An advisory opinion has been requested as to whether the Deputy Director of Data Processing at the Maryland Lottery may participate in the procurement evaluation committee regarding the agency's on-line computer system, where his brother is employed by an entity that is a likely bidder. Based on principles expressed in prior related opinions, we advise that an exception can be applied under §3-101 of the Ethics Law to permit this participation.
The Maryland Lottery Agency is the unit established in State government to conduct Statewide lotteries for instant, daily, and lotto games, as well as a lotto subscription game. The Lottery is conducted significantly with computers, including an operation covering the computerized games and ticket sales, located at the Hunt Valley Computer Center. This Center is run under a facilities management contract, and all supplies, services, equipment, training and operational consultation regarding the Statewide terminal system for sale of Lottery game tickets is operated out of this Center. Also, equipment is provided to terminal holders by the Lottery through this facilities contractor.
The Lottery's Deputy Director for Electronic Data Processing (the Deputy) is the senior manager responsible for this as well as other aspects of the agency's computer operations. His duties include responsibility for long and short range planning and operations of the data processing department. This includes monitoring and enforcing the vendor contract as to the Hunt Valley operation, and planning and operating the telecommunications network as to the games sales agents. He participates in agency evaluation and policy decisions regarding future plans and in identifying future equipment needs, and is responsible for physical security of both components of the agency's computer system. The Deputy indicates that he is the agency manager who is responsible for technical operations and would therefore be the person that would work on a regular operational basis with any computer vendor that is selected to handle the gaming program.
The situation at issue in this request relates to the Lottery's current procurement action to replace the computerized gaming system now located at Hunt Valley. According to the official in the Office of the Director who is responsible for this procurement (the Committee Chairman), a request for proposals (RFP) was released in early September 1990 to purchase a new on-line game computer system. An Evaluation Committee has been created to review the proposals. The Committee consists entirely of agency employees, including one from Data Processing, two from Marketing, a representative from Administration and the Committee Chairman from the Director's Office. The Committee will also be advised by an on-line games consultant currently under contract to the agency, and will be assisted by an advisory panel including representatives of other agencies. The Evaluation Committee will review the proposals for mandatory procedural compliance with the bid requirements and for technical responsiveness. A separate evaluation, also by the Evaluation Committee, will consider the financial aspects of each proposal. A recommendation of selection of a particular vendor will be made by the Committee to the Director, who has final agency authority. The award must then be submitted to Department of Budget and Fiscal Planning, with final award authority in the Board of Public Works.
The agency and the consultant have recommended that the Deputy, as Director of Data Processing, be included in the Evaluation Committee. His role would be to evaluate the communications network and terminals. The Committee Chairman advises that the Deputy formerly worked for an entity involved in computerized gaming and was employed by the Lottery in part for his engineering background as an expert in the hardware of gaming terminals. He has not been involved so far in the development of the RFP, but would be expected to participate in the technical review of the proposals. According to the Committee Chairman, there is apparently no one in State service who is an expert in terminal construction, and if the Deputy is unavailable the agency would have to do without this type of expertise in its review.
The issue arises here because the Deputy's younger brother is an employee of an entity (the Deputy's former employer) that is one of four expected to bid on the contract. The Deputy indicates that his brother is an adopted brother who lives in New Jersey and has worked for this company for many years, beginning before the Deputy's employment with the Lottery. His brother is a service technician working only with the company's race track division. His work involves on-site equipment service and maintenance not related to lottery gaming activities. He is not a manager, or involved in sales or development of bids or proposals. He apparently works solely in the company's Philadelphia-based operations and has no dealings in Maryland. The Deputy also indicates that he and his brother are not close. They talk, at most, once a year or so, usually at the holiday time, and in these conversations the subject of their respective jobs or employment activities never comes up.
This request presents issues under the nonparticipation provisions of §3-101 of the Public Ethics Law (Article 40A, §3-101, Annotated Code of Maryland, the Ethics Law). This section prohibits an official or employee from participating in any nonministerial way in a matter in which he has an interest or which involves as a party an entity with which he or certain identified relatives has an employment relationship. Brothers are one of the relatives included in this list. The concept of participation includes providing advice and recommendations, and, given the nature of the Deputy's proposed duties and functions on the Committee, we believe his service on the Committee would be nonministerial participation in the procurement. The strict prohibition of § 3-101 therefore applies to this situation, since the procurement action would apparently involve as a party an entity with which his brother is employed.
Section 3-101 provides, however, that exception to the strict participation prohibition may be allowed based on advisory opinion of the Commission. In our Opinion No. 90-2, we considered a situation very like this one, where an official was potentially involved in contractual activities that included a private entity where his brother was employed. This Opinion sets forth the kinds of factors considered by this Commission in allowing an exception under §3-101, including, for example:
1) The nature of the brother's position in his employment.
2) The nature of the relationship of the employee to his brother.
3) The geographical distance between the two.
4) The lack of or existence of involvement by the brother in Maryland and company activities involving the official.
5) The absence of any past issues in view of the length of the service and prior events.
6) The existence of agency controls and insulating mechanisms.
7) The nature of the official's involvement in relation to his duties generally and his ability to perform his State job if disqualification were required.
In applying these criteria to the circumstances as described by the Deputy, it is our conclusion that the relationships are sufficiently remote to warrant an exception. The Deputy's brother is not a company manager or policy-maker, and works in a division of the company unlikely to be involved in the Lottery procurement, and in a geographical area separated from the company's Maryland business. We also note the nature of the Deputy's technical assistance and its value to the agency in the procurement action, as well as the fact that he serves as one of several management and technical personnel responsible for evaluating the bid proposals, and would not in any case be the final decision-maker.
Under all these circumstances we conclude that the Deputy may participate as described in the evaluation process for the Lottery computer procurement. Applying the same kinds of principles and assuming the kinds of constraints addressed in Opinion No. 90-2, we also advise that the Deputy would be permitted to participate in contractual implementation in his role as manager of the Lottery's data processing operations, if his brother's employer were to be the successful bidder. In particular, we assume, consistent with Opinion No. 90-2, that the Deputy will not be the final decision-maker in management and policy matters regarding the evaluation process or contract implementation, that he will function as described in a technical role on the Evaluation Committee, and that the agency will continue to monitor this situation, especially if the Deputy's brother's employer is the successful bidder.
William J. Evans, Chairman
Mark C. Medairy, Jr.
Robert C. Rice, PH.D.
Mary M. Thompson
Date: October 23, 1990