Advisory Opinion No. 1999-24

Application Of The Post-Employment Rules To The Loaned Executive Program

The Loaned Executive Program was started by Governor Lowell Weicker and has continued in Governor John Rowland’s administration. The Program calls upon Connecticut’s corporations, unions, non-profit organizations and other institutions to donate the time and talent of their executives to the State. In response to this request, a law firm has allowed one of its attorneys to take a paid leave of absence to work in one of the State’s quasi-public agencies. The attorney completed his state service two months ago. The agency would now like to hire this attorney as a consultant to work on a number of projects. Principal Attorney Brenda Bergeron has asked whether and how the post-state employment provisions of the Code of Ethics for Public Officials apply to this individual.

At the outset of this program, the Commission approved the Executive Loan Program as a "Gift to the state" recognizing its value as a gift of services to the State which facilitate the execution of state action or functions. State Ethics Commission Advisory Opinion No. 91-1, 52 CLJ 35, p.1D (February 26, 1991), Conn. Gen. State. § 1-91(g)(5); Regulations of Conn. State Agencies § 1-92-51. In Advisory Opinion No. 91-1, the Commission noted that the loaned executive is neither a public official or state employee, under the Code. However, in noting the unique financial ties between the executive/officeholder and the private employer/donor, the State Ethics Commission recommended that participants in the Program treat their private employer as an associated business for Code purposes and abide by all the provisions of the Code, including the post-employment restrictions. Advisory Opinion No. 91-1, supra. Consequently, the participants in this program have agreed to treat themselves as state employees.

Under the post-state employment rules, no former quasi-public agency official or employee shall, for one year after leaving state service, represent anyone for compensation before the agency in which he was employed at the time of leaving state service, concerning any matter in which the state has a substantial interest. Conn. Gen. Stat. § 1-84b(b). The Commission, however, has established a policy to allow former state servants to enter into consulting contracts with their former agencies within the one year period. Specifically, such conduct is permitted, as long as the re-employment is at no greater pay level than the individual was receiving at the time of separation from state service plus necessary expenses. State Ethics Commission Advisory Opinion No. 90-30, 52 CLJ 15, p. 1C, (October 9, 1990). By prohibiting the negotiation of the compensation rate, this policy prevents improper use of influence and contacts for financial advantage. Id.

In this matter, the compensation of the loaned executive was not established by the State. Rather, his services, and thereby the value of his compensation, were donated by the law firm. However, safeguards still need to be in place to insure Connecticut’s citizens of the integrity of the Program and not allow any opportunity for misuse of office to affect the financial interests of the private employer. Therefore, the request or need for additional consulting services should be established by someone who held a position which was not subordinate to the former loaned executive. Furthermore, in order to avoid any financial advantage to the employer/donor, the fee to be charged once the former loaned executive becomes a consultant should be fiscally reasonable and not exceed the value of the services previously donated by the firm for the first year following his state service. Under these conditions, the loaned executive may return as a consultant to work for the quasi-public agency.

By order of the Commission,

Stanley Burdick,
Chairperson