Advisory Opinion No. 1994-6
Outside Teaching By Senior Staff Of The Real Estate
Division Provided To
Individuals Subject To
Regulation By
The Real Estate Commission
The Honorable Gloria Schaffer, Commissioner of Consumer Protection, has asked the State Ethics Commission to review two prior Rulings (Declaratory Ruling No. 84-A and Advisory Opinion No. 86-6) which allowed senior employees of the Departments Real Estate Division to teach courses which either serve as a necessary prerequisite to Real Estate licensure or provide required continuing education credit for licensees. At present, two Division employees, Director Lawrence Hannafin and Assistant Director John Charters, are engaged in teaching both types of courses.
With regard to the licensure prerequisite courses, the State Ethics Commission held that the employees apparent total lack of substantive involvement in the process whereby the Real Estate Commission approved the schools and courses, and the removal, in 1982, of the Commissions statutory authority to approve the instructors, obviated any potential conflict of interests. State Ethics Commission Declaratory Ruling 84-A (June 8, 1984).
With regard to the continuing education courses, the Ethics
Commission held that the Commissioner of Consumer Protections stated
willingness to assign non-Real Estate Division employees to administer the
continuing education program would, again, avoid any potential conflict. State Ethics Commission Advisory
Opinion No. 86-6. 47
Before this Commission may review, and possibly modify, a
prior decision, there must be a change of conditions or other considerations
which have intervened and materially affected the merits of the matters
previously decided. Grillo
v. Zoning Board of Appeals of the City of
Specifically, the 1984 Prerequisite Education Ruling was based, in substantial part, on the fact that the Real Estate Division staff, including its most senior members, played no evaluative or discretionary role in the review of schools or course offerings. Rather, the citizen-commissioners who served on the Real Estate Commission reportedly performed all necessary oversight functions, except strictly clerical duties.
Since the issuance of the 1984 Ruling, however, written information received by the State Ethics Commission clearly indicated that, during the mid-1980s, the Divisions Deputy Director was involved in evaluating the prerequisite education program offered by a college in competition with one of his outside employers.
At present, according to Real Estate Commission Chairperson
David DAmore, the Commission does not rely upon the
substantive assistance of its Director and Assistant Director concerning such
accreditation decisions. Chairperson DAmore stated that the Commissioners made all final
determinations, and further emphasized that any perceived staff attempt to
favor an outside employer or disadvantage a competitor would be totally
counterproductive. A Division staff
member, directly subordinate to the Director and Deputy Director, is, however,
involved in the process. It is
unarguable, under State Ethics Commission precedent, that staff involvement in the
decision making process, by the individual or a subordinate, constitutes
impermissible conduct when ones outside employer, or its competitors, are under
review. See e.g., Ethics
Commission Advisory Opinion Nos. 80-11, 41 Conn. L.J. No. 42, p. 30 (April 15,
1980) (If the initial review has any value at all, it is bound to shape action
at higher levels in a number of cases); 81-18, 43
Additionally, although the Real Estate Commissions
authority to approve course instructors was removed in 1982, the Commission
retains regulatory authority to
, without prior notice, visit the school and
observe the instruction given to insure proper standards as to method and
content of any approved courses. Regulations of
Based on the above facts and cited Opinions and Regulation, a reversal of the Ruling arrived at in D.R. No. 84-A would seem appropriate.
Turning to the 1986 Continuing Education Opinion, that
Ruling was based, in large part, on then Commissioner of Consumer Protection
Mary Heslins stated intention to assign non-Real
Estate Division personnel to perform all required duties in support of the Real
Estate Commissions administration of the program. Current Commissioner Schaffer, however, does
not share the opinion that, obviously less qualified, non-Division employees
should assist in the administration of the continuing education program in order
to allow senior Real Estate Division staff to earn outside income teaching
continuing education courses. To the
contrary, in response to an State Ethics Commission request for her views on the
matter, Commissioner Schaffer stated that It is very possible that the passage
of time and change in circumstances have caused a need for a change in policy
concerning this issue. Letter of
Additionally, according to Chairperson DAmore, in this instance the Division Director and Assistant Director are involved in the approval of entities offering continuing education courses. And finally, it is uncontroverted that at present (and apparently for a significant period of time) the Real Estate Division employee who is responsible for performing all clerical and technical work required in administration of the program is directly subordinate to the senior staff teaching continuing education courses. Such conduct directly contravenes the guidelines set forth in A.O. No. 86-6.
In addition to the above enumerated changes in policy and
procedure, another significant reason for overruling the Commissions decision
in A.O. No. 86-6 has come to light during our Counsels research into the
matter. Specifically, in addition to
their outside employment as continuing education instructors, Director Hannafin and Assistant Director Charters also teach an
annual continuing education course as part of their official duties. Consequently, they are in an ethically
untenable position. As the Ethics
Commission has previously held, a public servant may not be paid privately for
providing educational services he is also providing as part of his State
duties. To do so would
clearly impair the individuals independence of judgment concerning the issue
of how extensively to disseminate the free, public educational service; a
violation of Conn. Gen. Stat. §1-84(b).
See e.g., State Ethics Commission Advisory Opinion No.
90-15. 51
That the State Ethics Commissions staff review of this matter revealed an additional conflict of interest is not surprising. As long as the Director and Assistant Director continue to teach in areas directly regulated by the Real Estate Commission, conflicts between their outside employment and State responsibilities will undoubtedly continue to arise. (For example, Chairperson DAmore has articulated a long-term goal of restructuring the Real Estate Licensure Examination, currently administered by a national testing service, to make the test more relevant to the actualities of real estate work. However, the Commissions senior staff would be barred from assisting in this effort, because inside, perhaps confidential, knowledge regarding the restructured examination could well provide an advantage to these individuals in their outside teaching. Similarly, senior staff would often be unable to perform their official responsibilities in support of Agency or Commission proposals to amend the statutes governing the licensure prerequisite or continuing education requirements, because of the potential for a resultant financial effect on their outside employment.)
That it is a relatively easy task to identify multiple current and potential conflicts of interest between the Real Estate Divisions senior staffs official responsibilities and outside employment is a clear indication of the breadth and depth of the ethical dilemma at issue. There is, however, an even more fundamental ethical concern that requires reversal of D.R. No. 84-A and A.O. No. 86-6.
In the original Rulings issued in this matter, the Ethics Commission focused exclusively on the possible conflicts of interest created by the Division staffs outside teaching and the Real Estate Commissions statutory and regulatory authority over the schools and course offerings related to that teaching. There is, however, a more far reaching and basic conflict of interest that precludes the outside employment in question, even absent any state regulation of real estate education.
Specifically, on numerous occasions the State Ethics Commission
has held that it is an impermissible conflict of interest for state regulatory
personnel to accept outside employment in or within the industry or profession
they are authorized to regulate. See,
e.g. State Ethics Commission Advisory Opinion No. 88-16, 50
In this instance, the Real Estate Commission has broad
statutory authority over real estate practices in
As the State Ethics Commission has previously ruled, such authority precludes the public servant from simultaneously offering his services for profit to those he regulates. Advisory Opinion No. 88-16, supra. Regardless of the public servants honesty or expertise, he is in a position where inadvertent use of office for financial gain in violation of Conn. Gen. Stat. §1-84(c) is, quite literally, inevitable. It is impossible to ignore, or counteract, the obvious advantage such a person has in offering his compensated services to those whose careers he oversees. And it is equally impossible to ignore, or counteract, the obvious possibility that Real Estate license applicants or practitioners will select a course offered by the Real Estate Divisions Director or Assistant Director in order to ingratiate themselves with those state officials who possess such significant authority over their profession. Lastly, allowing the employment at issue creates a situation where many of those coming before the Real Estate Commission will either have chosen or declined the senior staffs outside, compensated services; thereby unavoidably impairing these regulatory employees independence of judgment in the performance of their official duties in violation of Conn. Gen. Stat. §1-84(b).
In summary, major alterations in both policy and practice at the Department of Consumer Protection and the Real Estate Commission dictate a reversal of the holdings in D.R. No. 84-A and A.O. No. 86-6. Additionally, State Ethics Commission staff inquiry has identified a substantial, additional conflict of interest (regarding the provision of continuing education) and has also identified the clear potential for future significant conflicts. Finally, even absent these numerous specific conflicts of interests, State Ethics Commission precedent and State Regulations bar the outside employment at issue based on the unavoidable impairment of independence of judgment and the inevitable, however unintended, misuse of office engendered when senior state regulatory officials offer their services for compensation to those they regulate.
State Ethics Commission Declaratory Ruling No. 84-A and Ethics Commission Advisory Opinion No. 86-6 are hereby overruled; and the Director and Assistant Director of the Real Estate Division, Department of Consumer Protection, are to cease and desist the outside employment sanctioned by those prior Rulings as soon as their current contractual obligations are fulfilled.
By order of the Commission,
Christopher T. Donohue
Chairperson