Ethics Advocates Petition State Ethics Commission for a New Rule on State Contracts

Ethics Advocates Petition State Ethics Commission for a New Rule on State Contracts

Earlier today a bipartisan all-star cast of ethics advocates including Common Cause Massachusetts asked the State Ethics Commission to adopt a new regulation that would allow state officials to hold certain non-negotiable contracts with the state.

According to a recent advisory opinion, the State Ethics Commission held that a State Senator could not hold his elective office while having a financial interest in a contract made by a state agency, even when the contract was a standard, non-negotiable agreement available to all other businesses in the same situation. State employees who are found to be in violation of the statute must stop doing business with the state, divest their interests in their company, or resign from their job. Those who don’t comply can be jailed and/or fined as much as $10,000 for each violation, regardless of the amount of the contract or whether it presents any real conflict of interest.

“Section 7 of the conflict of interest law is a gotcha sort of statute; its reach is way beyond what anyone would anticipate, even with a keen sensitivity toward ethical issues,” said former Ethics Commissioner Jeanne Kempthorne. “Sensible regulation is necessary and appropriate because section 7 reaches conduct that does not pose a real risk of a conflict of interest. It sometimes encroaches on private business interests needlessly and can impinge on important public interests like the freedom to run for office.”

Kempthorne joins ten other public integrity advocates in proposing a new exemption to the law (full list of petitioners and petition proposal). They include former Ethics Commissioners and former Ethics Commission staff such as Gus Wagner, Judge Elisabeth Dolan and Thomas Zampino, and former prosecutors and former judges like Frank Bellotti, Scott Harshbarger, Nancy Gertner, and Dan Winslow, and ethics advocates like Pam Wilmot of Common Cause.

The proposed exemption would allow an elected state employee to have a financial interest in a contract with the state as long as:

a) The state employee has not at any time participated in the contents, design, making, or award of the contract or the program under which the contract is made;

b) The contract contains only standard, non-negotiable terms that apply to similarly situated contractors. Any variable price terms, such as fees or rents, must be based on a fixed, pre-determined formula based on ascertainable factors such as square footage or tonnage that are consistently applied to every contractor; and

c) The state employee discloses the relevant facts concerning the contract.

All the other prohibitions of the conflict of interest law would continue to apply.

“We believe that this proposal addresses real problems without opening new loopholes in the law,” said Pam Wilmot, Common Cause Executive Director and longtime advocate for stronger ethics laws. “Even if this exemption were to be invoked, all of the other provisions of the ethics law continue to apply including ‘ 6, which requires a state employee to abstain in his official capacity from personally participating in a particular matter that would foreseeably affect his or his family’s financial interests. The Ethics Commission is the appropriate body to evaluate the matter: they are neutral, know the law, and are unlikely to create an exemption that creates a real risk of conflict of interest.”

The petitioners note that absent an important reason, the law should not disqualify a significant segment of the population”‘business owners who have any dealing with state government”‘from running for office.

“Massachusetts needs leaders from all walks of life, especially with private sector experience,” said State Representative Dan Winslow who formerly served as a District Court judge and as Governor Romney’s chief legal counsel. “I hope this petition will allow a balanced approach to invite new talent into public life without risking corruption. I believe that is an achievable goal.”

The Ethics Commission will consider the petition at its next meeting on September 19th at which time it could choose to schedule a hearing and a public comment period on the proposed regulation.