Citation Numbers: 94 Op. Att'y Gen. 88
Judges: DOUGLAS F. GANSLER.
Filed Date: 5/27/2009
Status: Precedential
Modified Date: 7/5/2016
Dear Earl F. Hance
On behalf of the Department of Agriculture ("Department") and the State Ethics Commission ("Commission"), your predecessor asked for our opinion concerning a 2007 law that permits the Department, in certain circumstances, to employ farmers who are subject to its regulatory authority. That law created a special exception to provisions of the Public Ethics Law that limit secondary employment and outside financial interests of State employees and required the Department, in consultation with the Commission, to adopt regulations to govern possible conflicts involving employees who fall within the exception. You state that, during that consultation, it became evident that the Department and the Commission disagree as to the breadth of the 2007 law.
In our opinion, the 2007 law allows an employee of the Department, other than the Secretary and Deputy Secretary, to own or operate a farm so long as the employee does not exercise any regulatory or supervisory authority over that farm and complies with the regulations adopted by the Department to implement the law. The restrictions on secondary employment and financial interests in the Public Ethics Law continue to apply to Department employees with respect to other employment or financial interests, apart from a farm, that a Department employee may have. And, of course, Department employees are fully subject to other provisions of the Public Ethics Law that are unrelated to the 2007 law. *Page 89
The statute specifies some exceptions to the general rule. For example, there is an exception for officials appointed to a regulatory or licensing unit when a statute that requires the regulated industry to be represented on the unit. SG § 15-502(c)(2). There is also an exception for board members with respect to employment or financial interests held at the time of appointment, if the prospective board member publicly disclose the otherwise disqualifying interest to the appointing authority, the Commission, and if applicable, the Senate prior to confirmation. SG § 15-502(c)(4). The statute also delegates to the Commission the authority to establish other exceptions by regulation, under certain conditions, and to grant special exceptions in extraordinary situations at an agency's request upon the Governor's recommendation. SG § 15-502(c)(1), (c)(3), (d).
In a similar vein, an executive branch official or employee is barred from employment with an entity that has a contract with the State if his or her duties "substantially" relate to the subject matter of the contract and the contract requires the State to pay at least $1,000. SG § 15-503; see also SG § 15-502(b)(1)(ii) (prohibition against employment or financial interest in entity negotiating *Page 90 contract with employee's agency). State officials and employees in the executive branch are also prohibited from providing assistance, on a contingency fee basis, to an entity in any matter "before or involving any unit of the State." SG § 15-504.1
There are other provisions of the Public Ethics Law, not implicated by your request, which apply to officials and employees of the Department. For example, the Public Ethics Law restricts participation in matters involving specified potential conflicts, forbids misuse of the prestige of office or of confidential information, and limits solicitation and acceptance of gifts. SG §§ 15-501, 15-505, 15-506, 15-507.
We understand that the Department has sought and obtained exceptions to the secondary employment and financial interest restrictions from the Commission in order to employ farmers in various positions within the Department, including Secretary and Deputy Secretary.
(1) Notwithstanding the provisions of §§ 15-502 through 15-504 of the State Government Article, an individual who owns or operates a farm that is subject to the regulatory authority of the Department may be employed within the Department, if the individual, with respect to the farm activities of the individual's farm, does not exercise any regulatory or supervisory authority in the individual's capacity as an employee of the Department.
(2) The Department, in consultation with the State Ethics Commission, shall adopt *Page 91 regulations to govern conflicts of interest with respect to employment of individuals who own or operate a farm under this subsection.
Annotated Code of Maryland, Agriculture Article ("AG"), § 2-102(e).
The Department's draft regulations would require employees, and applicants for employment, to disclose any interest in a farming business. They would bar an employee who is also a farmer from participating, in the employee's official capacity, in any Department matter involving the employee's farming business or a competing farm. Each employee who is a farmer would execute a Non-Participation Agreement incorporating that prohibition.
The Department takes the position that a farm associated with a Department employee may take part in current and future Department programs for farms, so long as the farmer employee avoids involvement in the matter simultaneously as part of the employee's duties within the Department. Moreover, under the Department's view, a current employee of the Department who inherits or purchases a farm while employed at the Department could come within the exception of AG §
By contrast, the Commission believes that the effect of AG §
Of course, this exception is limited to interests in farms. The provisions of the Public Ethics Law concerning other secondary employment and financial interests continue to apply to Department employees. Moreover, the exception in AG §
In providing that a farmer "may be employed within the Department" subject to the specified condition, AG §
AG §
The public disclosure requirement for prospective board members in SG § 15-502(c)(4) likely entails that an appointee whose outside employment or financial interest poses too great a potential for a conflict of interest will not be appointed or confirmed for the position. Such a device is clearly limited to potential conflicts at the time of appointment. It could prove ineffective in dealing with employment or financial interests acquired after appointment, particularly if the board member serves a term. Thus, the exception in SG § 15-502(c)(4) is reasonably limited to those interests that exist at the time of appointment and does not encompass those that may arise after the time of appointment.
Another exception to the Public Ethics Law that appears in the Agriculture Article is also illustrative. It provides that "[n]otwithstanding the provisions of §§ 15-502 through 15-504 of the State Government Article, a person may be appointed to and serve on the board [of trustees of the Maryland Agricultural Land *Page 94
Preservation Foundation] as an at-large member even if prior to theappointment the person sold an easement in the person's agricultural land to the Foundation." AG §
In testimony in support of the bill, the Department stated that it had encountered difficulty recruiting qualified employees — which it attributed in part to restrictions under the Public Ethics Law on secondary employment and financial interests of State employees. When it sought to hire a farmer to fill a position, the Department found that it frequently had to request an exception to those rules from the Ethics Commission. Legislative Comment of Department of Agriculture submitted to House Environmental Matters Committee concerning House Bill 558 (February 20, 2007). The Department argued that the changes wrought by the bill would improve its ability to both hire and retain qualified employees. Id. Several proponents noted that the majority of Maryland farmers have other employment in addition to the interest in their farms. See, e.g., Testimony of Chesapeake Bay Foundation on House Bill 558 (February 20, 2007).
The bill was amended in the House to remove the Secretary and Deputy Secretary from the provision — presumably in light of the complications that might be caused by a requirement that the head of the Department not exercise the regulatory authority of the *Page 95 Department.3 In addition, a provision was added directing the Department to devise regulations, in consultation with the Ethics Commission, to govern conflicts of interest of individuals hired pursuant to the exception. House Bill 558 (third reader).
When the amended bill was under consideration in the Senate, the Commission expressed its opposition to the measure. Letter of Suzanne S. Fox, Executive Director, State Ethics Commission, to Senator Roy P. Dyson, Vice Chairman of Education, Health, and Environmental Affairs Committee (March 21, 2007). The Commission took the position that the Ethics Law itself already contained a mechanism for seeking case-by-case exceptions to the secondary employment and financial interest restrictions and that all State employees should be subject to the same restrictions and same uniform process for seeking an exception. Nevertheless, the Senate passed the bill, but added an uncodified requirement that the Department and Commission jointly report to the General Assembly the number of farmers hired by the Department after the effective date of the bill, their positions within the Department, and the resolution of any conflicts of interest that were addressed by the Department.
While the impetus for the bill apparently arose from the Department's difficulties in attracting new employees and much of the testimony focused on how the bill would facilitate recruitment, this does not mean that the effect of the bill was limited to new hires.4 The Fiscal Note to the 2007 bill summarized the effect of the bill: "This bill exempts employees of the Maryland Department of Agriculture (MDA) from specified State ethics law restrictions, allowing an individual who owns or operates a farm regulated by MDA to be employed within MDA." Revised Fiscal Note to House Bill 558 (March 26, 2007). This accords with a plain language reading of the text of the statute. *Page 96
Douglas F. Gansler Attorney General
Robert N. McDonald Chief Counsel Opinions and Advice