An advisory opinion has been requested regarding whether an exception can be allowed under the employment provision of the Ethics Law to permit an Office Director in the Office of the Secretary of Human Resources (the Employee) to serve as an elected member of the Board of Directors of an agency grantee. We advise that this service is barred by the Law and that in view of the nature of the Employee's agency position and duties, as well as her private functions, an exception cannot be applied to allow the service.
This request is submitted on behalf of a Social Services Administrator VI in the Department of Human Resources (DHR) who is the Director of Project Independence. This is a unit of DHR that is technically part of the Income Maintenance Administration, but which for management and administrative purposes is included within the Executive Office of the Secretary of the Department. Project Independence is directed at changing the structure of the welfare system to foster long-term economic self-sufficiency for clients by providing training, education and support for women receiving payments under the Aid for Dependent Children program (AFDC). Most of its funding is administered and expended within the Department of Economic and Employment Development (DEED), through its Division of Employment and Training and the Governor's Employment and Training Council. The Employee's unit in DHR thus performs primarily an administrative and coordinating function in fulfillment of a federal requirement that the AFDC agency in the State must administer the Project Independence Program.
According to the Employee, Project Independence involves women receiving AFDC benefits and does not as a general matter focus on women who are victims of sexual assault or domestic violence. Participants in the program are referred by the Income Maintenance units of the local Departments of Social Services to a DEED job training agency, also at the local level. Her Office's coordinating function involves working with the other DHR units that have pieces of this program, including the Child Support Enforcement Office, the Income Maintenance Administration and the Child Care Administration. She also coordinates with the Budget Office regarding the joint reporting required by DHR and DEED and serves on several interagency committees involved in the program. The Employee also advises that her duties currently involve her in collaboration with staff of the Women's Services unit of DHR's Community Services Administration. This unit is responsible for a variety of programs for providing services to women, including the Displaced Homemakers program. The Employee indicates that she has had meetings with the Director of Women's Services regarding efforts to qualify clients of this program for funding under Project Independence.
This request arises as a result of the Employee's interest in serving as an elected member of the Board of Directors of a county sexual assault center (the Center), a private nonprofit entity located in the county where she resides. The Center functions as a rape crisis center under funding for such centers made available through the Women's Services unit of the DHR. Its program includes a 24-hour hotline and crisis intervention response service to victims of rape and sexual assault; an on-going short-term counseling program; and a public education component. All of these activities are focused on sexual assault issues, usually with regard to particular crisis incidents as to the individuals served.
The Center's DHR grant funding includes State money administered through the Women's Services Rape Crisis program and federal funds under the Victims of Crime Act, administered partly through the Women's Services Program and partly through the agency's Office of Protective Services for Children. These funds represent approximately 30 percent of the Center's annual budget for FY 1992. The Center's Clinical Coordinator indicates that it has a professional staff that is responsible for the day-to-day operation of the Center. The Board of Directors consists of professional and business persons from the community. It approves major policy approaches and new project initiatives and provides general program advice. It also is involved in other community-related functions, including fundraising. The Employee indicates that she is interested in serving on this Board as a community activity. She says that she spent many years working in a county child welfare program and would like to be involved in community service that keeps her active with social services work. The DHR agency ethics contact has indicated that the agency supports this activity and encourages employees to be involved in community service.
This request involves application of the employment prohibitions of §3-103(a) of the Public Ethics Law (Article 40A, §3-103(a), the Ethics Law), and particularly the regulatory exception set forth in the section. Subsection (a)(1)(i) of this provision bars employment by officials and employees with private entities that contract with their agency. We have advised in prior opinions that service on the management and policy-making boards of private entities constitutes an employment relationship even if it is not compensated. As a grantee of an administration within the Department of Human Resources, the Center is an entity that contracts with the Employee's agency. The service is thus within the strict criteria for prohibition under §3-103(a)(1)(i) and is barred by that section unless an exception is allowed.
Exception from the prohibition is possible under the proviso in the section that the prohibition applies except as provided by regulation of the Commission where there is no conflict of interest or appearance of conflict. The Commission regulations (published at COMAR 19A.02.01) include a series of guideline criteria designed to evaluate the relationships between an individual's official duties and proposed private activities. They consider, for example, whether the individual's duties involve direct impact on the private entity and whether the individual's unit or supervisor directly impact on the entity. The criteria also look to the nature of the person's functions in the private activity, considering, for example, whether the private work would entail responsibility for implementing the agency contract or complying with agency regulations. Generally, exception has been allowed only where we have been convinced that the relationships are sufficiently remote to conclude that the possibility of conflict or the appearance of conflict is unlikely.
In evaluating application of these criteria to the Employee's situation we recognize that her functions as Director of Project Independence do not involve significant direct relationships with the Center. She does, however, have a high level position in the Office of the Secretary, and, more importantly, her duties require her interaction with the administrator of the granting unit within the Department as well as others having authority over the entity. In her private capacity she would be functioning as a manager and policy-maker with the Board that is ultimately accountable to her agency for its compliance with agency grant and other requirements. Under these circumstances, we cannot conclude that the relationships here meet the standards to allow an exception to permit this service.
This conclusion is consistent with a significant number of prior opinions in similar situations. We believe that this prior approach to the Law of not allowing these affiliations has worked well in assuring the integrity of grant programs. We therefore advise the Employee and the Department that this affiliation may not be allowed. We also advise the employee, however, that the Law does not generally bar her or other agency employees from volunteering with such programs in a non-Board capacity, as long as they avoid any issues under the prestige and gift solicitation provisions of §§3-104 and 3-106.
William J. Evans, Chairman
Mark C. Medairy, Jr.
Robert C. Rice, Ph.D.
Mary M. Thompson
Date: October 30, 1991