|Advisory Opinion No. 93-15:||Application of Public Officers Law §73(8) to a former State employee who seeks to render pro bono services for a governmental entity on a case, proceeding or transaction in which the former employee was directly involved and personally participated while in State service.|
This opinion is issued in response to a joint May 4, 1993, inquiry by the State Department of Law and [State Agency A] concerning whether Public Officers Law §73(8) precludes a former Assistant Attorney General ("AAG"), who represented the Commissioner of [State Agency A], one co-plaintiff in a civil [ ] dispute, to represent on a pro bono basis one of the other potential co-plaintiffs, another governmental entity, in the same dispute.
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 §73(8) does not prohibit the former State employee from rendering services on a case, proceeding, application or transaction in which he was directly concerned and personally participated if the services are rendered on behalf of another governmental entity whose interests are not adverse to the State, the former employee is not compensated for such services and he does not appear, practice, communicate or render services before a State agency on the instant case, with or without pay.
The Department of Law and [State Agency A] asked the corporations to prepare a [ ] work plan in February 1989. After substantial negotiation, the corporations failed to produce an adequate work product. In October 1989, at [State Agency A's] request, the AG announced the State's intention to file suit in federal court against the three corporations. In December 1989, the corporations offered $600,000 to create a trust fund to finance an independent consultant to develop [a] work plan. As a condition, the corporations demanded that the fund be expended in a manner which met all of the interests of all governmental entities with jurisdiction over the [ ].
[The requesting individual] participated as [State Agency A's] representative on a committee of the involved government entities charged with drafting a memorandum of agreement to provide a framework for inter-governmental coordination to meet the members' respective [ ] responsibilities under [the law]. The drafting committee also included attorneys representing [trustees] and [a governmental client].(3)
In his February 22, 1993, letter to [State Agency A], [the requesting individual] asserted that the [governmental client] has full status as a [governmental entity]. Without discussing the status of the law pertaining to [the governmental client], the Commission agrees that, for Public Officers Law §73(8) purposes, the [governmental client] shall be treated as a governmental entity. As a governing body, the [governmental client] possesses significant public trust responsibilities and has the same standing in the case as the [trustees] and [State Agency A].
In 1990, the trustees executed a memorandum of agreement establishing a Trustee Council, contemplating a long-term commitment to work together to meet their respective [ ] trustee responsibilities. [ ]
In March 1991, the corporations and representatives of the State and federal governments and the [governmental client] entered into a Funding Agreement "in recognition of the common interests of the Trustees, and the interests of the Companies, to develop a [ ] Damage Assessment Plan." The agreement provided the terms by which the trustees are to spend the $600,000 the corporations provided. The funding agreement remains in effect until 60 days after the earlier of: (a) the corporations' receipt of the trustees' approved [ ] Plan; or (b) the exhaustion of the $600,000. While the funding agreement is in force, the trustees agreed to a stay of litigation. Consequently, no formal legal suit has been filed.
Until recently, the [governmental client] was represented in this process by a [ ] law firm which withdrew as counsel in December 1992. The [governmental client] then approached [the requesting individual], who had left State service for the private practice of law on November 6, 1991.
[The requesting individual] represents the [governmental client] on two other matters which he states are unrelated: as general [ ] counsel to the [governmental client] [ ] and as negotiator on behalf of the [governmental client] with [company A], seeking an agreement concerning the [governmental client's] cost of overseeing certain [ ] remedial measures on [the governmental client's] land.(4) He agreed to represent the [governmental client] without fee on the dispute described herein, provided he receives a favorable resolution of any outstanding ethical issues.
In a letter dated February 22, 1993, to [State Agency A], [the requesting individual] argued that the post-employment proscriptions of Public Officers Law §73(8) and the Canons of Professional Ethics do not disqualify him from pro bono representation of the [governmental client]. In a joint response to his letter, [State Agency A] and the AG responded that:
[i]n light of several factors, including the State's deference to the strong desire of the [clients] that you represent their government in this arcane and evolving specialty area, the fact that the State and [clients] are both in the position of plaintiffs and have, at least to date, worked collaboratively, and [State Agency A's] review of the issue as to whether any confidences may have been shared with you which it wishes to protect, we would not raise potential issues under the Canons of Ethics, if the Ethics Commission finds that there is no violation of law.
The Department of Law advised the Commission that it views the letter as its unconditional waiver of the State's ability to raise any issues under the Canons of Ethics that may arise out of [the requesting individual's] representation of the [governmental client] in this dispute. The Commission notes that the Committee on Professional Ethics ("CPE") of the New York State Bar Association, in its opinion 269 (3/22/92), prescribed specific criteria for such a waiver. In that opinion, the Committee held that:
. . . a lawyer whose current or past representation of a governmental entity gives rise to a conflict of interest with respect to contemplated or continued employment by another client, or whose obligations to the other clients give rise to a conflict of interest with respect to contemplated or continued employment by a governmental entity, may accept or continue the employment with the consent of the governmental entity, provided (i) such consent is obtained in accordance with DR 5-105(C) and all other applicable disciplinary rules, (ii) the lawyer is reasonably certain that both the entity is legally authorized to waive the conflict and all legal prerequisites to the consent have been satisfied, and (iii) the process by which the consent is granted is sufficient to preclude any reasonable perception that the consent was provided in a manner inconsistent with the public trust.
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.
Also known as the "revolving door" provision, §73(8) bars former State officers and employees for two years after termination of employment from appearing or practicing before their former agencies or receiving compensation for any services rendered in relation to any case, proceeding, application or other matter before such agency. The lifetime bar permanently prohibits former State officers and employees from participating for compensation in cases, proceedings, applications or transactions in which they were directly involved and personally participated.
The Commission has previously concluded that these provisions:
can be said to reflect the same intent expressed by Congress when it enacted the federal restrictions . . . that (f)ormer officers should not be permitted . . . to utilize information on specific cases gained during government service for their own benefit and that of private clients. (Advisory Opinion No. 89-7, p.4)
The purpose of post-employment restrictions is "to preclude the possibility that a former State employee may leverage his or her knowledge, experience and contacts gained in State service to his or her advantage or that of a client, thereby securing unwarranted privileges, consideration or action." (Advisory Opinion No. 90-11 pp.6-8; see also Advisory Opinion Nos. 91-2, 91-6, and 92-20)
In deciding cases involving the Ethics in Government Act, the courts have given clear recognition to the broad, important and laudatory purpose of the statute. In Forti v. NYS Ethics Commission and Kuttner v. Cuomo, 75 N.Y.2d 596 (1990), the Court of Appeals stated:
In general, the purpose of "revolving door" provisions such as those at issue here is to prevent former government employees from unfairly profiting from or otherwise trading upon their contacts, associations and special knowledge that they acquired during their tenure as public servants . . . The underlying premise is that (f)ormer officers should not be permitted to exercise undue influence over former colleagues, still in office, in matters pending before the agencies (and) they should not be permitted to utilize information on specific cases gained during government service for their own benefit and that of private clients. Both are forms of unfair advantage" (PL 95-521, Senate Report, reprinted in 1978 US Code, Cong & Admin News 4216, 4247.) (Forti at p.605)
The two-year bar
The revolving door prohibits a former State officer or employee from appearing, practicing or rendering services for compensation on a matter before his or her former agency for a period of two years from termination of State service. [The requesting individual] left his former agency, the Department of Law, on November 6, 1991, and now seeks to represent the [governmental client] in its dealings with the Trustee Council. As discussed earlier, the memorandum of agreement established the Trustee Council which consists of a representative of [State Agency A, the counsel to the governmental entity] and two federal agencies. The fact that one of the constituent members of the Trustee Council [State Agency A] is represented by [the requesting individual's] former agency does not make the Trustee Council his former agency. The Trustee Council is different from [the requesting individual's] former agency, the Department of Law and, for that matter, different from the [State Agency A].(5) It is not even a State agency.(6)
Therefore, [the requesting individual's] representation of the [governmental client] before the Trustee Council would not violate the two-year bar of §73(8).(7)
The lifetime bar
The lifetime bar contains two separate clauses which prohibit activities in relation to any case, proceeding, application or transaction with respect to which such person was directly concerned and in which he or she personally participated or which was under his or her active consideration if such activities are an appearance, practice, communication or otherwise a rendition of services before any State agency or if the former employee receives compensation for any such services before a State agency or elsewhere.(8)
To determine whether a violation of the first clause of the lifetime bar may occur in this instance, the Commission must first determine whether [the requesting individual] would be rendering services before a State agency. As discussed above, [the requesting individual's] services would be rendered on behalf of the [governmental client] on matters before the Trustee Council, which is not a State agency; therefore, there would be no violation of the first clause of the lifetime bar.
Whether the second clause is involved requires a determination of whether [the requesting individual's] representation of the [governmental client] on Council matters constitutes the same case, proceeding, or transaction as that in which he was involved as a State employee and whether such service is compensated.
As the [governmental client's] representative, [the requesting individual] will advocate for one of the members of the Trustee Council which, as an Assistant Attorney General, he helped establish through assisting in the preparation of the memorandum of agreement. While a State employee, [the requesting individual] provided the same service for the Department of Law/[State Agency A] in discussions with the Trustee Council's members, including the [governmental client] or their attorneys. The basic cause of action is the same, the issues are inherently related, the parties are the same and the interests of the State are unchanged. The Commission concludes that by rendering of services for the [governmental client] in Trustee Council matters, [the requesting individual] would be rendering services on the same case, proceeding or transaction as that on which [he] was directly concerned and personally participated while in State service.
The final inquiry is whether the uncompensated rendition of services on behalf of the [governmental client] in these circumstances removes them from the lifetime bar. The Commission concludes that it does. The Commission has held in previous opinions that services rendered for free by a former State officer or employee on behalf and at the request of a State agency for the benefit of the State agency, which would otherwise violate the lifetime bar of §73(8), are permissible. In Advisory Opinion No. 91-2, the Commission said that the lifetime bar should not be interpreted "in such a way as to hamstring State agencies from obtaining needed information" (p.11). There, the Commission found no lifetime bar violation where a State agency wanted to obtain information from a former State employee regarding the employee's acts while in State service. As long as services were rendered for free and the agency sought the information solely for its use and not any other advantage, no lifetime bar violation occurred.
In the present case, the State has not sought [the requesting individual's] services for either itself or for the [governmental client]. Nevertheless, the Department of Law and [State Agency A], through their refusal to seek application of the Canons of Ethics, have made it clear that they do not believe [the requesting individual's] representation of the [governmental client] will harm the State's interest in this dispute. Furthermore, the Commission was influenced by the fact that the party requesting [the requesting individual's] services is another governmental entity, the [ ].
Whether there truly is no compensation must be assessed on a case-by-case basis. As the Attorney General noted in Op. Atty. Gen. No. 84-F12 interpreting the meaning of the former post-employment restriction of §73(7):
We note that the waiver of compensation does not necessarily mean that a former official has no self-interest in a private sector matter. There may be an implicit promise of future compensation for future representation or the accrual of experience and good will that may be helpful in establishing a business.
While [the requesting individual] may well be generating good will and accumulating valuable experience through his representation of the [governmental client] in this matter, the Commission is persuaded that [the requesting individual's] refusal to accept attorney's fees obviates much of the State's concern over a potential violation of §73(8).
[The requesting individual's] refusal to accept attorney's fees so as not to violate the lifetime bar logically extends to [the requesting individual's] law firm, which the Commission views as prohibited from sharing in fees generated from this case. [The requesting individual] is eligible to act only because he is not paid; otherwise, he is disqualified. Likewise, his firm is eligible to act only if it is not paid as well. (If [the requesting individual's] characterization of his work as pro bono is accurate, it does not follow that his firm should bill for work other associates or partners perform.) Further, to allow the firm to bill for legal services performed other than by [the requesting individual] would create an unintended loophole in the lifetime bar. It would violate the spirit of the lifetime bar to allow an otherwise disqualified member to work for free and to let that member engage the assistance of his colleagues (here admittedly without expertise in an "arcane and evolving" area of law) for pay to help him, with the same case and clients. Only reimbursement associated with service of process, transcripts, expert fees and the like, which are necessary for the proper representation of the client, may be accepted by the firm in this case. Therefore, since neither [the requesting individual] nor the firm will receive compensation, the Commission concludes that [the requesting individual] may represent the [governmental client] in this case without compensation.(9)
The Commission concludes that §73(8) does not prohibit [the requesting individual], a former State employee, from rendering uncompensated services on behalf of the [governmental client] on matters before the Trustee Council. [The requesting individual's] law firm may be reimbursed for non-legal expenses incurred by the firm associated with rendering services on Trustee Council issues.
In addition to the Public Officers Law issues raised in his letter of inquiry to [State Agency A], [the requesting individual] also discussed the applicability of the Code of Professional Responsibility Governing Lawyers. Specifically, he noted that State representatives had not articulated concerns about Canon 4 "A Lawyer Should Preserve the Confidences and Secrets of a Client" or Canon 5 "A Lawyer Should Exercise Independent Professional Judgment on Behalf of a Client." [The requesting individual] questioned whether Canon 9 "A Lawyer Should Avoid Even the Appearance of Professional Impropriety" and Disciplinary Rule 9-101(B)(1) affected his representation of the [governmental client]. That DR states: "Except as law may otherwise expressly permit, a lawyer shall not represent a private client in connection with a matter in which the lawyer participated personally and substantially as a public officer. . . ."
While both [State Agency A] and the Department of Law have deferred to the Commission for its interpretation of Public Officers Law §73(8) to the circumstances, the Commission questions whether the waiver averred to by the State comports with the criteria found in the previously-cited CPE opinion and, if not, recommends that the participants in this matter strictly adhere to the requirements found therein. The Commission recommends that [the requesting individual] obtain an opinion from the State Bar Association Committee on Professional Ethics as to the applicability of the Code to his circumstances and obtain whatever consent necessary, if any, to obviate any issues under the Code.
Finally, the Commission's application of the post-employment restrictions of the Public Officers Law in this matter is based in large part on the similarity of interests of the trustees. The Commission is mindful of the possibility that circumstances could change and the interests of the State and the [governmental client] no longer remain compatible.(10)
If the circumstances should change and the interests of the State and the [governmental client] no longer are compatible, the State and [the requesting individual] should request a new opinion from the Commission and the New York State Bar Association.
This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding, unless material facts were omitted or misstated by the person in the request for opinion.
Joseph M. Bress, Chair
Angelo A. Costanza
Robert E. Eggenschiller
Donald A. Odell, Members
Dated: August 12, 1993
1. The background information in this opinion was provided in [the requesting individual's] letter to [State Agency A's] Counsel [and other correspondence].
2. [Footnote deleted.]
3. [ ]
4. [Company A] is one of the three alleged [violators] described above as one of the potential defendants in the [ ] dispute involving the trustees. Apart from the present issue, [the requesting individual] asserts he had no prior involvement while he was in State service with any of the issues he is presently handling for the [governmental client]. If these matters were determined to involve prior matters, §73(8) prohibitions would be an issue. Furthermore, the Commission expects that [the requesting individual] will not receive additional, delayed or deferred compensation for his services rendered as general [ ] counsel to the [governmental client] or negotiator for the [governmental client] with [Company A] to offset his pro bono services on this case.
5. See also, Advisory Opinion No. 92-22.
6. The term "state agency" is defined by Public Officers Law §73(1)(g) as:
[a]ny state department or division, board, commission, or bureau of any state department, any public benefit corporation, public authority or commission at least one of whose members is appointed by the governor, or the state university of New York or the city university of New York, including all their constituent units except community colleges and the independent institutions operating statutory or contract colleges on behalf of the State.
7. Any rendering of services by [the requesting individual] before the Department of Law pertaining to non-Council matters would constitute prohibited appearances under the two year bar until November 6, 1993.
8. See Commission's Advisory Opinion No. 92-20, Advisory Opinion No. 93-1 and Advisory Opinion No. 93-13. In Advisory Opinion No. 92-20, the Commission concluded that the lifetime bar of §73(8) applies to compensated and uncompensated services rendered in relation to transactions before State agencies and to compensated services rendered elsewhere.
9. The Commission recognizes this outcome is unique, considering the special nature of this case, specialized knowledge in an arcane area of law, and the Attorney General's waiver of the canons of ethics issues.
10. DR 5-108 of the New York Code of Professional Responsibility states: