New York State
Ethics Commission


Advisory Opinion No. 95-18: Application of Public Officers Law §74 to a member of a State Board serving as a compensated trustee of a foundation which is chartered by the State Board and provides grants to institutions of higher learning in New York State.

INTRODUCTION

The following advisory opinion is issued in response to an inquiry from [], a member of a State Board, concerning whether it is permissible for him, under Public Officers Law §74, to serve as a compensated trustee of a Foundation.

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 Public Officers Law §74 does not prohibit [the requesting individual] from serving as a trustee of the Foundation, subject to his compliance with the conditions set forth in this opinion.

BACKGROUND

[The requesting individual] has recently been chosen by the New York State Legislature to be a member of the State Board. He requests the Commission's opinion as to whether there is a conflict of interest between his serving as a board member and his continuing to serve as a compensated trustee of the Foundation.

The Foundation is a trust that was created by the late [] and has, as its single purpose, the provision of grants to advance education and training in the hotel field. [The requesting individual] is one of twelve trustees. Each trustee has one vote on Foundation matters. The Foundation has made, and will continue to make, grant awards to institutions of higher learning in New York such as Cornell, Niagara, Trocaire and Erie Community College. Pursuant to Education Law §216, educational trusts, such as the Foundation, and all institutions of higher learning that operate in New York State must receive a charter from the State Board. In addition, the State agency performs periodic programmatic reviews of the curriculum of institutions of higher learning and their financial aid and admission criteria.

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:

. . .

(c) 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.

. . .

(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

Before responding to the substantive issue presented by [the requesting individual], the Commission must first decide whether members of the State Board are covered by Public Officers Law §74. Each subdivision of this section imposes restrictions on the actions of officers and employees of a "state agency." The question presented is whether members of the State Board are officers of an agency.

Subdivision one of §74 defines "state agency" to include any "state department." Article 5, §4 of the New York State Constitution provides that the State Board shall serve as the head of the State agency. Members of the State Board are, therefore, officers of a State department, which is a State agency, and are subject to the provisions of Public Officers Law §74.(1)

This section 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. The issue presently before the Commission is whether [the requesting individual]'s service as a trustee of the Foundation would violate any of the standards cited above.

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

In Advisory Opinion No. 92-11, the Commission held that a member of a public authority must disclose his partnership in a law firm and recuse himself where the authority was selecting outside counsel and one of the prospective candidates was the member's firm.

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. However, there were 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 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.

Following the above opinions as guidelines, the Commission determines that [the requesting individual] may serve as a member of the State Board and as a trustee of the Foundation. His service as one of twelve trustees of a foundation that makes grants to institutions that are chartered by the State Board is insufficient to create a conflict or the appearance of a conflict with his position as a board member. There is nothing to indicate that [the requesting individual] would be in a position to disclose confidential information to the Foundation or any of the recipient institutions, or otherwise use his position as a board member to benefit the Foundation or these institutions, or to advance his personal interests.

However, applying the principles of disclosure and recusal cited above, [the requesting individual] would have to disclose his service as a trustee of the Foundation to the State Board and recuse himself from any decision that might come before the State Board regarding the Foundation's charter or its activities, including a review of any matters relating to its grants. On the other hand, the Commission determines that [the requesting individual] does not have to disclose his service to the Foundation and recuse himself from decisions of the State Board that affect those institutions of higher learning that are recipients of a Foundation grant as long as the State Board's action does not directly relate to or affect the grant. He may not use or share any information gained from his service with the State Board in his role at the Foundation unless such information has become public.

CONCLUSION

The Commission concludes that Public Officers Law §74, which is applicable to members of the State Board, does not prohibit [the requesting individual] from serving as a member of the State Board and as a trustee of the Foundation, provided that he recuse himself on any matter that comes before the State Board regarding the Foundation's charter or its activities, including a review of any matter relating to its grants, and does not use or share confidential information in his role at the Foundation.

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, Members

Donald A. Odell abstained.

Dated: May 31, 1995


Endnotes

1. Public Officers Law §73(1)(h) specifically excludes from the definition of "state officer or employee" members of the State Board. However, there is no general definition of this term in §74, and none of its subdivisions that contain a specific restriction on the actions of a state officer or employee include an exception for the board members.



URL: http://www.nysl.nysed.gov/edocs/ethics/95-18.htm