New York State
Ethics Commission


Advisory Opinion No. 98-22: Application of the lifetime bar restrictions of Public Officers Law §73(8)(a)(ii) to a former employee of the Metro-North Railroad who wishes to work for a bidder on a Transit Authority procurement for which he served on a peer review panel.

Introduction

The following advisory opinion is issued in response to a request by Richard K. Bernard ("Bernard"), Vice President and General Counsel of the Metro-North Railroad ("Metro-North"). He asks that the full New York State Ethics Commission ("Commission") review an informal opinion that was issued to an employee of Metro-North, [ ]. That opinion determined that the lifetime bar, contained in Public Officers Law §73(8)(a)(ii), would prohibit [the State employee], should he leave Metro-North, from working on a procurement pursuant to a Request for Proposals ("RFP") issued by the New York City Transit Authority ("TA") because [the State employee] had served on a peer review panel that reviewed technical specifications that were incorporated into the RFP. Bernard is concerned with the impact that the informal opinion would have on Metro-North and other State agencies.(1)

Pursuant to the authority vested in it by Executive Law §94(15), the Commission renders its opinion that [the State employee] is prohibited by the lifetime bar from rendering services in connection with the TA's procurement pursuant to the RFP.

Background

The facts as set forth in the informal opinion are as follows. [The State employee] is currently employed by Metro-North in its [ ] Department as the Deputy Director [ ]. He informed the Commission that he had been seeking possible future employment as a senior engineer with a well-known contractor. That contractor is considering submitting a response to a TA RFP for inspection services in connection with the TA's [ ] car procurement. If successful, the contractor would inspect the [ ] cars as they are being constructed to assure compliance with the TA's specifications. [the State employee] asked whether there would be any restrictions on his involvement in the performance of such inspection services.

During his employment with Metro-North, [the State employee] had been asked to serve as one of the agency's two representatives on a peer review panel convened by the TA to review the technical specifications of the TA's next generation of subway cars. This review panel included representatives of other transit agencies from around the country, including Bay Area Rapid Transit, the Chicago Transit Authority, the Southeast Pennsylvania Transportation Authority, PATCO, Metropolitan Boston Transportation Authority, New Jersey Transit, the Port Authority of New York and New Jersey, and the Long Island Rail Road ("LIRR"). The panel reviewed draft specifications, which were at the time approximately 60% complete, and offered comments and suggestions during five days of group discussions. The TA utilized these comments in the development of its final specifications, which were issued as the technical requirements in the RFP for the [ ] cars. These cars are now being manufactured by private contractors.

In the informal opinion, which was issued on September 10, 1998, the Commission, through its Executive Director, concluded that the lifetime bar precluded [the State employee] from working for the contractor on the inspection of the [ ] cars. After discussing the precedents established in Advisory Opinion Nos. 91-12, 95-6 and 95-15, the Commission determined that, because the peer review panel on which [the State employee] had served made comments and suggestions which were incorporated by the TA into the final [ ] specifications, [the State employee] had personally participated in the drafting of the specifications. His working on the inspections would, therefore, constitute his rendering services in a transaction on which he had personally participated while in State service.

Bernard has written to the Commission, arguing that its conclusion was in error. He notes that its determination was predicated upon [the State employee's] participation over a five-day period in a peer review panel consisting of representatives of transportation agencies from around the country convened by the TA to review its technical specifications for its then future procurement of subway cars.

Bernard argues that [the State employee] should not be precluded by the lifetime bar from inspecting the cars because he was not employed by the TA when he participated in the peer review panel, and he received no compensation for his service apart from his Metro-North salary. As did the other members of the review group, [the State employee] offered his expertise to assist the TA in refining the specifications. The members of the group related their experiences in new car procurement, but they did not draft or revise the specifications, which went through several iterations after the peer review process and were issued as a public document.

Bernard argues that as a result of the informal opinion, Metro-North, as well as other State agencies, will be limited in its ability to arrange the kind of inter-agency task force on which [the State employee] served or to generally tap the resources of sister State agencies to aid in agency work. State employees may be reluctant to offer their services in aid of other agencies for fear that they will be subject to the lifetime bar.

Bernard notes that Metro-North and the LIRR are now engaged in soliciting proposals for a joint procurement of new railroad cars. In drafting the terms and conditions of the proposed procurement contract, the agencies have used selected provisions of the TA's contract for the [ ] cars as a guide and have consulted with the TA's attorneys who drafted those provisions. Bernard questions whether the TA's attorneys would be lifetime barred on the Metro-North/LIRR procurement.

In another example, Bernard cites an agency engineer who is called upon to relate his experience regarding the remediation of a hazardous environmental condition with an engineer at another agency faced with the same problem. The engineer shares his experience with the other agency. Some time later, a private entity is retained to perform the clean-up and wishes to hire the engineer. Bernard wonders whether the lifetime bar would prohibit the engineer from taking the job with the private entity.

In sum, Bernard argues that the policy considerations which underlie the lifetime bar -- that a former employee should be precluded from using knowledge gained on a particular case or transaction -- do not apply to the situation where an employee is called upon to relate his or her experience in aid of another agency where the clear motivation is to assist and not to give a private entity an edge. He would, however, apply the bar where, as a consequence of the exchange of experience and information, the employee becomes privy to confidential data which can subsequently be used to the advantage of a private entity. He urges that the lifetime bar should not be a trap for the unwary.

Bernard suggests that a rule be fashioned that would not impede the exchange of information as he has described it, but would preclude the use of confidential information to the advantage of a private party.

Applicable Statute

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

Discussion

The above provision is known as the "lifetime bar." It sets the ground rules for what individuals may do with the knowledge, experience and contacts gained from public service after they terminate their employment with a State agency. It prohibits a former State officer or employee from rendering services for compensation 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 the individual's State service or which was under his or her active consideration during that period. This means, in essence, that [the State employee] cannot work for a future employer on any transaction on which he worked while an employee of Metro-North.

Bernard's legal arguments in support of modifying the informal opinion do not appear to attack the finding that [the State employee's] work on the specifications for the RFP and his future work on inspections for compliance with those specifications would constitute his rendering services on the same transaction. In fact, the opinions discussed in the informal opinion, which are cited above in the discussion of that opinion, support the conclusion that such work would be part of the same transaction.

Bernard focuses his legal arguments on the personal participation aspect of the statute. It is his position that [the State employee's] having represented Metro-North on a peer review panel did not constitute his personal participation in the RFP for purposes of the lifetime bar. He emphasizes that [the State employee] did not work for the TA, and that he offered the TA his expertise to assist it as it was preparing for a large purchase of cars. Thus, the question that must be re-examined is whether [the State employee] personally participated in the development of the technical specifications that became incorporated into the RFP.

The Commission, in its opinions, has recognized that a State employee can have some level of tangential involvement in a transaction without being found to have personally participated. In Advisory Opinion No. 90-16, the Commission held that a State employee who was present during consideration of a matter but did not participate was not precluded by the lifetime bar from later participation because "the statutory language clearly evidences legislative intent that mere acquaintance with or knowledge of a specific fact or circumstance is insufficient to trigger the lifetime bar." In Advisory Opinion No. 93-13, the Commission stated that "what is decisive to a finding of whether a former employee personally participated in and was directly concerned with or actively considered a transaction is whether the former employee had some official role in affecting the outcome of the transaction."

In Advisory Opinion No. 95-7, the Commission held that the lifetime bar did not prevent a former employee from participating in the development of certain legislation where he had cast a vote on behalf of his Executive Director within a task force that approved a report recommending regulatory reform. The Commission held that the former employee's casting of the Executive Director's vote in favor of the overall report did not necessitate a finding that the former employee had personally participated. By being instructed on how to cast the vote, the former employee's role "was not one of an active participant or a decision maker."

In Advisory Opinion No. 95-41, the Commission considered whether the lifetime bar prohibited a former Assistant Attorney General from representing a client in a civil matter where he had some involvement with a related criminal matter while he was Chief of the Environmental Crimes Unit. The former Assistant Attorney General had reviewed an indictment for form and suggested certain language changes which were adopted. He had also been consulted prior to the empaneling of the grand jury. The case had been prepared and handled by Assistant Attorneys General who were not in the Environmental Crimes Unit and who were not supervised by the individual in question.

In concluding that the former Assistant Attorney General's conduct did not constitute his personal participation in the matter, the Commission noted that the investigation that led to the bringing of criminal charges was conducted by the Department of Environmental Conservation, not the Attorney General's office, and that the former Assistant Attorney General was not involved in the investigation. The Commission described his activities -- reviewing the indictments and being consulted prior to the empaneling of the grand jury -- as "at most, tangential." It concluded that the lifetime bar did not preclude him from representing a client in the related civil action.

In [the State employee's] situation, he participated in a week-long discussion of the specifications within the context of a peer review panel. This gave him more than "mere acquaintance with or knowledge of a specific fact or circumstance." It cannot be said that his role "was not one of an active participant or a decision maker," as the panel spent five days and offered comments and suggestions which were offered to and utilized by the TA in preparing the final specifications. Since the specifications were approximately 60% complete when the panel met, there was opportunity for its members to have significant input. Unlike the Assistant Attorney General in Advisory Opinion No. 95-41, the role of the panel in which [the State employee] participated was not "at most, tangential." In fact, the panel had "some official role in affecting the outcome" of the technical specifications that became part of the RFP.

These precedents, when applied to [the State employee], lead to the conclusion that he personally participated in the development of the specifications, which makes him subject to the lifetime bar.

Bernard, in addition to his legal arguments, raises an important policy consideration. His concern is that the Commission's legal conclusion will cause State employees to be reluctant to offer their services and their expertise to other agencies. There are problems, however, with this argument.

When employees like [the State employee] are assigned to assist another agency, that is no different from any other assignment they receive to work on a matter, and there is no reason to treat that matter differently. In addition, as Bernard recognizes, confidential information gained by an employee while aiding another agency can be misused in the same way as can confidential information obtained from an employee's own agency.

Conclusion

The Commission, upon reconsidering its prior informal opinion, concludes that [the State employee] is prohibited from rendering inspection services in connection with the TA's [ ] procurement in which he personally participated.

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 L. Shechtman, Chair

Robert J. Giuffra, Jr.
Henry G. Gossel
O. Peter Sherwood, Members

Dated: November 23, 1998


Endnote

1. The Commission treats a request for an informal opinion as confidential and responds only to the individual making the request, who, in this case, was [the State employee]. [The State employee] has apparently shared the informal opinion with Bernard.


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