New York State
Ethics Commission


Advisory Opinion No. 95-35: Application of Public Officers Law §74 to a State employee who is the spouse of an individual who seeks to render services on projects funded by the State agency.

INTRODUCTION

The following advisory opinion is issued in response to a request by [], Counsel to [a State agency], concerning the application of Public Officers Law §74 to [a State agency] employee who is the spouse of an individual who renders services to clients which have contact with a Bureau which the employee oversees as Director.

Pursuant to its authority under Executive Law §94(15), the Commission concludes that there would be no violation of Public Officers Law §74 on the part of the State employee where the clients of her husband have contact with the Bureau over which she has oversight if the State employee discloses the spousal relationship, recuses herself from any matter involving her husband's clients and abides by the other conditions set forth in this opinion.

BACKGROUND

Counsel, [the requesting individual], requested an opinion concerning whether the conflict of interest provisions of the Public Officers Law prohibit [the State employee's spouse], a private architect, from providing services to clients whose projects require the involvement of [a State agency]. [The State employee's spouse] is married to [the State employee], [a State agency]'s Director of []. Since the ethics provisions of the Public Officers Law govern the conduct of State officers and employees, and not that of private citizens, the Commission must examine the issues as they apply to [the State employee], as Director.

[The State employee's spouse] is self-employed. All of his professional work relates to architectural services performed on [] projects, although not all of his projects involve [a State agency].

[The State employee], as Director of [], is involved in the oversight of the agency's [] Bureau ("Bureau") and the various programs and activities which are undertaken to fulfill the Bureau's mission, i.e., to identify, evaluate and protect the [] resources of the State. She reports directly to the Deputy Commissioner of [].(1) Her responsibilities include planning, coordination with other bureaus and regions within her agency and with other State agencies, and administration of overall policies to promote the Bureau's mission. Her involvement with specific projects is limited to situations where the unit supervisors require guidance or assistance beyond that provided through standard office procedures and policies.(2)

There are three program areas in which [the State employee's spouse] is likely to have contact with [the State agency]. [These are Program 1, Program 2, and Program 3] and programs concerning agency efforts to ensure compliance.

[The State employee's spouse]'s services for clients receiving grant assistance from [the State agency]

[The State agency] administers a program of matching grants-in-aid for the acquisition and rehabilitation of eligible and qualified properties under the [Program 1] and [Program 2]. Occasions might arise where recipients of [Program 1] or [Program 2] funding use the services of [the State employee's spouse].

[Program 1] applications are recommended by the regional staff as well as staff of the Bureau according to an objective numerical system. [The State employee's spouse] is not involved in either staff recommendations or the development of the rating system. Should the Commissioner seek her comments regarding any project with which [her spouse] is involved, [the State employee] would recuse herself from all discussions or decisions. She noted that grant regulations require specific bidding procedures by the grant recipient to obtain architectural services as a safeguard against potential conflicts of interest.

[The State employee's spouse] would not be a grant applicant, nor would he forward or sign any application. Rather, he would provide architectural services to an applicant prior to an award. In the event an award is granted to his client and additional architectural services are needed, the applicant would, pursuant to the terms of the grant contract, have to abide by [a State agency]'s bidding procedure. Therefore, [the spouse]'s initial involvement does not assure his future involvement, as a new architect might be retained.

[The State employee's spouse]'s services for clients applying for [Program 3] tax credits.

[Program 3] is a federal program which allows owners of qualified properties undertaking rehabilitation work under a specific set of criteria to take tax credits for a portion of that work. Under the program, the Bureau provides the initial review of an application, applying federal standards. The [federal agency], which administers the program, retains ultimate control over the approval process. [The State employee] indicated that if [her spouse] were to be retained by any client applying for [Program 3] and if it were determined that the standard review and federal approval procedures are not a sufficient safeguard against conflict of interest, [the State agency] would forward the project for direct [federal agency] approval without [the State agency] review. [The State employee] added that architect selection by the client usually takes place prior to the [Program 3] application, and the [Program 3] process is not tied in any way to the selection of an architect. Any tax credits would go to the owner of the project, not to [the State employee's spouse] as the architect.

[The State employee's spouse]'s services for clients on projects requiring compliance review.

[The State employee] has advised the Commission that the Bureau is required by law to review federal or State funded projects to determine their impact[].(3) She has indicated that there may be cases where [her spouse] is providing professional services to a client for a project which is either funded or regulated by another State or federal agency, thus triggering a compliance review by the Bureau. [The State employee] indicated that the vast majority of all compliance cases are handled on the staff level, with fewer than 5% requiring her substantive involvement. Most of those relate to [another State agency] projects where, because of the nature of the projects, [the State employee's spouse] is not likely to be involved.

APPLICABLE STATUTES

Public Officers Law §74 addresses both actual conflicts of interest and their appearance. The code of ethics, found in Public Officers Law §74, provides minimum standards against which State officers and employees are expected to gauge their behavior. The code addresses the conflict between the obligation of public service and private, and often personal, financial interest.

Public Officers Law §74(2) contains the rule with respect to conflicts of interest:

No officer or employee of a state agency . . . should have any interest . . . 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.

Of particular relevance to this inquiry are the following provisions of Public Officers Law §74(3):

. . . .

(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

As noted above, the Public Officers Law governs the conduct of State officers and employees, not that of private citizens. Therefore, this opinion must examine the issues as they apply to [the State employee] as Director and to other [State agency] employees.

In Advisory Opinion No. 91-21, the Commission considered whether the provisions of Public Officers Law §74 were violated when the brother of a senior State manager sought a no-bid consulting contract with the manager's State agency. The Commission concluded that there was no conflict of interest per se if the brother's firm contracted with and performed services for the agency. It reasoned that:

. . . a conflict of interest does not exist simply because a senior manager's sibling's firm is conducting business with a State agency . . . (and) absent circumstances beyond that of a sibling relationship, the fact that the [employee] has no interest in and receives no compensation from the firm, she plays no role in the selection process where this firm is a contender, and in light of the [agency's] contracting guidelines in place, no reasonable basis can be found for the impression that the [employee] would use her official position to obtain a contract for her brother or that she conducted herself in violation of her trust.(4)

The Commission concluded that the senior State manager did not violate Public Officers Law §74 provided that:

(1) the manager has no interest, financial or otherwise, in the sibling's firm; (2) the manager's regular job duties do not encompass the selection of the consultant or the review or oversight of the consultant contract, or, if the job duties involved encompass such involvement, the manager is completely screened out from the consideration and appointment of such a firm or contract; (3) the manager makes full disclosure to [agency] staff of her relationship to the firm's principals and recuses herself from any role in consideration or approval of a contract to the firm; and (4) should the firm be selected for a contract, the manager's supervisor approves the selection of the contract on its merits.

The New York State Attorney General reached a similar conclusion in circumstances when addressing the question of whether a county legislator should take part in executive sessions to negotiate a contract with the bargaining unit that included his wife's position. The Attorney General held that "these are matters in which the legislator has a distinctly personal, as opposed to governmental interest. We believe that the husband/wife relationship may compromise the legislator's ability to make an impartial judgment and at least creates an appearance of impropriety that must be avoided." (see Op. Atty. Gen. No. 86-101; Op. Atty. Gen. No. 88-34). The Attorney General found that the county legislator "should recuse himself from taking any actions with respect to the salary and terms and conditions of employment of his spouse with county government."

Unlike the circumstance in Advisory Opinion No. 91-21 or even the cited Attorney General opinions, the relationship between [the State agency] and the spouse of the State employee is indirect; that is, the client of the spouse, rather than the spouse himself, will have contact with the agency. This factor lessens the possibility that a conflict of interest will occur. The Commission recognizes, however, that the potential for conflict in circumstances involving spouses is greater than when siblings are involved. It cannot be said that [the State employee] has no interest in, or would not, to some degree, personally benefit from, the work of her husband.

Nevertheless, as [the State employee] has indicated her intentions to recuse herself from any consideration of projects in which her husband is involved, and in light of the guidelines and procedures in place governing [the State agency]'s programs, the Commission concludes that a conflict of interest can be avoided where the clients of [the State employee's spouse] have contact with [the State agency] and the Bureau that [the State employee] oversees. [The State employee] must disclose her spousal relationship and recuse herself from any consideration of the projects on which her husband is to perform services. Furthermore, she may not reveal confidential information to him, nor may she have any financial interest in his practice beyond that created by the spousal relationship. [The State employee] has also agreed that she will not be signatory to any form documents that are sent to any client of her spouse.

In addition, all matters in which [the State employee's spouse] is involved should be reviewed by [the State employee]'s supervisor, the Deputy Commissioner. This will serve to assure that each such matter will be considered by an individual in the Department not subject to [the State employee]'s direction and control. It, thus, serves to further shield the matter from the possibility of undue influence.

Finally, in an effort to take all reasonable steps to avoid the appearance of a conflict of interest, [the State agency] has indicated a willingness to send a memorandum to staff reminding them to avoid discussing with [the State employee's spouse] any matter from which she is recused, and to treat any application where [the spouse] is the architect as they would any other application. The Commission believes that this is an excellent suggestion and it is prepared to work with [the State agency] in drafting the document.

CONCLUSION

The Commission concludes that there would be no violation of Public Officers Law §74 on the part of [the State employee] where clients of her husband have contact with the Bureau over which she has oversight if she discloses the spousal relationship, recuses herself from any matter involving her husband's clients and abides by the other 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 person who is the subject of the opinion and who acted in good faith, unless material facts were omitted or misstated in the request for an opinion or related supporting documentation.

Concur:

Joseph M. Bress, Chair

Angelo A. Costanza
Donald A. Odell, Members

Dissent:

Robert E. Eggenschiller, Member

Dated: November 20, 1995


Endnotes

1. [The State employee] is not considered part of the executive staff at [the state agency].

2. [footnote deleted]

3. [footnote deleted]

4. The Commission underscored that the State manager must not only recuse herself from the contract process but must not disclose confidential information concerning the contract process or a specific project when the information would be useful to her brother in securing the contract for services with the agency.



URL: http://www.nysl.nysed.gov/edocs/ethics/95-35.htm