97.14

OPINION NO. 97-14

An opinion has been requested as to whether the provisions of the Public Ethics Law apply to require disqualification by a member of the Washington Suburban Sanitary Commission (the Requestor) in a procurement matter potentially involving an entity with which she has had some previous personal and official dealings. We advise, based on the information provided, that the Ethics Law does not require disqualification by the individual in this matter.

The WSSC is a bicounty agency that provides for construction, maintenance, and operation of water supply and sewerage systems in Montgomery and Prince George's Counties. Its membership includes three persons representing Montgomery County and three representing Prince George's. Most of the region's sewage is transported through trunk sewers through the District of Columbia and treated at the regional Washington, D.C. Blue Plains Pollution Control Plant, which empties into the Potomac River. The transaction directly at issue in this request is a procurement to select a contractor to haul sludge from the Blue Plains facility. The previous contract for this work was held by a joint venture including a Virginia Corporation (Joint Venturer A) and a Delaware Corporation with a major presence in Prince George's County Maryland (Joint Venturer B). The Requestor, who was appointed to the WSSC in April 1996, indicates that the primary owner of Joint Venturer B is a 30-year personal friend and past political campaign contributor. She advises, however, that she does not now and has not since 1994 had any active political campaign or solicited or received any contributions from this individual or his company. Further, the Requestor indicates that she is an administrator in a local public school system, and states that she does not have any employment, consulting or ownership interest in Joint Venturer B, or any debt or contractual relationships with it or with its owners.

During 1996 and 1997, the fifth year of the previous contract, issues arose regarding the contract and the joint venturers in which the Requestor had some official involvement. She participated, for example, in a meeting with the agency's General Manager regarding questions presented by Joint Venturer B about the compensation under the contract, as well as other aspects of the agreement. According to the Requestor, she attended the meeting, along with another Prince George's County member, as well as a representative of the company and several program staff and procurement personnel from the agency involved in contract implementation. The agency requested and received documentation regarding the company's concerns and the end result was a contract adjustment agreed to by the agency. Subsequently a dispute arose between the two joint venturers regarding this increased compensation and other contract matters. An arbitration was held and the Requestor was subpoenaed by Joint Venturer B. She advises, and the record of the arbitration confirms, that her testimony related entirely to a description of the circumstances of the previous meeting.

The currently pending transaction is a procurement to acquire the hauling services for the Blue Plains facility for the next five years. The procurement action was begun in January 1997, and entails an $11 million 3-year contract with 2 one-year extension options. The WSSC staff advises that there were four qualified bidders. The lowest bid was from Joint Venturer A, with a new partner; the second low bid is from another entity not involved in the previous contract; and the third low bidder is Joint Venturer B. The WSSC staff review determined that Joint Venturer A was responsive and responsible and recommended its selection as the winning bidder. Prior to and during the WSSC meeting to consider this recommendation, the Requestor raised a variety of issues regarding the selection of Joint Venturer A. The Requestor's concerns appear to reflect information from past WSSC actions, her participation in the arbitration, and other knowledge. A vote taken by the members present resulted in a decision to reject Joint Venturer A, and direct staff to evaluate the second lowest bidder. (Note that we are advised that the Requestor in fact has no special knowledge of or involvement with the second bidder.)

Joint Venturer A objected to this WSSC Board determination and the matter is currently in litigation. In the context of this judicial proceeding, it has been suggested that the Requestor should disqualify herself from further involvement in this transaction in her capacity as a member of the WSSC. As an official subject to the requirements of the Public Ethics Law (see State Government Article, §15-103, Annotated Code of Maryland), she has requested Ethics Commission advice as to whether her disqualification is required under the State Ethics Law. We want to make it clear that we do not in any way advise regarding the substance or procedure of the WSSC's contract actions, and do not comment on or otherwise take a position as to the pending litigation. Nor can we interpret or apply statutory or regulatory provisions or procurement, contract, or other procedures that may relate to the WSSC. Our focus is solely on whether disqualification or other action is required for the Requestor in this situation as a matter of law under the nonparticipation or other conduct provisions of the Maryland Public Ethics Law.

Section 15-501 the Ethics Law prohibits participation in a matter in which one has an interest or which involves as a party an entity with which one has certain economic relationships. These include, for example, having an ownership, employment or financial interest, as well as having a contractual or debtor relationship. Interest is defined as a "legal or equitable economic interest owned or held" by an individual. Political contribution relationships are not included. The Requestor acknowledges that she has some personal relationships with Joint Venturer B, including personal friendship and having received political contributions. She also participated as a witness in the arbitration proceeding. The political contributions to the Requestor are well in the past, however, and her involvement in the arbitration was in response to a subpoena and limited to a recitation of her actions relating to a meeting described as part of her official function as a member of the WSSC.

Based on this information reflected in our review of the records provided to us, and the information from the Requestor and the agency, we do not believe that the past political contributions and other contacts are economic relationships suggesting that Requestor has an interest in the matter or in Joint Venturer B as contemplated by §15-501(a)(1).1 Nor, even acknowledging that Joint Venturer B continues as a party to the procurement, does the Requestor appear to have any of the relationships with Joint Venturer B that would result in application of the disqualification requirement under §15-501(a)(2) of the Law. Under these circumstances, we cannot conclude that Requestor's disqualification from participation in the procurement decision is required as a matter of law by §15-501.

The remaining question for this Commission under the Ethics Law is thus whether the other conduct provisions dealing with use of prestige and official information would apply here to compel Requestor's recusal. Section 5-506 of the Law bars an official from using their official position for their own private gain or that of another. Section 15-507 further prohibits the use of confidential official information acquired in connection with one's official duties for one's own economic gain or that of another. It is not at all clear at this point that Joint Venturer B stands directly to gain from the Requestor's opposition to Joint Venturer A, since it is the third low bidder. Moreover, there is no suggestion by anyone involved that there is an issue of misuse of WSSC information.

The §15-506 requirements are to provide direction for officials and employees to avoid improper use of their position for the gain of another. An advisory opinion process cannot be used to judge whether a breach of this section occurs. However, we do not believe that personal acquaintance and a past political relationship necessarily demand a conclusion that the Requestor's participation violates these provisions of the Law, particularly given the apparent substantive basis for her concerns and the absence of any economic relationships between her and Joint Venturer B. Under the circumstances, and based on the information provided, we advise that as the situation currently stands, Requestor's participation in the transaction is not barred by the nonparticipation or other conduct provisions of the Ethics Law. The Requestor, however, is advised of the potential application of the prestige and confidential information provisions of the Law, and should take care to avoid any actions that could give rise to application of these provisions.

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

Date: November 18, 1997

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1 It should be noted in this regard that Joint Venturer A also made political contributions to the Requestor's past campaigns.