REQUESTED BY: Lori Paulsen, Compliance Specialist, Nebraska Department of Environmental Control.
QUESTION: May an employee of the Department of Environmental Control have a financial interest in a business which provides training to Waste Water Treatment Facility Operators for the purpose of helping them secure their operators certificates from the Department of Environmental Control?
We are advised that a Compliance Specialist with the Nebraska Department of Environmental Control (NDEC) has the duty of inspecting Waste Water Treatment Facilities (WWTF) in order to evaluate if the facility is properly operated and maintained and to determine the facility's compliance with its permit limitations and requirements. A violation of the permit or department regulations is referred to the legal section of the NDEC. We are additionally advised that in the course of an inspection of a WWTF, the compliance specialist is required to check to see if the operator is certified. If he or she is not, the compliance specialist alerts the NDEC section responsible for certification regulations. The section of the NDEC which supervises Compliance Specialists is separate from the section of the NDEC responsible for operator certification regulations and is also separate from the section responsible for enforcement of operator certification regulations. In other words, a Compliance Specialist is concerned primarily with the facility itself and not with the operator.
In the past several years, employees within the compliance specialist section have, with the approval of supervisors, assisted in training programs for operators. The Compliance Specialist requesting this opinion has also done so. In these cases, the department employees assisting in the programs were paid by those who were sponsoring the programs. The participation in these programs was considered non-state employment on non-state time. In the matter before us, the Compliance Specialist is seeking to participate in a program which will provide instruction to Waste Water Facility Operators and will help them prepare for an examination which is a prerequisite to obtaining a Waste Water Treatment Facility Operator's Certificate. The Compliance Specialist will receive a portion of the profits from this program. The Compliance Specialist has informed us that she has received the approval of both the Director of the Department of Environmental Control and its Legal Counsel to participate in this program.
The question presented is a daunting one because there is so much to be considered. An answer to the question requires the examination of several sections of the Nebraska Political Accountability and Disclosure Act, the provisions of the Waste Water Treatment Operators Certification Act, the rules and regulations of the Department of Personnel, and the concept of "the appearance of impropriety or conflict". Therefore, a concise answer must give way to a complete one.
Chapter 15, Section 5 of the Nebraska Classified Personnel Rules states that employees may, with prior notice to the agency head, engage in additional employment or acquire an interest in a business provided that such employment or business does not interfere with the interest of the state, the agency, or the state statutes. Section 6 of Chapter 15 states that an employee shall not 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 conflict with the proper discharge of his or her duties in the public interest. It is our understanding that these provisions of the personnel rules are to be interpreted by the Director of the agency. That is, the director makes the initial decision as to whether or not there is a conflict of interest. If there is a dispute between the employee and the agency then the matter is referred to the Accountability and Disclosure Commission. In the present case, the department did give its approval for the employee to be involved in this outside business, but referred it to the Commission because of its expertise in the area of conflicts of interest.
Section 49-1499 describes a potential conflict of interest as a situation in which a public official or employee, in the discharge of his or her official duties, is required to take any action or make any decision that may cause financial benefit or detriment to him or her, a member or his or her immediate family, or a business with which he or she is associated. A Compliance Specialist is a public employee in the executive branch of state government and is therefore subject to the provisions of Section 49-1499. Section 49-1408 defines a business association as a business "in which the individual is a partner, director, or officer". The description of the business provided leads us to believe that the compliance specialist would be a partner in the business establishing the program. Therefore the compliance specialist has a business association with the program being established. However, we do not see that at this point the compliance specialist is faced with taking an action or making a decision in her official capacity as an employee of the NDEC which may affect her business. Other parts of the Act, however, still need to be considered.
Section 49-14,101(3) states that no public official or public employee shall use that person's public office or any confidential information received through the holding of a public office to obtain financial gain, other than compensation provided by law, for himself or herself, a member of his or her immediate family, or a business with which the individual is associated. Strictly speaking it does not appear that the proposed activity would violate Section 49-14,101(3). However, the compliance officer would need to avoid certain activities. Primarily, she would not be permitted to refer operators with whom she comes in contact during the course of her employment to the program with which she is associated. In addition, she could not, based on information acquired in the course of her employment, provide to the program the names of the operators who she believes might be interested in the program or the names of operators who may be required to participate in such a program by virtue of the provisions of the Waste Water Treatment Operator Certification Act. That Act is found in Section 81-15,128 R.R.S., 1943 as amended by LB352 during the 1988 Legislative Session. The Compliance Specialist may not use confidential information received in the course of her employment in order to enhance the program with which she is associated. In Advisory Opinions #44 and #99 the Commission took the position that "confidential information" includes not only that information which is strictly confidential but that information which is generally not available to others. Obviously, and in addition, the Compliance Specialist must not in any way imply that there would be some sort of "special" advantage to operators who participate in her program.
Section 49-14,101(4) states that:
No public official or public employee shall use personnel, resources, property, or funds under that individual's official care and control, other than in accordance with prescribed constitutional, statutory, and regulatory procedures, or use such items, other than compensation provided by law, for personal financial gain.
Simply stated, the compliance specialist may not use state resources to enhance her business. That is, she must be scrupulous about avoiding the promotion of her business while on state time or using state materials in the course of promoting her business or instructing participants in her program. We do not see that her participation in the program would, in and of itself, constitute a violation of Section 49-14,101(4).
The law requiring WWTF operators to be certified is approximately a year old. Therefore a significant number of WWTF operators are currently in the process of securing certification. Several programs are available to meet this initial need. It is our understanding that the NDEC is presently conducting its own program in order to assist operators in obtaining their certification. The Compliance Specialist's duties do not include participation in the department's program. It is our understanding that the NDEC plans to eventually contract out this responsibility. While this is all somewhat speculative at this time, we do wish to alert the compliance specialist of the provisions of Section 49-14,102. This section generally provides that no public official or public employee, a member of that individual's immediate family, or a business with which the individual is associated shall enter into a contract valued at $2000 or more, in any one year, with a government body. An exception may be made to this rule if certain safeguards are built into the process for securing the contract. We bring this provision to your attention in the event your program seeks to secure this contract.
In the matter before us we have the prospect of a public employee attempting to make a profit from the people with whom she comes into contact in the course of her employment or, at the very least, with the employers of the people with whom she comes into contact during the course of her employment. Based upon this an appearance of impropriety or appearance of conflict of interest exists. Section 49-1402 of the Nebraska Political Accountability and Disclosure Act sets forth the Legislature's Finding of Fact and Declaration of Intent. This section condemns, as a statement of public policy, the appearance of "a substantial conflict between the private interest of a public official and his duties as such official". It should be noted, however, that while the "appearance of a conflict" is condemned by the Act, the prohibition provisions of the Act, such as section 49-14,101, do not make appearance of conflict a violation in and of itself. Therefore a state employee's involvement in activity which gives rise to the appearance of a conflict is not prohibited in and of itself. See Advisory Opinion #45.
We conclude that the activity proposed by the compliance specialist would not be a violation of the Nebraska Political Accountability and Disclosure Act. However, we do so with reluctance because the proposed activity requires scrupulous attention by the employee in order to avoid the prohibitions discussed above. Violations of the various sections of the Nebraska Political Accountability and Disclosure Act discussed in this opinion could result in civil or criminal penalties.
This opinion should not be construed as a blanket approval for any NDEC employee to participate in such programs. We specifically note that this Compliance Specialist has no connection with the section of NDEC which promulgates certification regulations. Other NDEC employees may not be in the same position since Section 81-15,130 provides that the Environmental Control Council shall promulgate rules and regulations on procedures for application and examination of the qualifications of applicants for certification. It has the further duty of developing training and continuing education programs in this area, including the approval of required classroom instruction. In addition it is required to develop procedures in the department for "preparing, conducting, and grading examinations either by the department or by its representatives or persons conducting approved training schools, short courses, conferences and programs, including correspondence courses". Therefore, while the Compliance Specialist may participate in the program described, a change in her specific duties or the duties of all Compliance Specialists may require further consideration by the Commission, and she is directed to seek further advice if such changes occur.
The Commission notes that this matter was brought to the Commission's attention by both the Compliance Specialist and the Nebraska Department of Environmental Control. We thank them for their sensitivity to ethical issues.