New York State
Ethics Commission


Advisory Opinion No. 94-9: Application of the lifetime bar of Public Officers Law §73(8) to a former State employee who seeks to perform consultant services for his former agency.

Introduction

The following advisory opinion is issued in response to a December 3, 1993, request made on behalf of [a requesting individual], concerning whether the lifetime bar of Public Officers Law §73(8) prohibits [him] from rendering services under a contract between his present employer and [his former State agency] in connection with programs he administered while in State service.

Pursuant to the authority vested in it by Executive Law §94(15), the State Ethics Commission ("Commission") hereby renders its opinion that the current programs are the same transactions on which [the requesting individual] worked while at [the State agency], so that the lifetime bar prohibits [the requesting individual] from rendering services in connection with them. However, the lifetime bar does not prohibit [the requesting individual] from applying a methodology he assisted in developing while in State service to programs in which he was not directly concerned and in which he did not participate during his State employment.

Background

[The requesting individual] served as [a Bureau Director at the State agency] until May 5, 1989, at which time he took a leave of absence until officially terminating State employment on May 1, 1991. Since taking his leave of absence [the requesting individual] has worked for [a non-profit organization].

I. [The requesting individual's] work at [the State agency]

As a [State agency] employee, [the requesting individual] supervised the on-going management of over 1,100 [State agency] contracts, subcontracts and memoranda of understanding with providers of a wide range of services [ ].(1) He directed the issuance of requests for proposals ("RFPs") for [ ] programs, participated in identifying emerging services needs of [ ], assessed gaps in services and supervised development of strategies to demonstrate methods of providing needed services.

Of relevance to this opinion, the Commission has determined that [the requesting individual] supervised [program A and program B] while at [the State agency].(2)

A. [Program A]

While [the requesting individual] was at [the State agency], there were two [types of program A]: [service A] and [service B].

1. [Service A]

During [the requesting individual's] tenure, [service A] was controlled and directed by [another State Council].(3) According to [the requesting individual], the Council established policy, directed issuance of RFPs, selected the contractors and shared programmatic oversight over all contracts [ ]. It also funded the program. Because of limited resources, the Council delegated day-to-day management of [service A] contracts to [the State agency]. As [the State agency's] program manager for [service A], [the requesting individual] was in charge of contract management and administration. He advised the Commission that he did not have any policy setting responsibilities.

2. [Service B]

[Service B] was a demonstration project directed by [the requesting individual] at [the State agency] with consultation and staff training provided by [the non-profit organization] pursuant to a contract between [the State agency] and [the non-profit organization]. The program funded [ ] services provided by small entrepreneurs.(4) The project looked for recipients who would deliver quantifiable results so that the effectiveness of the services rendered could be evaluated. [The State agency] funded [service B].

In support of the results-oriented approach to contract management, the Governor's Office of Employee Relations, in 1986, awarded [the non-profit organization](5) a [ ] contract to assist [the State agency] in implementation of [service B].(6) [The State agency] officials describe [service B] as a forerunner of the concept of "outcome funding" or performance-based reimbursement, developed later by [the non-profit organization], which will be discussed in more detail below. [The State agency] discontinued [service B] after [the requesting individual] went on leave of absence in 1989, although many of the services and concepts are now found in the [service A] program.

B. [Program B]

Prior to leaving State service, [the requesting individual] directed application of [service B]'s results-oriented principles to [program B]. Overseen by [the State agency] and with non-contract technical assistance from [the non-profit organization], six organizations received [contracts]. [The State agency] asked each organization to specify a clear result--most often the number of [contracts] they would commit to achieve. With the result stated, the next step was to what [the non-profit organization] termed "milestone development." [The requesting individual] concedes that the milestone process used in [program B] is substantially the same as the outcome funding approach currently promoted by [the non-profit organization].(7)

II. [The requesting individual's] proposed work at [the non-profit organization]

In late 1989, [the requesting individual] became [job title] at [the non-profit organization] which is charged with [the non-profit organization's] "strategy for planned change."(8)

On October 1, 1990, [the State agency] contracted with [the non-profit organization] for "outcome funding" services for the [service A] program. [The requesting individual's] anticipated role is to provide advice to [the State agency] regarding its requests for proposals ("RFPs") for [ ] services. The objective would be to include "results oriented" bids from subcontractors. His role is described as:

an overall managerial responsibility for the accomplishment of project deliverables as well as direct training and consultation with the [State agency's] staff and community providers. The program would provide the [State agency's] staff members a type of course where they would be trained in developing objectives for outcome based contracting and also developing a set of milestones, that is a specific result that they desire from a project. It would include both large group discussions and one-on-one discussion with the [non-profit organization] to train the Department staff in such methods.

Information obtained by [the State agency] from [the non-profit organization] and forwarded to the Commission reflects that [the requesting individual] will be responsible for:

. . . training and consultancy in several of the areas of organizational development which our contracts cover, including: outcome funding, approaches to organizational improvement, and management. The work will range from preparing program areas to use our approaches, communicating and teaching the approaches, and helping to implement them. The training and consultancy work will be with both [State agency] staff and provider agency staff. He will work with two or three program areas currently practicing or sleighted [sic] to practice outcome funding under [the non-profit organization's] contract. [The requesting individual] will also be engaged in "tool" and curriculum development for such training.(9)

[The requesting individual] states that his responsibilities under the new contract will require that he be "almost exclusively" involved in the implementation of outcome funding [ ].

III. [The requesting individual's] Position

At the time [the requesting individual] was in charge of contract management and administration of [the State agency's] [service A] program, it did not have a results-oriented aspect. Therefore, [the requesting individual] argues, the lifetime bar should not prohibit him from providing outcome-funding related services pursuant to [the non-profit organization's] contract with [the State agency] with respect to this program.

[The non-profit organization] indicates "that the [non-profit organization's] 'Outcome Funding Initiative', which is the subject of its current contract with the [State agency], is a separate and distinct contract methodology from that used in support of [service B] (which, as noted above, was the subject of the 1986 [State agency - non-profit organization] contract during [the requesting individual's] Department tenure)." It therefore argues that no prohibition lies. In response, [the State agency] replied

. . . the [non-profit organization's] current contract will apply the outcome funding methodology to the [ ]. . .[the requesting individual] would be prohibited entirely from participation in any contracts that involve the [program A] since that program was under his active consideration and was a subject of the [non-profit organization's] contract during his [State agency] employment.(10)

Applicable Law

The reforms made by the Ethics in Government Act of 1987 are intended to restore the public's trust and confidence in government through the prevention of corruption, favoritism, undue influence and abuses of official position. The purpose of post-employment restrictions found in the Public Officers Law 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."(11)

Public Officers Law §73(8) provides, in pertinent part:

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.

Discussion

The Commission must decide whether [the requesting individual] can render services pursuant to the contract between [the State agency] and [the non-profit organization]. Specifically, it must determine whether:

  1. the underlying methodology of results-oriented contracting as developed by [the requesting individual] as part of the [service B] program while he was with [the State agency] (and subsequently used in [program B]) and the methodology of outcome-funding used in the current [State agency - non-profit organization] contract are the same; and

  2. the current [ ] program and [program B] are the same programs with which [the requesting individual] was directly concerned and in which he personally participated while in State service.

With respect to Question 1, the Commission must determine how to construe a lifetime barred "transaction" in the context of program development. In its Advisory Opinion No. 92-20, where an issue was how to construe "transaction" in the context of legislation, the Commission referred to a ruling by the Office of Government Ethics ("OGE"), the Commission's counterpart in the federal government. There, in weighing whether a matter constitutes the "same particular matter" governed by the federal post-employment law, OGE referred to 5 C.F.R. §737.5(c)(4), which explains the concept as follows:

The same particular matter may continue in another form or in part. In determining whether two particular matters are the same, the agency should consider the extent to which the matters involve the same basic facts, related issues, the same or related parties, time elapsed, the same confidential information, and the continuing existence of an important Federal interest. (Emphasis in original.)(12)

The Commission concluded with respect to legislation that:

bills introduced in the same or different legislative sessions may constitute the same transaction, particularly when they affect the same or substantially the same population. Further, work on substantially the same issue may also be the same transaction. This can be true even when the form in which the issue is presented is not identical.(13)

As was previously discussed, the concept of delivering a specified "result" (as in [service B]) has been refined over the course of years. It was developed into "milestone development," as used in the [program B] program and eventually into the more polished "outcome" approach (as in the current [the State agency] contract with [the non-profit organization]). The outcome funding approach is now a procedure with numerous applications well beyond the specific programs in which it was first introduced. While it is true that the parties involved in the development of this methodology ([the State agency] and [the non-profit organization]) are the same, confidential information is not involved, as the concept was not "protected" by a copyright or otherwise from use or development by others. Therefore, it is the view of the Commission that the development of a non-confidential methodology by a State employee should not act as a lifetime barred transaction and prevent the employee from applying that methodology to other uses after he or she leaves State service. A contrary holding would result in an overly broad application of the law.

With respect to Question 2, above, [program A] has evolved over the past four years since the results-oriented method was applied to [service B] program which no longer exists. The funding sources and procedures in the current [service A] programs (now entirely funded by [the State agency]) are considerably different from the predecessor programs. [The State agency] has taken responsibility from the Council for these programs. Nevertheless, the Commission is persuaded that both of the previous programs (the Council's [service A] program and [service B]) and the present [service A] program affect the same or substantially the same population [ ]; they provide the same or substantially the same types of services [ ]; and they have the same goals [ ]. Thus, the Commission concludes that the current [ ] program is a transaction on which [the requesting individual] worked while he was at [the State agency]. Therefore, pursuant to §73(8), [the requesting individual] is permanently prohibited from applying the outcome approach to [program A].

Finally, [the requesting individual] concedes that the current outcome funding approach promoted by [the non-profit organization] is substantially the same as the "milestone" methodology he administered as part of [program B] while he was employed in State service. In addition, the present [program B] affects the same or substantially the same population [ ]; it provides the same or substantially the same types of services [ ]; and it has the same goals [ ]. Thus, as with [service A], the Commission concludes the [ ] program is a transaction on which [the requesting individual] worked while he was at [the State agency], and that he is permanently prohibited from applying the methodology he developed to the present [program B].

Conclusion

The purpose of the "revolving door" restrictions contained in Public Officers Law §73(8) are to preclude the possibility that a former State employee may use insider knowledge, experience or contacts gained as a result of State service to his or her advantage or that of a client in obtaining private sector employment. The lifetime bar prohibits a former employee from appearing, practicing, communicating or otherwise rendering services with respect to which the individual was directly concerned and personally participated, or which was under his/her active consideration during the time of State employment. Mere acquaintance with or knowledge of a fact or circumstance is insufficient to trigger the lifetime bar; the facts must clearly show personal participation and direct concern or active consideration of a transaction for the bar to be applicable.

The Commission finds that [program A and program B] with which [the requesting individual] was directly concerned and in which he personally participated while employed at [the State agency] are the same transactions as the [ ] on which [the non-profit organization] expects to perform services pursuant to its contract with [the State agency]; therefore, [the requesting individual] is permanently prohibited from rendering services with respect to those two programs. He can, however, apply the methodology he developed while at [the State agency] to other programs on which he did not work while a State employee.

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: May 3, 1994


Endnotes

1. [ ].

2. [ ].

3. [ ].

4. [ ].

5. The [non-profit organization] is a not-for-profit educational center.

6. The [non-profit organization] is described in the [non-profit organization's] literature as a "new and different approach" to resource allocation by government that is "strongly related to (the approach) of venture capitalists (who) generally believe that the right person is by far the most important factor in predicting success of a new venture."

7. The Commission notes that [the requesting individual's] original submission did not indicate his involvement with [program B], which incorporated most of the concepts now found in the [non-profit organization's] Outcome Funding program.

8. [ ].

9. [ ].

10. [ ].

11. See Commission's Advisory Opinion No. 90-11 pp. 6-8; also Advisory Opinion Nos. 91-2, 91-6.

12. 12 See OGE informal opinion 84x16.

13. Advisory Opinion 92-20, p. 24.



URL: http://www.nysl.nysed.gov/edocs/ethics/94-09.htm