New York State Ethics Commission
Alfred E. Smith State Office Bldg.
80 South Swan Street, 11th Floor, Suite 1147
Albany, NY 12210

INTRODUCTION

The following advisory opinion is issued in response to [ ], an employee with the New York State Office of Temporary and Disability Assistance (“OTDA”), who is contemplating retirement and wishes to provide part-time contractual services to a public benefit corporation that is staffed by OTDA.

Pursuant to the authority vested in the State Ethics Commission (“Commission”) by Executive Law §94(15), the Commission renders its opinion that for purposes of the revolving door restrictions, the Homeless Housing Assistance Corporation (“HHAC”) is considered [the requesting individual’s] “former agency,” in addition to OTDA, and, therefore, he may not provide technical services to HHAC as an independent contractor until his two-year bar expires.

BACKGROUND

In 1990, the Legislature established HHAC as a public benefit corporation to issue the necessary bonds to finance the costs of developing projects under HHAP (see, Private Housing Finance §45-c).  As a public benefit corporation, HHAC falls within the definition of a “State agency” for purposes of Public Officers Law §§73, 73-a and 74.   HHAC is a subsidiary of the New York State Housing Finance Agency (“HFA”).  HHAC has no employees of its own and is staffed by OTDA: the Commissioner of OTDA serves ex officio  as its chairperson and the President of HFA and the Commissioner of the Division of Housing and Community Renewal (DHCR) also serve ex officio  as members of the HHAC Board of Directors.¹ OTDA also submits an annual report to the Governor and the Legislature concerning the projects under HHAP.

Each year, HHAC selects categories of projects as priorities for funding to assist specific homeless populations based upon a determination of need.  The success of the program depends upon access to social and related services, including job training and placement, mental health services, and childcare.

[The requesting individual] is contemplating retirement and is interested in providing certain part-time technical services under contract to HHAC.  On [date], [the requesting individual] requested an informal opinion to determine the application of the post-employment restrictions involving this employment opportunity.  On [date], the Commission responded that, given the relationship between HHAC and OTDA, it would be difficult, if not impossible, for him to provide services to HHAC as an independent contractor. [The requesting individual] asks the Commission to issue a formal opinion reconsidering its prior informal opinion and has supplied additional facts as to his proposed activities on behalf of HHAC.

The technical services [the requesting individual] would like to perform are as follows:

(1)  [The requesting individual] proposes to act as a liaison between HHAC and HFA relating to tracking expenditures and reimbursement, which requires specific knowledge of the bond financing that funds HHAP.  In this capacity, [the requesting individual] states that he would collect data from OTDA, analyze it, and report his findings to HFA.

(2) As the only certified appraiser currently on staff with OTDA, [the requesting individual] would like to continue to review appraisals for the acquisition of real property from the sponsors for the capital development program.  He would prepare a memorandum with a recommendation as to the acceptability of the appraisal and submit it to the HHAC Board for its review and approval; and 

(3) [The requesting individual] would coordinate the State Environmental Quality Review Act (“SEQRA”) and the State Historic Preservation (“SHP”) processes for HHAP, which would require him to analyze materials relating to environmental, historic and local planning concerns. He would submit his evaluation to the HHAC Board.

[The requesting individual] argues that he would like to perform these duties exclusively for HHAC as a contract employee, and that in today’s State budget environment, this should be viewed as a cost effective approach to providing necessary State services.

APPLICABLE STATUTES

No person who has served as a state officer or employee shall within a period of two years after the termination of such service or employment appear or practice before such state agency or receive compensation for any services rendered by such former officer or employee on behalf of any person, firm, corporation, or association in relation to any case, proceeding or application or other matter before such agency.

DISCUSSION

1.  Whether HHAC is [the requesting individual’s] former State agency for revolving door purposes.

As an initial matter, the Commission must decide whether HHAC should be considered [the requesting individual’s] “former agency” for purposes of applying the two-year bar.  The Commission has previously considered the issue of whether a former State employee could have multiple former agencies.²   In Advisory Opinion 95-19, the Commission noted that the revolving door restrictions apply when it can be shown that there is a “continuing service” to a State agency, even where the employee is not compensated by the agency.

More recently, in Advisory Opinion 02-02, the Commission was asked to consider the “former agency” for employees of the Department of Economic Development (“DED”) and the Urban Development Corporation (“UDC”) d/b/a/ Empire State Development Corporation (“ESDC”).  UDC, a public benefit corporation, was authorized to organize subsidiary corporations established to manage specific projects or economic development activities in the State.  ESDC was then established to streamline the functions of UDC and its subsidiaries.  Given the unique structure, interaction and jurisdiction of DED and UDC and its subsidiaries which were created under the statutory jurisdiction of UDC and, together, operated under an umbrella corporation (i.e., ESDC) the designation of “multiple” former agencies was particularly complex.  In rendering its determination, the Commission considered both the specific duties and responsibilities of the individuals, along with the functions of certain programs and operations of the entities involved.  For the requesting individuals, their “former agency” was both DED and UDC d/b/a ESDC, but not the subsidiaries of UDC as their duties and the functions of their respective offices did not extend to those entities.

In the instant matter, HHAC was created to issue bonds for HHAP, and is staffed by OTDA.³   Another factor to be considered is that the Commissioner of OTDA serves ex officio  as the chairperson of the HHAC Board.  In Advisory Opinion 89-3, the Commission held that mere presence of one Executive Department officer on a Sitting Board established by statute does not make the Sitting Board a part of the Executive Department for purposes of applying the two-year bar.  Critical to that opinion, however, was the Board’s independent status as a State agency created by statute with a statutory mission separate from the agencies which comprised it.  That is not the case here because OTDA and HHAC share the same mission – that is, to provide housing for the homeless, and their work is totally intertwined.

Moreover, [the requesting individual] currently has job responsibilities relating to HHAC which mirror what he proposes to do for HHAC upon retirement.  He not only evaluates and makes funding evaluations for specific housing projects, but he is also responsible for reviewing the appraisals in the capital development program and assisting in the SEQRA and SHP process.   Thus, he has regular and continuing responsibilities to HHAC.  Given [the requesting individual’s] job duties and the role OTDA plays in staffing HHAC, the Commission concludes that both HHAC and OTDA would be considered [the requesting individual’s] “former agency” for two-year bar purposes.

2.  Whether [the requesting individual] can contract back with HHAC during the proscribed two-year period.

The Commission has held that a former employee may not contract with his former State agency within two years of leaving State service (see, Advisory Opinion No. 94-21).  As the Commission finds that HHAC, in addition to OTDA, is [the requesting individual’s] former agency, his proposal to contract with HHAC would be a violation of the two-year bar under Commission precedent.

The Commission notes that [the requesting individual] would like to perform these services as an independent contractor to HHAC, not as an employee.⁴  [The requesting individual] may wish to explore the possibility of entering into an arrangement whereby he would be employed by the HHAC or some other governmental entity, thus falling within the exception of §73(8)(e), and avoiding a violation of the two-year bar.⁵

CONCLUSION

This opinion, unless and until 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, Members

Dated: July 29, 2003

2. See, Advisory Opinion Nos. 90-22,   95-33,   96-7,   97-1,    99-1,   and 03-04.

3. While HHAC is a subsidiary of HFA, that arrangement permits HFA’s issuance of bonds to finance HHAP’s projects.

4. The Commission has in the past initiated a legislative proposal which would create an exception to the post-employment restriction under certain proscribed circumstances similar to those contemplated here (2003 legislative session - bill number S.5148).  However, the proposal did not become law.

5. [The requesting individual] is also reminded of the provisions contained in the lifetime bar, which prohibits him from working on any case, proceeding, application or transaction in which he was directly concerned, personally participated or which was under his active consideration while in State service.  Thus, for example, the lifetime bar would preclude him from working on a project to which he had evaluated or made a funding recommendation. Determinations regarding the lifetime bar are always made on a case-by-case basis. (See, Advisory Opinion No. 90-22.)