An advisory opinion has been requested regarding whether a Department of Human Resources employee who is the Director of the agency's Legal Services Program may also serve as the Executive Director of the private Maryland Volunteer Lawyers Service (MVLS). We advise that this arrangement is allowable so long as it continues to operate without conflict and if the arrangement is approved by any State executive control agencies that would be concerned in this type of situation.
The Legal Services Program is located in the Department's Community Services Administration. One of its primary components is the Judicare Program. This is a legal services program funded by State funds under the Department's general statutory authority. Though it can operate in all jurisdictions in the State, by regulation it currently functions only in the 1012 primarily rural counties where there is no Legal Aid Office. Services are provided to clients meeting certain income guidelines which reflect those adopted by the National Legal Services Corporation. Clients need not currently be clients of the social services or welfare system.
Under the Judicare program a client who is found to be eligible by the local intake personnel takes his case to an attorney of his choice, who must agree to comply with the Judicare regulations and payment limits ($30 per hour and usually $500 per case). After the case is completed the billing is sent to a local approving authority for review. The local approving authority is an attorney in the county, designated by the local bar association, who reviews the fee requested to assure the appropriateness of the services provided and the hours involved and the fee requested. Recommendations at this level are made to the Legal Services Program which has the authority to approve payment. If the requested fee exceeds $500, then the matter is reviewed by the Judicare Committee of the State Bar Association, and a recommendation made to the Legal Services Program.
The final payment determination in the Judicare cases is made by the Requestor or a person supervised by him in the Legal Services Program. Requestor indicates that he reviews Judicare cases presenting particular policy issues, and handles administrative matters such as regulations drafting. He is also responsible for substantive direction of several other programs managed by the Office, including two legal services contracts, one with Legal Aid and one with the Maryland Disability Law Center. The Legal Aid contract involves the legal representation of children that are in the juvenile justice system as a result of neglect or abuse, (Children in Need of Assistance or CINA clients). These children are entitled to an attorney if one is determined to be required by the judge. The court can appoint any attorney and can establish the fees. The costs, including attorneys' fees, can be assigned to any party to the case, and since DHR is a party to all of these cases, costs are usually assigned to it. Though the court can appoint any attorney, the Department's contract with Legal Aid is designed to have attorneys available to handle these cases under an established fee arrangement with the Department. Legal Aid handles the cases for a defined flat sum and bills that amount against the contract. The contract is currently $1.5M and approximately 6000 cases are handled under it.
The Maryland Disability Law Center (MDLC) contract is currently for $.5M and involves 300350 cases per year. Most of MDLC's work involves adult guardianship cases where the local adult protective services unit in a DSS has filed a petition to be appointed guardian of an adult who is unable to care for himself or who is neglected or abused. The statutory provision regarding adult guardianship cases brought by the Department requires that the individual have legal counsel and that this counsel be paid for by the Department. The court appoints the attorney who very often is an MDLC attorney, though as with the CINA program, the court may disregard the services contracted for by the Department and appoint any attorney, and assign the costs to the Department. As to the adult protective services cases, the statute provides that the State shall pay a "reasonable" fee, and agency directives provide for establishment of a maximum fee that the Department will view as reasonable and therefore payable by it under this statute.
The determination of the fee in adult guardianship cases is made by the Requestor based on recommendations from the Bar Association Judicare Committee. Though this aspect of DHR's legal services program is not a Judicare function, the decision was to use the review system already in place to develop a record for establishing the reasonableness of a fee. The Committee considers, for example, the kind of skill involved in a case, the normal fee, the indigency of the client, that the State is a bulk purchaser in these services, and the practice of others in the area. The Requestor as Director of the Legal Services Program determines the maximum that the State will pay based on the recommendation of the Judicare Committee, though in some situations the final fee may be established only after litigation as to its reasonableness.
The Legal Services Program budget also includes the $500,000 payment by the State to the Maryland Legal Services Corporation to fund legal services to the indigent. The Maryland Legal Services Corporation is a quasi-governmental entity established by statute to provide legal services to the indigent. It administers the Interest on Lawyer Trust Account (IOLTA) Program. It makes grants to qualified service agencies for the provision of legal services to poor Marylanders in the areas of housing, domestic relations, consumer matters, employment, public entitlement, social security, and other civil legal matters.
The MVLS was established in 1982 by a group of attorneys to provide pro bono legal services to the indigent, to fill the gap created by the cutbacks in the government-funded programs. It was funded initially by the American and Maryland Bar Associations, the Maryland Legal Services Corporation, and the Bar Association of Baltimore City. Its current funding is primarily from the Legal Services Corporation and the Legal Aid Bureau, though its budget also shows a $40,000 in-kind contribution from the Community Services Administration reflecting the Requestor's service as Executive Director. The MVLS maintains a panel of attorneys who are willing to accept cases on a pro bono basis. It makes assignment or referrals of cases to the attorneys based on referrals from the Legal Aid Bureau. The Requestor indicates that the Legal Aid Bureau and other pro bono organizations (there are three established by county bar associations, in addition to MVLS and a few smaller programs) have agreed on standard income eligibility criteria, and that this allows for more centralized intake procedures. The Legal Aid Bureau performs intake services for the MVLS and refers cases to it for assignment to attorneys.
These private and State programs relate to each other in a variety of ways, one of which is the Pro Bono Supplementation Program funded through Judicare funds. Under this program, an attorney who has handled a qualifying case on a pro bono basis assigned by one of the private pro bono referral programs and spent at least 20 hours on it may apply and be compensated by the Judicare program for any hours past 20 at the program's rate of $30 per hour. The Requestor indicates that the cases are reviewed through the Judicare Committee to ensure that the case and the hours are justified, and that this represents a limited risk to the program funds because few cases actually exceed 20 hours. Another example of this type of cooperation is the payment by MVLS of litigation costs for any pro bono case, including Judicare cases. The Judicare regulations specifically provide that court costs will not be reimbursed. Most of the other pro bono programs operate on budgets that would not support the payment of court costs incurred by attorneys that accept pro bono referrals. The MVLS, however, has funding support that allows this reimbursement, even for cases under the State Judicare program.
The Requestor's involvement with MVLS began early in its existence when he was asked to leave the State and take on the Executive Director position full-time. Subsequently when the organization had not found a director six months later, he agreed to fill the position as a volunteer. At this time he withdrew from consideration for a non-legal position as Director of Planning and Evaluation in order to stay with the DHR Legal Services Program and enhance the cooperative capabilities of both programs. He is compensated by MVLS based on initiative by the MVLS Board so that he would not be foregoing the benefits of the higher position for which he had applied, and to reflect the additional work involved. The payment is about $3500 annually. The Requestor performs his services both on behalf of the State and the MVLS from an office location provided by the MVLS.
The Department has been aware of this dual role and has supported it, by its approval, and its participation in MVLS activity through service of a DHR official as an agency representative on the MVLS Board. This position is currently held by the Administrator of the Community Services Administration (who is the Requestor's supervisor). The agency has been supportive of this arrangement as one which benefits the State program of delivery of legal services to the poor. It has not viewed the Requestor's MVLS compensation as an improper supplement to his State salary, and it is aware that MVLS and others view the Requestor's work for the entity as an in-kind contribution of CSA to the entity.
The various groups involved in the process of providing legal services to the indigent have significant, unique and complicated financial and operational relationships. The Requestor's service with the MVLS brings him into situations where he works with and relies upon private entities with which he also deals as a contract manager for DHR. Both the Department and the Requestor maintain, however, that the kind of cooperation that has resulted from the fact that he is the Director of both MVLS and the State's Legal Services Pro gram is beneficial to the State's total response to the need for providing legal services to the poor.
Nevertheless, because of the close working relationships of the private and State programs involved in this situation, the request presents potential issues under several provisions of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law). We have in the past generally interpreted the various provisions of the Law to reflect a legislative determination that persons that work for the State should not have private economic or fiduciary relationships with entities with which they are expected to interact in the context of their official duties. This concept has been applied in connection with the strict employment prohibition in §3-103(a)(1)(i) of the Law, and the exception provisions applying to it, as well as to the more generally applied impairment provision in §3-103(a)(1)(ii).
These provisions have been applied to relationships with non-profit entities as well as for-profit business dealings, and have as a general matter been found to apply to relationships involving fiscal, operational and management responsibilities with an entity even where there is no compensation. They are designed to make sure that persons managing State programs, contributing to policy decisions, and involved in funding actions are not impaired by other relationships they may have with private entities. We have also applied these kinds of principles in considering application of the other provisions of the Law that regulate private activities that may not be absolutely forbidden under the Law. This includes the provision in § 3-101, which bars participation as an employee in matters which involve as a party an entity with which a person serves as an officer or trustee or has a private employment relationship. Also, § 3-104 of the Law prohibits the use of prestige of one's office for one's own economic gain or that of another.
In our view, all of these provisions could present questions here, given the relationships between the MVLS and the Maryland Legal Services Program, if the Requestor's affiliation with MVLS is viewed as a purely private activity. We have in the past, however, tried to read the Ethics Law in harmony with other statutes and programs, recognizing that agencies may make program and policy decisions resulting in relationships on the part of employees that are part of official duties and subject to State procedures and controls. In this situation, the Requestor's holding of dual roles is viewed as a benefit to the agency and is approved by the agency. Apparently through its representation on the Board, it is aware that his services are treated in the entity's budget as an in-kind contribution from CSA, and that they are described this way in other contexts. The relationships between the State and private entities here are described as unique and not likely to be adversary in nature. The MVLS program is itself unique and does not appear to be in competition with other entities in the context of this program.
Based on the specific facts presented here, including the Department's view that the Requestor's serving in the position does fulfill a vital program function which does not result in a conflict of interest or appearance of conflict, we conclude that his affiliation with MVLS may continue as an agency assignment. This relies on the understanding that the Requestor is functioning under the policy control of the Department and that additional compensation, where appropriate, is approved by an appropriate executive control agency as not being inconsistent with State procedures or regulations. This approval is based on the facts as they now exist. The MVLS should be informed that the Requestor is an employee of the Department detailed by it to do this work, and that he owes his loyalty to that agency and not to the MVLS. If the facts should change in such a way that the Department and MVLS would be in conflict as to legal, funding or administrative matters, then the allowability of this arrangement under the Ethics Law would have to be reevaluated.
M. Peter Moser, Chairman
Rev. C. Anthony Muse
Barbara M. Steckel
Date: October 25, 1988