New York State
Ethics Commission


Advisory Opinion No. 98-18: Application of the lifetime bar restrictions of Public Officers Law §73(8)(a)(ii) to a former employee of the Long Island Rail Road who wishes to participate in a Subcommittee dealing with a subject related to one with which he was concerned while in State service.

Introduction

The following advisory opinion is issued in response to a request submitted by Michael R. Ambrecht ("Ambrecht"), Vice President, General Counsel and Secretary of the Long Island Rail Road ("LIRR"), for an opinion as to whether the post employment restrictions of Public Officers Law §73(8)(a) prohibit a former employee of the LIRR who now works for Amtrak from participating in a Subcommittee that was created after he left State service but which will consider a subject with which he was concerned while a LIRR employee.

Pursuant to the authority vested in it by Executive Law §94(15), the New York State Ethics Commission ("Commission") renders its opinion that, because of the quasi-public nature of Amtrak, neither the two year bar nor the lifetime bar prohibits the former LIRR employee from participating on the Subcommittee.

Background

Ambrecht's request concerns [ ], a former employee of the LIRR, who resigned on [ ] 1997. [The former State employee] is currently an Amtrak employee, and he wishes to participate in a Subcommittee for a project being overseen by a Committee know as the "Tri-Venture Steering Committee." This Committee is comprised of representatives of the LIRR, Amtrak and New Jersey Transit, and was formed to jointly address the need to maximize the terminal capacity of Penn Station, which is used by all three railroads. The Subcommittee on which [the former State employee] wishes to serve has as its purpose the development of a uniform operation plan and timetable for Penn Station. The background leading to the formation of this Subcommittee is as follows.

In February 1994, the LIRR, Amtrak, and New Jersey Transit asked a consultant, STV, to update findings and recommendations it had made in a 1992 report on "MTA Station Capacity and Utilization Analysis." The 1992 Capacity Study, in which all three railroads had the opportunity for input, had assessed capacity issues in Penn Station and presented proposals for dealing with estimated future growth. It had considered proposed operations into and out of Penn Station through the year 2005 based upon the best information available at the time. The 1994 Update Study was to consider "all of the changes that have occurred since the original study and develop proposals of how the proposed service level [at Penn Station] can be handled" in light of further studies conducted by the LIRR, its purchase of dual mode locomotives and bi-level coaches, platform extensions, and other factors. Each of the three railroads shared in the cost of the Update Study, which was administered by the LIRR based upon its existing relationship with the consultant.

STV, with input from the three railroads, developed, as part of the 1994 Update Study, operating scenarios for Penn Station extending to the year 2010. These were based on each railroad having furnished operational plans identifying service levels, operating slots, yard movements and train platform assignments. With this information, STV was able to model train operations into and out of Penn Station and describe reliability based upon on-time performance.

A June 1997 Executive Summary of the Update Study recommended, among other things, (1) creating a permanent "Tri-Venture Process" with respect to schedule changes, infrastructure improvements and "other initiatives" and (2) continuing to explore the advisability of operational changes to alleviate the joint operation bottlenecks.

During his employment with the LIRR, [the former State employee] held the position of Director of [ ], and later, Director of [ ]. For the 1994 study, he provided information to STV, exchanged data with employees of Amtrak and New Jersey Transit, and reviewed and commented upon STV's proposals with respect to its Study. In addition, he worked with the Superintendent of Penn Station Central Control and other LIRR employees on operational plans, issue identification, terminal manipulations and terminal usage charts, and he commented on STV's activities. This work was performed independently of the joint working group and was coordinated through STV.

The Subcommittee on which [the former State employee] wishes to participate as an Amtrak employee did not exist prior to his separation from the LIRR on [ ], 1997. Its first meeting took place on March 27, 1998. The Subcommittee is comprised of two or three individuals representing each of the three railroads. The function of the Subcommittee is to develop and coordinate terminal operation plans at Penn Station, including coordinating schedule changes, advancing a simulation of current and future operations and developing a uniform terminal timetable in consideration of the needs of the three railroads. To accomplish these functions, the Subcommittee will not rely upon the results of the Update Study; it intends to undertake its own investigation and study with respect to current circumstances and operational configurations which impact upon Penn Station.

[The former State employee] is currently Director of [ ] for Amtrak, and he is involved with developing all schedules for services on its Northeast Corridor. His role on the Subcommittee would be to work with LIRR and New Jersey Transit schedulers to achieve the purpose of the Subcommittee -- a joint train movement plan for Penn Station which would facilitate smooth terminal operations and help maintain reliable on-time performance (the "Uniform Time Table and Manipulations"). The Subcommittee would work under the direction of and be responsible to the Tri-Venture Steering Committee.

Applicable Statutes

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

(i) 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.

(ii) No person who has served as a state officer or employee shall after the termination of such service or employment appear, practice, communicate or otherwise render services before any state agency or receive compensation for any such services rendered by such former officer or employee on behalf of any person, firm, corporation or other entity in relation to any case, proceeding, application or transaction with respect to which such person was directly concerned and in which he personally participated during the period of his service or employment, or which was under his or her active consideration.

Discussion

Before proceeding to an analysis of the provisions of §73(8)(a), as is customary when a revolving door issue is presented, the Commission begins its discussion in this case by presenting its approach to the issues raised. What makes this situation different from the more common situation is that none of the entities involved in the project in which [the former State employee] wishes to work is a purely private entity. Of the three railroads that use Penn Station, two are government owned. The LIRR is, of course, a State agency under the definition contained in Public Officers Law §73(1)(g). New Jersey Transit is an agency of the State of New Jersey, having been created by the Public Transportation Act of 1979. The third railroad, Amtrak, is not a government agency in the manner of the first two, but neither is it a purely private corporation.(1)

Amtrak was created by the Rail Passenger Service Act of 1970 ("Act"), 45 U.S.C. §501 et seq. as a private for-profit corporation under the District of Columbia Business Corporation Act. The Act specifies that Amtrak is "not . . . an agency, instrumentality, authority, or entity, or establishment of the United States Government." Consistent with its characterization as a private entity, Amtrak is not covered by the Federal Torts Claim Act, nor is it an "agency" within the meaning of the Administrative Procedure Act. It is not subject to the procurement and contracting requirements that apply to agencies of the federal government. For other purposes, however, Amtrak is treated as a federal agency. It is subject to the Freedom of Information Act and the Inspector General Act of 1978. The federal government financed its establishment, funds its capital programs and continues to subsidize its operating losses. Its board includes federal employees; it is exempt from all new State and local taxes; and it has the power - - usually reserved for government - - to acquire interests in property by eminent domain (49 USC §§24301 and 24311). The United States Supreme Court has held that Amtrak is a governmental entity for purposes of the First Amendment, precluding it from interfering with the rights of individuals who wish to express political views at Penn Station. Lebron v. National Railroad Passenger Corporation, 513 U.S. 374 (1995).

The Commission has had occasion to consider the status of Amtrak for purposes of the Public Officers Law. In an investigation it conducted with respect to a former State employee who worked for Amtrak after he left State service, the Commission determined that Amtrak was a private entity. Thus, the former employee was not exempt from the revolving door provisions under the government-to-government exception. This determination does not mean, however, that the Commission must close its eyes to the nature of Amtrak. Clearly, it is not the usual private corporation. It was created by Congress because the maintenance of a passenger railroad system was believed to serve the public interest. For the same reason, Congress funded its establishment, funds its capital programs and continues to fund part of its operating costs. Furthermore, it does not compete in an industry in the same manner in which a typical private corporation competes.

The Commission, in Advisory Opinion No. 89-5, said that the revolving door statute was intended to prevent the misuse of knowledge and contacts by a former State employee "to the benefit of a private client." In the situation presented here, [the former State employee], the former LIRR employee, now works for Amtrak. The interests he proposes to serve by working on the Subcommittee dealing with the operation of Penn Station are not private interests in the usual sense. He is working for a quasi-public corporation, and the other two railroads with which he will be dealing are public entities. These considerations weigh heavily on the Commission, and they guide its approach in its analysis of the issues surrounding the two year and lifetime bars.

Section 73(8)(a)(i), quoted above, is known as the two year bar. It prohibits former State officers and employees from appearing, practicing or rendering services for compensation in relation to any case, proceeding application or other matter before their former agency for two years following their separation from State service.

The question that must be addressed is whether [the former State employee] would be appearing before the LIRR, his former agency, when he serves on the Subcommittee on which the LIRR is a member. In Advisory Opinion No. 94-20, the Commission permitted a former employee of a State agency to serve on a panel consisting of three State agencies, one of which was her former agency, but it prohibited her from serving on a board which would, similarly, include her former agency. The differing results were due to the different functions of each body. The panel was advisory only, and her former agency had no role in the final decisions that would be made after receiving the panel's advice. The board was quite different, and the agency had a more direct role in its activities.

In the case of [the former State employee's] proposed work on the Subcommittee, the Commission would undertake a careful analysis of its functions if [the former State employee] worked for a purely private organization. The question would be whether the functions of the Subcommittee are more like those of the panel or the board. However, since [the former State employee] works for Amtrak, the Commission, for the reasons set forth above, is prepared to approach his situation in a more favorable light toward his participation. Since the Commission has permitted private sector individuals to serve on at least some multi-member bodies which include their former agency, it is prepared to let [the former State employee] serve on the Subcommittee without his work being considered an appearance before his former agency.

The Commission next turns to §73(8)(a)(ii), which is known as the "lifetime bar." It prohibits a former State officer or employee from rendering services for compensation in relation to any case, proceeding, application or transaction with respect to which such person was directly concerned and in which he or she personally participated during the period of the individual's State service or which was under his or her active consideration during that period.

Ambrecht, in his request, argues that the 1994 "Update Study" and the current "Uniform Time Table and Manipulations" for Penn Station are different transactions. He emphasizes that the Subcommittee did not exist at the time [the former State employee] left the LIRR, and the Update Study was a completed "transaction" when its findings were prepared and presented in the 1997 Executive Summary. In addition, Ambrecht argues that the Subcommittee will prepare a time table based on current circumstances and on the Subcommittee's collection of data. It will not rely on the data collected during the Update Study.

There is support for Ambrecht's position in some of the Commission's opinions [See Advisory Opinion Nos. 95-7, 95-15 and 95-32]. Other opinions of the Commission might be read to lead to a different conclusion [See Advisory Opinion Nos. 91-12 , 95-6 and 97-9].

As with the two year bar, the Commission will not analyze [the former State employee's] proposed work for the Subcommittee as if he worked for a private sector employer. There is doubt that he could participate in the Subcommittee if were he so employed. Given the nature of Amtrak, discussed above, the Commission is prepared to let him participate on the Subcommittee. Neither [the former State employee] nor any private sector entity will gain undue advantage by his doing so.

Conclusion

The Commission concludes that neither the two year bar nor the lifetime bar prohibits [the former State employee] from participating on the Subcommittee, as his work for Amtrak should not be treated as purely private sector work.

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:

Paul L. Shechtman, Chair

Robert J. Giuffra, Jr.
Henry G. Gossel
O. Peter Sherwood, Members

Dated: November 23, 1998


Endnote

1. If Amtrak were a government agency, [the former State employee], as a government employee, would be exempt from the revolving door provisions of §73(8)(a) pursuant to paragraph (e) of §73(8), the government-to-government exception. The analysis would need go no further.



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