|Advisory Opinion No. 96-4:||Application of the two year and lifetime bars of Public Officers Law §73(8)(a) to a former employee of the New York State Department of Transportation seeking to sell traffic signals subject to his former agency's inspection.|
The following advisory opinion is issued in response to a request submitted by [ ] a former employee of the New York State Department of Transportation ("DOT"), who seeks a determination as to whether he may sell traffic signal equipment to various entities, both public and private, within New York State and engage in activities related to such sales.
Pursuant to its authority under Executive Law §94(15), the New York State Ethics Commission ("Commission") hereby renders its opinion that Public Officers Law §73(8)(a)(i) prohibits [the requesting individual] from communicating with or selling traffic signal equipment directly to DOT, but he may sell such equipment to other entities, including both governmental and private entities, even if DOT inspects and approves the equipment or is the eventual user of the equipment. He may not, however, have any role in certifying, in writing, that traffic signals meet DOT's requirements.
[The requesting individual] retired on [date] from DOT, where he served in the title of [ ] and supervised traffic signal crews in [a region].(1) He has since joined [a private company] which sells traffic signal equipment in New York State. In his request letter, [the requesting individual] asks several questions concerning his ability to sell traffic signals to various entities in the State and to engage in various activities related to sales.
He asks whether he can sell to towns, counties and cities in the State; the Port Authority, the Thruway Authority and other authorities; railroads; and, specifically, a contractor for the City of [ ], which, pursuant to a grant consisting of 80% federal funds, 10% State funds and 10% City funds, will rebuild 150 signals. He also asks:
According to DOT, the agency is involved with the selection and approval of each traffic signal to be installed along a State highway. Where a private contractor is to install such a signal, DOT requires that the signal conform to the agency's specifications, that the controller on the signal be inspected at the agency's laboratory in Albany prior to installation, and that the signal be inspected by DOT after its installation. Where State money is to be spent to acquire a signal for use other than along a State highway, DOT requires the signal to be compatible with its standards, and it retains the right to inspect after installation.
Many local jurisdictions have adopted DOT's standards for acceptable traffic signals. However, unless a State highway or State money is involved, DOT does not select, inspect or approve traffic signals purchased by a local jurisdiction.
It is the Commission's understanding that [the requesting individual], in selling signal equipment, has a limited role. He, basically, describes the equipment [the private company] sells and how it meets the buyer's needs, and he handles the sale. [The private company] does not manufacture or assemble the signal equipment.
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 provision, part of what is generally referred to as the "revolving door" statute, 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 provides for a two year absolute bar on a former employee's appearing, practicing or rendering services for compensation in relation to any matter before his or her former agency.
In analyzing this statute, the first restriction provides that a former employee may not "appear" before his or her former agency. That term has been broadly interpreted by the Commission. For example, a former employee may not communicate on behalf of a client with the former agency's staff (Advisory Opinion No. 89-7); write, prepare or submit a grant proposal to the former agency (Advisory Opinion No. 90-21); or negotiate contracts, participate in field audits or represent clients before the former agency (Advisory Opinion No. 90-4).
Applying these standards, some of [the requesting individual's] questions are easily resolved. He may not contact DOT to obtain a list of upcoming contracts and bidders, nor to obtain details of the [city] project. Furthermore, he may not make inquiry of DOT regarding its standards or preferences. Finally, he may not sell directly to DOT. In all of these instances, he would be appearing before his former agency within the two year period.
The more difficult questions arise under the restriction contained in §73(8)(a)(i) that prohibits a former employee from rendering services for compensation in relation to a matter before his or her former agency. Where, as here, the agency has a role in inspecting and approving equipment, there is clearly a matter before it. The hard question is whether the sale to an entity, whether public or private, other than the agency, is "in relation to" the matter before the agency.
In Advisory Opinion No. 94-4, the Commission held that a contract between a State agency and a contractor was a "matter" before the agency, and that former employees of the agency could not work for the contractor pursuant to the contract, as they would be receiving compensation for rendering services in relation to the matter. In the instant case, [the requesting individual] would not be working for an entity that has a contract with DOT. Thus, his situation is distinguishable from that presented to the Commission in Advisory Opinion No. 94-4.
This appears to be a case of first impression for the Commission. Specifically, the question before the Commission is whether, within two years of termination from State service, a former DOT employee may sell traffic signal equipment to municipalities, State entities other than DOT, railroads and private contractors where DOT inspects and approves the equipment.(2)
Since [the requesting individual] is involved in the sale of goods, rather than services, his role is to respond to requests for proposals or bids issued by various entities for the purchase of signal equipment. He sells the goods to the municipality, agency or entity for its installation and use. The goods he sells are then subject to analysis and inspection by his former agency, DOT.
In those situations where a former employee has rendered services and had his or her work product reviewed by the former agency, the Commission has found a violation of the two year bar [see, Advisory Opinion Nos. 89-8, 91-9, 90-21]. However, here, no services of the former employee would be reviewed by his former agency. Instead, [the requesting individual] proposes to sell goods, and it is the goods that must meet agency specifications. Since [the requesting individual] will have no role in manufacturing or assembling the goods he sells, his former agency will make no judgment with respect to his or his firm's work product. Once a buyer, whether a municipality, State entity other that DOT, private entity or a contractor, purchases the signals, [the requesting individual's] role ends. When DOT inspects the signals, either on site or in its offices, it would know that [the private company] has provided the signal, but would not necessarily know that [the requesting individual] had any role in its sale. Even if it did know of [the requesting individual's] involvement as the salesperson, it is not likely to affect the outcome of the inspection. The signals must be inspected based on technical, measurable standards, and they will pass or fail inspection based on those standards, not on who sold the signals.
Since [the requesting individual] is not in a position to use his relationships with former DOT colleagues to influence their inspection of the signals, the Commission concludes that there is no violation of the two year bar for [the requesting individual] to sell traffic signal equipment to entities other than DOT within his two year bar period.(3) The sales services he renders is not "in relation to" a matter before his former agency.
This conclusion leaves one final question - when [the requesting individual] sells to a contractor is he obligated to determine whether DOT will be the end purchaser? Put another way, would [the requesting individual] be in violation of the two year bar if he sold to a contractor who then sold to and/or installed the traffic signal for DOT? To answer this question, the Commission again begins its analysis with Advisory Opinion No. 94-4, discussed above, where former employees were prohibited from working for a contractor and doing contractual work where there was a contract with their former agency. The contract was a matter before the agency and their work would be in relation to the contract.
If [the requesting individual] were to sell goods to a contractor which, in turn, sold them to DOT, [the requesting individual's] rendering of services would not be pursuant to a contract with DOT; rather, his services would be as a salesman selling to the contractor. The fact that the goods he sells eventually find their way to his former agency does not mean that he is rendering services in relation to a matter before his former agency. As with the situation where DOT inspects the signals, the agency will make no judgment with respect to his services. It will consider, as purchaser, only the quality of the goods. As long as there is no contract between the firm for which [the requesting individual] works, [the private company], and DOT, there is no violation of the two year bar. Thus, [the requesting individual] need not be concerned with the eventual user of the equipment he sells, and he need not make inquiry when he sells to a contractor.
Notwithstanding the above, [the requesting individual] may not have any role in certifying, in writing, to any purchaser that the signals he sells meet DOT's specifications. It could be anticipated that, where such a certificate is given, the purchaser would provide DOT with a copy of [the requesting individual's] certificate, thereby causing the agency to review his work product. This would be prohibited by Advisory Opinion No. 89-8, where the Commission that held a former employee who has reason to know or anticipate, through a law, regulation or policy, that his private sector work will be referred to his former agency, may not submit such work, as it would constitute a prohibited appearance in violation of Public Officers Law §73(8)(a)(i) (See also, Advisory Opinion No. 94-6).
The Commission concludes that Public Officers Law §73(8)(a)(i) prohibits [the requesting individual] from communicating with or selling traffic signal equipment directly to DOT, but he may sell such equipment to other entities, including both governmental and private entities, even if DOT inspects and approves the equipment or is the eventual user of the equipment. He may not, however, have any role in certifying, in writing, that the signals meet DOT's requirements.
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.
Joseph M. Bress, Chair
Angelo A. Costanza,
Robert E. Eggenschiller,
Donald A. Odell, Members
Dated: March 11, 1996
1. For purposes of this opinion, the Commission must presume that while employed with DOT, [the requesting individual] had no role in setting the specifications for the signals he now wishes to sell. If the facts are otherwise, issues related to the lifetime bar of Public Officers Law §73(8)(a)(ii) may arise.
2. If DOT does not have any role, [the requesting individual] may sell to any entity other than his former agency without violating the two year bar. He may also maintain signals for any entity as long as DOT has no role.
3. While [the requesting individual] did not make specific inquiry about the lifetime bar, he is reminded that Public Officers Law §73(8)(a)(ii) prohibits former State employees from working on any case, application, proceeding or transaction in which he personally participated or which was under his active consideration while in State service. Thus, [the requesting individual] would be barred from working on any matter with which he was directly concerned or in which he personally participated while with DOT. Lifetime bar questions are determined on a case-by-case basis (Advisory Opinion No. 90-22). Should such a situation present itself, [the requesting individual] is encouraged to write the Commission.