STATE ETHICS COMMISSION BULLETIN Volume XXVII Issue 2 Summer 2005 MASSACHUSETTS Commission Issues Advisories on Abutters, SJC Rules on Commission’s Competitors and Elected Officials Voting on Budgets Authority to Issue Summonses I n a May 2005 decision, the Mas T he State Ethics Commission re ticipate in any discussion or vote on cently approved three updated any budget item that would affect the sachusetts Supreme Judicial Court educational advisories providing family member’s salary or sign a pay- (SJC) unanimously affirmed that the guidance to the public officials. roll warrant that includes the family State Ethics Commission has the au- As discussed in Advisory No. 05- member’s pay. For further informa- thority to issue a summons during the 02: Voting on Matters Affecting Abut- tion, see Advisory No. 05-03: Elected preliminary inquiry stage of an investi- ting or Nearby Property, a property Officials Voting on Budgets and Sign- gation. owner is presumed to have a finan- ing Payroll Warrants that Include Sala- In John Doe v. State Ethics Commis- cial interest in matters affecting abut- ries for Family Members. sion, the Commission voted in 2003 to ting and nearby property. Unless a As outlined in Advisory No. 05-04: initiate a preliminary inquiry into alle- public employee can clearly demon- Voting on Matters Involving gations of violations of the conflict of strate that he does not have a finan- Competitors, a public employee may interest and financial disclosure laws. cial interest, he should not take any not participate in particular matters if The plaintiff did not comply with a sum- action in his official capacity on mat- they also affect the public employee’s mons seeking his testimony and filed a ters affecting property that is near or financial interests. There is no one motion to quash the summons on the directly abuts his own property. The easy “rule” for a public employee to ground that the commission lacked the same rule applies to property owned rely upon when deciding who statutory authority to issue it. In re- by a business partner; property owned competitors are and whether the sponse, the Commission sought an or- by any immediate family members; competitors’ particular matters will der compelling the plaintiff to comply property owned by a private employer, also affect the public employee’s with the summons. A Superior Court or prospective employer; or property financial interest. judge allowed the Commission’s mo- owned by any organization in which The Commission continues to up- tion to compel the plaintiff’s testimony. the public employee is an officer, di- date its educational materials available The plaintiff appealed from the Supe- rector, partner or trustee. at www.mass.gov/ethics/educational rior Court judgment and the SJC In situations where an elected pub- _materials.html. Persons with ques- granted direct appellate review. The lic employee’s family members are tions about a specific situation should full text of the SJC’s opinion may be employed by the same city, town or contact the Ethics Commission at 617- found at www.masslaw.com/signup/ agency, the employee may not par- opinion.cfm?recID=116619. 727-0060. Table of Contents Ethics Primer: State Officials Appearing New Advisories Issued 1 Before State Boards and Agencies SJC Ruling on Summons Authority 1 Periodically, the Bulletin will discuss a par- law prohibits a state official from ticular area of the conflict of interest law. The State Employee Primer: Agency 1 acting as an agent for anyone other information provided is educational in nature than the state in connection with any Letter from the Executive Director 2 and should not be considered legal advice. Per- sons with questions about a specific situation matter in which the state is a party or Outreach to 40 Communities 2 should contact the Ethics Commission for free has a direct and substantial interest confidential advice. even if the state official abstains from “Special Municipal Employees” 2 Massachusetts General Laws c. taking any official action on this Recent Enforcement Matters 3 268A, the state’s conflict of interest matter. It also prohibits a state official law, governs the conduct of state from requesting or receiving compens- Section by Section 3 officials. In general, § 4 of the conflict Litigation Update 5 Continued on page 6 State Ethics Commission Bulletin Page 2 Summer 2005 From the Executive Director ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ Ten Percent of Commonwealth’s Communities Respon- “Legislature Funds Budget Increase” sible for Forty Percent of Complaints to Commission Commission Begins Outreach Campaign The Commission reached a critical juncture in its ability to carry out its T he Commission is conducting an matter or may have a small faction of responsibilities in FY 05. Since 2001, outreach campaign to educate budget cuts resulted in a reduction in individuals who file a large number of public officials, the media and the complaints. The Commission believes, Commission staff from 26 to 19. During this same period, the public’s general public in the 40 municipalities in however, that these statistics suggest that requests for advice increased by 11% which ten or more complaints have been these communities need further and complaints increased by 22%. filed over a recent two year period. education about the conflict of interest Fortunately, the legislature approved Of the total number of complaints law. a budget of $1,415,000 for FY 06, an received (1431) during the period Six of the targeted municipalities have increase of 12% from the previous reviewed, 577 were from forty already hosted educational seminars and year’s budget of $1,265,221. municipalities. Thus, 40% of the several others have scheduled seminars This increase will help the complaints come from 11% of the for the fall. Commission to: towns. At the other end of the spectrum, 75% • respond promptly to the thousands The Commission recognizes that a of the state’s municipalities (262) had five of requests for advice from public high number of complaints is not or fewer complaints during the same employees, necessarily a good indicator of systemic period, including 61 with zero complaints. • resolve in a more timely manner problems in a community. For example, For more information about sponsoring the hundreds of complaints that it a community may have a larger number an educational seminar, contact the reviews each year, of complaints all related to the same Commission at 617-727-0060. • fulfill its new mandate to create reasonable exemptions consistent with the conflict of interest law, Municipalities Advised to Review • provide 9 to 5 phone coverage and “Special Municipal Employee” Designations • maintain its voluntary electronic In June 2005, the Commission sent a particularly these restrictions for their filing system used by 70% of all SFI memorandum to each of the own protection. filers. Commonwealth’s 351 cities and towns Ultimately, it is the municipal The FY06 budget increase will not seeking assistance in ensuring employee not the municipality who address all of the Commission’s current compliance with the conflict of interest risks prosecution for a violation of the needs that were created in part by past law, particularly by those employees conflict of interest law. budget cuts along with increased who may be designated as special In the future, the Commission requests for services. For example, it municipal employees, many of whom intends to intensify its prosecution of is unlikely that the Commission will face restrictions of which they may violations of these sections and may have to funds to reinstitute its be unaware. In the memorandum, the impose civil penalties of up to $2,000 municipal seminar program. The FY06 Commission recommended that per violation, issue cease and desist budget increase will, however, go a long way toward providing the Commission municipalities review their special orders, bring civil damages to recover with an adequate level of resources. municipal employee designations and damages or refer matters for criminal The Commission appreciates the return them to the Commission within prosecution. support of the Legislature and the 60 days. Commission Summary 16: Special Governor in recognizing the need for The Commission continues to Municipal Employees provides this modest budgetary expansion in receive allegations of violations of the additional information about the order to allow the Commission to better provisions of G.L. c. 268A, including application of the conflict of interest fulfill its mission. §§17 and 20, which often turn on law to special municipal employees. Peter Sturges whether a municipal employee’s Other information is available on the position has been designated as a Commission’s website at Commission Members “special.” For example, municipal www.mass.gov/ethics. Summer, 2005 employees generally may not In addition, the Commission provides represent special interests or private to anyone who is covered by the E. George Daher, Chair employers before town boards or have conflict of interest law free, Christine M. Roach, Vice-Chair additional contracts with the confidential legal advice about how the J. Owen Todd Tracey Maclin municipality unless they are special law applies to them in a prospective Christopher D. Moore municipal employees. Therefore, the situation. For further information or Commission urged municipal leaders assistance, please contact the Carol Carson to make all employees aware of the Commission at 617-727-0060. Editor conflict of interest law generally and State Ethics Commission Bulletin Page 3 Summer 2005 Recent Enforcement Matters The Ethics Commission investigates numer- chastised the Chief for having the The Commission found that Uong ous cases alleging violations of the conflict of resident call him if he was not going violated § 20 by, while serving as a interest and financial disclosure laws each year. While the Commission resolves most matters to do anything about the ticket. city councilor and a LHS guidance confidentially, it resolves certain cases publicly. By asking the Chief to change a counselor, accepting appointment to A decision and order concludes an adjudica- ticket to a warning for a fellow Town the housemaster position. An tory proceeding or civil trial. The decision is a official that he knew and that he exemption to this section of the law finding by the Commission that the law was or served with on several Town allowed Uong to continue to hold the was not violated and the order determines the civil penalty or other remedy, if any. The committees, Kenney violated § position of guidance counselor at LHS Commission’s decision may be appealed in 23(b)(3). Kenney could have after his election in 1999 to the city Superior Court. complied with §23(b)(3) of the conflict council. The exemption, however, A disposition agreement is a voluntary writ- law by making a public written prohibits a municipal employee who is ten agreement entered into between the subject disclosure of the facts that would elected to the city council from being and the Commission in which the subject ad- mits violating the law and agrees to pay a civil otherwise lead to such a conclusion. eligible for appointment or re- penalty. Disposition agreements are matters Kenney made no such disclosure. appointment to a new position while of public record once a case is concluded. he serves on the city council or for six The Commission does not comment on any In the Matter of Chanrithy Uong months thereafter. matter under investigation, nor does the office In April 2001, the Commission confirm or deny that it has received a specific complaint. The identity of any complainant is The Commission issued a Decision issued an opinion advising Uong that kept confidential. and Order concluding the adjudicatory he could not relinquish his position as Full texts of Decision and Orders and Dispo- hearing of Lowell City Councilor guidance counselor and accept a new sition Agreements can be found on the Chanrithy Uong by finding that Uong position as an assistant principal or a Commission’s website, www.mass.gov/ethics. violated M.G.L. c. 268A, the state’s principal while continuing to serve as conflict of interest law. Uong was a city councilor. Following the Decision and Order ordered to pay a civil penalty of issuance of the opinion, Uong was $6,000 and to cease and desist advised that he could seek a legislative In the Matter of Richard Kenney violating the law by relinquishing his change or appeal the decision to the Lowell High School (LHS) The Commission issued a Decision housemaster position within 30 days. Continued on page 4 and Order finding that Kingston Selectman Richard Kenney violated § 23(b)(3) of the state’s conflict of SECTION BY SECTION interest law, G.L. c. 268A, by asking THE CONFLICT OF INTEREST LAW, G. L. c. 268A the Chief of Police to change a ticket for a Kingston resident whom Kenney • Section 4 of the conflict of interest law prohibits a state employee from knew and who was then a fellow Town receiving compensation from or acting on behalf of anyone other than the board member. Kenney was ordered Commonwealth in connection with any matter in which the Commonwealth to pay a civil penalty of $500. is a party or has a direct and substantial interest. A Kingston resident, who was at the • Section 6 prohibits a state employee from participating in a particular mat- time a member of the Silver Lake ter in which he has a financial interest. Regional School Committee, was • Section 19 prohibits a municipal employee from officially participating in stopped for not having a valid matters in which he has a financial interest. inspection sticker. He was not cited • Section 20 of the conflict of interest law generally prohibits a municipal for the sticker infraction, but instead official from having a financial interest in a contract made by a municipal was given a $25 ticket for not wearing agency of the same city or town. his seat belt. At Town Meeting, • Section 23(b)(2) prohibits a public employee from using his or her position Kenney told the Chief about the ticket to obtain for the employee or others an unwarranted privilege of substantial and asked the Chief to change the value not properly available to similarly situated individuals. ticket to a warning. The Chief told • Section 23(b)(3) of the conflict law prohibits a public official from acting in Kenney to have the resident call him a manner which would cause a reasonable person, having knowledge of the the next day. The next morning, the relevant circumstances, to conclude that anyone can improperly influence or resident contacted the Chief. He told unduly enjoy the public official’s favor in the performance of his official the Chief that he had not asked duties. A public official can dispel the appearance of a conflict of interest by Kenney to intervene on his behalf. The disclosing in writing to his appointing authority or, if no appointing authority Chief explained the process for exists, disclosing in a manner which is public in nature, the facts which would contesting the ticket; he did not change otherwise lead to such a conclusion. the ticket. At the continuation of the Town Meeting on May 8, 2001, Kenny State Ethics Commission Bulletin Page 4 Summer 2005 Continued from page 3 was aware of these complaints. make sure that the actual well When Capalbo was unable to reach placement matched the placement on superior court. Uong did not pursue Cole by phone to inquire as to the the application and approved the well these options. payment status, Capalbo visited the if it passed a test for water volume In March 2002, Uong applied for an Park Grove Farm subdivision to speak and quality. LHS housemaster position. Uong won with Cole personally. Cole was not at By participating in well inspections appointment and, in August 2002, the site. Capalbo asked the foreman that could result in Dover Water began serving as housemaster with a to have Cole contact him. Company losing customers, Fryer starting salary of $81,033, an increase Cole paid the $500 deductible on participated in matters affecting his of about $21,000 over his guidance November 19, 2002. According to family business in violation of § 19. counselor salary. LHS does not have Cole, he did so because he felt that principals or assistant principals; the Capalbo was linking his request for In the Matter of Ruvane E. “Rip” housemaster position is the high school payment to his role as a Planning Grossman equivalent of the position of assistant Board member overseeing the principal at the middle and elementary outstanding subdivision issues. The Commission fined Ruvane E. schools. Capalbo continued to participate as a “Rip” Grossman, a former consultant Planning Board member in Cole’s to the University of Massachusetts Disposition Agreements subdivision without disclosing his Medical School (UMMS), $10,000 for private dealings with Cole. violating the state’s conflict of interest In the Matter of Kevin F. Capalbo By continuing to participate as a law. Grossman provided intellectual Planning Board member in matters property consulting services to UMMS The Commission fined Shrewsbury concerning the Park Grove Farm to help license technologies developed Planning Board Member Kevin F. subdivision while seeking payment for by UMMS. At the same time, he was Capalbo $1,000 for participating in damages to his wife’s car from the also consulting for CytRx Corporation, matters involving the Park Grove subdivision developer, Capalbo a California intellectual property Farm subdivision at the same time that violated § 23(b)(3). Capalbo could marketing firm. By bringing UMMS he was seeking $500 from Robert have complied with §23(b)(3) of the and CytRx together on the licensing Cole, one of the developers of the conflict law by making a public matter while he was consulting for subdivision. Capalbo was seeking the written disclosure of the facts that both of them, Grossman violated G.L. $500 for damage that Capalbo’s wife’s would otherwise lead to such a c. 268A, §§ 4 and 6. car had incurred while in a parking lot conclusion. Capalbo made no such Grossman brought UMMS and owned by Cole. disclosure. CytRx together to discuss marketing According to a Disposition UMMS’s ribonucleic acid interference Agreement, on October 3, 2002, In the Matter of Josef Fryer (RNAi) technology. RNAi technology Capalbo’s wife’s car hit a metal pipe is an important life science and in an unpaved parking lot owned by Dover Municipal Well Inspector Josef therapeutic technology. Grossman Cole. That evening Capalbo, who had Fryer paid a $2,000 civil penalty to participated in the negotiation of a not yet learned of the damage to his resolve allegations that he violated the licensing agreement between UMMS wife’s car, voted to approve the Park state’s conflict of interest law by and CytRx by attending meetings, Grove Farm subdivision, subject to 28 inspecting wells of Dover Water making suggestions and discussing the conditions. When Capalbo learned of Company customers. Fryer is a one- relevant matters as both an agent for the damage to the car, $883.38, he third owner, with his siblings, of Dover CytRx and as a UMMS consultant. sought from Cole reimbursement for Water Company, a private family At the time Grossman so participated, the $500 deductible of his insurance business that supplies water services. he had a consulting contract with policy. Cole declined to pay the According to a Disposition UMMS for a maximum of $84,000, in deductible and told Capalbo to sue Agreement, Fryer conducted well addition to a consulting contract with him. inspections for an average of two CytRx for $5,000 a month and a A few weeks after this conversation, Dover Water Company customers a “success fee” of at least $150,000. when Capalbo called to discuss the year who had applied to the Dover In April 2003, UMMS signed a issue further, Cole agreed to pay the Board of Health for permits to dig licensing agreement with CytRx by $500 deductible. Capalbo sought their own wells. If successful, the which CytRx would market the RNAi payment from Cole in a letter dated applicants would receive water from technology and UMMS would receive November 2, 2002. In the meantime, their own wells and would no longer $200,000, 1.8 million shares in CytRx there had been a number of complaints do business with Dover Water stock, royalty payments and other from neighbors regarding the work Company. Fryer reviewed well beneficial commitments from CytRx. being done at the subdivision. Capalbo applications, met with the driller to In May 2003, after senior UMMS Continued on page 5 State Ethics Commission Bulletin Page 5 Summer 2005 Continued from page 4 between 1995 and April 2004. During 2003 and is appealing the termination that time, Kulian: with the Civil Service Commission, officials learned of Grossman’s dual · directed the Assessor-Appraiser, was second in command after the role, UMMS reviewed the licensing an employee of the Board of Chief. Patricia was first a reserve agreement. UMMS determined that Assessors, to reduce his property officer and then a permanent patrol it would be advantageous to leave the assessment in 1997 and 2000 resulting officer until her termination in June licensing agreement in place but took in reductions to his property tax bill 2004. She, too, is appealing the additional actions including: totaling $1,401; termination. · terminating Grossman’s relationship · participated in granting himself a Murphy violated § 19 of the conflict with UMMS; tax abatement in 2004 resulting in a of interest law in 2000 by: · requiring that Grossman forfeit the reduction to his property tax bill of · asking Lt. Mary Butler to obtain success fee of $53,000 and 100,000 $814; and medical information that would allow shares of CytRx stock valued at · participated in granting himself a Patricia to attend the police academy $240,000 as of October 2003, when statutory exemption based on age and in summer 2000; the termination agreement was made; income eligibility that could have · communicating concerns to Lt. and resulted in a tax abatement of $500. Butler and the Chief when Patricia · setting restrictive terms under which By directing the Assessor- was not allowed to attend the CytRx could employ Grossman in the Appraiser to reduce his property academy; and asking Lt. Butler and future, ensuring that Grossman would assessment, Kulian repeatedly used the Chief to make an exemption for not receive his forfeited commission his position to get an unwarranted Patricia that would allow her to attend. in the future, not have contact with privilege. By repeatedly participating Murphy also violated §19 in 2001 UMMS about the licenses and not in matters involving reductions in his by asking the Chief to defer the participate in the interpretation of the property tax, Kulian participated in decision to appoint three full-time licenses. matters in which he also had a permanent officers until after Patricia financial interest. attended the spring 2001 police In the Matter of Jacob Kulian academy in order to maintain In the Matter of Paul Murphy Patricia’s seniority over the another The Commission fined former appointee, who had previously Middleborough Assessor Jacob Kulian The Commission concluded public completed the academy. Finally, $10,215 for violating the state’s proceedings against former Salem Murphy violated § 23(b)(2) in 2002 conflict of interest law, M.G.L. c. Police Captain Paul R. Murphy by by obtaining confidential information 268A, by taking actions that reduced approving a Disposition Agreement in about a sexual harassment complaint his property taxes. The Commission which Murphy admitted violating the Patricia filed and using it in an attempt received $8,000 as a civil penalty; the state’s conflict of interest law, G.L. c. to demonstrate to the Chief that Lt. remaining $2,215 will be reimbursed 268A, by intervening in matters Butler, who served as the to the Town of Middleborough for involving his daughter Patricia, also a department’s sexual harassment unpaid property tax abatements and former Salem police officer. Murphy officer and reviewed Patricia’s reductions Kulian was not entitled to paid a civil penalty of $6,000. complaint, was biased against Patricia. receive. Murphy, who was terminated as a Kulian was an elected Assessor Salem police officer in September Litigation Update Staff Notes The Executive Director, and by delegation, in a deposition in relation to a matter Two Northeastern University the Commission’s attorneys, have special as- under investigation by the sistant attorney general status. This status students are working as interns for Commission’s Enforcement Division. six months in the Commission’s permits attorneys to represent the Commis- sion in court proceedings, under the over- In response, Ms. Doe is seeking to Enforcement Division where they sight of the Office of the Attorney General. quash the subpoena. In addition to will assist in the complaint intake The Commission has recently been involved seeking to quash the summons, Ms. and investigation process. in one litigation matter. Doe is seeking discovery prior to Davin Lee, a native of San testifying. Francisco, is a junior majoring in State Ethics Commission v. Jane Doe criminal justice. Dominic DeRiso, This matter is pending in the Suffolk a sociology major, is a junior from The Commission filed a civil action Superior Court. Materials in this seeking to compel Jane Doe to testify Houston, Texas. matter are impounded. State Ethics Commission Bulletin Page 6 Summer 2005 Continued from page 1 behalf of a client of his private law matter? ation in relation to any particular practice before the division of industrial accidents. He may not The state has a direct and matter in which the state is a party or substantial interest in any matter has a direct and substantial interest. appear, however, before the Department of Environmental pending before, under the official A state agency includes any board, jurisdiction of, or involving action by a commission, authority, other state body Protection regarding a matter involving a client. state agency, board, commission, or instrumentality of the state. authority or other state body; in any These provisions are intended to effort to change state regulations, A state official who is not a special prevent divided loyalties. As policies or procedures; any contract, state employee may not appear before discussed below, they apply less court case or other legal matter in any state boards or agencies. restrictively to “special state which the state is a party, or any ruling employees.” What is a “special state or other action by a federal, regional employee”? or state agency involving matters Can a volunteer board member which are subject to regulation by the appear before the board on which Some state positions are state. he or she serves on behalf of automatically designated as “special private clients? state employees” under the law. State Are there any exceptions to these No. A state official, even one who employees are “special state rules for state officials who are full- serves as an unpaid volunteer on an employees” if: time employees and thus cannot appointed board is prohibited from · they do not receive compensation; be “special state employees”? acting as an agent for those clients or for whom he or she provides consulting · they are not an elected official; and There are a number of exemptions services before the board on which · they hold a position which allows available to state officials including one he or she serves. For example, an you to work at another job during that allows a state official to give Ethics Commissioner who is an normal working hours; or testimony under oath, one that allows attorney may not represent a client · they were not paid for more than a state official to represent immediate before the Ethics Commission. 800 working hours (approximately 20 family members and others with weeks full-time or 15 hours or less whom he has a fiduciary relationship A state official always may, per week part-time) during the in certain circumstances and one that however, represent him or herself preceding 365 days. Compensation allows a state official to hold elective before his or her own board. For by the day is equivalent to seven hours or appointive office in a city, town or example, the insurance commissioner per day. district with certain restrictions. For may appeal an insurance surcharge. additional information, see Advisory She may not, however participate as What activities are considered 94-01: State Employees Acting as commissioner in any determination or “acting as agent”? Agent. decision regarding her appeal. An agent is anyone who represents The law also applies in a very limited Can a volunteer board member another person or organization in way to legislators. A legislator may appear before state boards other dealings with the state. Almost any not personally appear before a state than the one on which he serves? instance where you are acting on agency for any compensation other behalf of someone else can be than his legislative salary unless: Yes, if the board member is considered “acting as an agent.” For · the matter before the state agency designated a “special state example, contacting or communicating is ministerial, such as filing or employee.” A special state employee with the state on another person’s or amending tax returns, applications for may act as an agent before state group’s behalf, acting as a liaison with permits or licenses, incorporation boards other than his own, provided the state on another person’s or papers or other documents; or that he has not officially participated group’s behalf; providing documents · the appearance is before a court of in the matter, the matter is not now to the state on another person’s or the commonwealth; or (and was not within the past year) group’s behalf: or serving as a · the appearance is in a quasi-judicial within his official responsibility or the spokesperson before the state on proceeding, such as adjudicatory matter is pending in the state agency another person’s or group’s behalf proceedings or proceedings that are in which he is serving. For example, have been considered “acting as an appealable to the courts. an unpaid member of an advisory agent.” board to the Department of There may be other exceptions that Environmental Protection, which When does the state have a direct would apply to a particular situation. meets twice a week, may appear on and substantial interest in a Please contact the Ethics Commission for advice at 617-727-0060.
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