88.10

OPINION NO. 88-10

An advisory opinion has been requested concerning whether an instructional employee at the Juvenile Services Administration's (JSA) Maryland Youth Residence Center (the Center) may have a private business with a former employee marketing educational/psychological and other consulting services to State and local government, private industry, private agencies, and individuals in the State.1 Based on the information available regarding the employee's duties and his proposed private activity, we advise that the activity would be allowable, within certain limitations regarding its dealings with JSA in particular and within Maryland generally.

The JSA is charged with the responsibility for managing the State's provision of services to delinquent children and children in need of supervision. The Maryland Youth Residence Center in Baltimore City has approximately 20 residential students (with a maximum capacity of 35) that are under Juvenile Services' care as a result of a court referral. The students are boys between the ages of 8 and 14. The Director indicates that the facility functions very like a group home with an expected six to nine month stay. Though some boys may be there longer, the intention is that the Center not be a long-term answer to a particular boy's problems. Most residents would return home or be placed elsewhere within the anticipated period of the program.

The Employee recently began a new position with the Center. Though his duties have not yet been specifically defined, his supervisor, the Center's Director, indicates that he will be filling a newly-created position as a classroom teacher. There are currently two teachers, who focus on academic subjects. The Employee will probably be setting up a third classroom as an alternative class. Students will be pulled from the academic classes for testing, writing, pre-vocational or arts and crafts activities, possibly directed at developing skills for return to the public school.

The Employee has requested an opinion regarding a private consulting business which he and a former employee have organized and through which they plan to market a variety of services. Though the specifics of the entity's activities are still not firm, the Employee indicates that they will write grant proposals; they have copyrighted a proposed Youth Services Bureau (YSB); they will write a proposal for or set up a group home, they will provide vocational, educational and psychological testing and evaluation services; and they would develop testing programs for industries. He indicates that they would plan to subcontract some of the services. In addition to non-Maryland entities, individuals, schools and private businesses, their potential clients include youth services providers in Maryland and also the JSA itself.

This request presents issues under the outside employment and interest prohibitions of §3-103(a) of the Public Ethics Law, as well as the prestige provisions of §3-104 (Article 40A, §§3-103(a) and 3-104, Annotated Code of Maryland, the Ethics Law). Subsection (a)(1)(i) of §3-103(a) bars employees from being employed by or having an interest in an entity that contracts with or is subject to the authority of their agency. The consulting business proposed here involves to some extent the same kinds of activities in which the Employee and his agency are engaged: education, testing, training, and youth services. In our view the sale of these services directly to JSA would come within the strict prohibition of §3-103(a)(1)(i), and would be barred unless an exception is allowed pursuant to proviso language in this section and Commission implementing regulations (COMAR 19A.02).

In view of the very general description of the activities in which the business would engage, we are not in a position to advise the Employee specifically as to application of the exception. As a general matter, however, we have not permitted affiliation with private consulting or other businesses that contract directly with an individual's State agency. Also, in a long line of cases involving employees of the Developmental Disability Administration's residential facilities, we have not permitted consulting or other employment relationships with agency grantees and providers (see, for example, Opinion No. 85-20), and have prohibited affiliations with entities that are required to be certified or monitored by the agency (Opinion No. 85-21) or that serve the same population as the agency (Opinion No. 87-16). Also, in this situation, the Employee's agency has advised that it believes there would be an appearance problem if its employees were permitted to provide services under the agency's programs.

It is also our view that provision of services to private provider entities or others that are JSA contractors or grantees would be barred by the Ethics Law. Depending on the circumstances of the situation these relationships could be viewed as employment with the entity and be prohibited by the strict limitation of §3-103(a)(1)(i). Moreover, general consulting activities such as those anticipated by the Employee, though they have been allowed in the past, have been subject to the general limitations established pursuant to the inconsistent employment provisions of §3-103(a)(1)(ii) and the prestige provisions of §3-104. These sections prohibit officials from having any private employment that would impair their impartiality or independence of judgment, and also from using the prestige of their office for their own gain or that of another.

These provisions were applied and interpreted in a series of Opinions during 1986 that involved a variety of types of consulting activities. They include No. 85-18, where a group of employees with the Maryland State Lottery wanted to provide lottery consulting services to other States with which they interacted on their State jobs; No. 86-14, where an amusement ride safety inspector provided inspection services in other States; and No. 86-18, presented by the Executive Director of the Interagency Committee on School Construction, who wanted to do consulting in the school facility field with private architects or other entities. These Opinions considered factors such as geographic location of the private work, the relationship of the subject matter and the private entity to the employee's agency and duties, whether any of the individuals or matters were ones with which the person would be interacting or impacting in his State job, how the employment was acquired or business under it was expected to be generated, and whether the outside activity involved efforts directly arising as a result of work performance, contracts or relationships that were connected with State responsibilities.

Applying these principles to the Employee's situation, we advise that his consulting activities would be allowable, but only if they exclude dealings in Maryland, or elsewhere, with entities that are JSA grantees or providers or that could otherwise be impacted by the agency's programmatic activities. For example, the firm's work is described as including a plan for a Youth Services Bureau, as well as activities relating to group homes. The JSA has significant grantee and regulatory responsibilities relating to these types of private entities, and the interaction with private entities providing services in these areas would be expected to increase as the agency implements its new approach to community-based services. Also, the Employee's duties as a classroom teacher could bring him into contact with students that could eventually be referred to a YSB or private group home with which he could be affiliated through his company's provision of services to the provider.

The agency has expressed concerns about the prospect of one of its employees having these kinds of private interests, and we agree. This is the type of work in Maryland which, even though not directly with his agency, would bring the Employee's private business within the proscription of §§3-103(a) and 3-104 of the Ethics Law. We therefore advise the Employee that this activity is allowable, as long as it does not involve entities in Maryland or elsewhere that are or would be expected to be involved in the juvenile services program administered by JSA.2 If a situation arises that would be prohibited by the advice in this Opinion, but the Employee believes an exception would be possible, the matter should be presented to the Commission for further review.

M. Peter Moser, Chairman
   William J. Evans
   Rev. C. Anthony Muse
   Betty B. Nelson
   Barbara M. Steckel

Date: May 4, 1988

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1This request was originally presented by two individuals who at the time of the request were employees of the JSA at the Montrose School for Boys. Montrose School has since closed, and one of the requestors left the agency and is no longer a State employee. This individual should be aware that his activities in the private business could be impacted by the application of the post-employment provisions of §3-103(b) of the Public Ethics Law, which prohibits a former employee from assisting a party other than the State in a matter involving the State in which he participated significantly while a State employee.

2 If the Employee terminates his JSA employment, he will be subject to the post-employment limitations of §3-103(b) of the Law, discussed in footnote 1 above.