New York State
Ethics Commission


Advisory Opinion No. 95-33: Whether the "former agency" of a senior staff member at a State agency includes affiliated agencies for purposes of applying the post-employment restrictions of Public Officers Law §73(8)(a).

INTRODUCTION

The following advisory opinion is issued in response to a request submitted by [a senior staff member], [ ] at the Metropolitan Transportation Authority ("MTA"). He asks whether, at such time as he leaves his current position, the two year bar of Public Officers Law §73(8)(a)(i) would preclude his appearing, practicing or rendering services for compensation before only the MTA, or whether it would extend to all of the MTA's affiliates and subsidiaries.

Pursuant to its authority under Executive Law §94(15), the New York State Ethics Commission ("Commission") concludes that [a senior staff member]'s two year bar would cover the MTA and its affiliated agencies.

BACKGROUND

Public Officers Law §73(8)(a)(i) bars an employee who leaves State government from engaging in specified activities before his or her former agency for a two year period. Thus, it is critical that every employee know which agency or agencies is his or her "former agency." For some agencies, such as the MTA, this is not a simple matter.

In an informal opinion, dated May 27, 1993, the Commission considered the issue of whether officers and employees of the MTA should be considered employees of only the MTA or, alternatively, all of the MTA's affiliated agencies for purposes of determining their former agency.(1) The Commission held that, for other than certain "senior" employees, the former agency of MTA employees would be the MTA only. For senior employees, the Commission held that, "[t]he heads of MTA's 11 departments and the directors who are their immediate subordinates, whose current responsibilities include actively and routinely managing significant projects or matters involving one or more MTA affiliates or subsidiaries may be considered to be an employee of the MTA and the other MTA entity. This determination shall be made on a case-by-case basis." [A senior staff member], as a department head, is requesting consideration of his situation.

As [ ], [a senior staff member], [the requesting individual] functions as an MTA department head.(2) His duties require that he oversee the MTA's marketing, planning and market research functions, as well as a number of other programs. The directors of the following divisions report to him: Marketing and Corporation Communications, Policy Research, Planning and Arts for Transit. [The senior staff member] supervises a staff of 47, and his department's annual operating budget is approximately $6.5 million.

[The senior staff member]'s duties cause him and his staff to have regular contact with the affiliated agencies. His contacts stem from the MTA's role in policy and planning coordination over interagency matters; centralization of programs that more efficiently serve the agencies collectively; matters involving significant participation by transportation agencies or service providers outside the MTA; and matters involving policy changes that will significantly change the way transit services are provided.

With respect to interagency matters, [the senior staff member]'s department coordinated the MTA's overall approach for implementing the Americans with Disabilities Act, the Clean Air Act and the Intermodal Surface Transportation Efficiency Act, as these federal laws apply to all of the MTA's affiliated agencies. While each affiliated agency was responsible for compliance, [the senior staff member]'s department was responsible for acting as a consultant to each agency's staff in the development of compliance plans and for unifying the various plans into a single, coherent MTA-wide document or presentation.

[The senior staff member]'s department also directed planning studies that applied to two or more affiliated agencies. For example, it conducted a facility study of the Atlantic Terminal, which is shared by the New York City Transit Authority ("TA") and the Long Island Rail Road ("LIRR"), and a fare policy study, which applied to the TA, LIRR and Metro-North Commuter Railroad ("Metro-North").

In addition, the department created the overall framework for a number of planning initiatives, including the MTA's business and long-range planning efforts. However, the affiliated agencies, with the approval of the chair of the MTA's board of directors, are responsible for implementing any actions suggested by studies conducted by the department. Pursuant to the MTA chair's determination that centralized management of certain programs would provide greater consistency across agencies, as well as cost saving efficiencies, [the senior staff member]'s department has contracted for and managed the MTA's art, advertising, market research and homeless outreach programs on behalf of the affiliated agencies.

The department has also worked with non-MTA agencies and service providers, such as the New York State Department of Transportation, the New York City Department of Transportation, the New York Power Authority, New York Waterways, Amtrak, the Port Authority of New York and New Jersey, New Jersey Transit, and the 42nd Street Development Corporation, on a variety of projects involving the MTA's affiliated agencies. For example, it provided general coordination linking planned and new ferry services in the region with MTA bus and commuter rail services. The department also coordinated negotiations with Amtrak over the impact of the design of the [ ] project on subway and commuter rail facilities at [ ] Station. It currently oversees a long range transportation study affecting the region that is jointly sponsored by the Port Authority and New Jersey Transit. In all of these examples, the technical expertise of the staff of the MTA's affiliated agencies with respect to service delivery and facility development forms the basis of the study work and the MTA's negotiating positions.

[The senior staff member]'s department, to a limited degree, has also been involved in planning efforts involving potentially significant changes in the way certain transportation services are provided. For example, under [the senior staff member]'s direction, his staff worked with the staff of the [an affiliated agency] on preliminary efforts to study the feasibility of privatizing bus service. [The senior staff member] also played a role in formulating the financial terms under which the [an affiliated agency] assumed responsibility for providing paratransit service, which had been formerly provided by the New York City Department of Transportation.

[The senior staff member] states that in all of his efforts, he and his staff have worked and continue to work closely with the staff of the relevant affiliated agencies. He empathizes that those agencies retain the responsibility for operating the transportation services, and they must determine the feasibility of implementing suggested changes to their systems. In cases where [the senior staff member]'s department plays a lead role in shaping policy, each affiliated agency retains the responsibility for developing an individual plan to implement an overall MTA policy. [The senior staff member] states that he neither directs staff of any implementing agency nor reports to anyone other than the chair of the MTA.

APPLICABLE STATUTE

Public Officers Law §73(8)(a)(i) provides:

No person who has served as a state officer or employee shall within a period of two years after the termination of such service or employment appear or practice before such state agency or receive compensation for any services rendered by such former officer or employee on behalf of any person, firm, corporation, or association in relation to any case, proceeding or application or other matter before such agency.

This paragraph, part of what is generally referred to as the "revolving door" provision, sets the ground rules for what individuals may do with the knowledge, experience and contacts gained from public service after they terminate their employment with a State agency. It contains a two year absolute bar on an employee's appearing, practicing or rendering services for compensation on any matter before his or her former agency.

DISCUSSION

As noted above, the determination of a former employee's "former agency" is critical in understanding the breadth of the restrictions imposed on him or her by the two year bar. On May 27, 1993, the Commission issued an informal opinion to the MTA defining the former agency of its officers and employees. The Commission said:

  1. MTA board members are not subject to §73(8).

  2. Officers, other than MTA board members, and employees of the MTA, other than those senior employees described below, and officers and employees of any MTA affiliate or subsidiary, shall be considered to be officers of employees only of the entity where the officer or employee works. For purposes of the two year bar of Public Officers Law §73(8), these officers and employees may "appear or practice . . . or receive compensation for any services rendered by such former officer or employee on behalf of any person, firm, corporation or association in relation to any case, proceeding or application or other matter" before any other entity within the MTA system with the exception of his or her employing agency.

  3. The chair and the first vice-chair of the board of the MTA and the executive director of the MTA, by virtue of their statutory designations, shall be considered to be officers and employees of the MTA and all MTA system affiliates and subsidiaries. Any other officer or employee who holds a title, whether by statute or otherwise, with another MTA entity and whose current responsibilities include actively and routinely managing significant projects or matters involving that MTA entity shall be deemed to be an officer or employee of each such MTA entity.

  4. The heads of MTA's 11 departments and the directors who are their immediate subordinates, whose current responsibilities include actively and routinely managing significant projects or matters involving one or more MTA affiliates or subsidiaries may be considered to be an employee of the MTA and the other MTA entity. This determination shall be made on a case-by-case basis.

With this as his frame of reference, [a senior staff member] presents his situation to the Commission. He stresses that the MTA and each of its affiliated agencies are separate legal entities, established by statute or by an act of the MTA board. As a separate legal entity, each maintains its own by-laws, financial records, headquarters, executive staff, employees and assets.(3) While [a senior staff member] is correct, his argument is not determinative, as the Commission has held that former employees may have more than one former agency (See Advisory Opinion Nos. 90-22 and 95-19.) In the case of the MTA, the Commission, as noted, has held that an employee may, in certain circumstances, have more than one former agency.

[A senior staff member]'s more significant argument is based upon the Commission's Advisory Opinion No. 89-3. There, the Commission held that the former agency of an Assistant Counsel to the Governor is the Executive Chamber and not the State agencies to which the counsel is assigned, notwithstanding that the Assistant Counsel oversaw "issues in certain areas", had "regular contact with three agencies" and had responsibility for legislation which, when enacted, would "have a direct impact on regulatory or project-specific decisions of these agencies." Based on the Commission's holding in Advisory Opinion No. 89-3, [a senior staff member] argues that the Commission should find that his former agency is the MTA only, notwithstanding his work with the affiliated agencies.

It is [a senior staff member]'s position that the relationship between the MTA and its affiliates is analogous to the relationship between the Governor's executive staff and the executive agencies. He notes that the MTA, like the Governor's executive staff, provides planning, coordination and policy guidance to the operating agencies, but it is the agency heads who operate or administer their programs within the framework provided. In cases of disagreement or lack of clarity regarding a specific issue, the MTA Chair, like the Governor, provides the ultimate resolution. Based on this analogy and the Commission's finding in Advisory Opinion No. 89-3, [a senior staff member] argues that the Commission should find that his former agency is the MTA and not the affiliated agencies.

Despite its surface appeal, the Commission cannot agree with [a senior staff member]'s argument. The relationship between the Executive Chamber staff and the State agencies is different from the relationship between the MTA headquarters and the affiliated agencies. Each State agency head, while maintaining a close relationship to the Governor's office, is the final decision maker on matters within the agency. All employees within an agency report to its head. Furthermore, an agency head acts independently of the Governor, although subject to being dismissed by the Governor. In contrast, the MTA and each of its affiliated agencies are governed by the same board of directors. The employees of each affiliate are, therefore, ultimately responsible to the same board and the same individual who serves as Chairman of the Board. In all instances, final decisions are made by the same individuals. Furthermore, the MTA, unlike the Governor, has the power to create or dissolve its affiliated agencies. Therefore, the two situations are not analogous.

In addition, the Commission has recognized that a former employee may have more than one former agency. In Advisory Opinion No. 90-22, an employee of an agency worked as an administrator for another agency for 11 years as a significant and regular assignment. Even though his service for the second agency was uncompensated, the Commission held that both agencies were the employee's "former agency." The Commission noted:

[to] find otherwise would result in a State employee serving one agency, compensated by another and escaping the "revolving door" limitation with the first agency. Such "use" of the system, even if unintended, cannot be permitted to effect an evasion of the ethical requirement of this subdivision. The post-employment limitation was enacted to prevent the use of "insider knowledge" and private contacts to one's personal benefit or the benefit of others.

Recently, in Advisory Opinion No. 95-19, the Commission considered the matter of a State agency head who, during two and one-half years of his period of service at the agency, provided, on a regular basis, assistance to the Governor on issues unrelated to the agency. He was neither paid by the Executive Chamber for his work nor was he appointed to an Executive Chamber position or title. Based upon the level of responsibility exercised by the individual, his regular and continuing responsibility working for the Governor and the duration of his assignment, the Commission concluded that one of the individual's former agencies was the Executive Chamber. It noted that "the 'revolving door' restrictions apply when it can be shown that there is continuing 'service' to a State agency, even where the employee is not compensated by the agency."

Applying these precedents, including the informal opinion issued to the MTA, cited above, to [a senior staff member]'s circumstances, the Commission finds that his regular duties for the MTA included significant responsibilities in matters involving the affiliated agencies. Having served as [ ], an MTA department head position, from 1989 to 1991, and [ ] for the last four years, he is one of those MTA officers subject to having more than one former agency. Based on his functions and responsibilities, the Commission concludes that the MTA and its affiliated agencies comprise [a senior staff member]'s former agency for purposes of Public Officers Law §73(8)(a)(i).

CONCLUSION

The Commission concludes that [a senior staff member]'s two year bar under Public Officers Law §73(8)(a)(i) would cover the MTA and its affiliated agencies.

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

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

Dated: November 20, 1995


Endnotes

1. The affiliated agencies of the MTA include the Triborough Bridge and Tunnel Authority, New York City Transit Authority, Long Island Rail Road, Metropolitan Suburban Bus Authority, Metro-North Commuter Railroad and the MTA Card Company. The MTA's board of directors also serves as the board of each of the affiliated agencies.

2. [The requesting individual] joined the MTA in 1988 as []. He was promoted to [] in 1989 and [] in 1991. He states that he has never held a title with any of the MTA's affiliated agencies.

3. [The requesting individual] cites the following court cases in which the separate legal identities of the MTA and its affiliates have been recognized: Wenthen v. MTA, 464 NYS2d 212, 214 (2nd Dept. -1983), in which the court held that "although the Long Island Railroad is a subsidiary corporation of the Metropolitan Transit [sic] Authority, the railroad is a distinct legal entity"; and Noonan v. LIRR, 551 NYS2d 232 (1st Dept. -1990), where the court stated that the MTA may not be liable for the torts committed by the subsidiary arising out of the operations of the subsidiary corporation.



URL: http://www.nysl.nysed.gov/edocs/ethics/95-33.htm