92.04

OPINION NO. 92-4

A Water Resources Environmental Inspector in the Water Resources Administration of the Department of Natural Resources (DNR) has requested an opinion as to whether he may have a private forestry management consulting business. We advise, given the type of activity and the nature and extent of his agency's responsibilities in forestry management, that this consulting business would be inconsistent with the employment limitations of the Public Ethics Law.

The Requestor works in the Water Resources Administration (WRA) Enforcement Division. This Administration implements several permitting laws relating to State authority over tidal and nontidal wetlands, waterway construction in connection with streams and 100-year flood plains, and surface mining activities. Its Permit Division issues permits for any construction activity that would impact on these areas, that are designed to ensure that wetlands are not destroyed or altered and to protect water quality in streams. The permits include specific construction or other requirements related to WRA concerns, and may also include provisions regarding sediment controls imposed consistent with requirements of the Department of the Environment. After a permit is issued a copy of it is sent to the Enforcement Division, which has the responsibility for monitoring the permit area to ensure that the permit requirements are complied with. The Requestor works as an inspector responsible for monitoring and inspecting in accordance with the permits.

The Requestor advises that he is educated as a forester, with a B. S. degree in forestry. He worked for two years in DNR's Forest and Parks Administration, where he was a Project Forester in Charles County, and recently transferred to the Water Resources Administration. As a project forester he did all of the forestry work in the County (except in the Critical Area). This includes working with private landowners in writing forest management plans, assisting landowners in timber sales, marking timber for cutting, and fire suppression and school and education programs. The Requestor wants to use this experience to establish (with his spouse) a private forestry consulting business. Though he was not required to be a certified forester for his position in DNR, he has since leaving that position been certified as a forester by the State Board of Foresters (in the Department of Licensing and Regulation). He anticipates marketing this service through public ads in newspapers and by word of mouth, and functioning primarily in Charles, St. Mary's, and Calvert Counties.

The Requestor's business would involve provision of general consulting services to individual landowners who would be expected to own 25 to 40 acres of woodland. He would not serve any commercial forestry operations. His services would include walking the property and inventorying the timber on it and writing a management plan reflecting application of forestry management principles consistent with the landowner's particular goals. He would as a consultant then do a Timber Stand Improvement Plan, which actually entails marking specific trees for cutting. Depending on the size of the property and quantity of the trees, some owners may want to sell an intermediate harvest for commercial use. The Requestor indicates that in this situation he would anticipate his role as being to advise the landowner as to the value and quantity of the wood, prepare bid documents, and advise the landowner as to the appropriateness of a bid. He would not be further involved with actual cutting or with the commercial timber company, or its operations. We note, however, that the legal responsibility for compliance with any permit or other requirements is the landowner's.

As a general matter the Department has not in the past regulated the use and maintenance of forestland by private landowners. The Legislature in 1991, however, enacted a Forest Conservation Act that would require landowners planning to develop certain size tracts of land to submit a forest stand delineation plan and a forest conservation plan, prepared by a licensed forester or other qualified professional. In localities where local implementation is not adopted, the plans will be submitted to and enforced by the Department. Apparently the Forestry Service will be the lead unit within DNR, though the Chief of the WRA Enforcement Office indicates that his unit is also expected to have some enforcement responsibilities. The Department also administers regulatory requirements under the Seed Tree Law, which deals with cutting limitations relating to loblolly pine.

In addition to these regulatory functions, DNR has other significant forestry related programs. Through its Regional Forestry units and local project foresters, it provides assistance to private landowners in woodland management. A Project Forester may develop a management plan including recommendations for cutting, clearing or planting in the area, and may assist in implementation of the plan, either by carrying out the work or referring to a private contractor. Timber sales are turned over to a private contractor. Apparently there is a substantial demand for forestry services, and in most counties there is a waiting list for management plans, which is the basic service that the Department provides.

The Department's forestry activities also include several voluntary programs in which a private landowner may participate within certain constraints. The Woodland Incentive program is a cost-sharing program in which a landowner could submit a plan and meet certain cutting, clearing and planting criteria and be reimbursed part of the cost of implementing the plan. Under a comparable federal program, all of the initial application, review and other processes are at the federal government level; reimbursement is based on a certification by the State forestry program that the work was done. There is also provision for tax benefits under which income tax modifications are allowable based on certification from the State Forester of compliance with forest management plans. The Forest Conservation and Management Act is a program that allows reduced property assessment for forestland maintained pursuant to an approved management plan.

The Requestor recognizes that his Department has significant activity in the forestry area. It is his view, however, that he would be able to function in a private consulting business without engaging in any activities that would bring him into contact with the agency. He says that he would not accept clients who would participate in any of the voluntary agency programs and would not be involved in preparing any documents, applications or other materials for submission to or consideration by his agency. The agency's Enforcement Division Chief has expressed some concern, however, about the Requestor's ability to pursue this activity without encountering his agency and its requirements. His concern relates in part to an anticipation that the WRA enforcement unit will have enforcement responsibilities under the Forest Conservation Act, as well as the fact that forestry and timber harvesting activities frequently involve stream permits or wetlands permits issued by the Administration and enforced by the Requestor's unit.

This request presents issues under the outside employment provisions of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) and under the prestige and employment provisions that have been interpreted in connection with private consulting business activity by employees. The strict employment provision of § 3-103(a)(1)(i) bars employment with an entity that contracts with or is under the authority of an individual's agency. We have in the past consistently advised that an employment relationship exists with an entity to which personal consulting services are provided, even where there is an intervening private consulting business. Thus this prohibition has been applied where the private activity involved provision of services in connection with matters that were the subject of agency action, either in the regulatory or contractual context.

Our Opinion No. 80-18 is an early opinion in which we expressed this view. It involved a DNR employee serving as a consultant to landowners in presenting applications for capital improvement permits. The principles addressed in this opinion have been reiterated in many opinions since 1980, to some extent in the context of considering application of exception provisions that were subsequently added to this section of the Law. Thus, for example, exceptions have not been allowed where the employment activity involved contractual dealings with the agency or assistance to a private party in complying with agency regulations. We believe that these principles apply in the Requestor's situation. We therefore advise the Requestor that a private consulting business would be prohibited if it includes clients or activities that in any way entail his preparation of an application or other materials for submission to his agency, or provision of services to landowners subject to the permitting and enforcement authority of his agency.

We have also in implementing the Law considered many situations involving consultant businesses or private practices where there were no clear direct regulatory or contractual relationships with an individual's agency. (See, for example, Opinions No. 91-8, No. 89-1, No. 86-14, and No. 85-18.) These situations have involved application of the impairment provision of § 3-101(a)(1)(ii) of the Law, which bars any employment that would impair the individual's impartiality or independence of judgment, and § 3-104, which prohibits the use of the prestige of one's office for one's own economic gain or that of another. Generally, these opinions advise that private consulting that does not fall within the strict prohibition of § 3-103(a)(1)(i) is permitted, but only if it is within certain constraints that result from these two provisions of the Ethics Law.

The opinions discuss a number of factors that are applied to determine application of these provisions to a particular situation. In our view, application of these principles to the Requestor's circumstances, taking into account the extent of his agency's forestry activities and the likely dealings by landowners with units of the Department, also requires the conclusion that his proposed private consulting business is prohibited by the Law. In considering private consulting businesses both under the strict provision and its exception language, and under the inconsistent employment and prestige provisions, our focus has been on the relationships between the private activity and the employee's agency and program. We have particularly focused on situations where the business was to function in Maryland, to involve activities significantly within the individual's agency's program, and to present significant potential for impact by the individual's specific duties or agency role.

Concerns are presented under all of these factors by the Requestor's proposed private business. He would be functioning in Maryland, providing a service to landowners in Maryland that is also provided by his agency, presumably at a lower cost. Moreover, it is a service that he himself provided for the agency in the recent past. He will be in competition with other consultants, and, to the extent he serves as "liaison" to commercial timber companies, his work could involve interaction with these entities that are subject to a variety of environmental and resource management activities of the State. Further, we are advised by the agency that timber harvest operations frequently involve stream crossings or wetlands, and the Requestor's Division has enforcement duties relating to permits issued in these areas. Also, the agency has significant regulatory interaction with timber harvest companies that are engaged in permitted logging operations that are subject to the Administration's enforcement authority.

Moreover, in addition to these regulatory programs in the WRA, the Department has other significant forestry programs directly in the area where the Requestor proposes to work. We recognize that the Requestor states, and may truly believe, that he can do this business without conflict. But however committed the Requestor may be to avoiding his agency and conflict of interest, he cannot control his clients and he may not be able to ensure that none eventually decide to use the results of his work to seek to participate in agency cost sharing or tax benefit programs. Moreover, though it may be possible to draw some careful lines to say that his work would not involve the program he works on for the agency, the fact is that land use and management of environmental resources is a very complex integrated program involving many disciplines, agencies and programs at all levels of government and in the private sector. It is not reasonably possible in this environment for the Requestor to avoid situations prohibited under the Ethics Law.

Under these circumstances, we believe this situation presents significant potential for conflict of interest under the employment and prestige provisions of the Law, and raises the kinds of appearance of conflict concerns intended to be addressed by these provisions of the Law. We therefore advise the Requestor that the private forestry consulting business that he proposes would be inconsistent with the provisions of the Ethics Law.

William J. Evans, Chairman
   Mark C. Medairy, Jr.
   Robert C. Rice, Ph.D.
   Mary M. Thompson

Date: April 14, 1992