STATE OF NEW YORK
STATE ETHICS COMMISSION

Advisory Opinion No. 90-10: Application of §73(8) of the Public Officers Law to a former employee of the State Division of the Lottery with regard to post-employment activities.

INTRODUCTION

The following advisory opinion is issued in response to an inquiry from a former State employee regarding the application of the post-employment restrictions contained in §73(8) of the Public Officers Law to his current employment.

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 two-year bar on appearing, practicing or rendering services for compensation on behalf of any person, firm, corporation or association in relation to any case, proceeding or application or other matter before the individual's former employing agency, contained in §73(8), does not prohibit activities of a former State employee where the individual will have no direct or indirect contact with his former employing agency for two years or any State agency with regard to any transaction on which he worked.

BACKGROUND

Subdivision 8 of §73 of the Public Officers Law provides the restrictions on post-employment activities by former State employees. It provides, in relevant part, as follows:
No person who has served as a state officer or employee shall within a period of two years after the termination of such service or employment appear or practice before such state agency or receive compensation for any services rendered by such former officer or employee on behalf of any person, firm, corporation or association in relation to any case, proceeding or application or other matter before such agency. No person who has served as a state officer or employee shall after the termination of such service or employment appear, practice, communicate or otherwise render services before any state agency or receive compensation for any such services rendered by such former officer or employee on behalf of any person, firm, corporation or other entity in relation to any case, proceeding, application or transaction with respect to which such person was directly concerned and in which he personally participated during the period of his service or employment, or which was under his or her active consideration . . . .
As the Commission noted in its Advisory Opinion Number 88-1, subdivision 8 of §73 of the Public Officers Law, generally referred to as the "revolving door" provision, "sets the ground rules for what individuals may do with the knowledge, experience and contacts gained from public service after they terminate employment with a State agency." 1

The requesting individual was employed from 1976 until 1988 by the New York State Division of the Lottery ("Lottery"). His first position with Lottery was that of a sales representative. In 1978, he was promoted to manage the Manhattan office of Lottery and later was given the title of [position]. His duties included responsibility for five clerks and seven sales representatives, customer complaints, licensing, auto fleet reports, and changes of ownership. In 1983, he was placed in charge of the "on-line" agents and the licensing of all New York City lottery agents.

Lottery offers two kinds of lottery products, and consequently, requires two different applications from vendors who wish to sell these products. The first kind of application is for a Lottery Sales Agent License. This license permits the holder to legally sell lottery tickets. The second kind of application is for an "on-line" terminal which is used to sell tickets for the computerized lottery games (e.g., Numbers, Lotto, Keno). Lottery retained three contractors to assist in the process of identifying promising candidates to provide Lottery products and to then aid the candidates in preparing and submitting the two kinds of applications. The three companies involved in assisting in the identification process were, at the time this employee was with Lottery, [Company 1], [Company 2], and [Company 3].

After a candidate was identified and assisted by the contractors the applications were reviewed by Lottery. Applicants interested in obtaining an on-line terminal were judged competitively, with Lottery approving only those applicants having the best sales potential in the neighborhood.2 All applicants for the instant-only and the on-line lottery ticket sales were evaluated for their compliance with applicable statutes and the interests of Lottery.3 The approval for all applications was granted only by agreement of the Regional Director, the Marketing Director, and the Lottery Director.

Currently, the requesting individual has been asked by both [Company 1] and [Company 2] to train their representatives. These representatives are individuals who accompany Lottery officials to sites of potential lottery vendors to determine fitness for licensure. In addition, the representatives will be trained in dealing with agent complaints and evaluation methods for potential agents. The representatives are to be a part of the process of determining new sales locations, but only the Lottery personnel listed above are able to give final approval for any applicant. The requesting individual retired in 1988.4

DISCUSSION

The facts as presented by the requesting individual do not trigger the application of the limitations on post-employment activities contained in §73(8) of the Public Officers Law, because the activities anticipated in his new position will not require an appearance or practice before his former employing agency, or the receipt of compensation for any such services rendered on behalf of himself or another entity in relation to any case, proceeding or application or other matter before Lottery. Rather, the activities listed in the description of the new employment indicate that the individual will have no contact with the former employing agency, Lottery. The lifetime bar, which restricts an individual from ever working on a matter in which he personally participated and was directly concerned, or which was under his active consideration, does not apply in this case because the matter of training representatives for the corporations is sufficiently removed from the requesting individual's former responsibilities.

The "revolving door" provisions of the Public Officers Law are not intended to restrict all post-State employment activities, but are directed at eliminating any employment which might lend itself to actual or apparent use of contacts or influence gained in State service for the benefit of private clients. The facts as presented in the instant case do not indicate that this individual will be using his contacts or influence with regard to any matters before Lottery. It should be noted that it would be inappropriate if the requesting individual had left his State position at the request of the corporations in order to provide them with inside information on obtaining or retaining specific contracts with Lottery, and State employees should be wary that certain pre-termination contracts with private entities seeking to hire them may be construed as violations of §74 of the Public Officers Law, which sets forth the Code of Ethics.5 However, the requesting individual in this case retired after 20 years of State service, and there is no indication that the retirement occurred because the corporations extended or intended to extend employment offers.

Thus, the Commission finds that the employment circumstances described by the former employee do not trigger the post-employment restrictions contained in §73(8) of the Public Officers Law, because the former Lottery employee will have no direct or indirect contact with his former employing agency, will not practice or appear before such agency, and will not receive compensation for services in relation to any case, proceeding, application or other matter before Lottery. The lifetime bar does not apply because the facts do not indicate involvement with any matter in which the requesting individual was directly concerned and personally participated, nor is there any involvement with a matter which was under his active consideration.

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 requesting the opinion.

All concur:

Elizabeth D. Moore, Chair

Angelo A. Costanza
Norman Lamm
Robert B. McKay, Members

Dated: June 21, 1990


ENDNOTES

1. Advisory Opinion No. 88-1 dealt generally with the question of application of the post-employment restrictions to employees who left State service prior to January 1, 1989, as to acts which occur on or after January 1, 1989.

2. See 21 NYCRR Part 2800, et seq. for specific Lottery regulations governing Lottery Sales Agents and the various games.

3. Pursuant to §1605 of Article 34 of the Tax Law, entitled "State Lottery for Education," the following shall be considered with respect to potential lottery sales agents:

  1. Financial responsibility and security of the business or activity in which such person is engaged.

  2. Accessibility of the place of business or activity to the public.

  3. Sufficiency of existing licenses to serve public convenience.

  4. Whether place of business or activity is predominantly frequented by persons under the age of eighteen years.

  5. Expected volume of sales.
In addition, before issuing a license to any applicant to sell lottery tickets through a computer terminal, the division shall require each applicant to file fingerprints with the division, which are subsequently checked for the purpose of determining whether or not the applicant has previously been convicted of a crime.

See also 21 NYCRR Part 2801, et seq. The Lottery considers, among other factors before issuing a lottery sales agent license, whether the individual was convicted of any offense as defined in the Penal Law. Such conviction is also grounds, in the discretion of the Director of the Division, for suspension, revocation or rejection of a renewal application.

4. The application of the lifetime bar provisions of the Public Officers Law to employees who left State service prior to January 1, 1989, was challenged in two separate suits against the Commission, and in each, the New York Court of Appeals held that the application of the provisions to officers and employees who terminated from State service before January 1, 1989, as to acts engaged in on or after the effective date of §73(8) is not improper and is constitutional. See Forti v. NYS Ethics Commission, 147 A.D.2d 269, 75 N.Y.2d 596; Kuttner, et al., v. Cuomo, et al., 147 A.D.2d 215, 75 N.Y.2d 596 (1990).

5. The actual conflict of interest or its appearance could be found in circumstances where the State officer or employee, while still employed by the State, may have acted to the benefit of such a contractor in order to receive future employment.