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New York State Ethics Commission
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Albany, NY 12210


Advisory Opinion No. 03-2: Application of the lifetime bar to a former OMRDD employee.

INTRODUCTION

The following advisory opinion is issued in response to a request submitted by Paul Kietzman (“Kietzman”), General Counsel with the New York State Office of Mental Retardation and Developmental Disabilities (“OMRDD”), requesting that the Commission issue a formal opinion concerning the application of the lifetime bar of Public Officers Law §73(8)(a)(ii), to [ ], a former OMRDD employee(1).

By informal opinion dated August 7, 2002, the Commission provided [the former State employee] with specific advice on his representation of clients who are administratively appealing OMRDD’s determinations with regard to State reimbursement(2)

Pursuant to the authority vested in it by Executive Law §94(15), the New York State Ethics Commission (“Commission”) renders its opinion hereby reaffirming its determination in its prior informal opinion that [the former State employee] may represent clients before OMRDD in new matters relative to the application of rate reimbursements.

BACKGROUND

According to the information that served as the basis for the informal opinion(3), [the former State employee] retired on [date] from OMRDD where, since 1997, he served as the Director of [ ] in the Bureau of [ ] and was primarily responsible for processing rate appeals and drafting agency regulations. Prior to this position, he was Director of [ ] and was responsible for setting the agency’s reimbursement rates for providers of services. Since [date], his duties for OMRDD did not require that he authorize the agency’s rate structure for providers.

Among other responsibilities, the Bureau of [ ] is in charge of processing appeals from providers of services to OMRDD’s clients. Typically, such providers are not-for-profit agencies which bill OMRDD for services provided. On occasion, an appeal is taken when the provider contests OMRDD’s reimbursement for services. The reimbursement is based upon a cost report or budget filed by the provider and the application of the trending and rate methodology for the provider’s particular fiscal year.

Recently, [the former State employee’s] consulting firm was requested to assist a not-for-profit agency before OMRDD in its Intermediate Care Facilities’ (“ICF”) appeal of its application for reimbursement for the 1998/1999 fiscal year. The agency filed its appeal in June 2000, after [the former State employee] left State service, in which it appealed several issues that caused the provider a loss of approximately $180,000. OMRDD finished its review of the agency’s appeal in June 2002 and offered the agency approximately $44,000 in increased funding. [The former State employee] states that OMRDD’s decision, however, provided insufficient information explaining why several of its requests for increased revenues were denied. [The former State employee] would like to represent the agency before OMRDD to determine why its appeal was partially denied and whether that denial was appropriate.

In the August 7, 2002 informal opinion, the Commission concluded, in essence, that [the former State employee] cannot challenge a rate that he developed while in State service, but that he can challenge the application of that rate to a particular provider. Kietzman’s concern is that [the former State employee’s] challenge of the application of the rates to his client is a de facto challenge to the rate itself.

APPLICABLE STATUTES

The lifetime bar contained in Public Officers Law §73(8)(a)(ii) provides:

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 or she personally participated during the period of his or her service or employment, or which was under his or her active consideration.

DISCUSSION

These provisions, known as the “lifetime bar”, prohibit former State officers and employees from appearing, practicing, communicating or rendering services before any State agency, and rendering services for compensation in relation to any case, proceeding, application or transaction with respect to which they were directly concerned and in which they personally participated during the period of their State service, or which was under their active consideration during that period. In essence, the lifetime bar precludes a former State employee from working on any case, application, proceeding or transaction on which the former employee worked while in State service. The determination of whether the lifetime bar applies is one which must be made on a case-by-case basis (See, Advisory Opinion No. 90-22).

The purpose of the lifetime bar limitation is to restrict, on a permanent basis, former employees from using insider information about specific transactions in which they were involved before a State agency. “To trigger this limitation the individual, while employed by the State, must have been directly concerned and personally participated in the same transaction in which he or she wishes to appear, practice, communicate or otherwise render services following termination of State service. The statutory language is clear that mere acquaintance with or knowledge of a fact or circumstance is insufficient to trigger the lifetime bar. More is needed; the facts must clearly show personal participation and direct concern or active consideration of a transaction” (see, Advisory Opinion No. 91-18).


In Advisory Opinion No. 94-9, the Commission held that the development of a non-confidential methodology by a State employee does not act as a lifetime barred transaction and prevent the employee from applying the methodology to uses other than those to which he applied them while in State service. Similarly, in Advisory Opinion No. 94-18, the Commission concluded that knowledge and methodologies developed while an individual was in State service may be applied in new settings after the individual has left State service.

Given these precedents, [the former State employee] may represent the provider in a fact-finding capacity and argue before OMRDD that the State agency’s application of the 1998 - 1999 rates is insufficient to cover the ICF’s expenses for the 1998-1999 fiscal year, provided that the transaction in question is not one that was under his direct consideration during his employment at OMRDD. Thus, if [the former State employee] was involved in the ICF’s application for additional reimbursement that has led to its appeal, he would be prohibited from assisting the provider in this subsequent appeal, as the appeal would be part of the underlying original transaction. If, however, the initial OMRDD determination on the ICF’s request for additional reimbursement occurred after [the former State employee] left State service, and therefore was not under his consideration, he may argue that OMRDD’s denial of the increased revenue for the provider in this particular instance was improper based on the ICF’s particular circumstances during the 1998-1999 fiscal year.

In its August 7, 2002 informal opinion to [the former State employee], the Commission struck a cautionary note when it stated:

The Commission is concerned that in representing your clients you may be called upon to mix the specific facts of an applicant’s situation with the underlying methodology, making it difficult, if not impossible, for you to assist the ICF in its rate appeal without arguing the validity of the rates and ultimately triggering the lifetime bar prohibition of Public Officers Law §73(8)(a)(ii). Therefore, you are strongly advised to consider your assistance to the ICF, and the limitations set forth in this informal opinion in rendering such assistance.

[The former State employee] has been given clear guidance and he is allowed to argue the application of rates to his client’s particular situation in fiscal year 1998-1999.

CONCLUSION

Pursuant to the authority vested in it by Executive Law §94(15), the New York State Ethics Commission (“Commission”) renders its opinion hereby reaffirming its determination in the prior informal opinion that [the former State employee] may represent clients before OMRDD in new matters and to challenge the application of rates to a particular client.

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 Shechtman, Chair
Robert J. Giuffra, Jr.
Carl H. Loewenson, Jr.
Lynn Millane
O. Peter Sherwood,
Members

Dated: February 6, 2003


Endnotes

1. The two-year bar of Public Officers Law §73(8)(a)(i) is not at issue as [the former State employee] retired from OMRDD on May 12, 2000.

2. While the Commission’s informal opinion to [the former State employee] was confidential, Kietzman writes that [the former State employee] shared the Commission’s letter with OMRDD.

3. Kietzman does not provide any additional or contrary facts in his request for a formal opinion.

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