Speers v. New York State Ethics Com'n

• Decision Date: 04 August 1993
• Citation: 602 N.Y.S.2d 986,159 Misc.2d 132
• Parties: In the Matter of the Application of Craig E. SPEERS, Petitioner, v. NEW YORK STATE ETHICS COMMISSION, and Edward V. Regan, as Comptroller of the State of New York, Respondents. For a Judgment pursuant to CPLR Article 78.
• Court: New York Supreme Court

Page 986

602 N.Y.S.2d 986

159 Misc.2d 132

In the Matter of the Application of Craig E. SPEERS, Petitioner, v. NEW YORK STATE ETHICS COMMISSION, and Edward V. Regan, as

Comptroller of the State of New York, Respondents.

For a Judgment pursuant to CPLR Article 78.

Supreme Court, Special Term,

Albany County.

Aug. 4, 1993.

Richard E. Casagrande (William P. Seamon, of counsel), Albany, for petitioner.

Robert Abrams, Atty. Gen. (John S. Sherman, of counsel), Albany, for respondents.

THOMAS W. KEEGAN, Justice.

This is a proceeding pursuant to CPLR Article 78, challenging both the interpretation of Public Officers Law § 74, presented in New York State Ethics Commission Advisory Opinion No. 92-19 and the subsequent determination by the Office of the State Comptroller, requiring petitioner to resign from the Buffalo Water Board due to an appearance of a conflict of interest. Petitioner contends that the decisions of the New York State Ethics Commission (hereinafter SEC) and the Office of the State Comptroller (hereinafter OSC) were arbitrary, capricious and irrational since his appointment to the Buffalo Water Board did not create a conflict or appearance of a conflict of interest with his duties as a State employee.

Petitioner, Craig E. Speers, is currently employed by the State of New York as a Senior Examiner of Municipal Affairs, salary grade 18, in the Buffalo Office of the State Comptroller. Petitioner's position requires him to perform on-site field examinations of accounts and fiscal affairs (audits) of small units of local government (towns, villages) and to assist with audits of larger units of local government (cities, counties). The position is not classified as policy-making. Where feasible, the comptroller's office does not assign an examiner to audit the activities of the local governments where the examiner resides.

In early 1992, the petitioner was appointed by the Mayor to the Buffalo Water Board, and on May 28, 1992, the Buffalo Common Council confirmed petitioner's appointment. See, Public Authorities Law § 1048-f. The Water Board consists of seven members and is responsible for operating the City of Buffalo's water system. See, Public Authorities Law § 1048-g. As a public employee, Board members are generally uncompensated except for reimbursements of actual expenses.

The legislature established the Buffalo Municipal Water Finance Authority (hereinafter Authority), which is responsible for financing the City of Buffalo's water projects. See, Public Authorities Law §§ 1048-c, d. The Authority is administered by a seven member board of directors and no member of the Water Board may serve as a director of the Authority.

The Water Board may enter into agreements with the Authority and the City of Buffalo "... to provide a means whereby the authority shall finance the cost of constructing water projects; ... to acquire, purchase, lease as lessee, hold and use any property ... subject to any limitations in any agreement entered with the city; [and] ... to acquire from the city title to the water system of such city ..." Public Authorities Law § 1048-g; see also, Public Authorities Law §§ 1048-h, i.

The question of conflict of interest in this case arises since the Authority and the City of Buffalo are subject to financial audits by OSC. While OSC will not audit the Water Board directly, an Examiner of Municipal Affairs, in the context of auditing the Authority or the City, may review agreements and projects approved by the Water Board. With this concern, OSC requested an advisory opinion from SEC regarding whether petitioner's service on the Water Board violated Public Officers Law § 74. SEC Advisory Opinion 92-19 did not find a direct conflict of interest but found that petitioner's service in both capacities could give the appearance of a conflict of interest prohibited under Public Officers Law § 74.

Based on this opinion, OSC advised petitioner to resign from the Buffalo Water Board due to the potential appearance of a conflict of interest. Petitioner was later instructed by OSC to provide written notice of his resignation from the Water Board by December 31, 1992, or face disciplinary action seeking petitioner's termination from state service. To avoid the appearance of a conflict of interest, petitioner offered to recuse himself if the need arose and to refrain from public comment concerning any matter related to an audit. OSC rejected this proposal as insufficient to remedy the potential appearance of a conflict of interest. Under protest, petitioner resigned from the Water Board effective December 31, 1992.

Public Officers Law § 74, "called a code of ethics for State officers and employees, provides guidelines designed to eliminate substantial conflicts of interest between state duties and private interests." Rapp v. Carey, 44 N.Y.2d 157, 163, 404 N.Y.S.2d 565, 375 N.E.2d 745. Public Officers Law § 74(2) prohibits any state agency employee from "having any interest ... or engaging in any business or transaction or professional activity or incurring any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest." (emphasis added) Public Officers Law § 74(3) sets forward more specific standards of conduct which include both actual and apparent conflicts of interest. The SEC found Sections 74(3)(d), (f) and (h) particularly relevant.

d. No officer or employee of a state agency, member of the legislature or legislative employee should use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others.

. . . . .

f. An officer or employee of a state agency ... should not by his conduct give reasonable basis for the impression that any person can improperly influence him or unduly enjoy his favor in the performance of his official duties, or that he is affected by the kinship, rank, position or influence of any party or person.

. . . . .

h. An officer or employee of a state agency ... should endeavor to pursue a course of conduct which will not raise suspicion among the public that he is likely to be engaged in acts that are in violation of his trust.

The State Ethics Commission raised concerns about the possible conflict of interest which could be created if the petitioner or other members of OSC audited the City or the Authority. If OSC raised objections to terms of a contract made with the Water Board, "[t]he...