98.03

OPINION NO. 98-03

The question has been presented by the Eastern Shore Area Health Education Center (Eastern Shore AHEC) as to whether and how the Public Ethics Law applies to Board members of the organization who are employees of the University of Maryland System or the Department of Health and Mental Hygiene; and whether, in particular, the employment provision of the Law would limit the employment of any of these individuals as adjunct faculty in the program. We advise that individuals who are State employees may serve on the Board as part of their official duties, as long as the selection process provides for confirmation of official status by their State agency, and provided that they comply with constraints defined in previous opinions for official participation service. Individuals who serve as adjunct faculty may not be compensated above their regular salaries for their Eastern Shore AHEC service in any capacity.

This request was presented by the Executive Director of the Eastern Shore AHEC, a private nonprofit corporation established to implement the federal Health Professions Educational Assistance Act of 1976. This law was directed at the establishment of a grant program designed to strengthen training and increase enrollment in allied health professions. In particular, it provided for federal grants to eligible entities to cover the costs associated with establishing community-based allied health training programs that link academic centers to rural health settings. The law provides for grants to be made to eligible entities, which apparently includes only university medical schools. The ESAHEC is also supported by Maryland law enacted in 1978 to establish a Statewide Medical Education and Training System at the University of Maryland. Under this law the System is to include centers for comprehensive training in cooperation with an existing medical institution. The law provides that the Dean of the University of Maryland School of Medicine provide faculty and curriculum for each center and that an advisory council be established to include individuals from lay and professional communities. The University may assign third and fourth year students and residents to the Centers for training.

The organization is funded in part by a three-year federal grant directed through the School of Medicine and State funds directed through the Department of Health and Mental Hygiene. (Note that there are uncertainties regarding future funding, and the source of this funding is one of the current concerns of the organization.) All of the funding is then transferred to the AHEC for use in program development and administration on the Eastern Shore. Some of these funds are, however, paid by the AHEC to the University for services for adjunct faculty and other curriculum-related functions provided by the University to the program. In addition, the AHEC may enter into contracts with other entities such as hospitals, managed care organizations, and community organizations for the provision of program services related to its health education activities.

The Eastern Shore AHEC bylaws provide that the organization includes a Board of Directors and several caucuses. The Board itself includes one person elected from each caucus, three consumer members and three at-large members elected by the Corporation, ex officio members designated by the Board, the Chairman of the organization's Interdisciplinary Education Committee, a member appointed by the Vice Chancellor for Health Affairs from UMAB, and a member appointed by the Secretary of Health and Mental Hygiene. There are currently eleven caucuses established by the Board of Directors that represent the various health professions in the area. Any member of the profession who is interested and willing to participate may be a member of a caucus, and apparently the membership varies, ranging from as few as 2 or 3 where the number of professionals in the area is limited to as many as 15 or 18 for the more heavily represented disciplines in the area.

The AHEC program involves assignment of students from the Medical School or from other medical disciplines for 8-week rotations on the Eastern Shore. It is described as a community academic partnership entailing continuing education, general education, and programs to encourage rural practice by medical professionals. The program involves regular faculty at the University who as part of their regular teaching activities deal with students involved in the program. It also includes individuals who may be employed or assigned by the University to provide services to the program on-site. The program is a clinical program involving third or fourth year students, and is not a classroom situation. Students live in the area, and participate in weekly interdisciplinary sessions. They work with a preceptor in their field, "shadowing" a professional in the area or on assignment to a clinic or other facility. The preceptors and local professionals who are involved in the program do so without compensation though they may receive some recognition award or other acknowledgment.

We are advised that while the AHEC Board and staff are responsible for operation, management and general administration of the program, both the University and the DHMH also have defined roles and interests. The University is responsible (according to the statute) for curriculum development and for faculty recruitment and direction, and a Memorandum of Understanding is used by the entities to provide for the University to select and schedule students, assist in recruitment and training of preceptors, assist in curriculum development, and provide faculty to assist in program development and implementation. The DHMH designee to the AHEC Board describes his agency's interest as part of its mission of extending the Health Department into the larger community and as a complement to its programmatic goals of recruiting and retaining providers in under served communities. The agency thus sees its role as in part providing access to Health Department programs and personnel as part of educating students in the practice of public health in this type of setting.

The Board of Directors of ESAHEC includes a current membership of 19. Several of these individuals are affiliated with private health providers in the area, and one is a member of the General Assembly. The Board includes 9 individuals who are regular employees of either the Department of Health and Mental Hygiene or the University of Maryland System. Two of these individuals are clearly and officially appointed to the Board as designees of their agencies pursuant to statutory requirements. The remainder serve in various capacities as appointees of the Board or nominees of a caucus, though we have generally been advised by the agencies and the AHEC staff that they serve in connection with their official roles. Two of these individuals who are Board members also serve as adjunct faculty providing administrative and preceptor services to the organization. In one of these situations the individual is a University faculty member whose compensation under the Memorandum of Understanding is included as part of his regular University compensation, while the other individual works for a local health department and is directly compensated in addition to his Health Department salary through a contractual employment agreement with the School of Medicine.

The primary issues arise here under the employment provisions of §15-502 of the Ethics Law (State Government Article, §15-502, Annotated Code of Maryland, the Ethics Law). This section prohibits employees from being employed by or having an interest in an entity that contracts with or is subject to the authority of their agency (subsection (b)(1)), or from having any other employment that would impair their impartiality or independence of judgment. The Commission has in implementing this provision consistently advised that service on the operating or management board of a private entity constitutes employment even if it not compensated. Service by all of these individuals on the ESAHEC Board must therefore be viewed as employment under this approach. Since the AHEC is a private entity that has a variety of grant and other contractual relationships with both the University and DHMH, this service would be barred by §15-502(b)(1) unless it is viewed as official participation or an exception can be applied.

We have issued several opinions dealing with official participation. These opinions reflect our view that there are circumstances where an agency, based on its mission definition and goals, believes that it needs to be represented in the management of a private organization. This has in the past involved totally private organizations that have provided for a Board "seat" for an agency member (for example, Opinion No. 80-4), or in situations where the private entity was established directly at the instigation of a State agency and functions almost in its entirety in implementation of a defined public mandate of the State. (See examples discussed in Opinions No. 89-9 and No. 87-11.) The ESAHEC was established by private incorporators and its original impetus is a federal statute. The federal funds, however, result from a grant to the UMS School of Medicine and the organization's purpose is to carry out an educational program defined by the School of Medicine in its grant request, and further as part of the Medical Education and Training System mandated by the State.

Under the circumstances, we believe that the ESAHEC is an entity whose membership could be viewed as coming within the principles addressed in Opinion No. 89-9. This opinion provides as a general matter that employees may serve with private organizations as part of their official duties, as long as the service comes within certain constraints, including that:

1) The private entity may not provide compensation for State related officers or employees.

2) Reimbursement of expenses should be in accordance with agency rules.

3) Private entity funds cannot be used to supplement salaries of State employees or otherwise benefit them in violation of State personnel and fiscal policies.

4) State related board members must serve at the pleasure of the agency, either by virtue of their agency position or agency appointment.

5) Views expressed and actions taken by State related participants must reflect official agency policy.

6) Officials are subject to the other provisions of the Ethics Law, including the prestige of office and misuse of information provisions.

7) Fundraising by employees or officials in the context of their private affiliation, particularly as to persons or entities regulated by or doing business with their agency, would be limited or prohibited depending on the circumstances.

Applying these principles, we believe that the two official appointees to the ESAHEC Board can be viewed as fitting within the official participation principle, as they are both clearly appointed by their agencies as part of their official duties. The other individuals generally could also be viewed as serving in their official capacities, given their agencies' programmatic involvement in the AHEC, and the University, DHMH and the AHEC Executive Director all indicate that this is in fact the nature of their service. None of these individuals, however, are appointed by their agency or explicitly by virtue of their position. Though the service by these individuals may generally be considered to advance the interests of their agencies, they currently serve by virtue of their selection by the Board itself or a particular caucus. It is our view that the status of each of these other State employees needs to be reviewed to ensure that in fact they serve as part of their official duties in accordance with the principles discussed in our Opinion No. 89-9 and set forth above. If any cannot be justified by their agency as official appointees, then we believe that their service would be barred by the employment prohibition of §15-502 of the Law (assuming that the person involved would not qualify for any exception). Also, we advise the AHEC to review its bylaws and develop appropriate processes or requirements to confirm that any State employee selected to serve by a caucus or otherwise is reviewed by their agency for a determination consistent with this opinion.

As to the question presented regarding direct compensation of Board members as adjunct faculty, we can advise as to application of the Ethics Law as to State employees who properly serve as Board members. Our advice as to these individuals is that State employees who are Board members must serve in compliance with the constraints and conditions discussed in this opinion. This includes the constraint that they may not receive additional compensation for their services to the private entity in addition to their regular compensation as State employees. In fact, as a general matter, State employees whose job duties relate to the work of the AHEC would not be able to serve as employees of or consultants to the Board.

In summary, we advise that State employees may serve as members of the AHEC Board as part of their official duties if they are appointed pursuant to specific statutory or regulatory designation, or if their selection by some other means is confirmed as part of their official duties through a process established in the entity's bylaws. Such individuals, must, however, comply with the constraints defined for this type of official service, including the bar against being compensated for their service in addition to their regular State salary. Any other service by a State employee on the Board or as an adjunct faculty member would need to be reviewed by the Ethics Commission in the context of this opinion.

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

Date: June 30, 1998