| 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.