assigned the case to a subordinate, he would continue to be ultimately responsible for his Office's actions in the matter.
We recognize that at the time an investment or other decision is made it may not be possible to predict whether and at what point a particular entity would fall within the required authority or contractual relationship. The Requestor would need to be aware of the activities of the Office and develop a system for identifying when an agency action results in a prohibited relationship. We understand that this represents a significant burden. However, regardless of the difficulty in precisely identifying when agency action would trigger a prohibited relationship, it is clear to us that as a general matter once an entity with which he is affiliated is an identified target of investigation, is officially charged, or undertakes contractual dealings with the Office, then his affiliation with it as an officer, owner or employee would be barred by §3-103(a)(1)(i) and should be terminated.
The above case-by-case approach to applying the strict prohibition of §3-103(a)(1)(i) in accordance with the principles of Opinion No. 80-19 would apply to affiliations with entities that do not, in the general course of business and day-to-day activities, come within the obvious authority of the State's Attorney's Office. A broader approach would be applied to employment relationships (including interest relationships that involve the provision of services) with entities that interact more regularly with the Office, under the impairment provision in §3-103(a)(1)(ii). This section prohibits the Requestor, in addition to the strict prohibitions of subsection (a)(1)(i), from having any other employment relationship that would impair his impartiality or independence of judgment, either in his prosecutorial or administrative capacity.
In our view, given the breadth of authority of the State's Attorney, and the fact that his discretion includes the ability to decide not to proceed with regard to a particular matter, this prohibition would apply to bar employment with entities that interact on any regular basis with the State's Attorney's Office, even if that interaction does not result as a technical matter in direct authority or contractual dealings. This could apply, for example, to partnership affiliations with individuals that have frequent contacts with the State's Attorney's Office, or to affiliations with a business that frequently wants action to be taken by the Office. For example, as the Requestor indicates that bad check cases are frequent, service on a financial institution board should be avoided, if the institution would have any continuing likelihood of bringing these types of matters to the Office of the State's Attorney.
The Requestor should also be aware of other provisions of the Law that do not bar relationships, but that restrict actions of an official in connection with official duties to avoid conflicts or appearances of conflict between State duties and private financial endeavors. For example, §3-107 of the Law prohibits officials from using information acquired confidentially through their State position for their own private gain or that of another. Section 3-101 of the Law would prohibit participation in any matter that involves as party an entity with which the official has a variety of business relationships in addition to ownership or employment (such as contractual or creditor relationships). Also relevant, of course, is the general purpose language in §1-102 of the Law, which indicates that the goal is to avoid conduct on the part of officials and employees that would result in a conflict or even the appearance of a conflict.2
We do not believe that the Ethics Law flatly prohibits employment or interest affiliations as to any or all categories of business enterprise by incumbents in the State's Attorney's Office. We do, however, advise that great care should be taken to evaluate the specific circumstances of any potential private affiliation, taking into account the principles discussed above, and recognizing that to a considerable extent the type of affiliation allowed would be based on the likelihood of enforcement involvement with the State's Attorney's Office.
State's Attorneys should therefore, before undertaking any investment or affiliation, carefully evaluate the work of the Office, and refrain from an activity if it involves an entity or activity that is involved or likely to be involved with the Office's caseload. The Requestor should also realize that, given the breadth of his Office's authority and the extent his discretion as the elected officeholder, he needs to make a particular effort to be aware of the nature and scope of the activities of any entity with which he affiliates, in order to properly apply the principles we have discussed here, and to limit the possibility that some situation could compromise the Office's ability to carry out its statutory and constitutional mandate.
M. Peter Moser, Chairman
William J. Evans
*Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: December 1, 1987
* Rev. John Wesley Holland was a member of the Commission and participated in the consideration and decision regarding this request. He died prior to formal issuance of the Opinion.
1 See, for example, Opinions No. 87-1, No. 86-16, No. 84-23, and No. 80-4.
2 Note that the limitation in §3-104 against the use of one's prestige of office for private gain does not apply to elected constitutional officers such as State's Attorneys.