New York State
Ethics Commission


Advisory Opinion No. 92-8: Application of the conflict of interest standards contained in Public Officers Law §74 to a State attorney who seeks to perform certain public outside activities.

Introduction

The following advisory opinion is issued in response to an inquiry from [a State employee] for [a State agency]. [The requesting individual's] inquiry concerns whether Public Officers Law §74 prohibits him from continuing to serve [ ] of [three public or quasi-public entities] now that he is a full-time State employee [ ].

Pursuant to the authority vested in it by the Executive Law §94(15), the State Ethics Commission ("Commission") hereby renders its opinion that the conflict of interest standards contained in Public Officers Law §74 do not prohibit [the requesting individual] from continuing to serve the public in the above positions so long as these activities do not affect the performance of his full-time duties with [the employing State agency]. The Commission notes that [the requesting individual] is already subject to the provisions of §§73-a and 74 by virtue of his position with the [one of the entities]. He must continue to ensure that his responsibilities with [the other entities] do not impair the performance of his services with [that entity] as well.

Background

[Primary employing agency]

[ ] is [ ] created to assist municipalities and private industry [ ].(1) The corporation provides services including planning, design, construction, and financing of facilities [ ].

Among [the requesting individual's] duties [ ] with [the primary employing agency] are to:

[d]raft loan documents and closing certificates in connection with financings undertaken by the Corporation [and] assist the Associate Attorney or General Counsel, as necessary, with matters pertaining to the [ ] program, including drafting bond documents and correspondence, reviewing NYS statutes and regulations, attending and participating in negotiating sessions with prospective borrowers, monitoring federal regulations and guidelines, and acting as liaison with other affected NYS agencies.

. . .

[w]ork closely with local government attorneys (especially those representing small communities) to develop documents for direct loans under the [ ] Program.(2)

[State Agency A]

[The requesting individual] has served as chair of [State agency A] which is authorized by Public Authorities Law [ ] to provide [ ] services within the [area].(3) The [ ] district includes [ ].(4) The Governor makes appointments [ ]. The [ ] board members [ ] are subject to the provisions of Public Officers Law §§73-a and 74 but not §73.(5)

[Quasi-Public Entity]

The [quasi-public entity] seeks to stimulate economic development with the City of [ ].(6) It encourages the development and/or retention of business and industry primarily through the loaning of money to enterprises at below market interest rates. [The quasi-public entity] leases certain real estate to businesses to further develop job opportunities and aid the City. It receives and disburses [ ] funds as an authorized agent of the City of [ ] and receives assistance from the [city agency], substantially in the form of personnel paid by [agency] through [ ] funding.

As one of eight persons elected to the [ ] board of directors by the [quasi-public entity] members, [the requesting individual] reviews applications for funding from companies seeking either to establish or develop businesses within the City of [ ]. The board then makes loans to the companies which meet the criteria established for such loans by the board. Board members receive $225 per monthly [ ] board meeting.

[State Agency B]

[State agency B] was established [ ] for the purpose of interviewing candidates who are seeking appointment by the Governor to [ ]. The screening panel reviews written submissions prepared by the candidates and conducts personal interviews with each one as part of this process. Candidates whom the panel finds to be exceptionally qualified are recommended to the Governor. It is from this list of candidates that the Governor makes appointments to these vacant [ ] positions. The [ ] County Executive appointed [the requesting individual] to this panel [ ].

Applicable Law

The sweeping reforms of the Ethics in Government Act of 1987 were passed to restore the public's trust and confidence in government through the prevention of corruption, favoritism, undue influence and abuses of official position. The public's trust and confidence in appointed officials are fundamental and necessary conditions for a strong and stable government. The code of ethics, found in Public Officers Law §74, provides minimum standards against which State officers and employees are expected to gauge their behavior and is directed at addressing the conflict between the obligation of public service and private, often personal, interests. The rule with respect to conflicts of interest is provided in Public Officers Law §74(2):

No officer or employee of a state agency . . . should have any interest, 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.

Following the rule with respect to conflicts of interest, Public Officers Law §74(3) provides standards of conduct which address not only actual but apparent conflicts of interest:

Section 74(3)(d)

No officer or employee of a state agency . . . should use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others.

Section 74(3)(f)

An officer of a state agency . . . should not by his conduct give reasonable basis for the impression that any person can improperly influence him or unduly enjoy his favor in the performance of his official duties, or that he is affected by the kinship, rank, position or influence of any party or person.

Section 74(3)(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.

Discussion

Public Officers Law §74, which applies to all State officers and employees, seeks to address conflicts between the obligations of public service and private, often personal, financial interests. In the present case, the Commission must apply §74 to a State employee who is engaging in public sector or quasi-public outside activities. The public's suspicion may be raised when a State employee's personal business activities affect his or her public obligations. In contrast, [the requesting individual] seeks to continue to serve the public on State and local entities. A review of the functions of the three entities in question does not reveal any activity which are likely to conflict with the statutory responsibilities of [employing State agency] or [State agency A].

[State Agency A]

Specifically, [the requesting individual] wishes to continue serving as chair of [State agency A] while performing full time duties as an attorney for the [employing State agency]. [State agency A] seeks to improve [] services for the [] area. [The employing State agency's] role is to upgrade the [] infrastructure of New York's communities. Apart from both serving local communities, there is no area of mutual interest found between the organizations. It is also clear that the Legislature contemplated and approved the service of public employees on the [area authority] board when it enacted Public Authorities Law §[ ]:

Notwithstanding any inconsistent provision of this or any other law, general, special or local, no officer or employee of the state, or any public corporation as defined in the general corporation law, shall be deemed to have forfeited or shall forfeit his office or employment or any benefits provided under the retirement system maintained by the state or any of its subdivisions by reason of his acceptance of membership on or chairmanship of the authority; provided, however, a member or chairman who holds such other public office or employment shall be entitled to reimbursement for his actual and necessary expenses incurred in the performance of such services.

It is also clear that the previously described duties [the requesting individual] is to perform at [the employing State agency] are not likely to conflict with his responsibilities at [State agency A]. [State agency A] is involved in [] issues, their development and use. [The employing State agency] is concerned with financing and developing [] facilities. There is little likelihood of either entity becoming involved with issues of concern to the other. Therefore, the Commission does not consider it a conflict for [the requesting individual] to continue his service with [State agency A] while employed by [the employing State agency].

[Quasi-Public Entity]

[The requesting individual] wishes to continue his association with [quasi-public entity], a not-for-profit corporation performing a public function by facilitating financing for businesses in the [city] area. As indicated, [the employing State agency] is engaged in administering the financing for [] facilities. Both activities require significant interaction with individuals involved in municipal financing. Although the Commission is unaware of any particular financial transactions that are of mutual interest to [the employing State agency] and [the quasi-public entity] it is prudent that, should such transactions exist, [the employing State agency] not assign [the requesting individual] to any [employing State agency] activities in which the [quasi-public entity] is a participant.

[The requesting individual] should also be concerned that his activities as chair of [State agency A] are not affected by his responsibilities to the [quasi-public entity]. [ ] issues can be integral to a business' decision to locate in a community. It is important that [the requesting individual] take care that his decisions as [State agency A] chair are not influenced by any interests he may have as a member of the [quasi-public entity].

[State Agency B]

The Commission finds no conflict between [the requesting individual's] responsibilities with [the employing State agency] or [State agency A] and his participation on [State agency B]. The Commission does not anticipate that [the requesting individual's] [employing State agency] or [State agency A] duties will require him to be engaged in any activities which could be perceived as conflicting with his responsibilities on [State agency B]. Therefore, [the requesting individual] is not prohibited from such service.

Conflict of commitment

The Commission next considered whether [the requesting individual's] responsibilities to the entities discussed herein require commitments that render him less effective in the performance of his [employing State agency] and [State agency A] duties. Conflicts of commitment, a "subset" of conflicts of interest, exist when the external or other activities and undertakings of a State officer or employee are so substantial or demanding of the officer's or employee's time and attention as to interfere, or appear to interfere, with the individual's responsibilities to the agency to which the individual is assigned or to the State as a whole. The determination of this issue is usually best left to an individual supervisor or the appointing authority. In the present case, that would be [the employing State agency's] chair or, for [State agency A], the Governor. It is possible that such conflicts of commitment could rise to the level of a violation of the Public Officers Law. Public Officers Law §74 requires that all State officers and employees involved in outside activities conduct such activities outside of their normal employing agency working hours and that such activities do not interfere with their full-time responsibilities with the State. Therefore, all of the activities in which [the requesting individual] is involved must be conducted in a manner that does not detract from his State responsibilities. If [] his employing agency, determines that the outside activities in which [the requesting individual] is involved are impairing his ability to fulfill his State duties, it must take appropriate disciplinary action ranging from fining, suspension or requiring that he resign from one or all of the organizations in question. If the Governor or [State agency A's] board conclude that [the requesting individual's] [employing State agency] responsibilities are impairing his ability to fulfill his [State agency A] duties, they may take disciplinary action as well.

Finally, [the requesting individual] must insure that no [employing State agency] resources of any type be used in furtherance of his outside private activities. This rule applies to telephones, office supplies, postage, photocopying machines or support staff assistance.

It should be clear that he must obtain [employing State agency] approval to engage in these outside activities. A finding by the Commission that no conflict exists under the ethics law in the pursuit of such outside activities does not require the public employer to authorize such activity, if it finds it cannot afford such time spent by its employee.

Conclusion

The Commission views that any conflict or appearance of a conflict is mitigated when the State officer or employee involved is performing services for another public or quasi-public entity. In the present case, the Commission finds that the provisions of Public Officers Law §74 do not prohibit [the requesting individual] from serving the above three entities while an attorney for [the employing State agency].

It is incumbent upon [the requesting individual] to be sensitive to any potential conflict of interest issues that may arise during the course of his many activities. He must ensure that, should any conflict of issues arise during the course of his employment with [the employing State agency] or [State agency A] he must make full disclosure and immediately recuse himself from participation in such matters.

This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the persons who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for opinion or related supporting documentation.

All concur:

Joseph M. Bress, Chair

Angelo A. Costanza
Donald A. Odell, Members


Dated: March 19, 1992


Endnotes

1. [Cite omitted].

2. [Employing agency] position announcement for the title of [ ] in its General Corporate Administration program.

3. The [area] District embraces the counties of [ ] and other counties that may seek to become members by action of their governing bodies. Public Authorities Law §[ ].

4. Id.

5. Except §73(3)(b); see Public Officers Law §73(1)(h).

6. See [quasi-public entity] Annual Report, 1990. [The quasi-public entity] was established pursuant to Not-For-Profit Law §[ ], as a "Type C" corporation organized to "achieve a lawful public or quasi-public objective." Further, pursuant to Public Authorities Law §[ ], et seq., the New York [ ] makes loans and guarantees to qualified [ ] to improve employment opportunities in the State or for the acquisition, construction, rehabilitation or improvement of [ ].


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