91.09

OPINION NO. 91-9

An opinion has been requested regarding whether a prohibited conflict of interest arises where the private business of a member of the State Roads Commission and the Maryland Transportation Commission is submitting a proposal in response to a solicitation by the Stadium Authority for a project that would involve the Department of Transportation. We advise the Requestor that given the current status of the project, his employment would not be inconsistent with the Public Ethics Law. If his firm is selected, however, application of the Law to his situation is likely to present issues that would bar his dual affiliations.

The Requestor is employed by a general partnership involved in development projects in the Baltimore area. He is also a member of the State Roads Commission. This is an entity in State government referenced in Article III, § 40B of the State Constitution and § 8-210 et seq., of the Transportation Article, Annotated Code of Maryland. Section 40B is the Constitutional provision that deals with the taking of private property for public use, assigning authority for this action to the State Roads Commission. Originally the agency responsible for survey and construction of highways in the State, the State Roads Commission was made a unit of the Department of Transportation in 1970. At this time most of the Commission's substantive duties were assigned to the State Highway Administration, headed by the State Highway Administrator (also Chairperson of the State Roads Commission). The Commission retained its Constitutional function of condemnation of property for highway use, and this is today the extent of its responsibility. The Requestor was appointed in 1988 to complete the unexpired term of the Baltimore City representative.

The Department of Transportation is a major cabinet-level Department established in 1970 to consolidate all of the development, management, and execution of transportation policies within the State. It includes as operating units, in addition to the State Highway Administration, the Railroad Administration, the Maryland Port Administration, the Motor Vehicle Administration, the Mass Transit Administration, the Aviation Administration and the Maryland Transportation Authority. The Maryland Transportation Commission (MTC) is established pursuant to §2-201 et seq., of the Transportation Article to provide advice, guidance and direction to the Secretary of the Department. In addition to ten members appointed by the Governor, it includes the seven Regional Commissioners of the State Roads Commission, who serve ex officio by virtue of their appointment to the Commission. Though the MTC functions as a purely advisory body, the scope of its role is much broader than the State Roads Commission. It serves as a general advisory body to the Secretary of Transportation, charged with the duty to "advise and make recommendations to the Secretary and the heads of the units in the Department on all matters that concern transportation policy formation and program execution."

The question presented by the Requestor relates to a transaction that primarily involves the Maryland Stadium Authority. This is the State agency responsible for construction of a new baseball stadium in Baltimore City and for development of property owned by the Authority in the immediate environs of the stadium. This property includes the light rail line that goes through the area of the stadium, and also expansion of the MARC commuter rail line (using CSX tracks existing on the stadium site). All of the property for the stadium and these transportation projects was purchased by the Stadium Authority and the Authority holds all of the property in fee simple. The DOT and its units were not involved with the condemnation and other processes involved in this purchase, though pursuant to an interagency agreement the DOT shared in the costs reflecting the portion of the property that would be dedicated to transportation uses. A decision was made jointly by the Authority and DOT to consider possible development of a 6-acre parcel on the Eastern boundary of the stadium. The train tracks of the light rail transportation system that are within the jurisdiction of DOT's Mass Transit Administration (MTA) run directly into this parcel, where a small depot is planned to serve the stadium. The MARC lines also cross the stadium property and this site, with the total DOT use involving about 2—3 acres (or approximately 30 percent) of this portion of the stadium property.

The development of the property by the Stadium Authority is being pursued by circulation of a Request for Proposals (RFP) to solicit development proposals from private developers. The bid documents were published this spring with a proposal submission deadline of July 15, 1991. The request is relatively open-ended, with the developers free to propose a wide range of uses of the property as well as financial arrangements. The goal is to solicit expressions of interest by private developers, with the hope of attracting private investment for use of the property that would provide some return on the investment in the property as well as increase the traffic flow to the site and thus the rail patronage. Apparently at this point interest is in evaluating the feasibility of development by considering specific proposals and the quality of the interest in the site. The language of the bid documents is therefore very general, and the immediate result of the process would be either to reject all proposals (if none are feasible or appropriate for the site), or to select one that would become the basis for further negotiation and specific development.

The proposal, however, must take account of the existence of the rail transportation uses on the site. The RFP allows for use of air rights by the developer of the space above the rail line, but includes very specific and detailed requirements to comply with the needs of the rail systems. Proposals will be submitted to both DOT and the Authority and reviewed by them. Because of the open-ended nature of the process at this point, several aspects of the transaction are undecided. For example, there is an intention that there will be a station building for use for light rail and MARC that would include a ticket station, waiting area and restrooms. Specific plans for this development have been deferred pending a decision on development. Also, it is not clear at this point whether the DOT would actually be a signatory party to the transaction between the Stadium Authority and the developer, whether the property dedicated to the transportation use will actually be deeded in fee simple to the DOT or whether there will be a lease arrangement. This could depend on the developer and the negotiations.

The Requestor's employer is planning to submit a development proposal for this project. The Requestor is a Vice-President and senior staff person with the firm. He is the lead person in preparing this proposal and would be significantly involved in its execution if the firm is selected. He recognizes that the project implementation would likely include some interaction with the MTA, though he thinks that this would entail more practical and informational matters than policy or substantive issues. Also, the Requestor advises that in his involvement with the DOT as a member of these two Commissions, he has not had any occasion to deal with issues that could impact on this development project or the DOT's role in it. He says that the State Roads Commission's sole focus is on condemnation actions and that this does not tend to involve policy or program determinations as to where a highway should be located or how it should be constructed. The Requestor also advises that neither the light rail nor transportation issues relating to the stadium have been before the MTC since he has been serving on it.

This request presents issues under the employment provisions of §3-103(a) of the Public Ethics Law (Article 40A, §3-103(a), Annotated Code of Maryland, the Ethics Law). This section prohibits an official from being employed by an entity that contracts with or is under the authority of the agency with which he is affiliated (subsection (a)(1)(i)). It further bars any other employment that would impair the individual's impartiality or independence of judgment (subsection (a)(1)(ii)). The Requestor works as a senior staff person in a private entity that is seeking to do business with a State agency. The project is a significant one. It involves the company's direct dealings with the Stadium Authority, and also at least indirect dealings with the Department of Transportation. The Requestor serves on the State Roads Commission and also on the general agency-wide advisory board in the Department of Transportation. Under our prior opinion specifically dealing with these boards, this would be viewed as an affiliation with the Department of Transportation generally as well as with any of its modal administrations. (Opinion No. 80-11) We therefore believe that his employment with a business engaged in activities involving the Department or its administrations could potentially be within the prohibition of §3-103(a).

This transaction is, however, in its very preliminary stages. The response to the RFP initiates a process by which a possible development approach might be selected for further review and negotiation. It is not clear at this point that DOT will be a signatory of any implementing agreement, or whether the property itself will be transferred to DOT. Moreover, there appears to be no current or past official involvement by the Requestor or either of the DOT boards on which he serves in DOT's policy or operational involvement in this transaction. Under these circumstances, we do not believe that this situation, in its current status, presents the kind of contractual or regulatory relationship intended to be addressed by the strict language of subsection (a)(1)(i). Nor do the facts suggest that the Requestor's service on behalf of his private employer would relate to his duties on the two DOT boards so as to impair his functioning in those positions. Therefore, as long as his private work does not involve interaction with DOT, and as long as this transaction does not come before either of Requestor's State boards, we advise that his dual service can continue, while the preliminary review of development proposals is pending.

If the State's review of the proposals submitted for development of the property results in selection of the Requestor's employer, however, it is our view that his continued service on the two DOT boards would likely be barred unless an exemption is granted pursuant to §§2-103(h) and 3-103(a) of the Ethics Law. We recognize that even after selection of the successful proposal there will continue to be unresolved questions about the exact nature of the relationships of the parties in this transaction. It is already clear, however, that the Department of Transportation has significant involvement in the implementation process. The Department is likely to be involved in the negotiations to resolve the issues regarding property disposition and final development arrangements. It would also be involved as the project moves forward, given its continued responsibility for the light rail and MARC operations at the site. Moreover, the Department will likely continue to have substantial interests and involvement in transportation policy and other issues that may arise in connection with the overall stadium site and program.

The Requestor is a senior staff person with his firm, and is significantly involved in preparation of the firm's development proposal. He would be expected to be involved in the firm's subsequent negotiations and implementation efforts if its proposal is selected. This would necessarily entail his regular interaction on important operational and policy aspects of the development. In our view, his involvement in these kinds of activities while he serves on the DOT central policy advisory board would be inconsistent with the employment provisions of the Ethics Law, and represents the kind of situation intended to be avoided by this and other provisions of the Law. Further, though we recognize Requestor's good faith in this matter, we believe that these circumstances present the kinds of concerns addressed by the Legislature in its description of the Law's purpose as avoiding the appearance of as well as actual conflicts of interest. (§ 1-201)

We therefore advise the Requestor that his continued dual service with his firm and on these two agency boards is allowable based on the current facts, assuming that this or related matters do not come before either of his State boards and that he in no way uses his State position in the proposal process. He should, more specifically, avoid contact or discussion of any aspects of the proposal with DOT officials. Also, if his employer's proposal is selected for further negotiation, he should not continue on the boards unless this is specifically approved after further review of the facts existing at that time.

William J. Evans, Chairman
   Mark C. Medairy, Jr.
   Mary M. Thompson

Date: August 14, 1991