96.10

OPINION NO. 96-10

Ethics Commission advice has been requested from the Maryland Higher Education Commission (MHEC) as to whether the post-employment provision of the Ethics Law applies to bar or limit the activities of a former Assistant Secretary of the MHEC (the Former Employee) on behalf of a private college in its dealings with his former agency. We advise that the prohibition of §15-504(b) of the Law does not apply to totally bar the Former Employee's activities as a consultant to the College, though it does limit his ability to assist it or act on its behalf as to aspects of its dealings with the agency that relate directly to particular actions taken by him in his employment with MHEC.

The Maryland Higher Education Commission was established in 1988 as the successor agency to prior higher education boards in a reorganization of Maryland universities and colleges that consolidated higher education policy and funding management in a single agency. The MHEC in consultation with the governing boards and agencies concerned with higher education develops and updates an overall plan to coordinate the growth and development of post-secondary education in the State. It has planning and academic affairs functions, including approval of academic programs and new institutions, overseeing post-secondary institutions (including private career schools), and analyzing the needs of and plans for education and training programs. The Planning and Academic Affairs unit is responsible for doing policy analysis and Statewide planning, approving new and existing programs, doing general research, regulating private schools, and oversight of veteran's administration educational activities.

The Former Employee's position as Assistant Secretary for Planning and Academic Affairs involved supervision of the review, development and implementation of State regulations for the approval of new academic programs and operation of degree-granting institutions in Maryland. Institution approval activities included preparing requirements for 2-year and 4-year colleges and universities; evaluating institutions for compliance with MHEC requirements; and monitoring conditional approvals, commitments, and agreements between the MHEC and the institutions. This included dealings with the College, a private upper division college approved in 1991 to offer instruction on evenings and Saturdays and grant degrees in two areas. This original approval included several conditions and in a one-year follow up visit the College was found to be in non-compliance. The College's authority to operate was revoked in December 1994. Subsequently in June 1995 a Corrective Action Agreement (the Agreement) was negotiated under which the revocation was suspended until September and several required actions were identified. Based on the College's actions regarding these requirements, the MHEC Secretary in September 1995 granted the College a two-year authorization to operate under stated conditions.

In his role as Assistant Secretary the Former Employee was very substantially involved in the MHEC's activities relating to the College during the 1993—1995 review. He retired from the Commission in September 1995 and affiliated with a private educational consulting business through which he has had a variety of consulting projects with higher education programs. The Former Employee indicates that about six months after he left the MHEC he was approached by the College for consulting help with strategic planning as to admissions and graduation requirements, accreditation issues, and aspects of the College's relationships with community colleges. He says that he did write a plan and has been helping to implement it. He says he is not involved in operational management of the institution, but is focussed on policy issues as to where the College hopes to be in the next 1, 3 and 5 years. He says that he has been substantially involved with the College in developing its current proposal to MHEC for a change in the admissions requirements.

In May 1996, the MHEC Secretary requested a report from the College on the current status of the College's compliance with the areas of corrective action addressed in the Agreement. The College has apparently maintained that the Secretary's September 1995 letter amounted to a two-year authorization to operate that in effect started a new college, and that the Agreement has no current relevance to its operations today. The agency seems to believe that given the nature of the commitments undertaken as part of the Agreement it has an obligation to ensure that the resulting changes are still in place. The MHEC points particularly to the College's board structure, continuing arrangements regarding faculty, its progress toward the goals of the financial and marketing plan submitted under the Agreement, and its accreditation process. The current status of the College is that a one-year on-site review is ongoing, and the College has submitted a proposal to MHEC requesting changes to its operating policies and procedures, particularly as to its admission requirements.

According to the Former Employee, his focus is on policy and not management, though he has participated in meetings of the College and assisted in drafting documents for submission to the MHEC. He states, further, that he has not had any direct dealings with the agency or its staff in this process and that he has not been involved in any meetings regarding the MHEC review of the College's status or its issue with the agency as to the ongoing status of the Agreement. He states that his concentration on strategic planning, mission development and long-term goals will not involve the State.

The question presented here is a post-employment issue under §15-504(b) of the Public Ethics Law (State Government Article, §15-504(b), Annotated Code of Maryland, the Ethics Law). This section prohibits former officials and employees from assisting or representing a party other than the State for compensation, in a matter involving the State, if the matter is one in which they participated significantly as an employee. As a general matter, this section has not been interpreted to flatly bar any employment with an entity involved in matters relating to a former agency, or an individual's appearance before the agency. Rather, it looks to identification of particular matters in which the individual was involved in any significant way in the context of their State employment, and forbids assistance or participation as to these on behalf of another party. There is no time limit on this prohibition.1

The general philosophical basis of the provision, at least in part, is the avoidance of "switching sides" and the use for another party of special knowledge acquired in the context of one's State employment. Another goal is to avoid situations where an individual may be seen to be using a State position to create a private employment opportunity. The Law defines specific conduct and participation as prohibited, and its application involves the question of whether the matter is the same matter and whether the person's participation while an employee was significant. In applying the prohibition we have generally viewed participation as including more than final authority or responsibility for a matter. Participation involving personal supervision of the work of others or involvement in a required sign-off or concurrence capacity are activities that have been viewed as significant participation. Providing advice and recommendations as to a matter is also participation.

In the situation here, the Former Employee participated significantly in the agency's activities in connection with the College's status as an approved degree-granting college in the State. Particularly, he was the key MHEC representative in the statement of deficiencies, the approval revocation, the Corrective Action Agreement, and the September 1995 two-year approval. He also is assisting the College in its current dealings with MHEC, both as a general planning matter and in connection with specific actions such as the pending request for changes in the College's operating procedures and admission policies. To the extent that this participation involves the same matter that he worked on while an employee, then the §15-504(b) limitation would apply to bar this activity. In considering this provision, we believe a situation constitutes a matter if it involves a discrete and isolatable transaction or set of transactions between identifiable parties. More specifically, a matter would be the same matter if it involves the same basic facts, related issues, the same or related parties, and the same confidential information. The proximity of the events can also be a factor in considering whether the matters are the same, as is the continuing existence of an important government interest.

The situation here involves a variety of transactions and types of matters, some of which involve general policy and operational development, and some of which are clearly discrete transactions. The latter would include, for example, the Corrective Action Agreement, the approval to operate, and the pending request for changes in the institution's operating procedures. To the extent that the Former Employee was involved in particular aspects of these matters as an MHEC employee, he is barred from assisting the College regarding them at this time. This would include, for example, any involvement in the disagreement between the College and the MHEC regarding the continuing status of the Agreement, as well as specific aspects of that agreement in which he had direct input, such as requirements as to the structure of the Board of Trustees, the accreditation process, and specific aspects of the marketing plan generated as part of the Agreement. Section 15-504(b), would not, however, bar the Former Employee from assisting the College in more general long-range planning, in dealing with operating issues regarding compliance with MHEC requirements that were not at issue in the controversy that led to the Agreement and the grant of operating authority in September 1995, or in specific new projects such as communications programs and admissions requirements (assuming these specific issues were not part of the past controversy).

We recognize that this advice requires the drawing of a very careful line between what is allowable and what is not. The Ethics Law acknowledges the ability of former State employees to engage in subsequent employment activities that may build upon expertise and experience developed in the context of their State employment. It allows this even when the activity entails interaction with entities dealing with their prior State employer, and their own interaction with that employer. The Law, however, requires a balance between these private interests of former employees and the concern to ensure that the conduct of government business in the public interest is not impaired by the involvement of former employees on behalf of private parties in controversies in which they were significantly involved on behalf of the State. Where an individual's post State employment entails direct involvement in this type of situation careful vigilance and monitoring are necessary in order to ensure compliance with the letter and spirit of the Law. The Former Employee, the agency and the College all need to be aware of this and act accordingly in the context of the relationship between the College and the MHEC.

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

Date: October 23, 1996

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1 For a review of previous opinions providing post-employment advice, see Opinion Nos. 95-10, 95-2, 92-11, 91-13, 91-2, 90-12, 89-11, 86-24, 85-14, 85-9, 84-33, 83-12, 82-24, 82-17, 82-3, 81-15, and 80-1.