Ethics: 2008-6

ADVISORY OPINION 2008-6

 

State Employees Participating in Rebate Program Administered by Their Agency

 

INTRODUCTION

 

The Citizen’s Ethics Advisory Board issues this advisory opinion at the request of Attorney Scott L. Murphy,[1] who asks a question in regard to the Solar PV Rebate Program, a program administered by Connecticut Innovations, Inc. (“CI”), that is designed to assist Connecticut homeowners with the cost of purchasing and installing solar photovoltaic systems (“Solar PV System”), which utilize energy from the sun to produce electricity.

 

QUESTION

 

            Specifically, Attorney Murphy asks whether, under the Code of Ethics for Public Officials (“Code”), CI employees, including those involved in administering the Solar PV Rebate Program, may participate in the program on the same terms as other eligible Connecticut residents.

 

ANSWER

 

            With the exception of those substantially involved in developing, and those involved in approving the development of, the criteria under which the Solar PV Rebate Program operates, CI employees, including those involved in administering the program, may participate in the program on the same terms as other eligible Connecticut residents, provided that the guidelines set forth in this opinion are followed.

 

FACTS

 

            The Renewable Energy Investment Fund—commonly known (and hereinafter referred to) as the Connecticut Clean Energy Fund (“CCEF”)—is a legislatively created fund, the mission of which is to promote, develop, and invest “in clean energy sources for sustainable energy for the benefit of Connecticut ratepayers.”  CCEF, which is financed through a surcharge on ratepayers’ electric utility bills, is administered by CI and governed by the Connecticut Clean Energy Advisory Board (“CCEF Board”), a fifteen-person board that is independent of CI and exists within CI for administrative purposes only.  The CCEF Board is statutorily required to develop a comprehensive plan for the implementation of renewable energy expenditures and programs.

 

            Among its renewable energy programs is the Solar PV Rebate Program, which provides incentives to Connecticut residents who install Solar PV Systems on their homes.  The program is available, and its eligibility requirements[2] are equally applicable, to all residential electric customers of Connecticut Light & Power and United Illuminating (i.e., those making payments into CCEF).  The program works, in part, as follows: 

 

1.                  A residential electric customer contacts a CI-certified installer to get a rebate calculation based on the proposed Solar PV System. 

 

2.                  The installer sends to CCEF a rebate application, which is co-signed by the customer and includes copies of the customer’s electric bill and the purchase agreement between the customer and the installer. 

 

3.                  Once the application is received, it is evaluated by CI employees to ensure that it is complete and that it satisfies the eligibility requirements, which are technical and objective, involving no discretionary action or subjective decision-making.   

 

4.                  If the application is approved, CCEF sends a rebate reservation letter to the customer.

 

5.                  The materials are purchased, and sixty percent of the rebate is awarded once CCEF receives a signed packing slip from the homeowner. 

 

6.                  The Solar PV System is installed, inspected by the local authority, the utility, and a CCEF independent contractor, who confirms the details of the information submitted by the installer.

 

7.                  Upon satisfactory inspection, the remainder of the rebate is paid to the installer, and the resulting purchase and installation cost to the customer is reduced by the amount of the rebate.  

 

            According to Attorney Murphy, there “is sufficient unused capacity within the Solar PV Rebate Program so that no other eligible residential electric customer would be disadvantaged by the participation of CI employees.”[3]  Further, applications submitted by CI employees will be processed just like any other, namely, in the order in which they are received.  Moreover, to avoid even the appearance of a conflict of interest, CI will impose the following rules: first, no CI employee will be involved in the processing of an application relating to the installation of a Solar PV System at his or her home or the home of an immediate family member; and second, neither the president/executive director of CI nor the CI employee appointed to the position of CCEF president will be eligible to participate in the Solar PV Rebate Program.   

 

ANALYSIS    

 

            In addressing whether the remaining CI employees may participate in the Solar PV Rebate Program, we turn first to Advisory Opinion No. 84-14, which is entitled “State Employee Seeking Support from Own Department on Private Matter.”  There, a sanitary engineer employed in the Water Compliance Unit of the Department of Environmental Protection (“DEP”) contacted that unit in his private capacity regarding what he perceived as irregularities in the administration of his hometown’s sewer system.[4] 

 

            Specifically, after receiving what was in his judgment an “extraordinarily high” sewer-use bill, the sanitary engineer contacted, and received no response from, his hometown’s sewer authority.[5]  He then wrote a letter to the Assistant Director of the DEP Water Compliance (i.e., his unit), seeking the unit’s support by way of answering three questions relating to his hometown’s sewer-use billing practices.[6]  The Assistant Director answered one of the three questions, and before “prodding” him to respond to the other two, the sanitary engineer asked the former State Ethics Commission (“former Commission”) whether he was permitted to do so, given that support from his unit could accrue to his financial benefit (and that of others using the sewer system).[7]  Precisely, he asked whether “his employment in the Water Compliance Unit restricts the rights he would have as a private citizen.”[8]  

 

            According to the former Commission, the sanitary engineer could seek the support of the Water Compliance Unit without violating the Code, provided that he and his unit were “careful and open in their relationship involving the engineer’s private concerns . . . .”[9]  By “careful and open,” the former Commission meant this: first, the sanitary engineer’s communications with his unit had to be formal and in writing; second, he had to refrain from influencing his unit’s response in any way other than by the facts and argument in his written communications; and third, the unit’s response had to be formal and in writing, signed by one of his superiors and issued only if the unit would do so for any other citizen.[10]  The last requirement, it explained, would permit “comparison of the [unit’s] position in this case with those in the past, and reminds the [unit] that its views at this time must be considered should the same issue arise in another municipality.”[11]

 

            Thus, a state employee is not per se prohibited by the Code from interacting in a private capacity with his or her employing agency, even if such interaction will result in personal financial gain.  In fact, in one instance, such interaction is specifically authorized by the Code.  That is, with certain exceptions, General Statutes § 1-84 (i) allows a state employee or public official to enter into a contract with the state—including his or her employing agency—provided that the contract is awarded through an “open and public” process, which includes prior public offer and subsequent public disclosure of all proposals considered and the contract awarded.  As explained by the former Commission, the “process is open so that all, or a substantial number, of eligible [bidders], not just a . . . State employee who learns of a State requirement due to his position, may offer to supply [what] the state needs”[12]; and it is “public so that it can be reviewed by persons required to approve a contract, by unsuccessful bidders, and by auditors.”[13]

 

            The specific scenario of a state employee contracting with his employing agency was addressed in Advisory Opinion No. 84-11.  For a state employee to do so without violating the Code, the former Commission explained, certain guidelines must be followed, the first being that the contracting process must be “open and public,” in accordance with § 1-84 (i).[14]  Second, “if the State employee normally participates on behalf of the State in the contracting process, he must [under General Statutes § 1-86 (a)] disclose the matter of the contract and the potential conflict of interest to his superior, who will assign the employee’s role to another” of equal or greater rank.[15]  And last, to avoid violating General Statutes § 1-84 (c), the state employee must not use his state position, or confidential information acquired in the course of state employment, to gain an advantage in the contracting process.[16]

            More on point, but from another jurisdiction, is Advisory Opinion No. 2001-48, issued by the Rhode Island State Ethics Commission (“Rhode Island Commission”).  It was asked whether an employee of the Providence Neighborhood Housing Corporation (“PNHC”) could participate in the city of Providence’s Employee Advantage Homebuyer Program,[17] given that he satisfied the eligibility criteria but was involved in administering the program.[18]  According to the Rhode Island Commission, the PNHC employee could participate in the program only if (1) he refrains from participating in all PNHC matters involving his application and loan, and (2) he did not participate in establishing the program’s eligibility requirements.[19]  The Rhode Island Commission justified the latter requirement on the ground that it had consistently concluded that public officials and employees may not bid on contracts if they have participated in the bid development process,[20] for such participation “places the public official or employee in a privileged and/or advantageous position with respect to other bidders.”[21] 

            Based on those opinions, and the specific facts set forth above,[22] we conclude as follows: With the exception of those substantially involved[23] in developing, and those involved in approving the development of, the criteria under which the Solar PV Rebate Program operates, CI employees, including those involved in administering the program, may participate in the program on the same terms as other eligible Connecticut residents, provided that the following guidelines are followed:

 

·                    If a CI employee who is normally involved in administering the Solar PV Rebate Program submits a rebate application, he or she must, in accordance with § 1-86 (a), file a written statement describing the potential conflict with his or her immediate superior, who must then assign the matter to a CI employee who is not a subordinate to the conflicted individual.

 

·                    If a CI employee who is not normally involved in administering the Solar PV Rebate Program submits a rebate application, his or her application must not be evaluated by a subordinate. 

 

·                    CI employees submitting rebate applications must receive absolutely no preferential treatment; that is, their applications must be treated precisely in the same manner as those submitted by other applicants.   

 

·                    CI employees must refrain from using their positions, or any confidential information acquired in the course of their employment, to influence CI’s response to their applications. 

 

·                    Any communications between CI and its employees regarding their applications must be formal and in writing.

 

 

By order of the Board,

 

Robert Worgaftik, Chairperson

Dated July 24, 2008                          

 



            [1]Attorney Murphy asks this question on behalf of Connecticut Innovations, Inc., a quasi-public agency; General Statutes § 1-79 (l); the employees of which are considered “state employees” for purposes of the Code of Ethics for Public Officials.  General Statutes § 1-79 (m).

 

 

 

                [2]The eligibility requirements for a Solar PV System are that it satisfies the technical requirements of the California Energy Commission (which are viewed as “industry standard”); that it not be larger than is necessary for the particular home; and that the structure is suitable for installation (e.g., the structure is optimally situated toward the sun, the roof is in sufficient condition to support the system’s installation, etc.).  

                [3]In regard to that statement, Attorney Murphy explained: “That is a true statement as a practical matter, but of course the funding for the program is not infinite so participation by a CI employee could

theoretically involve the use of funding that would otherwise have gone to a subsequent applicant.  To provide some perspective, the current program has sufficient funding earmarked for approximately 1000 Solar PV installations.  Approximately 550 applications have been approved, so there is room within the currently allocated funding for approximately 450 more.  This is a popular program with ongoing demand, so the expectation is that funding for another 1000 installations will be authorized in due course.  If demand is still continuing and the overall CCEF budget permits, a further allocation would then be considered.  The

number of CI employees expected to have a personal interest in the program is almost certainly under 10, and likely 5 or fewer.  Since it is a well-publicized program that has been and will be open for an extended period of time, with rebates available on a first-come, first-served basis, CI believes that the statement that CI employee participation will not disadvantage others is a fair one.”

                [4]Advisory Opinion No. 84-14.

                [5]Id.

                [6]Id.

                [7]Id.

                [8]Id. 

                [9](Emphasis added.)  Id. 

                [10]Id.

                [11]Id.  

                [12](Emphasis added.)  Advisory Opinion No. 84-11.

                [13](Emphasis added.)  Id.

                [14]Id.  

                [15]Id.

                [16]Id.

                [17]The Employee Advantage Homebuyer Program, which was established to encourage municipal employees to purchase homes in targeted city neighborhoods, offered roughly 5000 permanent city employees a forgivable loan of between $5000 and $15,000, at zero percent interest.  Rhode Island State Ethics Commission, Advisory Opinion No. 2001-48. 

                [18] Rhode Island State Ethics Commission, Advisory Opinion No. 2001-48.  

                [19]Id.

                [20]The former Commission concluded likewise in Advisory Opinion No. 96-10, stating that employees of the Office of the State Treasurer who were involved in developing the request for proposals in connection with the Second Injury Fund privatization contract could not bid on the contract. 

                [21] Rhode Island State Ethics Commission, Advisory Opinion No. 2001-48.   

                [22]Critical to this opinion’s conclusion is the fact that there is (in Attorney Murphy’s words) “sufficient unused capacity within the Solar PV Rebate Program so that no other eligible residential electric customer would be disadvantaged by the participation of CI employees.”       

                [23]By substantial involvement, we mean this: involvement that was “direct, extensive and substantive, not peripheral, clerical or ministerial.”  Advisory Opinion No. 96-20.    



Content Last Modified on 7/25/2008 11:33:47 AM