New York State
Ethics Commission

Introduction

Pursuant to the authority vested in the Commission by Executive Law §94(15), the Commission hereby renders its opinion that the existence of a former familial relationship between one of the [State agency's] employees and an individual who operates a transcription and typing service does not bar the [State agency] from contracting with the service provided the [State agency] employee abides by the conditions set forth in this opinion. Further, the employee's referral of the service and delivery of its materials to the [State agency] are not violations of the Public Officers Law.

Background

On [date], [the requesting individual] had received correspondence from [a private company].⁽¹⁾ The letter stated that the company had been established thirteen years earlier, "under the guidance of" [a private individual]. [That private individual], who is the only signatory to the letter, states that "[an employee of your State agency] referred us to your agency." The letter goes on to describe the company, identify several of its current clients and ask that [the private company] be considered in the expansion of the [State agency's] pilot [transcription] program. [The referring State employee also delivered some materials on [the private company] to [the requesting individual].

[The requesting individual] informed the Commission that "[the referring individual] was previously married to [the private individual's] sister, who is now deceased. Most recently, [the referring individual] has re-married." [The requesting individual] also indicated by telephone that the [State agency] currently utilizes a "standing list" of [transcription] vendors. This list was developed over a number of years and is based on direct experience with the various firms. The [State agency] does not generally solicit [transcription] services through a competitive bidding process. [The requesting individual] asked for an opinion as to whether the relationship between [the referring individual] and [the private individual] would prohibit the [State agency] from considering [the private company] as a vendor of [transcription] services.

On [date], the Commission responded to the [State agency's] request with an informal opinion. The Commission determined that the [State agency] was not prohibited from contracting with [the private company] to perform [transcription] services provided [the referring individual] discloses his relationship with [the private individual], recuses himself from any role in selecting [transcription] services and is not compensated for rendering services to assist [the private company] in obtaining a contract with the agency.⁽²⁾ The Commission also noted that if the [State agency] does select [the private company] to perform [transcription] services, it should be made clear that the selection of the firm was based on the merits.

On [date], the Commission received a letter from [another State employee], requesting a formal opinion in this matter.

Applicable Law

Public Officers Law §73(7)(a) states, in relevant part:

No . . . state officer or employee, other than in the proper discharge of official duties, . . . shall receive, directly or indirectly, or enter into any agreement express or implied for, any compensation, in whatever form, for the appearance or rendition of services by himself or another in relation to any case, proceeding, application or other matter before a state agency where such appearance or rendition of services is in connection with:

(i) the purchase, sale, rental or lease of real property, goods or services, or a contract therefor, from, to or with any such agency

. . . .

Section 74 contains the Code of Ethics. It is concerned with both actual conflicts of interest and the appearance of conflicts. The rule with respect to conflicts of interest, contained in §74(2), provides the following:

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.

Standards set forth in §74(3) which further explain and define the above-mentioned rule and which pertain to the present circumstances, include the following:

. . . .

3. 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.

4. 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.

   . . . .

6. 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.

   . . . .

8. 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 in violation of his trust.

   . . . .

Discussion

The second issue to be addressed is whether the former familial relationship between [the referring individual] and [the private individual] precludes the [State agency] from contracting with a company operated by [the private individual]. The Commission has previously considered several situations involving relatives of a State employee doing business with the employee's agency. In Advisory Opinion No. 91-21, the Commission considered the appropriateness of a firm performing services for a State agency where the principals of the firm were the brother and sister-in-law of the Deputy Director of that agency. In that opinion, the Commission noted that the mere existence of a sibling relationship, standing alone, would not result in a conflict of interest, and it held that the agency may award a no-bid contract to the firm provided (1) the State employee has no interest, financial or otherwise, in the firm; (2) the employee's job duties do not encompass the selection, review or oversight of the contract; (3) the State employee makes proper disclosure and recusal; and (4) the firm is selected on its merits.

Following Advisory Opinion No. 91-21, the Commission concludes that the familial relationship in the instant case, that of former brother-in-law and sister-in-law, would not, by itself, preclude the [State agency] from contracting with [the private company]. As the Commission indicated in its informal opinion, to avoid a conflict of interest or the appearance of a conflict, [the referring individual] should disclose his relationship with [the private individual] and recuse himself from any role in selecting [transcription] services for the [State agency]. In addition, [the referring individual] must have no interest, financial or otherwise, or be compensated by [the private company] for services rendered in connection with that company's obtaining a contract with the [State agency]. Further, the [State agency] should take steps to insure that its selection of a firm to provide [transcription] services, including [the private company], is based on the merits. Finally, if [the private company] is selected, [the referring individual] should not utilize the company's services [ ] in order to avoid any appearance that he is favoring a company in which someone with a former familial relationship to him has a significant interest.

Conclusion

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

All concur:

Joseph M. Bress, Chair

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

Dated: November 21, 1994

Endnotes

1. This letter was apparently a follow-up to one sent by [the private company] on [ ].

2. The Commission cited Advisory Opinion No. 91-21.