97.12

OPINION NO. 97-12

An opinion has been requested as to whether the Director of Department of Economic and Community Development's Day Care Financing Programs may teach a course at a private college (the College) entitled "Introduction to Child Care," that is the course required for day care licensing in the State. We advise, based on the facts presented by the Requestor and the Department regarding the agency's approach to this program, that this activity is not prohibited, as long as the Requestor continues to have no significant interaction with substantive program staff in the Department of Human Resources (DHR) child care licensing program, and her student populations continue not to be directly involved with her program.

The Day Care Financing Programs in the Department of Business and Economic Development (DBED) are established pursuant to Article 83A, §§6-102 through 6-312. They include a Loan Guarantee Fund that guarantees up to 80 per cent of loans by a bank or private lender to a small business providing day care services, a Direct Loan Fund that provides direct loans of up to 50 per cent of the cost of construction or renovation of a facility for child day care, and a Child-Care Special Loan Fund that consists of federal funds transferred to DBED from the DHR to lend to child-care providers to expand or improve their facilities, meet State or local licensing requirements, and improve the quality of care. Loan or guarantee actions are taken by the Day Care Financing Committee, and after a loan is settled, it is transferred for administration and monitoring to the Loan Administration Office. Problems or delinquencies are referred to a Special Assets Unit, which works with the borrower to develop a repayment schedule or take action to result in eventual repayment of the debt. There are currently 184 outstanding loans of which 15 are in Special Assets; there have apparently been no actual defaults on any loans.

Applications for a loan guarantee are submitted to the agency after a loan commitment has been made by a bank that requests that the loan be guaranteed by the State, whereas applications for direct loans under the other programs are made directly to the agency. All of the programs require submission of a substantial amount of business information by an applicant, and loan officers will work with the applicant to have questions answered, to assist in adjusting a plan format to meet the DBED requirements, or to review marketing strategies and issues. The application must describe what the applicant wants to do with the money, and why it is needed. The applicant must also show creditworthiness, ability to repay the loan, ability to manage the facility or contract for management of the facility, and evidence of the inability to obtain financing without State funding or guarantee. Qualification or ability to qualify for licensing by the State's child care administration, however, is not a direct criteria for any of the programs.

According to the Requestor and other DBED staff, though the agency encourages applicants to participate in DHR's Child Care Administration (CCA) orientation program, and arranges for CCA to hand out financing brochures, it does not otherwise participate in CCA's presentation and generally has very limited and intermittent interaction with the licensing program in the DHR. Licensing issues are described as only indirectly a part of the program's concerns, to the extent that the ability to operate the facility relates to the ability to have sufficient funds to pay back the loan. The agency's focus is on financial and mathematical underwriting criteria as to whether the application suggests a sufficient need and business capability to support a conclusion that the loan can be repaid, and loan monitoring after settlement apparently takes the same approach.

The Requestor has asked for advice about teaching a course at a private college in the Baltimore area (the College). The course is called Introduction to Child Care, and is described as meeting the DHR minimum requirements for child day care senior staff certification. The Requestor indicates that her background is in teaching and educational administration. She says that in the interest of doing some teaching, she contacted a friend at the College, was asked to teach the introductory child care course, and actually taught it in September 1996. She says that there were 27 students, most of whom were aides in day care centers doing the course for continuing education purposes, as a first time ever college experience. The class also included a few teachers, and two administrators, one from the Salvation Army and one who owned her own center. None of the participants, according to the Requestor, had funding supported by her program. She indicates that the course was taught from a standard text book dealing with early childhood education. It involved totally child care and educational approaches and did not deal in any substantial way with facilities or at all with financing issues.

This request involves application of the employment provisions of §15-502 of the Public Ethics Law (State Government Article, §15-502, Annotated Code of Maryland, the Ethics Law). This section prohibits employees from being employed by an entity that contracts with their agency (subsection (b)(2)) or from having any other employment relationship that would impair their impartiality or independence of judgment (subsection (b)(2)). The College does not appear on the list of entities doing business with DBED, though it has some limited dealings with the Higher Education Commission, and the agency ethics liaison indicates that he can identify no other grant or funding/contractual relationships between DBED and the College. This inquiry thus presents questions involving application of the impairment provision similar to those previously considered in several situations where employees wanted to engage in teaching activities at community colleges. (See particularly Opinions No. 96-3 and No. 90-16, which discuss the approach to teaching activities.)

Generally teaching affiliations have been allowed, unless there are direct relationships between the teaching activity and the duties and program functions of the individual or her State agency that would raise concerns about an individual's ability to carry out their official duties impartially and with independence of judgment. In considering application of §15-502(b)(2) to particular situations, for example, one of the questions is thus whether a course is a specialized course targeted at a regulated population, or a regular academic course unlikely to focus on individuals or entities served or regulated by an individual's agency. Our concern is to ensure that individuals do not encounter in a private teaching situation the same persons or entities they are regulating or funding, or appear to be providing official advice or guidance as to an agency program in what is fundamentally a private undertaking.

The course proposed to be taught by the Requestor is not part of a regular academic program, but is a course targeted at child care providers in connection with licensing requirements. It would appear on its face to have a relationship to a program such as the Requestor's that deals directly with child care providers. Also, issues could be presented by the fact that the Requestor's ability to teach the course depends on enrollment by persons likely to be employed by entities that are involved in her program, and there is always a potential for her to encounter in her course owners or managers that are applicants directly dealing with loan officers supervised by her in the Day Care Financing Program.

The Requestor and her agency, however, insist that in fact her State program has little interaction with the licensing aspects of the State's delivery of child care services, and none with the course requirements. She also points out that the course itself is not generally directed at the individuals involved in managing day care programs with whom she or her staff would likely interact, but with workers in such programs. Further, the course subject does not, according to the Requestor, address any areas of concern to her agency's financing activities. The agency also has suggested that the likelihood of relationships developing between the course, its students and the day care financing programs is remote, and has advised through its ethics liaison that it does not believe this affiliation would impair or otherwise impact on the Requestor's fulfillment of her duties in the Program.

Under the circumstances, we do not believe that the apparent related subject matter addressed by this course and the Requestor's agency program present sufficient concerns to prohibit this activity under the impairment provision, and so advise the Requestor and her agency. Our advice, of course, depends substantially upon the agency's and the Requestor's description of the Program and the absence of any significant interaction with the licensing and related substantive day care activities that may be the subject of the course. If in the course of carrying out this activity issues arise suggesting a contrary situation, then further review and possible discontinuance of the activity may be required.

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

Date: October 1, 1997