92.05

OPINION NO. 92-5

An opinion has been requested as to whether and how the Maryland Ethics Law would apply to the proposed appointment to the Racing Commission of an individual whose son is the Commission's Deputy Director. We advise that the Law would not apply to bar this appointment based on this relationship.

This request is presented by the Department of Licensing and Regulation (DLR). The issue involves the proposed recommendation to the Governor of the appointment of an individual (the Appointee) to serve as a member of the Racing Commission. The Appointee is a former federal employee who has been involved in the raising and servicing of thoroughbred horses since 1965. He also has other significant involvement in the racing industry in the State, including active service with the Maryland Horse Breeders and membership on the Maryland Million Advisory Committee. The issue presented here arises from the fact that the Appointee's son serves as the Deputy Director of the Racing Commission.

The Maryland Racing Commission consists of 7 members appointed by the Governor with the advice and consent of the Senate. The Commission has broad authority over the racing industry. Persons holding and conducting race meetings must be licensed by the Commission, and stewards, judges and other track personnel are employed by or subject to the authority of the Commission. Racing dates are awarded by the Commission, which also has the power to establish rules and regulations under which all horse races are to be conducted within the State. The Commission may also hear appeals from decisions by track officials implementing these regulations. These hearings are conducted by panels of three Commission members, whose decisions may under some circumstances be appealed to the full Commission. In addition to this adjudicatory function, the Commission in carrying out its administration of the Racing Law addresses a variety of administrative issues, including, for example, assignment of racing days, policy regarding race entries, and the types of betting allowed.

The Racing Law provides for employment of an Executive Director by the Secretary of DLR, with the approval of the Governor. The selection is made from a list of three names supplied by the Commission. The Executive Director serves at the pleasure of the Secretary. According to the Commission's Executive Director, the administrative staff consists solely of himself as Executive Director, a Deputy Director, and additional clerical and support staff, supplemented by legal staff who are part of the Department's Attorney General's Office. The Deputy Director is interviewed by the Commission and a hiring recommendation made to the Secretary. This staff person is appointed by the Secretary, receives personnel direction and evaluation from the Executive Director, and serves at the pleasure of the Secretary.

The Director indicates that since he and the Deputy are the only professional administrative staff, they have overlapping roles. He says that generally the staff takes its substantive direction from the Commission. Both participate in meetings and prepare materials and recommendations for Commission consideration, as to general policy and administrative matters. As to adjudicative matters, the Director advises that staff fulfills a logistical court clerk type of function. They handle scheduling and set up the meeting, but generally do not actually participate in adjudicative deliberations.

The State of Maryland does not include in its statutes specific nepotism provisions generally addressing issues of relatives serving in the same agencies. In an early opinion (No. 81-2), however, the Ethics Commission considered the types of circumstances where provisions of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) would deal with these kinds of issues. Generally, it concluded that the Law does not deal with administrative, personnel and other types of issues that may be presented when relatives serve in the same agency. It did, however, advise that two sections of the Law could be relevant to limit or control activities of employees or officials as they relate to relatives. These sections are §§3-101 and 3-104.

Section 3-101 of the Law bars nonministerial participation by an official or employee in any matter in which they or certain relatives have an interest, or which involves as a party an entity with which they or the listed relatives have certain economic relationships. We have in the past advised that this limitation would apply to restrict participation by employees in hiring, firing, evaluation, or other personnel-related matters that involve the listed relatives. The other section relied upon by the Ethics Commission in situations involving relatives is §3-104. This section provides that a public official or employee may not use the prestige of their position for their own economic gain or that of another. In Opinion No. 81-2 and subsequent opinions (see, for example, No. 81-37, No. 84-8 and No. 85-8), the Commission advised that this section would be violated if employees or officials took action to urge the hiring of relatives, or if they used their position to advance the employment positions or benefits of relatives.

In applying these provisions to the situation here, we note that the relatives listed in §3-101 include minor children, but not adult children. Though we have several times recommended and urged amendment of this provision to include adult children, the Legislature has declined to take this action. It would therefore appear that this provision would not apply to limit actions by the Appointee with regard to his son's employment circumstances. The son, however, could be barred from participation in matters involving his parent, including both appointment issues and situations involving his parent's private horse breeding business. Involvement by the Appointee in personnel matters relating to his son, however, would be limited by application of the §3-104 prestige provision, at least as to personnel or related situations that would have an economic impact on the son. Thus, as a practical matter, participation in any matters impacting on the son would raise significant §3-104 issues.

We therefore advise the agency that these provisions would apply to limit the conduct of the Appointee and of his son if he is appointed to the Racing Commission, but would not apply to flatly bar the Appointee's service on the Commission.1

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

Date: May 28, 1992

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1 This advice relates solely to the application of the provisions of the Public Ethics Law, and does not reflect any view as to whether the appointment should be made. Also, the Appointee, the agency, and the appointing authority should be aware that nonparticipation and time of appointment disclosure considerations would apply to the Appointee in view of his existing involvement in horse breeding and racing activities.