New York State
Ethics Commission


Advisory Opinion No. 98-11: Whether Public Officers Law §74 prohibits a State employee from serving as an officer of a not-for-profit corporation where the division in which he is employed administers a memorandum of understanding between his agency and the corporation.

Introduction

The following advisory opinion is issued in response to a request submitted by Ann Hill DeBarbieri ("DeBarbieri"), Ethics Officer for the New York State Department of Environmental Conservation ("DEC"). She asks whether a non-policymaking employee who serves in the agency's Division [ ] may, consistent with the provisions of Public Officers Law §74, serve as an officer of a not-for-profit corporation which has entered into a Memorandum of Understanding ("MOU") with DEC and where the MOU is administered by the Division [ ].

Pursuant to the authority vested in it by Executive Law §94(15), the New York State Ethics Commission ("Commission") renders its opinion that Public Officers Law §74 prohibits the employee from serving as an officer of the corporation.

Background

DeBarbieri has informed the Commission that a non-policymaking employee in the agency's Division [ ] serves as Secretary for [ ], a corporation organized pursuant to the Not-for-Profit Corporation Law. She asks whether this presents a conflict of interest.

[The corporation] is a nonpolitical, nonpartisan organization of citizens and sportsmen of the State of New York.(1) According to its Certificate of Incorporation, its purpose is to "strengthen efforts to enforce the fish and wildlife and related environmental conservation laws of the State of New York by providing incentives in the form of monetary rewards for reporting information that is essential to, and aids in, the apprehension and conviction of law violators."(2) [The corporation's] goal is reducing violations of the fish and wildlife laws by "encouraging the public to cooperate with and assist public officials charged with the duty of apprehending, preventing and punishing violators. . . ."

To further this goal, [the corporation] has created and maintains a reward fund which it makes available to DEC's Division [ ] to be used in offering rewards. It seeks to develop a statewide offensive against fish and wildlife law violations "by motivating, informing and educating members of laws and to cooperate with [DEC] and other law enforcement agencies. . . ."(3)

[The corporation] and DEC entered into an MOU on [date]. DEC agreed to maintain and operate public access to the [the corporation] program; [the corporation] agreed to raise funds, through banquets, memberships, auctions, investments, gifts, etc., for a rewards program. DEC, through its Division [ ], agreed to take complaints of illegal activities, conduct investigations, initiate prosecutions and make recommendations for rewards. Such rewards are to be paid by [the corporation] to informants, with the amount of each reward to be determined by [the corporation] in consultation with DEC.

The MOU permits either DEC or [the corporation] to make reports and to issue news releases and public statements in furtherance of the program, but where they concern issues of mutual party responsibility, the issuing party is required to consult with the other.

Paragraph 8 of the MOU, dealing with [the corporation's] governing officials, provides:

DEC shall be represented at [the corporation] Board of Directors meetings by the Director of the Division [A] and the Director of the Division [B] or their designees. The Division [A] shall assign an officer to serve as a liaison with [the corporation].

[The corporation] has elected as its Secretary an individual who is [ ] employed in the Division [ ]. He is not one of the individuals designated by DEC pursuant to the MOU. This has created a situation of concern to DEC because of potential conflicts.

[ ].

DEC's concern arises because the [employee] who serves as [the corporation's] Secretary may, in acting as a corporate officer, take positions that are contrary to those taken by the agency. It argues that DEC's relationship with [the corporation] is one which has been defined in the MOU, and that having an [employee] serve in a corporate decision making position potentially undermines that relationship. DEC asks whether the [employee], by engaging in this outside activity, is acting in a manner consistent with the conflict of interest standards contained in Public Officers Law §74.

Applicable Statute

Public Officers Law §74(2), the code of ethics for State officers and employees, 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 apparent as well as actual conflicts of interest:

. . . .

(b) No officer or employee of a state agency . . . should accept employment or engage in any business or professional activity which will require him to disclose confidential information which he has gained by reason of his official position or authority.

. . . .

(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 in violation of his trust.

. . . .

Discussion

Section 74 is concerned with both actual and apparent conflicts of interest. It provides minimum standards against which State officers and employees are expected to gauge their behavior, addressing the conflict between an employee's obligation in public service and his or her private, often personal, interests. As the Attorney General stated in a 1979 opinion applying Public Officers Law §74(4):

A public official must not only be innocent of any wrongdoing, but he must be alert at all times so that his acts and conduct give the public no cause for suspicion. He must give no appearance of a potential conflict between his duties and personal activities even though an actual conflict is not present. . . .

The Commission has historically looked carefully at situations where State employees wish to engage in uncompensated outside activities which are related to their public work. In Advisory Opinion No. 95-9, it noted that it was "not the intent of the Ethics in Government Act to dissuade or discourage civic minded employees from contributing to their communities or pursuing personal interests outside the workplace." However, it alerted State employees that where "their outside activities related to their agency's mission, the potential for a conflict of interest or the appearance of a conflict is present." The Commission noted that "each situation must be reviewed on an individual basis" and that "certain activities must inevitably be avoided entirely to prevent a conflict . . . ."

In that opinion, the Commission considered the question of whether an employee of the Adirondack Park Agency ("APA") could serve as a member of the board of directors of a not-for-profit river conservation organization. It held that she could so serve, but that, to meet the standards of Public Officers Law §74, she must recuse herself in her position with the corporation from any discussions or votes concerning land or rivers within the Adirondack Park or concerning specific issues on which the APA would likely take a position. Such recusal would serve to distance her private activities from her public position.

The Commission dealt with a similar issue in Advisory Opinion No. 91-4. There, the Department of Social Services ("DSS") had established a day care center for its employees, and one of the questions presented to the Commission concerned the ability of DSS employees to serve on the board of directors of the center, which was organized as a not-for-profit corporation. The Commission held that the agency's policymaking employees could not so serve. More significantly for purposes of this opinion, it also held that those DSS non-policymaking employees who had direct or indirect job responsibilities regarding inspection, certification, licensing or fiscal oversight of day care centers could not serve on the center's board of directors. It distinguished these employees from other non-policymaking DSS employees who were permitted to serve. Similarly, in Advisory Opinion No. 92-18, the Commission prohibited policymaking employees and non-policymaking employees whose job duties concerned the agency's contracting process from serving on the board of directors of a Task Force that had a funding contract with the agency. In these opinions, the Commission demonstrated its concern with an employee serving as an officer or director of a not-for-profit organization where the employee's job duties and the work of the organization are related.

Where the Commission has permitted employees to engage in outside activities without compensation, it has found that the activities are separate and apart from their public responsibilities. For example, in Advisory Opinion No. 95-43, it permitted a DEC engineer to assist, without compensation, a property owner's association to which he belonged in applying to the agency for a permit to repair a dam. It was critical to the determination that the engineer and the bureau in which he worked functioned independently of the bureau that would review the dam permit.

Turning to the [employee] and his service as Secretary of [the corporation], it appears from a reading of the organization's certificate of incorporation and its MOU with DEC that [the corporation's] work is inexorably intertwined with the work of DEC's Division [ ], in which the [employee] serves. Their missions in the area of fish and wildlife enforcement are nearly identical, and the MOU shows that there is an extremely close working relationship between the two. There is a consultation requirement whereby one cannot act independently of the other with respect to rewards, reports, news releases and public statements. The rewards that are offered by [the corporation] are based on the investigation and enforcement activities of the Division [ ]. Furthermore, based on the job description of the [employee], his work in his public position is likely to be directly related to [the corporation's] programs.

Given these arrangements, the Commission concludes that the restrictions contained in Public Officers Law §74 preclude the employee's service as Secretary of [the corporation]. While recusal can often be a means of avoiding a conflict, as in Advisory Opinion No. 95-9, this mechanism would not appear to be available here, as there is almost no activity in which [the corporation] engages that is separate and apart from its relationship with the Division [ ]. Thus, while the Commission does not like to discourage charitable and civic outside activities on the part of State employees, this is a situation where there is no alternative to a prohibition.

Conclusion

The Commission concludes that Public Officers Law §74 prohibits the [employee] from serving as an officer of [the corporation], because of the relationship between DEC's Division [ ], where the [employee] is employed, and the corporation.

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.

Concur:

Paul L. Shechtman, Chair

Henry G. Gossel
O. Peter Sherwood, Members

Dissent: Evans V. Brewster, Member

Dated: July 15, 1998


Endnotes

1. There are three categories of membership: (1) "active" membership, available to any organization or group which supports its purposes and pays dues ($50 annually), entitling the member to one vote; (2) "associate" membership, available to any organization or group which supports its purposes and pays dues ($25 annually), with no right to vote; and (3) "individual" membership, available to individuals who support its purposes and pay dues ($5 annually), with no right to vote.

2. [ ]

3. Paragraph 3, Certificate of Incorporation.

4. 1979 Op. Atty. Gen. 66.



URL: http://www.nysl.nysed.gov/edocs/ethics/98-11.htm