92.10

OPINION NO. 92-10

The Maryland State Police has requested advice as to whether a for-profit retail operation of the Maryland Troopers Association (MTA or the Association) may be a vendor to the Maryland State Police. We advise that inclusion of the Association's retail operation as an agency vendor would be prohibited by the Public Ethics Law.

This opinion arose as a result of a request from the General Manager of the Police Supply Store of the Maryland Troopers Association that it be placed on the bid and quotation lists for Maryland State Police (MSP) purchasing. The Maryland Troopers Association is a private incorporated fraternal association, organized for the benefit of the interests of State troopers. It serves as a representative for troopers and also provides certain other benefits such as life insurance and legal assistance. The Association has no official government status or sanction, though its members are permitted bi-weekly dues check-off from State paychecks. The MTA has had a paid fee lobbyist for several years, whose 1991 registration and activity report identify him as a legislative and executive branch lobbyist, dealing with "all matters relating to salaries, benefits, and working conditions of State police".

According to the Association's President, membership is limited to active Maryland State troopers or those who have retired in good standing. Apparently troopers at all levels, including agency managers as well as uniformed personnel involved in the procurement process, are members of the organization. The MTA is run by a Board of Officers that includes 5 executive officers and 12 members from all areas of the State elected by the membership. Of these 17, two are retired troopers; the remaining 15 are active troopers and therefore current employees of the agency. One of the current MTA Board members is employed in the MSP's Supply Division.

The MTA Store is a for-profit operation functioning within the corporate structure of the MTA. It originally began by marketing logo items such as T-shirts and cups, apparently with the specific written approval of the MSP Superintendent. Recently the Store expanded to begin to carry a broader range of police and related equipment. This would include, for example, clothing, security devices, light bars, and radio equipment. The Store is the registered dealer and repair facility for some items, and as to some is the exclusive dealer within the State. According to the Store's General Manager, it does business with police departments and related law enforcement entities in Maryland as well as in Pennsylvania, Delaware and Virginia.

The General Manager, a civilian employee, reports directly to the President of the Association. Neither he nor any other Store employees are troopers or employed by the State, nor, according to the General manager, are any troopers involved in the Store's marketing or bidding activities. Also, the General Manager advises that though major management decisions (such as significant expansion or site location) would be made by the MTA Board, as a general matter he makes operational decisions regarding personnel, product lines and other aspects of Store operation. The Store has a showroom and sells to individual police officers and the public. Apparently Store profits will ultimately accrue to the MTA's general operating funds, but now are being reinvested in the Store.

The Maryland State Police purchases about $12 million worth of items during a typical year, including a wide variety of general equipment and supplies such as those marketed by the Store. Purchases are made through the Supply Division pursuant to the State's procurement process (COMAR Title 21), through authority delegated by the Department of General Services. Procurements may be by any of a number of methods, including both competitive and sole source, as well as special noncompetitive procedures for purchase of human, social or educational services. Also, small procurement procedures applying to purchases under $10,000 can be by oral solicitation, written solicitation, or published solicitation. To some extent purchases at these smaller value levels can be informal and involve some discretion by the purchasing agent.

This request presents issues under the employment as well as the participation, prestige and information provisions of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law). Section 3-103(a) of the Law prohibits an employee from having any employment relationship with an entity that contracts with or is negotiating to contract with his agency (subsection (a)(1)(i)). It further bars any other employment relationship that would impair the individual's impartiality or independence of judgment (subsection (a)(1)(ii)). While we have not in the past viewed mere membership in a trade or professional association as employment for purposes of these provisions, we have consistently advised that service in a fiduciary capacity on the operational or management boards of such organizations, whether or not compensated, would be employment for purposes of this section.

Thus, as to the question specifically presented here, it is our view that §3-103(a)(1)(i) would prohibit any active trooper from serving on the MTA Board, if the Store is engaged in sales and contract transactions with the MSP, or any other unit of the Department of Public Safety and Correctional Services, and that no regulatory exception would be applicable to this situation.1 Moreover, other provisions of the Ethics Law also point to the kinds of problems that would be presented if the MTA store were to become an MSP vendor. Though they may not be officers or board members of the Association, the persons involved in the purchasing process are members of the Association and have some interest in its financial well being. As participants in procurement decisions, they would have information regarding agency needs and have agency involvement that could be viewed in some circumstances as being inconsistent with the participation provisions of §3-101 and the confidential information provisions of §3-107.

Even more significant is the prohibition in §3-104 of the Law, which bars the use of the prestige of one's office for one's own economic gain or that of another. This limitation could potentially be at issue in any situation where a purchasing agent selects the MTA Store as a vendor, or if an individual trooper defines a need for an item that ends up being supplied through the Store. However innocent such transactions may be, persons involved in them would regularly be risking allegations of impropriety, especially in the small less formal procurements.

We recognize that many of the provisions dealing with conduct of employees (§§3-101, 3-104, and 3-107) do not as a general matter apply to flatly prohibit relationships. Section 1-102 of the Law, however, makes it clear that appearances of conflict are also of concern under the Law. The potential concerns and the appearance issues they could present under §1-102 of the Ethics Law are to some extent recognized by the MSP procurement staff in requesting advice on the issue. It is our view, in fact, that it was these kinds of concerns that led to the Legislature's inclusion in the Law of the employment provisions that apply to bar the activity here. Also, the ethics liaison speaking on behalf of the Secretary of the DPSC has expressed the view that an ongoing relationship involving sales transactions with a private entity with which so many troopers are affiliated would present problems for the agency.

The MTA is an important fraternal organization with which many MSP troopers, including those in the procurement process, are affiliated. It provides a variety of services and benefits to its members, and speaks on their behalf on a wide range of public policy issues. The members of the Association would be expected to have a substantial loyalty to the organization and the advancement of its interests. To place agency procurement personnel in the situation of handling business transactions with this organization would, we believe, place significant strains on the integrity of that process. It would result in violation of the strict employment provisions of the Ethics Law for MTA Board members and officers; it would raise substantial and ongoing questions under the participation, prestige and information provisions of the Law; and it would give rise to the kinds of appearances of conflict that are intended to be addressed in the Law. We therefore advise the agency and the Association that inclusion of the MTA Store as a potential agency vendor of police supplies and other equipment would be prohibited by the Public Ethics Law.2

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

Date: July 7, 1992

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1 Since we believe that this request is resolved by application of subsection (a)(1)(i), we do not consider whether, as to particular persons, the proposed vendor relationship would also be barred by the impairment provision of subsection (a)(1)(ii).

2 The Store engages in procurement and sales transactions with Maryland law enforcement agencies with which troopers may interact. Apparently, however, the Store is managed solely by its civilian employees and no troopers are involved in any marketing or related activities. Trooper members and officers of the MTA should be aware of the §3-104 prestige provision of the Law, and make certain they continue to avoid any actions that relate to the Store's business, particularly any transactions or potential business with other law enforcement agencies or other entities with which they may be dealing in the context of their MSP duties.