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New York State Ethics Commission
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Albany, NY 12210


Advisory Opinion No. 03-9:

Application of Public Officers Law §74 to members of the New York State Soil and Water Committee, an entity within the Department of Agriculture and Markets, and their affiliations with outside organizations as they administer a grant program.


INTRODUCTION

.The following advisory opinion is issued in response to a request from Joan A. Kehoe (“Kehoe”), Counsel to the Department of Agriculture and Markets (“DAM”), concerning the ethical obligations of members of the New York State Soil and Water Committee (“State Committee”), as they administer grants to County Soil and Water Conservation Districts (“SWCDs”).

Pursuant to the authority vested in the New York State Ethics Commission (“Commission”) by §94(15) of the Executive Law, the Commission concludes that members of the State Committee must disclose their affiliations, if any, with potential grant recipients and recuse themselves from certain aspects of the grant process under the guidelines set forth below.

BACKGROUND

Soil and Water Conservation Districts Law (“SWCD Law”) §11-b establishes the Agricultural Nonpoint Source Abatement and Control Program (“NPS”), which is a competitive matching grant program. Under NPS, County SWCDs apply to a State Committee for grants to correct and prevent water pollution from farms and farming activities.1  SWCDs, of which there are 58 in New York, are special purpose districts created to develop and implement programs of soil, water and related natural resource conservation; each SWCD has a five member Board of Directors appointed by the County (see, SWCD Law §6).  

The State Committee

As described in SWCD Law §4(1), the mission of the State Committee is to develop a responsible Soil and Water Conservation Program to be implemented through County SWCDs. The State Committee consists of fourteen members: five voting members and nine advisory members.  Three voting members are appointed by the Governor from lists of nominees submitted by the State Grange, the State Farm Bureau Federation and the New York Soil Conservation Districts Association, Inc.  The two other voting members are appointed as at-large members, one a representative of farm interests and the other a  representative of  non-farm landowner interests. Voting members receive no compensation for their services, but are reimbursed for their expenses.  Notably, nothing in the statute precludes a voting member from being associated with a County SWCD, and historically many members have had such associations.

The nine non-voting members serve in an advisory capacity and consist of individuals, many of whom represent State agencies, who bring varied expertise and knowledge to the State Committee.2

The Grant Process

Each year, the advisory members of the State Committee, with the assistance of State Committee staff, develop a Request For Proposal (“RFP”) to be sent to the County SWCDs, as well as criteria to be used in the grant selection process.  The RFP and the selection criteria are then reviewed and approved by the voting members of the State Committee.  When proposals are received from the County SWCDs in response to the RFP, the advisory members have the responsibility to rank the proposals in accordance with the selection criteria.  Those rankings are then forwarded to the voting members, who have the final authority to award grants until available funds are exhausted.3  After the grants are awarded, the State Committee has oversight functions, which include the authority to approve work plans and grant modifications.

Potential Conflict of Interest

The potential for a conflict of interest arises because, at present, three of the voting members on the State Committee also serve on the Board of Directors of their local County SWCDs: one is Chair of Delaware County; one is Chair of Suffolk County; and a third is Vice Chair of Tioga County.  In addition, some of the non-voting members of the State Committee are associated with County SWCDs.   CALS, CCE and ESF/SUNY, or their employees, for example, often assist County SWCDs to draft grant proposals or subcontract with County SWCD grant recipients to provide services under the grants.4  In short, both voting and non-voting members may be in a position to review and pass judgment on proposals in which they or the organization they represent have some interest.5

APPLICABLE STATUTES

The members of the State Committee are State officers covered by Public Officers Law §74, the code of ethics.  The rule with respect to conflicts of interest, contained in Public Officers Law §74(2), states:

No officer or employee of a state agency . . .should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest.

Public Officers Law §74(3) provides standards of conduct:

. . . .

(c) No officer or employee of a state agency. . .should disclose confidential information acquired by him in the course of his official duties nor use such information to further his personal interests.

(d) No officer or employee of a state agency. . .should use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others.

. . . .

(h) An officer or employee of a state agency. . .should endeavor to pursue a course of conduct which will not raise suspicion among the public that he is likely to be engaged in acts that are in violation of his trust.

DISCUSSION

Kehoe poses two questions which the Commission will address in turn.

1.  May a voting member of the State Committee, who concurrently serves on the board of a County SWCD which has applied for funding, or is involved in an organization that subcontracts with SWCD to provide services under the NPS grant program (a) set policies related to RFPs for the NPS grant program; (b) approve the RFP; (c) approve the ranked list of applicants; or (d) approve amendments to the contract?

Closely on point is Advisory Opinion No. 95-13, in which the Commission considered the ethical obligations of members of the New York State Thoroughbred Breeding and Development Fund Corporation, who were responsible for allocating Fund  resources and some of whom were eligible to receive awards from the Fund.  The Commission reviewed the statutory framework and concluded that the Legislature clearly intended to repose decision-making authority over Fund resources in the hands of qualified individuals connected to the breeding industry. The Commission recognized that in such circumstances, a broad prophylactic rule that would disqualify a director from participating in any aspect of the funding process if he or she were eligible to receive an award would “clearly frustrate th[at] legislative intent.” It would impose a limitation on membership that would be at odds with the Legislature's purpose in enacting the law.  Nonetheless, the Commission recognized that there would be a substantial conflict of interest, and clear appearance of impropriety, if a member deliberated and voted on a matter from which he or she might personally benefit.  The Commission therefore held that, under Public Officers Law §74, a member was required to recuse himself in any such instance.

More recently, in Advisory Opinion No. 01-02, the Commission employed a similar analysis to determine whether members of the Advisory Committee to the New York Office of Science and Technology and Academic Research (“NYSTAR”) could deliberate and vote on applications when an entity in which the member had an interest was applying for a grant.  The Commission again adopted a targeted recusal rule instead of a broad ban on any participation in the grant process.  The Commission looked separately at the relationship between the various members of the Advisory Council and potential grant applicants and required recusal only where a “member would have an interest in a transaction in substantial conflict with the proper discharge of his duties in the public interest . . . and would be engaged in a course of conduct which would raise suspicion that he [was] engaged in acts that are in violation of his trust.”

That same analysis should be applied in determining the ethical responsibilities of State Committee voting members in the NSP grant process.  The Legislature clearly contemplated that voting members would be individuals with expertise and interest in County conservation issues.  The Commission is therefore loathe to apply a broad rule that would bar participation in the grant process if a voting member has any connection with a potential grant applicant.  Such a rule would frustrate the Legislature's purpose in putting decision-making authority in the hands of those who understand the issues the best.

At the same time it would blink reality not to recognize that a member's judgment could be affected if he were called on to vote on a grant application in which he has a direct interest.  Moreover, the public might well perceive favoritism in such circumstances even if none actually existed.  For these reasons, the Commission concludes that although a voting member may approve the RFP and the grant selection criteria, he or she must disclose any business relationship he or she has with a County SWCD and recuse himself from any vote involving a grant application in which he or she has a direct interest.  That means, for example, that a voting member may not consider or vote on an application from a County SWCD on whose Board he or she serves or for whom he or she provides any services.6 Likewise, it means that a voting member may not exercise any oversight responsibilities in connection with a grant awarded to a County SWCD with which he or she has such a relationship.

The Commission recognizes that a voting member could still seek to skew the selection process toward his County SWCD even if he or she is prohibited from voting on its  application.  In theory, one could vote to disfavor a rival applicant in order to favor one's own County's application.  The sole remedy for such potential mischief, however, is a broad disqualification rule that the Commission has rejected for the reasons set forth above.  Voting members are charged with responsibility to award grants in the public interest, and there is every reason to believe that they appreciate the seriousness of their assignment.  Under these circumstances, the recusal rule adopted herein seems sufficient to ensure that voting members will not act in a manner that could be perceived as improperly favoring one County organization over another.  If there is any indication that we are wrong in that assessment, the Commission is prepared to revisit the issue in the future.

2.  If an advisory member or any of its employees assists a County SWCD to draft a grant application or subcontracts with a County SWCD that has received a grant, may the member have any role in the grant process?

The principle enunciated above makes the answer to this question straightforward.  Where an advisory member has some involvement with a County SWCD, either in preparing a grant or performing services under it, the public might well suspect that the advisory member is predisposed to that applicant.  It is the very potential for such favoritism that the Ethics Laws are designed to guard against.  Advisory members have an important role in the grant process.  Not only do they help formulate the RFP and selection criteria, but their rankings are given substantial weight by the voting members in reaching final determinations.  It is therefore important that ethical restraints apply to them as well as to voting members.  

Accordingly, the Commission believes that a similar recusal rule is required for non-voting members of the State Committee.  Non-voting members may assist in drafting the RFP and in ranking grant applicants, but they must disclose any business relationship with a County SWCD or other affiliation they may have in an organization performing services under the grant and not participate in ranking that County proposal or overseeing any grant awarded to that County SWCD.  For the Dean of CALS, for example, the recusal rule means that she should not rank any County SWCD application in which CALS or any of its employees has had, or will have, involvement. Nor should she exercise oversight over any grant that has been awarded to such an applicant.  Moreover, given the close relationship between CALS, CCE, and the local CCEs, the Dean of CALS should recuse herself from ranking a grant application in which CCE or a local CCE is or may be involved and from administering any such grant that is awarded.  Similarly, the Director of CCE should recuse herself from considering grant applications and administering grants involving CCE, a local CCE, or CALS.

The Commission recognizes that the Dean of CALS and the Director of CCE bring especially valuable technical and practical knowledge to the State Committee and that the recusal rule enunciated herein will limit their participation more than that of other advisory members.  It believes, however, that public confidence in the fairness of the grant process requires that limitation.

Finally, it is important to reiterate the same admonition to non-voting members that was directed to voting members.  The ability to help develop the RFP, to formulate the selection criteria, and to vote on grant applications and administer grants subject to the recusal rule set forth herein (all of which are permitted under this opinion) can be abused to favor a grant application in which a non-voting member has an interest.  Given the high quality of the non-voting members and their commitment to the public interest, the Commission has no reason to expect that will occur.

CONCLUSION

The Commission concludes that the provisions of Public Officers Law §74 require the members of the State Committee to disclose their affiliations and recuse themselves from certain matters consistent with this opinion.

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
Susan E. Shepard, Members

Dated: December 4, 2003 


End notes

1. SWCD Law §11-b sets forth detailed criteria for project eligibility and provides for preferences to projects located in priority water bodies identified pursuant to Environmental Conservation Law §17-1407.

2. The non-voting members include: the Director of the Cornell Cooperative Extension (“CCE”), the Dean of the State College of Agriculture and Life Sciences (“CALS”) at Cornell University (“Cornell”), the President of the College of Environmental Science and Forestry of the State University of New York (“ESF/SUNY”), the Commissioner of the Department of Environmental Conservation (“DEC”), the Commissioner of DAM, the Commissioner of the Department of Health (“DOH”), the Secretary of the Department of State (“DOS”), the President of the New York State Conservation District Employees’ Association (“CDEA”); and the United States Department of Agriculture, Natural Resources Conservation Service  (“USDA/NRCS”).

3. State funding comes from the New York State Environmental Protection Fund and the Clean Water/Clean Air Bond Act.

4. CCE, CALS and Cornell are closely associated with each other.  County Law §224 provides for the formation of local CCE organizations.  Where the local CCEs have been organized, a county may pay for their maintenance.  The money is expended under an agreement with CCE and Cornell for the management of such work and the supervision of the professional staff.  Moreover, the current Director of CCE reports to the Dean of CALS, and her representative on the State Committee is employed at CALS and is also a Cornell employee.

5. For example, one of the voting members of the State Committee is a Chair of his County SWCD and a Director of his local CCE.

6. Recognizing the need for a quorum, the voting member may, however, approve the rank list in total, but may not challenge the standing of his or her County SWCD on the list, or take a position that will directly affect his or her particular County.

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