We have received an advice request from the Director of the Department of Social Services in a small rural county asking whether her continued service on the boards of directors of two community organizations is permissible under the State's Ethics Law. She has also inquired if she may have a private mediation practice, as a sole proprietorship in the county in which she is employed and surrounding counties. We advise that she may not continue on the board of directors of one of the community organizations, but may continue on the other and may have a private mediation practice subject to the restrictions discussed below.
The Requestor was appointed Director of the Department in 1993. She was appointed by the County Commissioners with the approval of the Secretary of the Department of Human Resources and advice of the County Social Services Board. She is responsible for administration and supervision of all the department's programs and operations. Her responsibilities are directed toward management and supervision of her employees, who provide all Department of Human Resource functions related to direct customer services in the County. Among others, the programs include Medical Assistance, Temporary Emergency Medical and Housing Assistance, Food Stamps, Long Term Medical Assistance, and Child and Adult Protective Services.
The Requestor appeared before and was accompanied by a member of the County Social Services Board. The Social Services Board meets with the Requestor each month to review and advise on all aspects of the programs and operation of the Department. The Board has encouraged the Director's involvement and participation with local civic organizations as a means to enhance and encourage Department services to citizens of the county. The Requestor notes that, given the size of the county, she interacts with nearly every community service organization. The Board has encouraged her service on the board of directors of the two organizations for which she has sought our advice.
The first organization is a non-profit organization that offers the county's only program providing transitional housing to homeless women and their children. It also operates the only food pantry in the county and provides food, clothing, and financial assistance for needy families. The Requestor presently serves as a member of the board of directors of the organization. Her Department routinely refers persons to the organization and receives referrals from the organization. As the organization is the only private provider of temporary shelter services and food in the county, there is a cross over of clients from the organization to the county Social Services Department.
Subtitle 5 of the Public Ethics Law, Md. Code Ann., State Gov't Article, Title 15 (Supp. 2001), addresses conflicts of interest, and §15-502 specifically addresses general restrictions related to employment or financial interests. The issue in this request relates to §§15-502(b)(1) and (2), which provide that an official or employee may not "be employed by ... an entity subject to the authority of that ... employee or of the governmental unit with which the ... employee is affiliated;" or "hold any other employment relationship if that employment relationship would impair the impartiality and independent judgment of the official or employee."
In previous opinions we have said that non-compensated service on the board of directors of a private entity constitutes employment for the purposes of §15-502. (See, for example, our Opinion Nos. 87-1, 86-16, 85-19, and 83-23). We have looked to the substance of the employee's relationship with the outside entity rather than the existence or amount of compensation. If the employee holds an office, directorship, or other position of trust with an entity subject to the authority of or having contractual dealings with the employee's agency and to which she would reasonably be expected to have a personal loyalty or commitment to the goals of that entity, then holding the position would be prohibited by §15-502. As a result, the Requestor's continued service on this Board is not permissible under the Ethics Law. The Requestor, however, could assign an employee of the Department to serve as a liaison to the organization's board, provided the employee solely represents the Department and does not participate as a board member.
The second organization is a small charitable organization that raises money to help support various non-profit organizations in the county such as the boy and girl scouts organizations and the local hospital and hospice programs. The Requestor serves on the board of directors, which generally meets one or two hours per month. There is no contractual or authority relationship between the Department and the charitable organization, and, therefore, her service is not prohibited by §15-502 of the Ethics Law. The Requestor should, however, be aware of §15-506 of the law, which prohibits an employee from intentionally using the prestige of office or public position for private gain or that of another. She should take care to avoid using her position in any fund raising activities for the charity. She should also be mindful that §15-505 prohibits an official from directly soliciting or facilitating the solicitation of a gift, even on behalf of another person or entity, from an individual regulated lobbyist.
The Requestor recently completed mediation training and asked if she may engage in a private mediation practice as a sole proprietor in the county of her employment and in surrounding counties. The proposed activity would include court-ordered mediation in divorce cases. The Requestor believes that her referrals will come from the circuit and district courts, private attorneys, therapists, and the public at large. She states that she will not accept referrals directly from the DSS. She plans to devote only two to four hours per week, evenings and weekends, to this activity. The proposed population from which her clientele would derive includes the county in which she serves in her capacity as Director of the DSS.
We have advised that private practices by professionals are not prohibited, provided they are conducted in compliance with significant constraints, particularly the avoidance of any dealings with persons served by their agencies or referrals from their agencies. These constraints are directed at the avoidance of any conflict, or even the appearance of any conflict of interest. In Opinion No. 81-45, involving a dentist in a local health department, a private practice was approved with the understanding that it did not include clients referred from, or otherwise involved with, his agency. The requirement that practices avoid agency clients has been consistently applied in subsequent opinions. For example (as summarized in Opinion No. 93-6):
in No. 82-46, a dentist was advised he could not affiliate with a practice that accepted referrals from his agency;
in No. 83-20, an attorney in Juvenile Services was allowed to have a private practice provided she took no clients involved with the juvenile justice system;
in No. 84-31, a Vocational Rehabilitation counselor could have a deaf interpreter service provided her services were not marketed to, or used by, her colleagues in the agency;
in No. 85-1, RICA psychiatric nurse's private practice could not involve any clients referred from, or otherwise affiliated with, the agency;
in No. 85-4, a lawyer with the Subsequent Injury Fund was prohibited from representing clients before the Workers' Compensation Commission, to avoid involvement with attorneys and others that he dealt with in his official capacity;
in No. 87-8, a DAGR veterinarian was permitted a private veterinary lab only if he did not serve veterinarians in the same area as served by his State lab;
in No. 88-21, State's Attorney could not include criminal cases in his private law practice
in No. 89-1, a DNR Natural Resources Manager was permitted a private consulting practice only if he avoided any work with persons or entities involved with his agency; and
in No. 91-6, an adoption caseworker in Cecil County was permitted to have a private practice doing adoption home studies only if they were foreign adoptions that did not involve activity within her own county and its courts.
All of the above-referenced opinions reflect the Commission's consistent interpretation of the impairment and prestige provisions of §§15-502(b)(1) and (2) and 15-506, and they represent the Commission's determination to prohibit relationships between the outside employment and a State employee's agency. In general, the focus has been to avoid situations in which the population served by the private practice and the agency may overlap.
One cannot discount the likelihood that active clients of the Requestor's department may also need court referrals for divorce mediation. Regardless of her lack of personal interaction with them, because of the prominence of her position with the DSS and her responsibility for all services provided by the DSS, it is likely that any client who has received services from the DSS would be familiar with her name and her position. She has supervisory and management responsibilities for all of the agency's employees, and, therefore, she ultimately shares in the responsibility for the services received by all of the clients of the local DSS. Additionally, there is a likelihood that in the conduct of her mediation responsibilities, she may recognize the need or usefulness of DSS services for one of the parties, and her position with the State could easily compromise her independent decision making judgment related to such a referral. Some of these individuals or their families may have had a variety of relationships with her agency. Under the circumstances, we advise the Requestor that she may not have a private mediation practice in the county in which she is the Director of the Department of Social Services. The private mediation practice would be permitted in other counties and only if the activity comports with the following conditions:
she does not receive referrals directly from the local Department of Social Services;
she does not receive referrals from attorneys who either represent the Department of Social Services or routinely have matters involving the department;
she may not provide mediation services for current or former clients of her department;
she may not provide mediation services for any employee of her department; and
she understands that if issues arise as to the enumerated constraints, further review and restriction may be required.
The restrictions have been discussed with the Requestor, and she agrees to abide by them. She also understands that she is subject to the mediators' code of ethics that includes additional recusal or disqualification requirements. Given these limitations, her private mediation practice is permissible under the secondary employment provisions of the law.
Charles O. Monk, II., Chairman
Dorothy R. Fait
Michael L. May
D. Bruce Poole
Date: August 15, 2002