92.09

OPINION NO. 92-9

An opinion has been requested regarding whether and how the Ethics Law applies to the private environmental consulting activities of the spouse of the Department of the Environment's (MDE) Acting Administrator for the Underground Storage Tank/Leaking Underground Storage Tank (UST/LUST) Program. We advise, based on the specific facts presented regarding the circumstances of this relationship, that there is no general prohibition under the Public Ethics Law, but that the Requestor and his spouse must take care to function within certain constraints designed to avoid conflicts and the appearance of conflict.

The UST/LUST program is a part of the Hazardous and Solid Waste Management Administration (the Administration) in MDE. This Administration is one of several in the Department, including the Air Management Administration, the Water Management Administration, the Sediment and Stormwater Administration, and the Toxics, Environmental Science and Health Administration. In addition to an operational management unit, the Administration has several program offices, including the solid waste program, which deals with permitting and disposal requirements relating to municipal trash, rubble, and sewage sludge, and also manages the State's recycling programs. The UST/LUST Office implements oil, gasoline and chemical laws designed to limit and abate groundwater pollution caused by the practice of storage of such materials in underground storage tanks. The program requires registration and monitoring of most underground tanks. Where there is evidence (such as low gauge pressure) of a leaking tank, the Administration has inspection authority and can direct the tank to be removed or "pulled". Agency inspectors participate in the process and monitor the amount of gasoline or other petroleum substance remaining in the soil. To the extent that contaminants remain in the soil, additional soil must be removed from the site and other abatement action taken.

According to the Requestor the focus of his Office's concern is on the particular site from which the tank was pulled. Apparently UST/LUST inspectors do not have any control over where the contaminated soil is taken. However, the form used at a tank pull provides for identification of the disposal location for the soil and the staff has a list of the possible disposal sites. One option for disposal of soil removed from storage tank sites is transportation to a recycling or "remediation" facility. Soil recycling involves a "baking" process in which the contaminated soil is subjected to intense heat and the petroleum contaminants are vaporized. The remaining "clean" soil is then removed and can be used as fill dirt or for other purposes. The "vapor" is exhausted through air stacks subject to permitting and monitoring under the air pollution control laws administered through MDE's Air Management Administration.

The Requestor's spouse is an environmental consultant who provides services in the field of air quality control to private entities on a contract fee basis. She is a former employee of MDE's Air Management Administration who has also served as the Director of Environmental and Safety Services for a national trade association. The Requestor indicates that his spouse is a known expert in the area of environmental controls relating to air quality, and has recently established her own private consulting business. According to the Requestor this is a sole proprietorship Subchapter S corporation and his spouse is the only employee. The business operates out of the family home, uses limited family resources, and its income forms a part of the family income. According to the Requestor, these family economic relationships represent his only involvement with the business. He is not an officer or otherwise listed on any of the papers regarding the business, nor does he provide any services to it. The Requestor indicates that through her private business, his spouse is a consultant to a company (the Company) that is planning to develop a soil recycling facility in Maryland. The Company became a customer of the spouse in the Fall of 1991 through her contacts in her private association employment. She was asked to provide presentations on the air quality impact of the proposed project and additional information required in connection with processing the permit application for the facility through MDE's Air Management Administration.

According to the Requestor, his spouse's involvement on the Company's behalf relates solely to the air quality permit. The facility also, however, as a result of agency policy considerations, is now required to be permitted by the Solid Waste Office within the Administration. According to the Administration's Director, since the Air Management Administration was without authority to monitor or establish conditions relating to the soil at the start of the process, his Administration began to develop a process for controlling the soil. Apparently the Requestor was involved in this in-house review, until about October 1991, when it was concluded that the better approach to regulating the contaminated soil aspect of the soil recycling facilities was through the solid waste program. According to the Director, at this point the Administration's soil recycling activities were transferred to the Chief of the Solid Waste Program.

The agency ultimately determined that soil recycling facilities receiving contaminated soil would be required to be permitted under the solid waste program. The Department presented this position in testimony during the 1992 Session of the Legislature regarding proposed bills directed at the particular facility proposed by the Company. The facility is apparently opposed by citizens groups who are supported by local legislators. The Department testified in opposition to the legislation, announcing its determination that such facilities would require solid waste permits, and inclusion in the County's solid waste management plan. Since these two processes would include substantial opportunity for public comment and citizen participation, the Department's view was that moratorium and additional study was not required.

In connection with the legislative consideration, there was comment regarding the Requestor's agency employment and the fact of his spouse's affiliation with the Company. The Requestor's spouse was present at the hearing, but the Requestor was not. As noted above, at this point, Administration responsibility relating to soil recycling had been transferred from the UST/LUST unit to the Solid Waste Program. The Requestor and the Administrator both indicate that after October 1991, when the Solid Waste Program took over the regulatory effort as to soil reclamation facilities, the Requestor has not been involved with the soil recycling issue generally or the Company's facility in particular. The Requestor advises that when his spouse took on the Company as a client he advised his superiors of the potential conflict and the need for him to be excluded from any Company matters. He also indicates that he did not participate in the bill hearings and was not an agency source person in other policy meetings regarding regulation of soil reclamation facilities. Nor, according to agency managers, would the Requestor be expected to be involved in any way in the process. His only indirect connection with the Company would arise if it were an entity designated to receive soil being taken from a tank pull site.

Section 3-103(a) of the Public Ethics Law (Article 40A, §3-103(a), Annotated Code of Maryland, the Ethics Law) sets forth employment and interest restrictions applying to officials and employees of the State. Based on the information provided in this situation, we do not believe that the Requestor has an employment relationship with his spouse's business that would be covered by these limitations. Nor do we believe, as the current circumstances are described, that the situation comes within the § 3-103(a)(1)(i) prohibition against an official or employee having a financial interest in an entity that is subject to the authority of his agency. We have in several situations considered economic relationships arising from situations involving spouses' businesses. (See, for example, Opinions No. 80-17, No. 82-12, No. 85-24, and No. 82-50.) Based on the principles developed in these opinions, we conclude that the Requestor here does not have a financial interest in his spouse's business. Moreover, in the situation here, the spouse's business is a formally chartered corporation functioning as a vendor in the provision of limited technical services. To the extent that these limited services are provided as a vendor through a company-to-company contract, the business itself would not appear to be under the authority of the MDE.

It is therefore our conclusion that although there is an appearance concern here, the strict §3-103(a) provisions dealing with interest and employment relationships of employees and officials would not apply under the facts as presented. The Ethics Law provisions that are relevant here are therefore the participation, prestige and information provisions of §§3-101, 3-104, and 3-107. These provisions basically control the conduct of employees whose spouses (or other relatives) have economic interests in or relationships with matters being considered by the employee's agency. They prohibit the employee from participating in the matter if the spouse's business is involved or if the spouse is negotiating employment in connection with the matter (§ 3-101). They also forbid general involvement with or discussion of the matter by the employee with agency staff, as well as other actions, by barring the use of prestige of office for one's own economic benefit or that of another (§3-104); and they prohibit the improper use of agency confidential information for one's own benefit or that of another (§3-107).

Although these provisions of the Law do not necessarily result in an absolute prohibition of a relationship, they do establish significant restraints. They require both the Requestor and his spouse to exercise particular care to avoid any situations where his spouse could be viewed as gaining any advantage for herself or her clients by virtue of his position in the agency. While his spouse is affiliated with the Company, the Requestor needs to be careful to continue his nonparticipation in policy issues relating to the regulation of soil recyclers as a general matter and the permit process as to the Company in particular. He should also avoid involvement in nonministerial aspects of the UST/LUST program's interaction with the Company, including any activities that could involve preparing or handing out facility lists that could include the Company. Also, the Requestor should take care not to discuss matters pending before the agency where his spouse has a private client, and he should continue not to provide any services to his spouse's business.

We recognize that these constraints are substantial. As noted, we assume that Requestor and his spouse can function within them, and continue to avoid situations presenting potential for conflicts of interest. The Requestor should be aware, however, that this advice deals with the specific description of the business as it now exists and the facts of this one situation. It assumes that his spouse will not become involved as a consultant to entities directly involved in the Requestor's agency program, and that, if her interaction with MDE programs expands, these constraints can be applied without impairing the Requestor's ability to function effectively in carrying out his State duties. Should the circumstances change, further advice should be requested.

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

Date: July 7, 1992