New York State
Ethics Commission


Advisory Opinion No. 95-12: Application of Public Officers Law §74 to a non-policymaking employee serving on the board of directors of a provider regulated and funded by the employee's agency.

INTRODUCTION

The following advisory opinion is issued in response to an inquiry from [], an employee of the New York State Office of Mental Retardation and Developmental Disabilities ("OMRDD"), concerning whether it is permissible for him, under Public Officers Law §74, to serve as a member of the board of directors of a not-for-profit corporation that receives funding from OMRDD and is subject to its oversight.

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 because [the requesting individual] is not in a policymaking position, is not involved in licensing, rate setting or certification matters, and has no official responsibilities with regard to the corporation, he may serve on its board of directors, under the conditions set forth in this opinion, without violating Public Officers Law §74.

BACKGROUND

[The requesting individual] is employed by OMRDD as a [] Program Assistant, which is a non-policymaking position.(1) He asks the Commission whether he may serve on the board of directors of [a not-for-profit corporation], which has been described as " . . . a consumer directed not-for-profit non-residential independent living center assisting people with disabilities to have direct control over their own lives and to participate fully in all aspects of community life."(2) The [not-for-profit corporation] receives some funding from OMRDD, and the agency oversees some of its services by means of regulation and certification.

[The requesting individual's] responsibilities for OMRDD are " . . . to work towards a system that will promote individualized integrated employment and day services for people with developmental disabilities based on their personal preference."(3) He states that he does not set agency policy, and is not involved with the licensure, rate setting or certification of the [not-for-profit corporation] or of any other entity. In a telephone conversation, [the requesting individual] indicated that he has had no interaction with the [not-for-profit corporation] in his official capacity except for one speaking engagement last year.

APPLICABLE STATUTE

Public Officers Law §74 sets forth the Code of Ethics for State officers and employees. Section 74(2) contains the rule with respect to conflicts of interest:

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.

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:

. . . .

(b) No officer or employee of a state agency . . . should accept employment or engage in any business or professional activity which will require him to disclose confidential information which he has gained by reason of his official position or authority.

. . . .

(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 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.

. . . .

(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 interests but also conduct that gives rise to the appearance of a conflict. 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.

In assessing whether a State employee may engage in an outside activity in conformity with Public Officers Law §74, the Commission considers several factors: the employee's duties on behalf of the agency for which he or she works, the relationship of the agency and the employee to the proposed outside activity, whether the employee would be in a position to use his or her position to secure unwarranted privileges, and whether the outside activity would impair the employee's independence of judgment in the exercise of official duties [see Public Officers Law §74(3)(a), (b), (c) and (d)].

In Advisory Opinion No. 90-25, the Commission held that a policymaking employee may not serve on the board of directors of a not-for-profit organization that is licensed or regulated, or whose rates are set, by the employee's agency. It concluded that an appearance of a conflict of interest will inevitably be present in such circumstances. In Advisory Opinion No. 92-4, the Commission similarly held that a director of a State facility who was designated as a policymaker was prohibited from serving as an uncompensated member of the board of directors of an entity over which his agency exercised certain oversight responsibilities.

The Commission has not previously had occasion to determine whether employees who are not policymakers may serve as directors of not-for-profit corporations in similar situations. It has, however, permitted non-policymaking OMRDD employees to have an outside employment relationship with providers licensed by OMRDD where their job responsibilities are removed from the agency's licensing and rate setting functions (See Advisory Opinion No. 91-3), and it has permitted OMRDD employees who are not policymakers to be family care providers if they do not work in the unit that certifies or administers the family care programs (See Advisory Opinion Nos. 91-11, 94-17). In permitting these activities, the Commission considered whether the public might perceive that the employees in their outside capacity would receive preferential treatment from agency employees or be privy to confidential agency information not available to others engaging in similar activities. The question now before the Commission is whether these concerns should prohibit a non-policymaking employee from serving on the board of directors of a not-for-profit corporation regulated by his or her agency.

As stated above, [the requesting individual] is not involved in the licensing, rate setting or certification of the [not-for-profit corporation] as part of his public responsibilities. The Commission finds that just as employees in his situation need not be prohibited from serving as employees of regulated providers or from becoming family care providers, he need not be prohibited from serving as a member of the board of directors of the [not-for-profit corporation]. Since he is neither a policymaker nor a member of the unit that oversees the [not-for-profit corporation], the public will not perceive that the [not-for-profit corporation] might receive preferential treatment or have access to confidential information. Thus, [the requesting individual] may serve as a director as he requested.

Recently, in Advisory Opinion No. 95-9, the Commission addressed a situation where the requesting individual's employing agency did not license or regulate a not-for-profit corporation on whose board she wished to serve, but had authority over areas of common interest to the agency and the corporation. The Commission determined that as long as the employee, who was a policymaker, followed certain guidelines, such as recusing herself from any board decision or vote concerning specific issues on which her agency would likely take a position, she could serve on the board. The Commission further required the employee to disclose her board membership to her agency with regard to each such matter. The agency then would be in a position to consider whether to reassign the matter. In this way, she would be able to fulfill her responsibilities at the agency and pursue her personal interests without violating the Public Officers Law.

While that opinion is not directly on point, as [the requesting individual] has not been designated a policymaker and OMRDD, his agency, directly funds and regulates the [not-for-profit corporation], the guidelines set forth therein are useful. By following those guidelines, [the requesting individual] would avoid the risk that his serving as a member of the board of directors could cause the public to suspect that he might be engaged in acts that are in violation of his trust. Therefore, as a member of the [not-for-profit corporation's] board of directors, [the requesting individual] should recuse himself from discussions or votes on issues on which OMRDD has an interest or is likely to take a position or must issue a determination, and inform OMRDD of his membership on the board with regard to each such matter. These precautions, taken to avoid the appearance of a conflict of interest, will assure that [the requesting individual] fulfills his responsibilities at OMRDD without violating the Public Officers Law.

CONCLUSION

The Commission concludes that Public Officers Law §74 does not prohibit [the requesting individual] from serving as a member of the board of directors of the [not-for-profit corporation] under the conditions set forth in this opinion.

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 person in the request for opinion.

All concur:

Joseph M. Bress, Chair

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

Dated: April 25, 1995


Endnotes

1. [The requesting individual's] position is classified at a Grade 14 level earning approximately $27,000/year.

2. Letter of February 17, 1995, from the [not-for-profit corporation] inviting [the requesting individual] to become a member of its board.

3. Letter of request, dated February 24, 1995, to the Commission from [the requesting individual].



URL: http://www.nysl.nysed.gov/edocs/ethics/95-12.htm