94.06

OPINION NO. 94-6

An inquiry has been received regarding application of the Public Ethics Law where expenditures relating to travel by an agency employee were provided by private entities regulated by the agency. In the course of reviewing the request it has become clear that this agency and others need more general advice regarding these types of matters. FT1 It is our opinion that in most situations regulated entities or contractors should not be solicited or provide funds for staff travel to training or conferences or for agency dues to various membership organizations.

In the 15 years since enactment of the Public Ethics Law (Article 40A, Annotated Code of Maryland), we have provided substantial advice regarding application of the gift and prestige of office provisions of the Ethics Law (§§3-106 and 3-104) regarding private payment of travel and related expenses for State officials and employees. These include, for example:

No. 81-6—DPSC Data Center employee could not accept seminar expenses from a company where the seminar seemed to be a company marketing activity. Though recognizing that travel could be accepted in some situations, we recommended that supervisors and officials and employees take great care when considering whether gifts of travel will be accepted, especially where the donor has business or regulatory relationships with the employing agency.

No. 81-31—State Aviation Administration personnel air fare could be paid by airlines in connection with the employees' conduct of agency briefings at airline reservation centers. This is the key opinion that sets forth the principle that expenses to the agency in connection with an established agency program are allowable under certain narrow circumstances.

No. 81-46—Employees of a DHMH regional health center could not accept a gift of travel and related expenses from a Chicago entity to do an informal evaluation that would lead to a demonstration contract and possible later contracts by the entity with the DHMH.

No. 82-28—Executive Director of the Board of Examiners of Nurses permitted to accept travel and related expenses from the National Council of State Boards of Nursing in connection with her service on the Council's Examination Committee. The service was part of her official duties as the agency representative to the Council.

No. 88-17—Incentive award gifts to MVA employees funded by private donations were allowed as part of an agency program within specific constraints designed to protect against abuse and ensure agency control, and to avoid direct relationships between recipient employees and private donors.

These formal opinions have been supplemented by many informal advice letters to agencies and individuals, beginning with a general letter in April 1982 to the Secretary of Budget and Fiscal Planning indicating that travel paid by other than the State is limited by the Ethics Law. In other informal advice we have advised that contractors and regulatees should not be solicited for training funds to allow for U.S. or international travel by staff to training seminars. We have also advised a regulatory agency that it should not solicit or accept national organization dues money from a regulatee.

This advice relies primarily on the general prohibition in §3- 106 against solicitation of gifts by State officials and employees, as well as the prohibition against the acceptance of gifts by these individuals from individuals or entities that have regulatory or contractual dealings with their agency, have interests that can be directly impacted by the individual, or are lobbyists as to the individual's agency. For purposes of this section, "gift" is defined very broadly in §1-201(q) of the Law as the "transfer of anything of economic value regardless of form without adequate and lawful consideration." Another provision of the Law impacting on these situations is the prohibition against using one's position for one's own gain or that of another (§3-104).

As a general matter, the Commission in interpreting these limitations has treated the provision of travel and related expenses as well as payment of dues and provision of in-kind services as gifts that could be restricted in accordance with the solicitation and acceptance provisions of §3-106 and the prestige provision of §3-104. We have recognized in evaluating the circumstances of these gifts that they can in some very limited situations be gifts to an agency, and that establishment of an agency relationship with a private entity may be a matter of agency policy and management determination. Nevertheless, we have also taken account of the mandate in the Ethics Law to construe its provisions liberally to accomplish its purpose of avoiding conflicts and appearances of conflict in the conduct of the State's business. We have been concerned with the substantial appearances of conflict and possible impropriety that arise when regulatees and contractors whose economic interests are significantly impacted by an agency are solicited by that agency for contributions to support certain agency activities. This has been especially true where the solicitation and subsequent donations result in some personal benefit or advantage to individual agency officials or employees.

For these reasons we have, for example, allowed acceptance of travel only where it was a part of an established agency program, where identification of individual participants is a matter of agency determination, or where travel is particularly provided for in the context of contractual relationships. We have insisted that policies regarding acceptance of contributions from private entities be established and administered by agency managers at the highest level, and decisions not made directly by individual beneficiaries or their immediate supervisors. And we have consistently advised agency personnel of the importance of avoiding direct solicitations of contributions from individuals or entities that are regulated by the agency or have significant contractual relationships with it. This is particularly true where the donor may have regulatory compliance problems or has a procurement matter under consideration.

We continue to believe that these guidelines are necessary if the integrity and impartiality of government is to be maintained as set forth in the Public Ethics Law. Though we recognize that there are narrowly defined and carefully constrained circumstances where a private entity may make a contribution to an agency to advance the agency's mission, we believe solicitation of travel and related expenses for use by individual employees and of dues money from regulatees or contractors and grantees is generally inconsistent with the provisions and purposes of the Public Ethics Law.

Mark C. Medairy, Jr., Chairman
   Michael L. May
   Robert J. Romadka
   April E. Sepulveda

Date: September 28, 1994

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1 In the process of our reviewing this particular situation, the funds, which were solicited by another agency employee, were returned to the donor.