New York State
Ethics Commission


Advisory Opinion No. 91-9: Application of Public Officers Law §74 and the post-employment restrictions of Public Officers Law §73(8) to a State employee seeking employment and actually rendering services which would involve contact with his former employing agency.

Introduction

The following advisory opinion is issued in response to an inquiry whether Public Officers Law §73(8) prohibits a former employee of [a State agency] from serving [ ] on panels administered by [the State agency] within two years of his termination from State service. This opinion is based upon information provided by the affected individual and [the State agency].

Pursuant to the authority vested in the New York State Ethics Commission ("Commission") by Executive Law §94(15), the Commission hereby renders its opinion that by submitting his application for appointment to the [ ] panels prior to termination from State service the employee violated Public Officers Law §74(3)(d) and (h) and by serving on the panels after termination of State service but prior to expiration of the two-year bar, the former employee violated Public Officers Law §73(8). The Commission does not have jurisdiction over the requesting individual in relation to addressing a §74 violation because he is no longer a State employee.

A former employee of [the State agency] may not serve [ ] on panels administered by [the State agency] within two years of termination from State service because the required submission to [the State agency] of documents for its review and approval by [the State agency] constitutes an "appearance" in relation to a matter before [the State agency] which is prohibited by Public Officers Law §73(8). In the instant case, the Commission has reasonable cause to believe that the requesting individual violated §73(8) because he served as a [State agency]-assigned [panel member] within two years of his termination from State service. The requesting individual shall be notified of the Commission's determination. A hearing shall be held to determine whether the violation was knowing and intentional and the penalty to be assessed in relation to the violation.

Finally, the Commission recommends that [the State agency] revise its internal policy concerning designation of members of the [ ] panels to eliminate both the favoritism given to former employees as opposed to other panel applicants and to conform its criteria to the Public Officers Law, which bars such appointment or service of former Board officers or employees for two years after their termination from State service or employment.

Background

[The State agency] was created pursuant to [State law] to help resolve disputes. [ ]. It is governed by a three-member Board.(1) [The State agency] resolves disputes [ ] by using [panel members] who serve on [one of two types of panels] administered by [the State agency] and comprised of private sector individuals appointed by the Board. (2)

An individual who is interested in serving as a [State agency]-appointed [panel member] submits a resume to the [director] at the [State agency]. The [director] reviews his or her education, training and work experience and makes a recommendation to the Board concerning an appointment to the panels. Former [State agency] employees receive preferential consideration under the criteria established for appointment to the panels, however, mere application by an individual who objectively meets the stated qualifications does not automatically result in appointment to the panels. The [director] and the Board make a substantive judgment as to whether, for example, previously issued awards are clear and well reasoned, issues and parties show variety, prior experience is suitable and panel expansion is appropriate.(3) The [director] and the Board exercise substantial discretion in judging the merits of an application.

The requesting individual was the [director] for [the State agency]. He directly applied to the Board for appointment to the panels several months prior to his retirement from State service. According to the minutes of the [State agency] Board, the Board approved his application to the panels on [ ], prior to his retirement from State service.

Soon after his appointment to the panels, the requesting individual retired from State service and received at least one assignment as a [panel member]; a dispute in a [municipality]. He now is requesting an opinion of the Commission concerning the application of the post-employment restrictions in §73(8) of the Public Officers Law to his appointment(s) and service on the [State agency] administered panels.

Discussion

Code of Ethics Application

The Commission has determined that the requesting individual submitted his own name directly to the Board for appointment to the panels while he was still employed by [the State agency], as evidenced by a memorandum signed by him. The Commission cannot escape the conclusion that, as [director], the requesting individual had access to the Board that others do not, and that his appointment was made under circumstances which give rise to an apparent violation of Public Officers Law §74 by the requesting individual.

Section 74(2) provides the rule with respect to conflicts of interest:

No officer or employee of a state agency, member of the legislature or legislative employee should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest.

Section 74(3) provides specific standards of behavior for State officers and employees. Particularly pertinent are the following:

(d) No officer or employee of a State agency, . . . should use or attempt to use his official position to secure unwarranted privileges . . . for himself . . .

(h) An officer or employee of a state agency, . . . should endeavor to pursue a course of conduct which will not raise suspicion among the public that he is likely to be engaged in acts that are in violation of his trust.

The Commission concurs with the following statement by the Attorney General about the actions of an employee immediately prior to termination of State service:

[O]ne of the purposes of §73(7) is to remove any doubt in the public's perception as to whether actions by an employee or officer prior to separation from the State were solely in the public interest. (1984 Op. Atty. Gen. 46). The Legislature decided to eliminate the potential for impropriety or the appearance of impropriety by prohibiting State officers and employees, for a period of two years after termination of State service, from appearing as to certain matters before the State agencies that employed them (ibid.). In our view, the public reasonably might question whether the subject persons carried out their public responsibilities solely in the public interest or whether they consciously or otherwise acted to further their private business objectives. It is this potential for abuse and appearance of impropriety that forms the underpinnings for the two-year rule expressed in §73(7) of the Public Officers Law.(4)

In this case, the Commission believes that the requesting individual acted out of private interest before leaving State service, and appeared and received compensation for services rendered in relation to a matter before his former agency before the two-year bar had expired, as discussed below, giving substance to the Attorney General's example. The submission of the application for appointment to the Board while still employed is a violation by the employee of the Code of Ethics contained in Public Officers Law §74(3)(d) and (h).

Revolving Door Application

Subdivision 8 of §73 of the Public Officers Law provides, in relevant part:

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 noted by the Commission in Formal Advisory Opinion No. 88-1, subdivision 8 of §73, 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. The provision contains two distinct prohibitions: a two year bar related to activity before the former State agency, and a lifetime bar related to all State agencies with respect to certain matters in which the individual had personal knowledge or involvement." The instant request concerns application of the two year bar.(5)

The Commission has reasonable cause to believe that the requesting individual appeared and received compensation in relation to a matter before his former agency in a manner prohibited under Public Officers Law §73(8). Following his appointment to the panels and within two years of termination from State service, [the State agency] assigned the requesting individual as a [panel member] to a dispute in a [municipality]. The job required the individual to submit periodic status reports, a final report of findings and billing invoices to [the State agency] for review and approval.(6) These actions by the requesting individual constitute a prohibited appearance in violation of Public Officers Law §73(8).

The Commission has previously determined that an "appearance" under §73(8) is not limited to an actual, physical appearance before the agency, but, following the Attorney General's precedent on the meaning of the term, includes submissions which are signed by the individual or which involve identifying matter specific to the individual, such as a seal or certification.(7) The submission of a proposal or application for review and approval to the former agency which the former employee prepared and which contains the former employee's name or identifying detail, such as a professional stamp or seal, within two years of termination from State service is prohibited under §73(8). The Commission determined that the submission of reports to the Board and submission of billing invoices are both "appearances" as contemplated in Public Officers Law §73(8). The receipt of compensation as a result of the mediation, a matter before [the State agency], is prohibited within two years of termination.

Conclusion

The Commission concludes that there is reasonable cause to believe that the requesting individual violated Public Officers Law §74 by submitting his application for appointment to the [two types of panels] prior to termination from State service. The Commission is without jurisdiction to address a violation of Public Officers Law §74 after a State employee has terminated State service.

The Commission concludes that a former employee of [the State agency] may not serve as a [panel member] on panels administered by [the State agency] within two years of termination from State service because the required submission to [the State agency] of documents for review and approval by [the State agency] constitutes "appearances" prohibited by Public Officers Law §73(8). The Commission makes this finding because [the State agency's] administration of the [two types of panels] requires the exercise of substantive judgment and is not ministerial. Accordingly, the Commission concludes that the requesting individual is barred by §73(8) for a period of two years from the date of termination from State service from applying to serve or serving on the [two types of panels].

Finally, the Commission concludes that there is reasonable cause to believe that the requesting individual violated Public Officers Law §73(8) by serving as a [State agency]-assigned fact-finder in a local dispute, well before the expiration of the two-year bar. The requesting individual shall be notified of the Commission's belief that a violation has occurred and a hearing shall be held to determine the penalty, if any, to be assessed in relation to the mediation assignment already completed.

The Commission recommends that [the State agency] revise its internal policy concerning the preference given to former employees who apply to the [two types of panels] in order to eliminate both the favoritism given to former employees as opposed to other panel applicants and to conform with this opinion, which bars such appointment or service of former Board officers or employees for two years after their termination from State service or employment.

This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the requesting individual who acted in good faith unless material facts were omitted or misstated by the individual in the request for opinion.

All concur:

Joseph M. Bress, Chair

Angelo A. Costanza
Norman Lamm
Donald A. Odell, Members

Dated: July 2, 1991


Endnotes

1. [Footnote deleted].

2. [Cite deleted].

3. This information is contained in a letter submitted by [the State agency] in response to an inquiry by the Commission concerning the process of appointing and administering the panels.

4. 1986 Op. Atty. Gen. 6. Note that Public Officers Law §73(7) referenced herein was renumbered as Public Officers Law §73(8) as a result of the amendments made in 1988.

5. No circumstances which would implicate the lifetime bar are alleged.

6. According to [the State agency], all [ ] reports are reviewed by [the State agency] for the purposes of insuring clarity in the expression of recommendations and rationale. All billings are submitted by [panel members] to insure that they conform to the time limitations imposed by [the State agency] for each assignment.

7. In Formal Advisory Opinion No. 89-11, the Commission discussed the definition of "appearance" for the purposes of §73(8) of the Public Officers Law. The Commission relied on the interpretation of former §73(7) (now §73(8)), rendered by the Attorney General in 1986 Op. Atty. Gen. 6 (1986), which stated the following:

In submitting a proposal to provide to 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. These persons are president and vice president, respectively, of the "Private Firm" and are principal investors. Any application by the "Private Firm" constitutes an appearance by these persons. Inevitably, principals of the companies submitting proposals will be required to appear before representatives of DCJS.




URL: http://www.nysl.nysed.gov/edocs/ethics/91-09.htm