|Advisory Opinion No. 98-03:||Whether the two year bar precludes a former employee of the Racing and Wagering Board from serving as Property Manager of a licensed harness track.|
The following advisory opinion is issued in response to a request from [ ], a former part-time employee of the Racing and Wagering Board ("Board"), who asks whether the two year post-employment bar of Public Officers Law §73(8)(a)(i) is applicable to him, and whether, if it is, it precludes him from seeking a license from the Board to act as Property Manager of a harness track licensed by the Board.
Pursuant to the authority vested in the State Ethics Commission ("Commission") by Executive Law §94(15), the Commission hereby renders its opinion that [the requesting individual] is subject to the two year bar and he may not apply for the license he needs to serve as Property Manager.
Prior to his retirement in [date], [the requesting individual] served as a [ ], which is a part-time position with the Board. On [date], [the requesting individual] and [a racing association] indicated their intention to enter into a contract whereby [the requesting individual] would serve as Property Manager of [ ], a harness track located in [city] which is owned by [the racing association]. At the present time, [the track] is simulcasting races from other venues, but no live races are being run.
[The requesting individual's] service as Property Manager was included as part of an agreement whereby [the racing association] will sell [the track] and all assets used in the operation of the track to the [ ] Off-Track Betting Corporation. The sale is to take place on or before [date]. Pursuant to the terms of the agreement, [the requesting individual] would "act as property manager to monitor, supervise and control all aspects of the [the racing association] operation." [The racing association] agreed that "[the requesting individual's] authority to operate the facility shall be complete and that there will be no interference from the owners."
The proposed arrangement would require [the racing association's] owners, agents and representatives to relinquish complete control of all funds held by [the racing association] for horsemen's purses or capital improvements, and any other funds held for the operation of the business. [The requesting individual] would "exercise control over such designated funds with power to disburse the same, subject to the laws of the State of New York and the rules and regulations of the Racing and Wagering Board."
On [date], the Board approved the application of [the racing association] to continue its track license through [date], subject to several conditions. One of these conditions was that "control of all aspects" of [the racing association] would be relinquished to [the requesting individual] as Property Manager. In addition, [the racing association] was to promptly submit to the Commission a request for an opinion with regard to [the requesting individual's] ability to serve. In the event that [the requesting individual] was determined to be unable to serve, [the racing association] was to submit the name of a qualified manager within 72 hours or the license granted would terminate. It was explicitly stated that [the requesting individual] would have to be licensed.(1) The submission of certain financial statements was also required.
On [date], the Commission received a request for an informal opinion regarding [the requesting individual's] ability to serve.(2)
On [date], the Commission issued the requested opinion in which it held that the two year post-employment restrictions prohibited [the requesting individual] from applying to his former agency for the necessary license to serve as Property Manager. It further stated that it appeared impossible for [the requesting individual] to perform the role required of him without his making a prohibited appearance before the Board, although it did not reach a definitive conclusion as to that issue since his application to obtain a license was prohibited.
Based upon that opinion, the Board required [the racing association] to designate a different property manager within seventy-two hours. However, [the requesting individual] requested a formal opinion of the Commission, and the Board has agreed to await this opinion before deciding what action to take.
In his recent request, [the requesting individual] amplified the detail first supplied to the Commission regarding certain aspects of his relationship with [the racing association]. He noted that everyone associated with any gaming or gambling business must secure a license from the Board, including grooms, busboys, telephone operators, and secretaries. The purpose of the license, he stated, is to provide a background check conducted through a fingerprint search.
[The requesting individual] also asserted that the title of "Property Manager" might be misleading. He stated that his position at [the track] would be:
[S]trictly in an accounting capacity. . .the only job I do is to prioritize the paying of bills, and deal with utility companies, vendors, etc. Through a small simulcasting business each week, there is a certain amount of revenue to be dispersed. Along with . . . [the] Comptroller and Assistant Manager, we decide what we can pay, and how best to distribute the money we have to work with.
In the capacity of property manager of [the track], I have never had any dealings with the Racing Board, and I have never, or will never have to negotiate contracts, participate in audits, prepare documents, or represent anyone to the Racing Board. All of the negotiations, the application for racing dates, etc., will be conducted after [date], by representatives of [ ] Offtrack Betting Corporation.
My only function at [the track] is to negotiate with vendors and creditors, to explain what we hope will be a sale beneficial to all, since part of the sale agreement includes the payment of all debts. . . .
The two year post-employment restrictions, found in Public Officers Law §73(8)(a)(i), are as follows:
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 subdivision, part of what are generally referred to as the "revolving door" provisions, 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 the State. It contains an absolute two year bar which prohibits a former State employee from appearing before his or her former agency, or working for compensation on a matter before the former agency, for a period of two years after his or her termination from State service.
In the informal opinion issued to [the law firm], the Commission concluded that [the requesting individual], having served in a part-time capacity as a [job title] until [date], is subject to §73(8)(a)(i). This was consistent with its prior holdings that the two year bar is applicable to former State employees who served on less than a full time basis, including former part-time and seasonal employees (see Advisory Opinion Nos. 96-11, 94-4 and 91-17). Thus, it is clear that [the requesting individual] may not appear or practice before the Board or render services in relation to a matter before the Board until August 1998.
Racing and Wagering Law §309(1) authorizes the Board to license "some or all persons participating in harness horse race meets." If the Board finds that the "experience, character and general fitness" of an applicant are such that participation in meets will be consistent with the "public interest, convenience and necessity and with the best interests of racing generally", it may grant a license.(3) Counsel for the Board has informed the Commission that the Board exercises substantial discretion in deciding whether or not to issue a license based upon its conclusion regarding the character and fitness of the applicant.
Title 9 NYCRR Part 4101.24(a), the Board's regulations governing "occupational licenses," provides that:
No person shall participate in the affairs of any association or corporation licensed by the New York State Harness Racing Commission to conduct harness race meetings at which pari-mutuel betting is permitted as director, agent or employee of such track license, unless such person shall have received an occupational license from the commission.
When an applicant submits an application for a license, the Board, unless there is a specific reason to deny it, issues a temporary license. This allows the applicant to serve pending a decision regarding the issuance of a final license. Currently, [the requesting individual] is operating under a temporary license, and the final decision regarding his license application is being held by the Board pending the issuance of this opinion.
In its informal opinion, the Commission concluded that [the requesting individual] is precluded from applying to the Board for the required license. This conclusion was based on Advisory Opinion No. 98-1, where the Commission prohibited a former employee of the Department of Motor Vehicles from applying to his former agency for an initial license to operate a driving school. In that Advisory Opinion, the Commission concluded that the amount of oversight exercised by DMV was sufficient to warrant application of Public Officers Law §73(8)(a)(i). An assessment of the nature and extent of oversight of licensees exercised by the agency are important considerations. The evidence before the Commission here reveals that the Board actively regulates the business affairs of [the track] more actively than DMV regulates driving schools.
In Advisory Opinion No. 98-1, the prohibition was imposed even though the agency did not actively regulate the licensed activity, but merely had certain oversight responsibilities. In the case of [the track], the Board actively regulates its business. In addition, the Board has advised the Commission that it exercises substantial discretion when it considers a license application. Thus, based on its precedent, the Commission affirms its informal opinion-- the two year post-employment restrictions prohibit [the requesting individual] from applying to the Board for the license he needs to serve as Property Manager.(4)
The Commission concludes that the two year post-employment restrictions of Public Officers Law §73(8)(a)(i) apply to [the requesting individual] and prohibit him from applying to the Board for the license he needs to serve as Property Manager at [the track].
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.
Evans V. Brewster
Henry G. Gossel
Paul L. Shechtman
O. Peter Sherwood, Members
Dated: March 25, 1998
1. Such a license is required by the Board's regulation, found at 9 NYCRR Part 4101.24(a).
2. The request was from the law firm [ ], attorneys for [the racing association]. It was dated [date] but was not received by the Commission until [15 days later].
3. Section 309(2) further provides that the Board may refuse to issue a license if it finds that the applicant has been convicted of a crime involving moral turpitude; has engaged in bookmaking or other form of illegal gambling; has been found guilty of any fraud or misrepresentation in connection with racing or breeding or has been found guilty of any violation or attempt to violate any law, rule or regulation of racing in any jurisdiction for which suspension from racing might be imposed; or has violated any rule, regulation or order of the Board.
4. Even if [the requesting individual] were licensed, the Commission would be concerned about his ability to perform the functions he would have to carry out upon assuming all aspects of [the racing association's] racing interests. The Commission has held that any communication by a former State officer or employee with his or her former agency on behalf of a client or any other person during the two year statutory period amounts to a prohibited appearance (Advisory Opinion No. 89-7). In its [date] letter to the Board, [the racing association] indicated that [the requesting individual] will have "complete" authority to operate the facility without interference from [the racing association]. Given these responsibilities, the person who serves as a Property Manager may well have to "appear" before the Board or render services on a matter before the Board in the course of running an ongoing operation with live betting and simulcasting, which is open to the public.