92.01

OPINION NO. 92-1

An opinion has been requested by the Department of Health and Mental Hygiene (DHMH) as to whether the agency's Director of Policy and Health Statistics (the Director) may have secondary employment at the University of Maryland in connection with development of software materials expected to be used by her DHMH program. We advise that this employment with another State agency is allowable, as long as certain controls and understandings are met.

The Policy and Health Statistics Administration (PHSA) develops policy initiatives and conducts technical analyses addressing concerns raised within the DHMH and elsewhere in both the Executive and Legislative Branches of State government. According to the Director, the office handles a lot of short-term fast turn around projects in direct response to requests from the Secretary, as well as from other sources. The PHSA handles some nonstatistical projects and may do policy analysis in a variety of areas, including, for example, legislative proposals. The Medicaid program, however, is the largest DHMH program and includes the largest agency data base. Given this fact and also the staff's specialized expertise in dealing with Medicaid numbers, a significant part of its work relates to health policy development in the Medicaid area based on data developed and managed in this program.

The Director indicates that the PHSA has developed significant expertise and reputation for its ability to work with Medicaid data. She herself has worked in the field for 10 years and during that time acquired a doctorate from Johns Hopkins University dealing with medical claims data. She says that as a result of this, she received an inquiry from a private group regarding a project for developing computer software using the medical data from employee health claims for profiling physician provider practice patterns. Though the project with the private group was not pursued by the Director, the Department has undertaken an interest in developing this type of software for use in policy development in the Medicaid area. The agency has therefore pursued a collaborative effort between the Department and the University of Maryland. This effort would involve an agreement between the Department and the University under which the University would develop the software package which would then be available to the Department.

Given the Director's function as a supervisor and policy person in the Department, both she and the Department indicate that she would not have the time within the context of her DHMH position to provide the practical information and support to the project necessary for its completion. She advises that the University has programmers who could develop software but who are not skilled in the substance and methodology of medical data and particularly in medical profiling. The proposal is that she would become a contractual employee of the University with a Research Faculty appointment, and under this contract would provide her expertise in the medical data base to the University programmers. The resulting software would be of use to the University and also available to the Department.

This request presents issues under the employment and prestige provisions of §3-103(a) and 3-104 of the Public Ethics Law (Article 40A, §§3-103(a) and 3-104, Annotated Code of Maryland, the Ethics Law). Section 3-103(a) bars an employee from being employed by an entity that contracts with or is negotiating a contract with her agency (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)). Section 3-104 prohibits employees from using the prestige of their office for their own economic gain or that of another.

The term "entity" used in the strict prohibition of subsection (a)(1)(i) has been interpreted not to include State agencies. (See, for example, Opinion Nos. 85-25, 85-17, 84-4, 83-22, 82-51, and 82-15.) We have therefore advised in several opinions that secondary employment with another State agency would not come within the strict prohibition of this section. We have also advised, however, that the more general impairment provisions of subsection (a)(1)(ii) can be applied to secondary employment in a State agency. (See Opinion Nos. 88-14, 86-5, 83-20, 83-16, 82-51, and 82-37.) In the general application of the impairment provisions of the Law, we have looked to the relationships of the two employments to determine whether the secondary employment would result in private interests or loyalties that would impact on the individual's ability to carry out her primary State duties objectively and impartially. As to secondary employment with a State agency, we have considered whether there are clear personal and organizational conflicts intended to be addressed by the Ethics Law that cannot be controlled by the personnel and administrative systems.

The employment proposed here for the Director is with the University of Maryland, another State agency. We therefore conclude that the strict employment prohibition would not apply. The question is thus whether the employment arrangement with the University would be permissible under prior opinions dealing with secondary employment with another State agency. More particularly, the question is, under §3-103(a)(1)(ii), whether the Director would be significantly impaired in her ability to do her State job by virtue of her relationship with the University. A second issue, under §3-104, is whether there are concerns or potential concerns about use of her DHMH position for her own gain.

This project is one that the Director's agency wants to pursue, and agency personnel and managers agree that her necessary involvement in it cannot entirely be supported in the context of her official duties. The project and its resultant work product are viewed by the agency as presenting significant cost saving and management potential. Agency staff are convinced that the Director's affiliation with the University would not be likely to impair her impartiality in connection with her official duties. Also, her participation in her private capacity reflects a compromise worked out to enable the agency to pursue the project, rather than an intentional improper use of her position for her own personal benefit.

Under these circumstances, we conclude that this arrangement for secondary University employment by the Director would not be inconsistent with the employment or prestige provisions of the Ethics Law. In order to ensure that this is and continues to be the case, however, we believe that certain controls must be understood:

1) The agency determination to pursue the project needs to be documented and to reflect management decisions beyond the Director's particular unit;

2) The employment must be consistent with State personnel and other procedures regarding secondary employment;

3) Administrative controls need to be established to account for time spent on the project for the University as distinguished from work related to the activity in connection with her official duties;

4) The tasks to be performed in each capacity need to be clearly delineated (preferably with a clearly defined work product identified in the University work) and personnel time records must be clearly kept to ensure proper time accounting; and

5) The Director and the agency should be aware that the private relationship with the University may need to be discontinued if the goals or interests of the agency and the University should diverge.

It should be further understood that our concurrence in this approach relies on the fact that this is to be a time limited (no more than a year) project adopted on a one-time-only basis. Use of agency employees in this type of situation as secondary employment staff to accomplish State projects should not be considered on any regular or continuing basis.

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

Date: January 29, 1992