Subject: Conflicts of Interest/Use of Office for Financial Gain
Requested by: Janet L. Killiam, Field Representative, Nebraska Commission for the Deaf and Hard of Hearing
Question Presented: Can an employee of the Nebraska Commission for the Deaf and Hard of Hearing operate a private business which sells devices to the hearing impaired?
Conclusion: Yes, but see analysis.
Facts: A field representative employed by the Nebraska Commission for the Deaf and Hard of Hearing (NCDHH) coordinates the issuance of equipment in the NCDHH’s equipment pool. She also assists with the application process of the Nebraska Equipment Distribution Program. This program was established by LB 359 which was passed during the 1999 legislative session. The purpose of this program is to provide free TTYs to deaf and hard of hearing people in Nebraska. The NCDHH assists with the application process and forwards the completed application to the Public Service Commission for final approval. The PSC mails a voucher to the applicant along with a list of vendors who can provide the TTY equipment. The applicant chooses where to purchase the equipment.
On her own time, the field representative operates a small business which sells devices for the deaf. These devices include TTYs. In the past the vendor list sent out by the PSC included the actual name of the field representative. At the field representative’s request, the vendor list has been changed. It now shows the field representative’s private business as K-D Communications.
The field representative wishes to know if she may continue to operate a private business which accepts vouchers issued under the Nebraska Equipment
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Distribution Program. She and her supervisor pose certain scenarios to determine how the Nebraska Political Accountability and Disclosure Act applies.
Analysis: There is nothing in the Nebraska Political Accountability and Disclosure Act (NPADA) which prohibits a state employee from having an outside business. See Advisory Opinions #117, #129, #150, #170, and #172. For those
state employees within the classified personnel system, the issue of outside business interests is addressed by Title 273, Chapter 15, section 005 of the Classified System Personnel Rules and Regulations. It states:
An employee, with the prior notification of the agency head, may engage in additional employment or acquire private interest in business, provided such employment or interest does not interfere with the interest of the state, the agency, or the State Statues.
Other state employees are subject to a labor contract applicable to employees within a particular bargaining unit. To the extent that section 005 is a “past practice” of the State of Nebraska, it could apply to an employee under the labor contract. Certain state agencies may also have applicable rules and regulations. The field representative is covered by the NAPE/AFSCME Labor Contract. The NAPE/AFSCME Labor Contract is silent as to the issue of outside business interests. The contract does include a section entitled Reasons for Imposing Disciplinary Action. This section sets forth activity in which employees are prohibited from engaging. Both the labor contract and the personnel rules establish their own mechanisms for addressing violations. The interpretation and application of the personnel rules and the labor contract is not a function of the Commission
Section 49-14,101(3) of the Nebraska Political Accountability and Disclosure Act (NPADA) provides as follows:
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.
This section would require the field representative to avoid promoting her private business while she was engaged in performing the duties of her public position. For example, if the field representative were helping a client of the NCDHH to complete an application for a voucher, she could not suggest that once the voucher is received, the equipment could be secured from her. If a client were to
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ask the field representative where the equipment could be obtained, it would be acceptable to provide the client with a copy of the vendor list. It would be contrary to §49-14,101(3) to suggest that the equipment could be obtained from her or to highlight the name of her business in any way.
Section 49-14,101(3) also prohibits the use of confidential information obtained through the holding of a public position to obtain financial gain. In Advisory Opinion #99 the Commission took the position that the term confidential information includes not only that information which is strictly confidential, but also that information which is not generally available to the public.
Section 49-14,101(4) of the NPADA generally provides that no public official or public employee may use resources, personnel, property, or funds under his or her official care and control for personal financial gain. As applied to the situation of the field representative, she must avoid using government resources in connection with the business. This would require avoiding the use of state telephones, email systems, computers and the like in connection with her business.
We now turn to the scenarios.
Scenario #1- Field representative assists a NCDHH client with an application for a TTY under the Nebraska Equipment Distribution Program. As part of this process she establishes that there is a qualifying impairment. She determines that the person is eligible for the program and forwards the application to the Public Service Commission for approval. The field representative contacts this individual at home after normal business hours to determine if he has received this voucher. Could this be a violation of the NPADA?
Response- No. A normal follow-up to determine if the client has been served is certainly legitimate. A follow-up based upon the belief that there may be a problem is legitimate.
Scenario #2- The field representative contacts the client while she is not engaged in her state duties. She makes no mention of the voucher but asks the client if he would be interested in purchasing the equipment from her. Could this violate the NPADA?
Response- Yes, if the information as to the client’s identity is confidential. As long as the information is not available to the public, it may not be used for private business purposes by the field representative. To do so could constitute a violation of §49-14,101(3). Once the information is available to the public it
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may be used by the field representative in the same manner and on the same basis as any other member of the public.
Scenario #3- During the application process, the field representative advises the client that she has a private business which can accept the voucher and supply the needed equipment. Could this action be a violation of the NPADA?
Response- Yes. This action could constitute the use of public office for personal financial gain or that of a business association.
Scenario #4- During the application process the client asks if he can purchase the equipment from the field representative’s business. He is aware of her business from past private dealings with her. She has not raised the issue or mentioned the business during the application process or while otherwise performing her state duties. Could it be a violation of the NPADA for her to sell the equipment under such circumstances?
Response- It depends upon how the matter is handled. If the field representative engages in private business or promotes the business while on state time such activity could constitute a violation of §49-14,101(3). An appropriate response would be to advise the client that she cannot discuss private business on state time. The field representative could provide a copy of the vendor list. She could then advise the client that the client may contact any of the vendors on the list in order to procure the equipment. If the client later contacts the field representative’s private business, the field representative may sell the equipment
Scenario #5- The field representative assists a client with an application. At a later date the client contacts the field representative at her business to purchase equipment with the voucher. Would the field representative violate the NPADA by selling the equipment to the client? For the purposes of this scenario we are assuming that the field representative did not solicit the business while engaged in her official duties or use state resources to solicit the business.
Two other questions are posed in the request for the opinion and the accompanying documents. The first is whether the field representative can continue have a role in the Nebraska Equipment Distribution Program. The second is whether the NCDHH can require the employee to cease operating the business. Neither of these issues are addressed by the NPADA and are therefore outside the jurisdiction of the Nebraska Accountability and Disclosure Commission. The NPADA applies to this situation is only to the extent that it
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prohibits the employee from using her state position and state resources for financial gain.
Summary: An employee of the Nebraska Commission for the Deaf and Hard of Hearing may operate a private business which sells devices to individuals who are hearing impaired. She may not conduct private business while engaged in the duties of her public position. She may not use confidential information for the benefit of her business. She may not use state resources in connection with her business.
Adopted as an Advisory Opinion pursuant the provisions of §49-14,123(10) and Title 4, Chapter 1, Rules of Practice and Procedure. As provided in §49-14,123(10), this Advisory Opinion shall be binding upon the Commission, unless amended or revoked, concerning the person or public body who requested the opinion and acted in reliance on it in good faith unless material facts were omitted or misstated by the person in the request for the opinion.
Dated this ______of March 2000.