STATE OF NEW YORK
STATE ETHICS COMMISSION

Advisory Opinion No. 89-2:

Application of §73 of the Public Officers Law to a State employee who, acting in the capacity as Executive Director of a not-for-profit organization, signs a certification necessary to receive State funding.

INTRODUCTION

The following advisory opinion is issued in response to an inquiry whether a State employee1, acting in the capacity as Executive Director of [], a non-profit organization, may sign the "chief administrator's certification" portion of an application to be submitted to a State agency to obtain State funding.

Pursuant to the authority vested in the New York State Ethics Commission ("Commission") by §94(15) of the Executive Law, the Commission hereby renders its opinion that the restrictions of §73(7) do not permit a State employee, acting as Executive Director of a not-for-profit organization from which he receives compensation, to sign an application on behalf of such private organization to obtain a grant of money from a State agency.

The Commission states that it will apply this Advisory Opinion to any similar request on and after January 1, l989. This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for an opinion.

DISCUSSION

Paragraph (a) of subdivision 7 of §73 of the Public Officers Law provides, in relevant part, as follows: (a) No . . . state officer or employee, other than in the proper discharge of official duties, . . . shall receive, directly or indirectly, or enter into any agreement express or implied for, any compensation, in whatever form, for the appearance or rendition of services by himself. . .in relation to any . . . application or other matter before a state agency where such appearance or rendition of services is in connection with:

. . . . (iv) the obtaining of grants of money or loans; In the matter before the Commission, the State employee serves as Executive Director of [a non-profit organization]2 which annually applies to the [State agency] for funding pursuant to law. For the annual grant periods beginning June 1, 1987, the law apportions funds for approved expenses, for each [non-profit organization], to be paid in accordance with a formula and schedule of payments developed and approved by the Commissioner of the [State agency] and the Director of the Division of the Budget.

The form application previously signed by the State employee notes the following budget summary:

          Professional salaries        $   [ ]
          Travel expenses                  [ ]
          Employee benefits                [ ]
          [other costs]                    [ ]

The application also contains the following Chief Administrator's Certification on its cover sheet:

[The certification states that the amounts are necessary and appropriate and that federal and state anti-discrimination laws are to be followed.]
The Certification is signed by the State employee as Chief Administrative Officer of the non-profit organization.3

The Commission reviewed the provisions of §73(7)(a), to determine whether the signing of an application should be construed to be "the appearance or rendition of services for compensation."

In a 1986 Opinion, the Attorney General construed the previously existing §73(7) and the word "appear".4 In that matter, two Division of Criminal Justice Services employees left State service to work in a private firm which desired to bid on a contract to implement an automated fingerprint identification system for their former agency. The Attorney General concluded that, ". . . in submitting a proposal to provide DCJS an Automated Fingerprint Identification System, it seems clear that the subject persons, through the "Private Firm" would be appearing before DCJS within the meaning of §73(7) of the Public Officers Law . . . Any application by the "Private Firm" constitutes an appearance by these persons." (emphasis added)

The Commission concludes that, in signing the certification, the State employee involved was acting as the Chief Administrative Officer of the [non-profit organization], a paid position; is compensated, either directly or indirectly, as part of his salary to perform the act of signing the certification, and, the act of signing of the chief administrator's Certification is an "appearance" within the meaning of §73(7)(a).5

Section 73(7)(c) contains an exception to the general rule prohibiting appearances set forth in paragraph (a), i.e.,

Nothing contained in this subdivision shall prohibit . . . a state officer or employee, unless otherwise prohibited, . . . from appearing before a state agency in a representative capacity if such appearance in a representative capacity is in connection with a ministerial matter.
Section 73(1)(d) defines "ministerial matter" to mean "an administrative act carried out in a prescribed manner not allowing for substantial personal discretion."

In deciding whether the signing of the chief administrator's certification was "in connection with a ministerial matter", the Commission considered whether the individual had to exercise personal judgment or discretion in order to sign and whether the decision by the State agency to grant the request is purely ministerial.

The Commission concludes that the content of the certification is such that the individual had to use personal judgment or discretion to sign, and, therefore, the act by the chief administrator of signing the certification on behalf of the [non-profit organization] was not an administrative act carried out in a prescribed manner not allowing for substantial personal discretion. Certifying that the [non-profit organization] needs the amount of money requested, that the amount is appropriate, and that the [non-profit organization] agrees to comply with federal and State anti-discrimination laws and guidelines is more than a ministerial act; it requires an expression of judgment by the certifier that the grant is necessary and that the corporation is pledged to abide by certain laws. This act is not simply a reflection of a corporate board's resolution. The Chief Administrative Officer has exercised independent judgment and action in executing the certification on behalf of the corporation.

In addition, the Commission concludes that the determination by the [State agency] to grant the funds for which the application is made is not ministerial or pro forma. The determination to approve the grant requires an exercise of judgment by the Commissioner of [the State agency] to determine whether the [non-profit organization] has complied with the requirements of the law. The Commission acknowledges that there may be occasions when an application for some State benefit may be ministerial only, when an application properly completed may suffice for an agency to grant a benefit. However, the decision to grant funds (in this case, a substantial amount), no matter how routine the process by which the funds are made available, is not insignificant or automatic.

Therefore, the Commission finds that the individual, when acting in the capacity as Executive Director of the [non-profit organization], is not acting in "the proper discharge of official duties" as a State employee; that the individual could be indirectly, if not directly, receiving compensation from the funds applied for, or, at the least, is compensated for his services as Executive Director in which capacity he signed the Certification; that the submission of an application bearing his signature amounts to an appearance or rendition of service before a State agency in order to obtain a grant of money or loans; and, that neither the signing of the certification on behalf of the non-profit organization nor the act of appoval of the grant of funds by the State agency is within the "ministerial act" exception permitting certain appearances. The Commission concludes that the restrictions of §73(7)(a) apply in this case to prohibit the individual from signing a chief administrator's certification, or other document seeking money or loans on behalf of the [non-profit organization] from a State agency.

A final question to be resolved is the effect of the application of subdivision 2 of §73, which provides:

In addition to the prohibitions contained in subdivision 7 hereof, no . . . state officer or employee . . . shall receive, or enter into any agreement express or implied for, compensation for services to be rendered in relation to any . . . application or other matter before any state agency, whereby his compensation is to be dependent or contingent upon any action by such agency with respect to any . . . ruling, decision, opinion . . . or other benefit; provided, however, that nothing in this subdivision shall be deemed to prohibit the fixing at any time of fees based upon the reasonable value of the services rendered.
The individual receives compensation from the [organization] for a variety of duties, including services related to the application. While the individual receives a fixed salary as Executive Director, it may be dependent or contingent upon action by such State agency, to the extent that the [organization] may have no other funds to pay the Executive Director's salary if the State application is denied. However, the fact that the Executive Director's salary is based on the reasonable value of his services, appears to bring him within the savings clause.

In any event, the Commission finds that application of §73(2) is not necessary, since §73(7) is conclusive of the circumstances in this case, to prohibit a State employee, who is also the paid Executive Director of [a non-profit organization], from signing an application on behalf of the station for funding from a State agency.

All concur:

Elizabeth D. Moore, Chair

Joseph J. Buderwitz, Jr.
Angelo A. Costanza
Norman Lamm
Robert B. McKay, Members

Dated: March 8, 1989


Endnotes

  1. The individual is employed by a State agency as defined under §73(g) of the Public Officers Law.

  2. The non-profit organization is incorporated as an educational corporation.

  3. The Commission notes that the application does not itemize any salary for the Executive Director. There is no indication that a portion of the total salary received as part of the grant is or is not used for that purpose.

  4. Formal Opinion No. 86-F6. At the time, §73(7) of the Public Officers Law was the revolving door provision, which now appears in subdivision 8.

  5. The Commission will maintain, where possible, an interpretation of §§73 and 74 which is consistent with previous constructions by the Attorney General so as to provide consistency of interpretation of these sections for covered individuals.