New York State
Ethics Commission


Advisory Opinion No. 93-16: Application of Public Officers Law §74 to a member of the New York State [ ] Board.

Introduction

The following advisory opinion is issued in response to an inquiry by [the requesting individual] about the propriety of his serving as a member of the New York State [ ] Board ("Board") while serving [full-time as an officer of two private organizations.]

Pursuant to its authority under Executive Law §94(15), the State Ethics Commission ("Commission") hereby renders its opinion that there would be a conflict of interest posed by [the requesting individual's] voting in his Board capacity on applications from the [members of the two private organizations which employ him]. For this reason, [the requesting individual] should recuse himself from voting as a member of the Board upon applications of members of the [two private organizations]. Moreover, [the requesting individual] should not provide any assistance to [ ] members of the [two private organizations] that are preparing applications for the Board, nor should he consult with any other member of the Board as to the merits of such applications.

Background

[The requesting individual] is [ ] the second-ranking officer of both private organizations. [ ].(1)

[The requesting individual's] principal responsibility is to head the Government Affairs Department of the [two private organizations], overseeing the organizations' government relations activities at the federal, State and local level. He is elected by the boards of the [two private organizations]. His salary is paid from the funds of these organizations. [One private organization] receives dues from its members and the [other private organization] receives contributions from its [members] as well as other individuals, firms and institutions.

[The requesting individual] also serves as a member of the Board, [ ]. The Board consists of four uncompensated members, two of whom are appointed by the Governor, one of whom is appointed by the Speaker of the Assembly, and one of whom is appointed by the President Pro Tempore of the Senate.(2) The statute provides that no actions of the Board may be taken except upon the affirmative vote of at least three members [ ]. Certain action requires unanimous approval of the Board.(3)

[ ].(4) Statute authorizes the Board to solicit applications [ ], to evaluate applications [ ], and to make recommendations with respect to [those applications].

There are occasions when members of the [two private organizations] submit applications to the Board [ ].(5) [The requesting individual] informed the Commission that on such occasions it has been his practice, upon the advice of counsel to the Board, to vote upon such applications, disclosing on the record the relationship of the applicant to the [two private organizations]. [The requesting individual] has requested an opinion regarding whether he should recuse himself from voting as a member of the Board on applications of members of the [two private organizations]. He also asks if he may continue to serve on the Board.

Applicable Law

The Code of Conduct in Public Officers Law §74(2) is intended to prevent State officers and employees(6) from acting in ways that present actual or apparent conflicts of interest. Section 74(2) states:
No officer or employee of a state agency . . . 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.

The rule of §74(2) is further explained and defined by standards found in Public Officers Law §74(3). These standards attempt to assure the public confidence in State officers and employees as they discharge their official duties. Standards relevant to the present inquiry include the following:

. . . .

  1. No officer or employee of a state agency . . . should disclose confidential information acquired by him in the course of his official duties nor use such information to further his personal interests.

  2. 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.

  3. No officer or employee of a state agency . . . should engage in any transaction as representative or agent of the state with any business entity in which he has a direct or indirect financial interest that might reasonably tend to conflict with the proper discharge of his official duties.

  4. An officer or employee 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.

    . . . .

  5. 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 favoritism, undue influence, corruption and abuses of official position.

Public Officers Law §74(3)(e) prohibits an officer or employee of a State agency from engaging in any transaction as a representative of the State with any business entity in which he has a direct or indirect financial interest that might reasonably tend to conflict with the proper discharge of his official duties. In the instant case, [the requesting individual], as a member of the Board, has occasion to vote on applications of members of the [two private organizations]. [Approval of the application] would be an economic benefit to the applicant. Given [the requesting individual's] position with the [two private organizations], and that the role of the [two private organizations] is to support and lobby on behalf of their members, it is clear that [the requesting individual] has at least an indirect financial interest in these entities that might reasonably tend to conflict with the proper discharge of his official duties. It would thus be a violation of §74(3)(e) for him to engage in review of these entities' applications as a representative of the State.

Moreover, as noted earlier, Public Officers Law §74 addresses not only actual but apparent conflicts of interest.(7) For example, under §74(3)(f), a State officer or employee should not give reasonable basis for the impression that he or she is affected by the position or influence of any party or person or that any party or person can unduly enjoy his or her favor in the performance of official duties. Given that [the requesting individual's] employment with the [two private organizations] centers on promoting and lobbying on behalf of [their members], and that in his position as a member of the Board he determines which [applicants] receive the economic benefit of [ ], it is foreseeable that the public might suspect that he is favorably disposed toward [the two private organizations as] applicants when making [ ] determinations.

In Advisory Opinion No. 92-11, the issue before the Commission was whether a conflict of interest was presented if a public benefit corporation were to retain a law firm, one of whose partners was a member of the board of directors of the public benefit corporation. Among the concerns raised was that the member might furnish the law firm with "confidential" or insider information in violation of §74(3)(c), giving the law firm an advantage over other law firms in obtaining a retainer agreement with the public benefit corporation. The Commission held that, in addition to abstaining from reviewing or voting upon his law firm's proposal, the member should take no part in preparing the law firm's proposal, nor should he communicate with any other member concerning the merits of the law firm. Likewise, in the instant case, [the requesting individual] should not provide any assistance to [ ] members of the [two private organizations] that are preparing applications for the Board, nor should he consult with any other member of the Board as to the merits of such applications.

Conclusion

The Commission concludes that a conflict of interest would be presented by [the requesting individual's] voting in his Board capacity on applications of [members of the two private organizations]. For this reason, [the requesting individual] should recuse himself from voting as a member of the Board upon applications of members of the [two private organizations]. Moreover, [the requesting individual] should take care not to provide any assistance to [ ] members of the [two private organizations] that are preparing applications for the Board, or to consult with any other Board member as to the merits of such applications.

The Commission notes that there may be an issue concerning the impact of recusal on [the requesting individual's] ability to perform his responsibilities as a member of the Board, given the statutory requirement that the Board conduct certain action by unanimous approval [ ]. Whether the statute is to be construed to allow the Board to cast unanimous votes with one member recusing himself is not for the Commission to determine. That is an issue to be determined by the agency, perhaps with the guidance of the State's Attorney General. Furthermore, assuming the determination is that [the requesting individual's] recusals do not make it impossible for the Board to cast unanimous votes, whether those recusals pose an operational problem is, likewise, not for the Commission to determine. The Commission has previously held that the determination of whether and when recusals reach an unacceptable level is for the State agency to make (Advisory Opinion No. 92-10).

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 in the request for opinion or related supporting documentation.

All concur:

Joseph M. Bress, Chair

Barbara A. Black
Angelo A. Costanza
Robert E. Eggenschiller
Donald A. Odell, Members

Dated: October 14, 1993


Endnotes

1. [Footnote deleted.]

2. [Footnote deleted.]

3. [Footnote deleted.]

4. [Footnote deleted.]

5. According to documentation provided by [the requesting individual] and [ ], approximately 20% of applicants are members of the [two private organizations].

6. As a member of the board, [the requesting individual] is covered by §74, which defines "state agency" as "any state department, or division, board, commission, or bureau of any state department or any public benefit corporation or public authority at least one of whose members is appointed by the governor". The Commission finds unpersuasive the argument of [ ] that the Board is not a State agency within the meaning of §74(compare, Advisory Opinion No. 92-9 [the term "state agency" as found in §74(1) does not include county political parties]; Advisory Opinion No. 93-1 (county and New York City alcohol beverage control boards are not State agencies for purposes of §§73, 73-a and 74]).

7. See, e.g., Advisory Opinion No. 90-6 (an appearance of a conflict of interest exists where a high-ranking State employee serves as an uncompensated member of the board of directors, in a voting capacity, for a not-for-profit corporation or its for-profit subsidiary in circumstances where both corporations do extensive business with the State of New York) and Advisory Opinion No. 91-7 (an appearance of a conflict of interest exists where the president of a State university serves as a director of the bank in which the college deposits funds or has an ongoing business relationship).



URL: http://www.nysl.nysed.gov/edocs/ethics/93-16.htm