96.13

OPINION NO. 96-13

Ethics Commission advice has been requested as to application of the non-participation provisions of the Ethics Law to the Director of Marketing for the Maryland Port Administration (the Employee), whose adult son works as a supervisor for a terminal operator/stevedoring company operating at the Port of Baltimore. We advise that the Employee must avoid participation in any defined matter that directly involves his son's employer, but is not barred from general marketing activities that might indirectly impact on this entity.

The Maryland Port Administration is charged with the responsibility for operating the Port of Baltimore and generally with promoting and increasing waterborne traffic in and through the Port. Its functions include marketing the Port to attract customers, maintaining and enhancing the facilities, and working with private operators to enhance the Port's operations. It is authorized to construct and operate facilities directly as public terminal facilities, and also owns and operates the World Trade Center-Baltimore. Its operations include interaction with several categories of entities—shippers, shipping lines, terminal operators, stevedoring companies, and land carriers. The Port itself includes several types of facilities—privately owned and operated facilities in which the Administration plays little role, two terminals owned and operated by the Administration at Seagirt and North Locust Point, and several terminals owned by the MPA and leased to private operators.

The terminals owned and operated by the Administration are the responsibility of Maryland International Terminals, Inc., a private entity created by MPA, which in turn contracts with a private terminal operator/stevedore to operate the terminal. The contractor for these two facilities is selected through a competitive procurement which is handled by the Operations Division of the MPA, a Division separate from the Employee's Marketing Division, and a process over which he has no control or input. This entity (the Contractor) handles general terminal operations and stevedoring work at both of these terminals. The terminals leased to private entities are operated solely by the tenants without any operational involvement by the MPA, and the terminal operators select the stevedoring company. According to the Employee, the long term leases are negotiated by the Operations Division and he does not have a role in this process. Selection of a stevedoring company is the responsibility of the tenant/terminal operator.

The stated goal of the MPA is to stimulate waterborne commerce through the Port in a manner which provides economic benefit to the citizens of Maryland. As Director of Marketing, the Employee's focus is on the recruitment work required to accomplish these goals, which he indicates involves primarily his interaction with shippers and shipping lines. He and his staff (which includes units in several other states as well as both MPA and private contractor offices in international locations) do this by working with existing lines that currently call at the Port to help with problems and respond to issues raised by them. They also work to recruit new lines to the Port, presenting a proposal to a line tailored to meet the particular concerns of that line. These proposals are geared to marketing the whole Port, pointing out the Port's strategic location in the Baltimore/Washington area, its access to the Midwest via convenient turnpike and highway capacity as well as railroad capabilities located at the Port, and the operational advantages of its various terminals. According to the Employee, MPA's marketing activities do not entail the particular promotion of any one facility over another.

The Employee indicates he is the third generation of his family to be involved with the Port, having previously worked for shipping companies at the Port. His son (who is in his twenties) has also worked at the Port since he began working, and has worked for the Contractor since February 1993, prior to the Employee's joining the MPA in December 1995. The Employee advises that his son's job for the Contractor is at the South Locust Point Terminal and involves overseeing the stevedoring operation. He checks paperwork related to a transaction, watches the activities of the stevedores, and communicates with the Port Captain (an employee of the shipping line) as to any issues or problems that arise. He reports to his superiors at the Contractor as to any damage or related concerns, since damaged cargo or containers cannot move. He does not directly supervise stevedores and reports up the line to the Contractor's Terminal Manager at South Locust Point, who in turn answers to the Operations Manager for the Contractor in Baltimore. There are also a Vice President for Operations and a General Vice President in this chain of command.

In response to the possibility that the Employee may want to promote an individual operator who is his son's employer, the Employee indicates that he is not aware of any specific circumstance since his employment at the MPA, or related to his MPA duties, that would be a basis for this possibility. He points out that he has had no dealings with his son in connection with his son's work for the Contractor, and indicates that he has few direct interactions with the Contractor. Also, as noted above, the Employee says he does not have a role in the long term lease process or in selecting a contractor to operate MPA-owned terminals. He describes his focus as on shippers and shipping lines who he says make a decision based on the Port's location, accessibility to inland transportation, facilities and cost. The choice is rarely based on who the terminal operator is and the shippers/shipping lines tend not to be involved in selection of a stevedore. Apparently the Employee's dealings with the Contractor or another operator/stevedore would be to facilitate or assist a shipper or shipping line in resolution of any concerns. He says that this type of situation arises infrequently, no more than once a month, and he points out that he is sometimes contacted in these types of circumstances because of his lifetime affiliation with the Port.

This request presents issues primarily under the nonparticipation provisions of §15-501 of the Ethics Law.1 This section prohibits officials and employees from participating in any non-ministerial way in a matter in which they have an interest or which involves as a party an entity with which they or certain relatives, including adult children, are employed. In applying this provision we have considered a "matter" to include any proceeding, application, submission, request for ruling or other determination, contract, claim, case or other such particular matter that would involve some discrete and particularized impact on the employee, a relative or a relative's employer. (Opinions No. 91-11, No. 90-8, No. 83-2 and No. 80-17.) Under this approach, we believe that this prohibition applies to require the employee's continued non-participation in any specific contract or lease transaction involving the Contractor, his son's employer. We also advise that this provision applies to limit his involvement in interactions that the Employee describes as "facilitating" between shippers or shipping lines and the Contractor as a terminal operator/stevedore. Though these situations may be less formal, they nevertheless seem to involve genuine interests and economic concerns of the individual/entities involved, and the Employee's assistance would be sought for the very reason that his intervention would have an impact on the outcome of the situation. Under these circumstances, we conclude that his involvement in such situations must be viewed as participation in a matter and would be prohibited if the situation directly involves the Contractor.

As a general matter, this advice relates to conduct and does not result in a general or absolute prohibition against a particular employment or other relationship. We have, in some situations, advised that a disqualification requirement was so pervasive that it limited a person's ability to function in a position and as a practical matter prohibited a relationship. (See, for example, Opinion No. 86-20.) The Employee here, however, indicates that his primary interaction is with shippers and shipping lines, and that his direct dealings with the terminal operators/stevedores are infrequent. Since these limited questions arising that require official actions relating to the Contractor can apparently be referred to others on his staff, we do not believe that the potential for this type of activity would substantially impair the Employee's ability to do his job so as to result in an employment prohibition under §15-502 of the Law. This assumes, of course, the Employee's compliance with the prestige provision of §15-506 of the Law, and that he engages in no other actions or dealings within the agency or among its various user entities that suggest the improper use of his position for the economic gain of the Contractor.

We also recognize that to some extent the Employee's marketing activities could impact on the Contractor and its activities in the Port, both as an MPA operator and as a tenant. Certainly activities that increase the flow of cargo through the Port generally, or to any particular terminal, would necessarily benefit entities that function in the facility. We do not believe, however, that these ancillary benefits to the various entities that operate in connection with the Port necessitate nonparticipation by the Employee in the broader marketing of the Port, simply by virtue of his son's employment with a terminal operator.

Michael L. May, Chairman,
   Mark C. Medairy, Jr.,
   Charles O. Monk, II
   April E. Sepulveda

Date: December 11, 1996

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1 State Government Article, §15-501, Annotated Code of Maryland, the Ethics Law. We have generally advised that employment of a spouse or other relative would not be attributed to an individual for purposes of application of the employment prohibitions of §15-502 of the Law. Operation of the participation prohibition as an employment bar for practical purposes is discussed below.