New York State
Ethics Commission


Advisory Opinion No. 92-19: Application of Public Officers Law §74 to a State employee who is seeking to serve on the board of a local public authority.

INTRODUCTION

The following advisory opinion is issued in response to a request from [a State agency] for an opinion concerning whether it would be a violation of Public Officers Law §74 for a certain [State agency] employee to serve on [a municipal] Board ("[ ] Board").

Pursuant to its authority under Executive Law §94(15), the State Ethics Commission ("Commission") hereby renders its opinion that there would be the appearance of a conflict of interest under Public Officers Law §74 were the [State agency] employee to serve on the [ ] Board.

BACKGROUND

The employee in question is employed in [the State agency's regional] office in the position of [ ]. According to the New York State Department of Civil Service job description, individuals serving in that title " . . . perform on-site field examinations of [ ] affairs of small units of local government such as towns and special districts to determine compliance with the General Municipal Law, the State Finance Law and appropriate local laws." [State employees in this job title] also " . . . assist in the examination of the [ ] affairs of large units of local government such as cities and counties." [The State agency] has not designated the employee in question as serving in a policy-making position.

The [ ] Board is established pursuant to Public Authorities Law §[ ] and consists of seven members appointed by the mayor of the City of [ ]. The common council of the City confirms the appointments. The [ ] Board is responsible for operating the City's [ ] system.

The [ ] Municipal [ ] Finance Authority ("Authority") is responsible for financing the City's [ ] projects. The Authority is administered by a board of directors consisting of seven members. No member of the [ ] Board may be a director of the Authority.(1)

The general powers of the [ ] Board in relation to the Authority and the City include:(2)

to enter into agreements . . . with the authority and the city to provide a means whereby the authority shall finance the cost of constructing [ ] projects;

to acquire, purchase, lease as lessee, hold and use any property . . . subject to any limitations in any agreement entered with the city; and

to acquire from the city title to the [ ] system of such city.

Public Authorities Law §[ ] also provides that the [ ] Board, the Authority and the City may enter into agreements for the construction and financing of a [ ] project.

Although [the State agency] does not directly [supervise] the Board, it does exercise [ ] oversight of the Authority(3) and the City(4). According to [the State agency], its [regional] office has been assigned [ ] responsibilities over entities located in [ ] County such as the Authority and the City.

[The State agency] determined that a conflict may exist between the employee's service as a member of the [ ] Board and the proper discharge of his duties with [the State agency]. In a memorandum dated July 3, 1992, [the State agency] shared its concerns with the employee's service on the [ ] Board:

There is a close relationship between the City of [ ], the [municipal] Finance Authority, and the [ ] Board. Even though the [State agency] will not be [supervising] the [ ] Board directly, the fact that it clearly has a responsibility to [examine] the City of [ ] and may [examine] the [ ] Authority could place [the employee] in a position of reviewing and reporting on agreements and projects approved by the [ ] Board. This could put the [employee] in a position of approving a contract or project as a board member and reviewing such agreements or projects for [ ] propriety as a member of the [State agency's] staff. Assuming that the [employee] in question was not assigned the task, the appearance of a conflict resulting from one member of the [State agency] reviewing the work of another of the [State agency] could be raised.

In a June 16, 1992 letter requesting permission to serve on the [ ] Board, the employee in question stated:

As a member of the [State agency's] staff I have not participated in any [ ] examination of the [ ] Board. As a member of the [State agency's] staff I have participated in only one [ ] examination of a similar type of authority in over 18 years of service. I also understand that the [State agency] rarely [examines] these types of authorities in the [ ] region.

STATUTORY AND POLICY BACKGROUND

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. The code is directed at addressing the conflict between the obligation of public service and private, and often personal, financial 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. Of relevance to this inquiry 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 or exemptions for himself or others.

. . . .

(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.

. . . .

(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 addresses not only actual conflicts of interest, but also conduct that gives the impression that a conflict exists. The law is intended to restore the public's trust and confidence in government through the prevention of corruption, favoritism, undue influence and abuses of official position.

In Advisory Opinion No. 89-6, the Commission held that Public Officers Law §74 prohibits [a high-level State employee] of a State agency from serving as the uncompensated president of a not-for-profit homeowners' organization because his State agency had substantial influence and responsibility over other State agencies whose decisions could affect the homeowners' organization.

In Advisory Opinion No. 92-8, the Commission approved a State employee's serving on the board of [three public or quasi-public entities]. The Commission concluded that these outside activities did not affect the employee's performance of his duties for his State agency because the nature of the State agency did not involve matters before the various boards.(5)

In Advisory Opinion No. 92-16, the Commission held that [a State employee who is involved with the leasing of property for his agency] may not run for or serve on the city council in a jurisdiction in which the employee has official duties on behalf of his State agency.(6) The Commission stated:

the concerns are compounded where the [State employee] seeks election to the city council in the geographic area over which he has responsibility for lease negotiations. Given the broad scope of the responsibilities of members of the city council, we are skeptical that the [State employee] can fulfill his responsibilities both as a State employee and as a council member without a conflict of interest. Among the city council's powers, for example, are those to levy taxes, to purchase and lease real estate, take real estate by eminent domain, administer to, construct and maintain public buildings and facilities, and to order the repair or removal of buildings. This only partial list of city council powers suggests that there would be significant matters affecting current and potential lessors from which the [State employee], because of his State position, should recuse himself when discussing, voting and otherwise serving as a city council member to meet the State's code of ethics.(7)

In the present matter, it is the potential that the employee in question or other members of [State agency's regional] office may [examine] the activities of the [ ] Board, in the context of [examination] of the Authority or the City, that leads to the finding of an appearance of a conflict of interest pursuant to Public Officers Law §74(d) and (f). [The State agency] has expressed its concern that the [ ] process requires the highest standards of integrity to ensure that an [examination] is performed without any bias on the part of the [State agency employee] and that there is no possible perception of bias.

[The State agency] has provided the following hypothetical situation: the employee in question, acting in his capacity as a member of the [ ] Board, approves a contract with the City; during [a State agency examination] of the City, another [State agency] employee takes issue with the terms of the contract. The employee in question could be placing himself in a position of defending, as a member of the [ ] Board, certain practices that are contrary to precedents established by [the State agency]. He would be involved with decisions that are reviewable by the State agency by which he is employed. Specifically, [the State agency] identified three possible ethical problems under this scenario:

  1. The employee, as a [ ] Board member, may be involved with decisions that are reviewable by the state agency by whom he is employed.

  2. The employee, as a Board member, may be required to publicly explain and defend actions which are contrary to positions he would otherwise be required to take as an employee of this office.

  3. Disclosure that the employee [ ] Board member is trying to convince the state agency by which he is employed to change its position on an issue would give the appearance of a conflict even if an actual conflict does not exist.

The Commission concurs with the [State agency] concern that its employee's service as a [ ] Board member raises concerns about his ability to discharge his [ ] responsibilities for the State. To serve in both capacities would give the appearance of a conflict of interest prohibited under Public Officers Law §74.

CONCLUSION

The Commission concludes that because the [State agency] employee would violate the standards of Public Officers Law §74, he may not serve as a member of the [ ] Board.

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

Barbara A. Black
Angelo A. Costanza
Donald A. Odell, Members


Dated: September 8, 1992


Endnotes

1. [Statutory cite deleted.]

2. [Statutory cite deleted.]

3. [Statutory cite deleted.]

4. [Statutory cite deleted.]

5. The State agency's mission is to upgrade the [ ] infrastructure of New York's communities.

6. The Commission permitted the same [State employee] to serve on a local school board because there are only limited matters involving the current or potential landlords with whom the [State employee] deals.

7. In Advisory Opinion No. 92-16, the Commission found that recusal was not a viable option.


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