Montgomery County v. Walsh
| Decision Date | 14 April 1975 |
| Docket Number | No. 201,201 |
| Citation | 336 A.2d 97,274 Md. 502 |
| Parties | MONTGOMERY COUNTY, Maryland, et al. v. John B. WALSH, Jr., et al. |
| Court | Maryland Court of Appeals |
Alfred L. Scanlan, Washington, D.C., (James R. Bieke, Shea & Gardner, Washington, D.C., Richard S. McKernon, County Atty., and Richard E. Frederick, Asst. County Atty., Rockville, and Ralph J. Moore, Jr., Bethesda, on the brief), for appellants.
George A. Nilson, Asst. Atty. Gen. (Francis B. Burch, Atty. Gen., and Henry R Lord, Deputy Atty. Gen., Baltimore, on the amicus curiae brief) for State of Md.
Amicus curiae brief filed by American Civil Liberties Union. Gary Howard Simpson, Bethesda, on the brief.
Amicus curiae brief filed by Bd. of Ed. of Montgomery County. Robert S. Bourbon and John T. Horton, Rockville, on the brief.
Amicus curiae brief filed by Bd. of Trustees of Montgomery Community College. Robert S. Bourbon, Rockville, on the brief.
Stanley B. Frosh, Rockville (A. Howard Metro, Rockville, on the brief), for appellees.
Argued before MURPHY, C. J., SINGLEY, SMITH, DIGGES, LEVINE and O'DONNELL, JJ., and RICHARD P. GILBERT, Special Judge.
The Montgomery County Financial Disclosure Ordinance (the County Ordinance), codified as Chapter 20A of the Montgomery County Code (1974), requiring designated elected and appointed officials and employees of the County to disclose certain of their financial interests, was declared 'unconstitutional, null and void in its entirety' by the Circuit Court for Montgomery County (Moorman, J.) on October 10, 1974. The court found that the Ordinance was in conflict with a public general law of the State and as such was void; that it violated the constitutional right of privacy of County employees, their spouses and children; that it violated the constitutional right of County employees to hold public employment; that the Ordinance was so vague and indefinite that it violated the due process provisions of the federal and state constitutions; that it denied certain employees the equal protection of the law; and that it violated other constitutional provisions and was in conflict with the Montgomery County Charter and the Code of Professional Responsibility. We granted certiorari prior to decision by the Court of Special Appeals on the appeal taken to that court by the County so that we could promptly consider the significant public issues presented in the case. See Maryland Code (1974) Courts and Judicial Proceedings Article, § 12-201.
The seeds of this controversy are found in the 1973 enactment of a public general law by the General Assembly of Maryland requiring certain elected and appointed officials within the State government, and candidates for such elective offices, to file statements with the Secretary of State publicly disclosing designated financial interests held by them. 1 That Act (Chap. 3, 1st Sp.Sess. of 1973), now codified as Code (1971 Repl.Vol., 1974 Cum.Supp.) art. 33, §§ 29-1 through 29-11 (the State Act), contains a legislative declaration in § 29-1 'that our system of representative government is dependent in part upon the people maintaining the highest trust in their public officers . . . that the people have a right to be assured that the financial interests of holders of and candidates for public office present no conflict with the public trust . . . (and that) the purpose of this act (is) to promote the continued trust and confidence of the people of the State of Maryland in the integrity of their public officers.'
The State Act requires in § 29-5 that the declarant annually disclose his interests in real property; interests in all corporations; interests in other entities doing business with the State; the receipt of certain gifts; a schedule of all offices, directorships and salaried employment with corporations or other entities doing business with the State; a schedule of all liabilities (other than retail credit accounts) owing to persons doing business with the State, including liabilities incurred by the declarant's spouse or children if he was involved in the transaction giving rise to the liability; and a list of all members of the declarant's immediate family who were employed by the State in any capacity. The term 'interest' is broadly defined in § 29-2(a) of the State Act to embrace any legal or equitable interest owned or held by the declarant, in whole or in part, jointly or severally, directly or indirectly, at any time during the reporting period; it does not include, however, an interest in a time or demand deposit in a financial institution. Nor does it include an interest in an insurance or endowment policy or a fixed dollar annuity contract. The phrase '(b)usiness with the State' is defined in § 29-2(d) to mean Section 29-6 provides that with respect to interests in real property and corporations and in other entities doing business with the State, any interest held by the spouse or children of the declarant shall be considered his interest if directly or indirectly controlled by him. Section 29-6(b) provides, in effect, that the declarant must disclose an interest held by a business entity only if he holds a 30% or greater interest in it. Section 29-10 provides that each county of the State, the City of Baltimore and each incorporated municipality
'(is) hereby directed to enanct public financial disclosure requirements with respect to any local officials of their respective jurisdictions, including candidates for election to such offices, the standards and requirements of which must be substantially those required by this subtitle for State officials and candidates. . . .'
Section 29-11 authorizes the Governor, by Executive Order, to require persons holding 'State positions compensated in whole or in part by public funds and noncompensated gubernatorial appointees' to disclose annually, as public records, 'such relevant information concerning their financial affairs as he may deem necessary to promote the continued trust and confidence of the people in the executive branch of the State government.'
By Executive Order dated April 1, 1974, the Governor promulgated an extensive schedule of nonelective 'offices and positions' in the State government and required that persons occupying such offices and positions make the same public financial disclosure as that mandated by the provisions of the State Act.
The Montgomery County Financial Disclosure Ordinance was enacted by the County Council on June 18, 1974 and became effective on June 28, 1974. It recited in § 21A-1 that it was the purpose of the Ordinance 'to implement at the local level the provisions of Chapter 3 of the 1973 Acts of the General Assembly and to promote the continued trust and confidence of the citizens of Montgomery County in the integrity of their public officers.' Section 20A-3 of the Ordinance requires persons holding, and candidates for the elective offices of County Executive, County Surveyor and members of the County Council and County Board of Education, and persons holding or appointed to other designated 'offices and positions' in the County, to annually make a public disclosure of their financial interests, and those of their spouses and dependent children, in accordance with the dictates of § 20A-5. That section requires that the declarant disclose, for the reporting period, interests in real property; interests in any business entity or profession; 'all other assets of every nature whatsoever in excess of $1000 each not otherwise reported'; all income received by the declarant and its source, together with a statement of the gross income of the declarant's spouse and dependent children, 'including the source of any portion of such income which may reasonably be expected to have a direct or indirect effect on the activities with the County of the . . . (declarant)'; a schedule of certain gifts received; a schedule of all offices and directorships held in any corporation or other business entity and the amount of compensation received therefrom; a schedule of all liabilities (other than retail accounts) in excess of $1,000 owing to any person doing business with the County or who is regulated, inspected or licensed by the County, including such liabilities incurred by the declarant's spouse or children if the declarant was involved in the transaction giving rise to the liability; and a list of all members of the declarant's immediate family employed in any capacity by the County. Section 20A-6 provides that with respect to interests in real property and in any business entity or profession, any interest held by the declarant's spouse, father, mother, brother, sister, or child shall be considered his interest if directly or indirectly controlled by him at any time during the reporting period. Section 29A-6(b) provides, in effect, that the declarant must disclose any interest in a business entity in which he held a 30% or greater equity interest during the reporting period. 'Interest' is defined in § 20A-2(a) of the Ordinance in terms similar to those contained in the State Act, except that it includes an interest of over $1,000 in a time or demand deposit in a financial institution; it also includes an interest in an insurance or endowment policy or fixed dollar annuity contract.
In addition to persons required by § 20A-3 to disclose their financial interests, § 20A-3(c) makes provision for the filing of financial disclosure statements by '(a)ny other official, employee or appointee' of the County where it is determined by designated authority that it is 'desirable to promote the trust and confidence of the citizens of the County . . ..' Financial disclosure statements filed under this subsection need not be made public. §...
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