Ethics: Advisory Opinion No. 1997-1

Advisory Opinion No. 1997-1
Advisory Opinion No. 1997-1

University Professor May Not Accept Outside Employment With Private
Provider Originally Established, With His Official Participation,
As A University Affiliated Program

The petitioner, Orv C. Karan, Ph.D., is the former Director of the University of Connecticut’s Pappanikou Center on Special Education and Rehabilitation (The Center). Although he resigned his Directorship, effective July 1, 1995, Dr. Karan has continued his employment with the University as a professor in the School of Education. As such he is a state employee subject to the requirements of The Code Of Ethics For Public Officials, Conn. Gen. Stat. Chapter 10, Part I.

Commencing in July of 1995, Dr. Karan has provided unpaid consultation services to Directions, Inc., a non-profit corporation which offers services to social/emotionally maladjusted adolescents. He has now asked whether, consistent with the requirements of The Code Of Ethics, he may be paid for these services.

During his Directorship of The Center Dr. Karan supervised and was substantially involved in the establishment of Directions. Initially, the functions subsequently performed by Directions were carried out as a University Affiliated Program (UAP). In 1994, however, this Program was reconstituted as the non-profit corporation, Directions, Inc. in order that it might more effectively perform its mission. At the time of incorporation, Dr. Karan was listed as a Director, Vice-President and Secretary of the entity. In order to fund Directions, Inc. the RISE/Futures Division of RISE, Inc. was closed and all its funds transferred to the new corporation. (Both RISE and Futures were initially UAPs established during Dr. Karan’s Directorship of The Center and subsequently privatized.) In addition to this funding, Directions, Inc. continued to receive administrative support and technical assistance, as needed, from UAP staff under Dr. Karan’s direction.

In Dr. Karan’s request for advice, it is posited that the Code should pose no bar to the paid consulting work in question, because more than one year has elapsed since both Dr. Karan resigned his Directorship and Futures (the last of the above discussed UAPs to be privatized) became part of Directions, Inc. In a subsequent correspondence, the attorney representing Directions, Inc., Andrew Feinstein, further argues that no conflict exists, since Dr. Karan, in fact, "vigorously resisted" the University’s privatization of Directions.

Under the Code Of Ethics For Public Officials, Dr. Karan’s current unpaid consulting work for Directions, Inc. is not "employment", and, therefore, is not subject to restriction by the State Ethics Commission. In contrast, the petitioner’s proposed compensated activity will be subject to Code. Specifically, under Conn. Gen. Stat. 1-84(c), a state employee may not use his position to obtain financial gain.

Applying this provision to the request under review, the State Ethics Commission finds that Dr. Karan’s acceptance of payments for consultation from Directions, Inc. would violate the Ethics Code. In essence, Dr. Karan, as Director of The Center, was instrumental in creating, privatizing and funding Directions, Inc. No matter how impeccable his qualifications for the work in question, it is impossible to separate his future employment from his past official actions. Simply stated, but for Dr. Karan’s efforts in his state capacity, his proposed private employer, Directions, Inc., might well not exist. In fact, according to Attorney Feinstein, Dr. Karan is "uniquely" qualified for the position in question based, in part, on his past official involvement in establishing the Directions program. Therefore, he is substantially responsible for creating the very position he now seeks to fill. Under such circumstances, use of office for financial gain in violation of 1-84(c) is inherent and unavoidable. See, State Ethics Commission Advisory Opinion No. 96-10, 58 Conn. L.J. No. 7, p. 1D (August 13, 1996). (State employees who may bid on Second Injury Fund privatization contract cannot be involved in any aspect of the development or award of the contract without violating Conn. Gen. Stat. 1-84(c).)

In making this determination, the Commission rejects as unpersuasive the arguments put forth by Dr. Karan and Attorney Feinstein. Specifically, the claim that no conflict exists because one year has elapsed since Dr. Karan resigned as Director of The Center is without legal foundation. The Code’s conflict of interest sections (Conn. Gen. Stat. 1-84, 1-85, and 1-86) contain no such limit. Rather, it is the post-state employment provisions of the Code which establish one year bans on certain activities for former state employees; and those provisions are not applicable to a current employee, such as Dr. Karan, who transfers from one state position to another. Secondly, the Commission can find no substantiation for Attorney Feinstein’s claim that Dr. Karan opposed the privatization of Directions. To the contrary, two documents which address the subject (one, "A Framework For Reviewing The Audit Report" authored by

Dr. Karan, and the other, "Responses To Audit Report", co-authored by Dr. Karan and the former Director of Futures) make no reference to any such opposition. In fact, both documents identify program privatization as a UAP goal. It is true, as set forth by Attorney Feinstein, that Dr. Karan strongly opposed the privatization of the Futures Program. However, when faced with the inevitability of this decision, in October of 1994, Dr. Karan advocated, and subsequently accomplished, the transfer of the program to Directions, Inc. Thereby, he helped to create helping to the very employment opportunity he now seeks to undertake. Given this course of conduct, any prior opposition to a facet of the privatization in question is of no legal significance.

In summary, under The Code Of Ethics For Public Officials, Dr. Karan may not accept outside employment with a corporation which, in his official capacity, he was substantially responsible for creating, privatizing and funding. He may, however, consistent with the Code and Commission Regulations, pursue other outside employment opportunities which utilize his expertise, including experience gained in state service.

By order of the Commission,

Maurice FitzMaurice
Chairperson



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