State Law and Ethics
(from Maine Townsman, July 1990)
by Geoff Herman, MMA Paralegal

This Maine Municipal Association publication is presented for "Classroom Use Only."  Its intended use is to stimulate and aid in discussion and role playing within a classroom setting.


Maine law does not reach deeply into the area of municipal governmental ethics. Appropriately, the setting of ethical standards for municipal officials is left to the municipal legislative body, except for some minimum standards which are found in the statutes or which have been developed over the years by related court decisions.

There are essentially four ethics-related situations that can occur at the level of municipal government which are covered to some degree by various statutes or common law: conflict of interest, incompatibility of office, prohibited appointments or employment, and various provisions regarding bias.

Some of these legal standards, such as the incompatibility of office or quasi-judicial bias provisions, are designed primarily to ensure fairness in government and a healthy system of checks and balances within the govern mental machine. The legal provisions governing conflict of interest or prohibited appointments/employment, on the other hand, are designed more deliberately to frustrate a municipal official from furthering his or her own self interest at the expense of the broader municipal interest.

Conflict of Interest

In a sense, all issues regarding governmental ethics boil down to the situation of the municipal official being motivated by conflicting or competing interests. Municipal officials are sworn into public office to serve the interests of the public as a whole, and in the municipal official there is vested a public trust.

A betrayal of that trust occurs when an official is motivated to action as a result of a self interest rather than a common interest. The legal concept of "conflict of interest" as governed by statute, however, is limited to interests of a financial nature only.

30-A MRSA 2605 is the statute which attempts to define the official who will be presumed by the law to be "self interested" when performing a particular governmental action, such as awarding a contract or voting in an official capacity on any question.

The standard found in 2605 is essentially a 10% financial interest in the business or economic entity affected by a vote of a municipal board. The statute states that the vote of any municipal board can be vacated or voided by a court (which would occur upon complaint) when any official on that board votes on a question in which that official has a 'direct or indirect pecuniary (financial) interest A "direct or indirect pecuniary interest" in a vote is deemed to occur when the voting official has at least a 10% interest in the business to which the vote relates as an officer director, partner, associate, employee or stockholder.

It should be noted that it is not merely the "interested" official's vote which is voided or discounted, but the entire vote of the Board. In order to protect the Board's vote, the statute requires the "interested" Board member to (1) make a full disclosure of his or her interest before any action is taken, (2) abstain from voting on the matter, and (3) otherwise refrain from attempting to influence the Board's decision.

The 10% standard is not a terribly strict conflict of interest standard. If the 'interested" official has only a 5% interest in the company affected by his or her vote, but that 5% interest represented many thousands of dollars, many people would perceive there to exist a conflict of interest. There are at least two other guidelines in the law concerning conflict of interest which have the effect of more strictly controlling the actions of interested municipal officials.

In 1989 the Legislature added a subsection to 2605 which reads "every municipal and county official shall attempt to ovoid the appearance of a conflict of interest by disclosure or by abstention." From this subsection it is reasonable to conclude that even when a municipal official does not meet the 10% interest test, but that official still possesses in the mind of the public a financial self interest in the outcome of a vote sufficient to impinge on his or her duty to serve the public's interest, then that official should either provide full disclosure or abstain, or both.

From a practical perspective, this subsection of the conflict of interest law, if it stood on its own, is more advisory than it is enforceable, both because the substantiation of an "apparent conflict could be extremely difficult and because any violation of this subsection carries with it no clear judicial remedy.

There exists, however, rather straightforward case law on this issue which further defines activity which may constitute a conflict of interest. That standard is "whether the town official by reason of his interest, is placed in a situation of temptation to serve his own personal pecuniary interest to the prejudice of the interests of those for whom the law authorized and required him to act." Lesieur v. Inhabitants of Rumford, 113 Me. 317 (1915).

When the subsection in 2605 which requires officials to attempt to avoid the appearance of a conflict is taken together with the conflict of interest standard defined in Lesieur there exists a sufficient body of law to suggest that even if the 10% financial threshold is not reached, the actions of municipal officers which are demonstrably guided by personal self interest could be held by a court to be without force.

Incompatibility of Office

In many cases one person may simultaneously hold more than one position or office in municipal government. Indeed, town and city managers frequently hold a dizzying number of offices in the performance of their duties.

There are certain positions in municipal government, however, which may not be held simultaneously by certain other officials. Although the concept of "incompatible offices" is often described as a 'conflict of interest", there is a significant difference between these two situations, particularly when viewed in the light of governmental ethics. As has been discussed, a statutory conflict of interest concerns a municipal official's divided loyalty between his or her financial self interest and the public interest. The common law doctrine of incompatibility of office is also intended to assure uncompromised loyalty, but this time the tension is found to exist between the legitimate duties of two separate offices which no single individual - no matter how capable, well-intentioned or altruistically motivated could be expected to perform with undivided loyalty.

The common law (court cases) exerts more influence on determinations of incompatibility than do the statutes, which expressly define the following as "incompatible":

- A town manager may not simultaneously serve as either the town moderator, selectman, assessor or school committee member (30-A MRSA 2632);

-A tax collector or treasurer may not simultaneously serve as either selectman or assessor (30-A MRSA 2526);

- A full-time time deputy sheriff may not simultaneously serve as selectman, city councilor or budget committee member (30-A MRSA 355);

- A county commissioner may not simultaneously serve as either the mayor of a city, selectman of a town, or assessor (30-A MRSA 52);

-A municipal officer or his or her spouse may not simultaneously serve as a board of appeals member or associate (30-A MRSA 2691);

-Finally, if the municipal planning board is still constituted under the "old planning board law" found in then-existing 30 MRSA 4952, a municipal officer may not simultaneously serve as a planning board member. This particular incompatibility does not pertain to planning boards created or recreated after September 23, 1971.

As can be seen, incompatibility can be generally held to exist where two municipal offices, which are separated vertically with regard to authority, may have occasion to perform the same function or authorize its performance. The incompatible offices expressly defined in the statutes serve also to establish some criteria to determine other incompatibilities, which are not expressly defined in the law.

For example, the statutes do not allow a treasurer to simultaneously serve as a selectman because the treasurer prepares the municipal disbursements while the selectmen actually authorize the disbursements to be made.

In order to achieve a similarly healthy system of checks and balances, the offices of selectman and school committee member would be incompatible, even though they are not expressly incompatible by statute. A town manager is not permitted by statute to serve simultaneously as a selectman because, among other reasons, the decisions made by the manager are regularly reviewed by the selectmen, who are in many cases empowered to affirm, modify or reverse those decisions. Similarly, even in the absence of a specific incompatibility statute, a person could not simultaneously be the town's Code Enforcement Officer (CEO) and a member of the planning board where the planning board is structurally empowered to review and modify decisions of the CEO. Finally, the selectmen hire/fire and directly supervise the manager, and so the statutes define the two offices as incompatible. Similarly, if a town does not operate under a town manager form of government, the selectmen are authorized to directly supervise the road commissioner, and those two positions would therefore be incompatible by the common law doctrine.

It is often impossible to generalize a determination of office incompatibility. The duties and authorities of a particular office, as controlled by local ordinance or charter, frequently differ from one town to the next. Therefore, it is important that before deciding on incompatibility there is a determination of the duties and authorities actually vested in the two separate offices to be filled by one person. If it is found that the duties of one office holder serve the purpose of providing a check with regard to the duties of the other, or that the one office could review, modify or supervise the work of the other, then the two offices should not be simultaneously held by the same person.

Prohibited Appointments/Employment

From the point of view of governmental ethics, the statute governing prohibited appointments or employment represents a return to the restriction on financial self-interest.

30-A MRSA 2606 prohibits a municipal officer (a selectman or councilor) from being appointed to or employed in any "civil office of profit" in the municipal government when that position was either created or its level of compensation was increased during his or her term by action of its board of selectmen or town council. This prohibition extends throughout that officer's full term plus one calendar year thereafter. There is a similar prohibition for school committee members found in 20-A MRSA 1002(3).

As is the case with much statutory law, 2606 is either clumsy or broad enough not to care how the individual selectman might have voted on the salary increase, or whether the councilor is waling to accept the position at the original salary level; if the position was created or the position's salary increased by action of the board of municipal officers, then none of those officers are eligible for that position for their term plus one year. The dynamics of this prohibition are straightforward; the law suggests that people should not be tempted to create for themselves a position of employment by means of their elected office.

Bias

The issue of bias emerges in the area of the municipality's quasi-judicial functions. The issuance of permits or governmental approvals of any kind (such as land use, business, or concealed weapons permits) the awarding of bids or contracts, employment removal proceedings, or the appeal processes for those permitting, award, or removal procedures or other fair hearing processes (such as welfare fair hearings) all would fall under the category of quasi-judicial functions.

It is mandatory that quasi-judicial functions are performed by municipal officials who are capable of being completely objective, or "disinterested," with regard to the outcome of the proceeding. This requirement for disinterestedness flows primarily from the due process clauses of both the Maine and U.S. constitutions inasmuch as the decision making process due to an individual would not in fact be available to them if it were not an inherently fair process.

Obviously, if an official responsible for making a quasi-judicial decision had a financial self-interest in the decision, he or she would have a conflict-of-interest type bias and would therefore be unable to sit as a quasi-judicial officer.

Setting aside the financial type of bias, there are essentially two other types of bias. One of these types might be called familial bias, which is covered to some degree in Maine law, where one might expect there to exist a temptation of a family member to find in favor of the related applicant or claimant. The other type of bias might be called prejudicial bias, which can only really be recognized by the quasi-judicial officer him or herself, and where more often than not there is a temptation to rule against the applicant or claimant.

1 MRSA 71(6) is a disqualification statute which reads "When a person is required to be disinterested or indifferent in a matter in which others are interested, a relationship by consanguinity or affinity within the 6th degree according to civil law or within the degree of 2nd cousins inclusive, except by written consent of the parties, will disqualify."

What this means is that when an official is sitting as a quasi-judicial officer to decide on a matter involving a relative by blood (consanguinity) or marriage (affinity) who is a second cousin or more closely related, the related official should either step down as a quasi-judicial officer or seek written permission from all parties to the proceeding to remain.

In many of Maine's smaller communities, particularly, the invocation of this disqualification statute could significantly alter the voting membership of the planning board, for example, for land use proposals submitted by cousins, nephews or aunts or uncles of one or more planning board member.

What has been referred to as prejudicial bias is not subject to quantification on a consanguinity chart, although, like familial bias, it is also a bias of degree. It is entirely human to harbor some degree of positive or negative feelings toward other people, and a mere like or dislike of an applicant or claimant does not necessitate that a municipal official step down as a quasi-judicial officer.

On the other hand, a municipal official must abstain when there is a significant degree of bias for or against the applicant or claimant such that the official cannot make an impartial decision, thereby depriving the applicant of his or her due process right to a fair and objective determination. Because the presence of that degree of prejudicial bias can only truly be known to exist by the quasi-judicial officer, the decision to step down as a quasi-judicial officer for reasons of bias is a uniquely unguided, internal, and ethical decision most illuminative of a municipal official's sense of the public trust.

And from a purely practical perspective, even where extraordinary prejudice does not exist, but prior statements made by the municipal official might suggest the presence of bias, the municipal official might step down to avoid the appearance of making a biased quasi-judicial decision in order to remove one argument that could easily be used to subsequently challenge the municipal decision in a court appeal.

Summary

The municipality is, of course, free to strengthen by local code any of these guidelines found in the statutes and in common law governing conflict of interest, incompatible offices, prohibited appointments/employment, bias, or, for that matter, any other area of ethical concern.

In fact, in 1989 the Legislature added a section to 30-A MRSA 2605 which authorized the municipal officers to adopt, at their discretion, an ethics policy governing the conduct of both elected and appointed officials. Even before this law was enacted, some towns had by charter already made some provisions relating to ethics. Despite the fact that the need for enabling legislation in this area is doubtful, it is probably more efficient to have either an ethics policy adopted by the municipal officers or a separate ethics ordinance than it is to have the municipal ethics policy entirely embedded in the charter, which requires a fairly major process to amend or revise.