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(a) The Commission may on its own initiative investigate any matter that the Commission believes may constitute a violation of this Chapter or Sections 2-109, 11B-51 or 11B-52(a) if the Commission finds in writing that an investigation is necessary to resolve the matter.
(b) Any investigation must be conducted by the staff of the Commission, the County Attorney, or a special counsel or other person temporarily retained by the Commission to conduct the investigation. The Commission must not actively participate in any investigations.
(c) An investigator acting under the authority of the Commission may require any person to:
(1) respond under oath to written questions within 30 days;
(2) produce verified copies of records within 30 days; and
(3) on 15 days notice, attend a deposition to answer under oath questions asked by the investigator.
The investigator must disclose to the person from whom information is sought the general nature and purpose of the inquiry. A person must not refuse to answer written questions, produce records, attend a deposition, or answer questions at a deposition unless the refusal is permitted by law. The investigator may seek from a court of competent jurisdiction an order compelling compliance with this subsection.
(d) The identity of any person who supplies information to an investigator and the report of the investigator must be kept confidential, except as otherwise expressly provided in this Chapter.
(e) The investigator must give the Commission a confidential written report of the investigator's factual findings, the sources of information, and the identity of each person providing information. (1990 L.M.C., ch. 21, § 1; 1997 L.M.C., ch. 37, §1.)
Editor’s note—See County Attorney Opinion dated 8/23/02 describing the elements required for a complaint to the Ethics Commission to initiate an investigation.
(a) (1) Any individual may file a confidential written complaint with the Commission. The complaint must allege facts under oath that would support a reasonable person in concluding that a violation of this Chapter or Sections 2-109, 11B-51 or 11B-52(a) occurred.
(2) (A) The complaint must be filed within the later of 2 years after:
(i) the alleged violation; or
(ii) the complainant learned or should have learned of facts that would lead a reasonable person to conclude that a violation occurred.
(B) A complaint may not be filed more than 6 years after the alleged violation occurred.
(3) The Commission may refer the complaint to Commission staff or the County Attorney for investigation under Section 19A-9 or may retain a special counsel or other person to investigate.
(4) If the complaint does not allege facts sufficient to state a violation of this Chapter or the Commission finds that dismissal is consistent with the purpose of this Chapter, the Commission may dismiss the complaint. The Commission must inform the complainant of its decision to dismiss the complaint. The Commission may inform the subject of the complaint that the complaint was filed and dismissed but must not disclose the identity of the complainant.
(b) The Commission may file, on its own motion, a complaint based on a report received from an investigator under Section 19A-9, if the complaint is filed within the time limits established in subsection (a).
(c) If, based on a complaint and a report, if any, submitted under Section 19A-9, the Commission finds reasonable cause to believe that a violation of this Chapter or Sections 2-109, 11B-51 or 11B-52(a) has occurred, the Commission must hold an adjudicatory hearing. However, the Commission may dispose of a matter by consent order instead of holding an adjudicatory hearing.
(d) If the Commission holds an adjudicatory hearing, the Commission must:
(1) give the subject of the complaint a copy of the complaint, including the identity of the complainant; and
(2) give the subject of the complaint copies of those portions of approved minutes of the Commission relating to the complaint, and any report issued under Section 19A-9.
(e) The Commission may:
(1) issue summonses and subpoenas to compel attendance at a hearing;
(2) require any person to produce records at a hearing; and
(3) administer oaths or affirmations to witnesses.
(f) The parties to the hearing are the subject of the complaint and the County. The prosecuting attorney may be the investigator who issued a report under Section 19A-9, an attorney in the County Attorney’s office, or a special counsel. Each party may be represented by counsel. Each party may present evidence and cross-examine witnesses. The subject of the complaint may require the Commission to issue subpoenas for witnesses and documents to the same extent a party in litigation in state court would be entitled to the summons or subpoena.
(g) The rules of evidence used in judicial proceedings do not apply. The Commission may admit and give appropriate weight to evidence, including hearsay, that possesses probative value commonly accepted by reasonable and prudent persons.
(h) A hearing is closed to the public. However, the Commission may in its sole discretion open the hearing to the public if the subject of the complaint requests that the hearing be open. The Commission may issue additional rules of procedure governing an adjudicatory hearing.
(i) The Commission must make written findings of fact and conclusions of law based on the record made at the hearing. If after a hearing the Commission finds that no violation of this Chapter has occurred, the Commission must dismiss the complaint.
(j) If the Commission dismisses a complaint without holding a hearing or after holding a closed hearing, the Commission must not release to the public the identity of the subject of the complaint, the complainant, or any witness.
(k) If the Commission finds that a violation of this Chapter has occurred, the Commission must publicly disclose its findings and conclusions, including the identity of the subject of the complaint, the complainant, and the witnesses.
(l) The Commission must promptly notify the complainant and the subject of the complaint of its findings and conclusions and the disposition of the complaint.
(1) seek injunctive relief under Section 19A-27;
(2) proceed under Section 19A-28;
(3) seek recovery under Section 19A-29;
(4) seek the imposition of disciplinary action by appropriate public employees under Section 19A-30;
(5) order the subject of the complaint to stop any violation;
(6) issue a public or private reprimand, and
(7) impose a fine which does not exceed $1000.
(n) The Commission may, at any time, refer to an appropriate prosecuting attorney any information that indicates that a criminal offense may have occurred. The Commission may, at any time, share confidential information about a pending matter with an employee’s appointing official and the County Attorney
(o) A public employee must not retaliate against an individual for:
(1) communicating with the Commission; or
(1990 L.M.C., ch. 21, § 1; 1997 L.M.C., ch. 37, § 1; 2010 L.M.C., ch. 5, § 1; 2021 L.M.C., ch. 4, § 1; 2022 L.M.C., ch. 33, § 1.)
Editor’s note—See County Attorney Opinion dated 12/17/08 discussing the authority and role of the Merit System Protection Board and the role of the County Attorney as legal adviser. See County Attorney Opinion dated 8/23/02 describing the elements required for a complaint to the Ethics Commission to initiate an investigation.
2010 L.M.C., ch. 5, § 2, states in part. This Act takes effect on April 1, 2010. The amendment to Section 19A-10 made in Section 1 of this Act applies to any complaint filed after this Act takes effect.
(a) Prohibitions. Unless permitted by a waiver, a public employee must not participate in:
(1) any matter that affects, in a manner distinct from its effect on the public generally, any:
(A) property in which the public employee holds an economic interest;
(B) business in which the public employee has an economic interest; or
(C) property or business in which a relative has an economic interest, if the public employee knows about the relative's interest;
(2) any matter if the public employee knows or reasonably should know that any party to the matter is:
(A) any business in which the public employee has an economic interest or is an officer, director, trustee, partner, or employee;
(B) any business in which a relative has an economic interest, if the public employee knows about the interest;
(C) any business with which the public employee has an active application, is negotiating, or has any arrangement for prospective employment;
(D) any business that is considering an application from, negotiating with, or has an arrangement with a relative about prospective employment, if the public employee knows about the application, negotiations, or the arrangement;
(E) any business or individual that is a party to an existing contract with the public employee or a relative, if the contract could reasonably result in a conflict between private interests and official duties;
(F) any business that is engaged in a transaction with a County agency if:
(i) another business owns a direct interest in the business;
(ii) the public employee or a relative has a direct interest in the other business; and
(iii) the public employee reasonably should know of both direct interests;
(G) any business that is subject to regulation by the agency with which the public employee is affiliated if:
(i) another business owns a direct interest in the business;
(ii) the public employee or a relative has a direct interest in the other business; and
(iii) the public employee reasonably should know of both direct interests;
(H) any creditor or debtor of the public employee or a relative if the creditor or debtor can directly and substantially affect an economic interest of the public employee or relative;
(I) any business or individual that in the previous 12 months employed the employee or an immediate family member of the employee; or
(J) any business in which the employee or an immediate family member of the employee was an officer, director, trustee, or partner in the previous 12 months; or
(3) any case, contract, or other specific matter affecting a party for whom, in the prior year, the public employee was required to register to engage in lobbying activity under this Chapter.
(b) Exceptions.
(1) If a disqualification under subsection (a) leaves less than a quorum capable of acting, or if the disqualified public employee is required by law to act or is the only person authorized to act, the disqualified public employee may participate or act if the public employee discloses the nature and circumstances of the conflict.
(2) Subsection (a) does not apply to an administrative or ministerial duty that does not affect an agency's decision on a matter.
(3) Paragraph (a)(1) does not apply to a public employee who is appointed to a regulatory or licensing body under a statutory provision that persons subject to the jurisdiction of the body may be represented in appointments to the body.
(4) Subparagraph (a)(2)(A) does not apply to a public employee, if the County Executive or the County Council appoints the public employee to serve as an officer, director, or trustee of a business to represent the public interest.
(5) Subparagraph (a)(2)(A) does not apply to a public employee who is an officer, director, or trustee of an organization, if the public employee discloses the relationship, is not compensated by the organization, and has no:
(A) managerial responsibility or fiduciary duty to the organization;
(B) authority to approve the organization's budget;
(C) authority to select any officer or employee of the organization; or
(D) authority to vote on matters as a member of the governing body of the organization.
(6) If expressly authorized by regulation, subsection (a) does not apply to:
(A) a police officer’s exercise of the officer’s police authority during approved outside employment; or
(B) a police officer or fire/rescue employee who is exercising the employee’s official duties in an emergency affecting a business or property in which the employee or a relative of the employee has an economic interest.
(c) Thresholds. In this section, interest or economic interest means:
(1) any source of income, direct or indirect, if the employee:
(A) received more than $1,000 from that source of income in any of the last 3 years;
(B) is currently receiving more than $1,000 per year from that source of income: or
(C) is entitled to receive at least $1,000 in any year in the future from that source of income;
(2) a business in which the public employee or a relative owns more than 3 percent;
(3) securities that represent ownership or can be converted into ownership of more than 3 percent of a business; or
(4) any other economic interest worth more than $1,000.
(d) Procurement disclosure. A public employee who participates in a procurement process with an individual or organization seeking to do business with the County that compensated the public employee for services performed more than 12 months before the participation began must disclose the prior relationship to the Procurement Director. The Procurement Director must include a statement of this disclosure in the procurement file. (1990 L.M.C., ch. 21, § 1; 1994 L.M.C., ch. 25, § 1 2015 L.M.C., ch. 38, § 1; 2018 L.M.C., ch. 7, §1; 2020 L.M.C., ch. 40, § 1; 2021 L.M.C., ch. 4, § 1.)
Editor’s note—See Montgomery County Ethics Commission Waiver 21-05-007, dated 5/24/21, which states:
On behalf of the Executive and Legislative branches of the Montgomery County Government, the County Attorney requested that the Ethics Commission issue a class waiver under § 19A-8 (a) of the County Code from the prohibitions of § 19A-11(a)(1) and (2) to allow public employees who hold a limited economic interest in certain large publicly traded entities to participate in matters that involve those entities. For the reasons stated below, the Ethics Commission grants the requested class waiver.
Section 19A-11(a)(1) prohibits a public employee from participating in a matter if the matter affects property or a business in which the employee has an economic interest worth $1,000 or more; § 19A-11(a)(2) prohibits a public employee from participation in a matter if a party to the matter is an entity in which the employee has an economic interest worth $1,000 or more.
On December 1, 2020, the County Council, at the request of the Ethics Commission, introduced Bill 47-20, Ethics, Ethics Commission - Conflicts of Interest – Financial Disclosure –Amendments. Bill 47-20 proposed to carve out an exception to § 19A-11(a)(1) and (2) to permit a public employee, who holds a limited economic interest in certain large publicly traded entities, to participate in a matter that involves those entities. The proposed amendment to § 19A-11(b) reads as follows:
(7) Subparagraph (a)(2) does not apply to an employee’s participation in a matter affecting a business with a principal place of business outside of the County where the employee’s economic interest is limited to ownership of publicly traded securities: (A) issued by a company that is part of the Standard & Poor’s 500 Index; and (B) the market value of the securities does not exceed $25,000.
(8) Subparagraph (a)(1) does not apply to an employee’s economic interest that is limited to the ownership of publicly traded securities issued by a company with a principal place of business outside the County if the market value of the securities does not exceed $50,000.
The Ethics Commission proposed this amendment due to the extreme unlikelihood that an action of the Montgomery County government would impact a large publicly traded entity to such an extent that the entity’s stock price would be materially impacted. At the insistence of the State Ethics Commission, the Council deleted this provision from Bill 47-20. The State Ethics Commission, however, suggested that the County Ethics Commission might accomplish the same outcome by issuing a class waiver.
Pursuant to § 19A-8, the Ethics Commission, after receiving a written request, may grant a class of public employees a waiver from the prohibitions of the Ethics Law if the Commission finds that: (1) the best interests of the County would be served by granting the waiver; (2) the importance to the County of a class of employees performing their official duties outweighs the actual or potential harm of any conflict of interest; and (3) granting the waiver will not give a class of employees an unfair economic advantage over other public employees or members of the public.
The proposed exemptions from the coverage of § 19A-11 in Bill 47-20 (described above) were modeled on exemptions in federal regulations from application of the federal conflict of interest law. See 18 U.S.C. Section 208 and 5 C.F.R. 2640.202. Given the national scope of federal action, the likelihood of federal action impacting public companies is immensely greater than action by a single Maryland county. Nonetheless, certain holdings of federal employees have been exempted from application of the federal conflict of interest law. As the County’s proposal is limited to the very largest public companies as represented in the Standard and Poor’s 500 Index, the proposal has an even narrower scope than what the federal regulation permits. Coverage by the County’s Ethics Law of circumstances that are inherently not problematic trivializes the Ethics Law and the application of that law. An employee with a few shares of a major corporation’s stock who is involved in a procurement involving that corporation’s products would reasonably conclude that there is no conflict of interest, because, in fact, there is no actual conflict. It would be the extremely unusual case that an employee could affect the value of the employee’s holding of the Company’s stock through action as a County employee. Nonetheless, the County’s Ethics Law imposes strict liability in this circumstance and makes the services of that employee unavailable to the County, unless a waiver is obtained from the Ethics Commission. Of course, the Ethics Commission could use “prosecutorial discretion” and decline to pursue a technical violation by an employee caused by the employee’s holding of a small amount of stock of a major corporation. But it is preferable to create a general rule through the issuance of a class waiver rather than rely on the ad hoc use of prosecutorial discretion where inconsequential technical violations have occurred.
Granting this class waiver request is in the best interest of the County, because the importance of having County employees do their respective jobs without fear of inconsequential violations of the Ethics Law that might occur in the absence of the waiver outweighs any theoretical harm of such violations. Granting the waiver will not confer an economic advantage over other employees or members of the public. There simply is no economic advantage as the exempted holdings will not be materially affected by employee action; so, granting the waiver would not confer economic advantage on any person.
For these reasons, the Commission grants a class waiver to establish the exemptions from the law that the Ethics Commission proposed to the Council in Bill 47-20.
The Commission imposes the following condition on use of the waiver. In the event an employee wishes to assert entitlement to the waiver, when requested by the Ethics Commission, the employee must attest to the precise value and extent of the employee’s holdings in the securities for the time period(s) for which the waiver is claimed to apply.
See County Attorney Opinion dated 12/14/98 addressing the creation of “Friends of Recreation” for revenue-raising activities.
2020 L.M.C., ch. 40, § 2, states: Name. This Act must be known as the Public Accountability and County Transparency (PACT) Act.
(a) General restrictions.
(1) A public employee must not engage in any other employment unless the employment is approved by the Commission. The Commission may impose conditions on its approval of other employment.
(2) The Commission may adopt appropriate procedures to receive and decide other employment requests.
(3) The appointing authority should give a copy of this Section to applicants for positions that are affected by this Section. The Supervisor of Elections should give a copy to candidates for elected offices that are affected by this Section.
(4) A request for approval of other employment is confidential. Commission action on the request is also confidential. However, the Commission must disclose to the public each action approving an employment request, including:
(A) the name of the employee;
(B) the name of the employer;
(C) the nature of the other employment; and
(D) any conditions imposed by the Commission.
(5) After giving the public employee notice and an opportunity to respond, the Commission may revoke any action approving an employment request if it finds that the public employee did not disclose a material fact in the request.
(b) Specific restrictions. Unless the Commission grants a waiver under subsection 19A-8(b), a public employee must not:
(1) be employed by, or own more than one percent of, any business that:
(A) is regulated by the County agency with which the public employee is affiliated; or
(B) negotiates or contracts with the County agency with which the public employee is affiliated; or
(2) hold any employment relationship that could reasonably be expected to impair the impartiality and independence of judgment of the public employee.
(c) Exceptions.
(1) Subsections (a) and (b) do not apply to:
(A) a public employee who is appointed to a regulatory or licensing body under a statutory provision that persons subject to the jurisdiction of the body may be represented in appointments to it;
(B) a public employee whose government duties are ministerial, if the employment does not create a conflict of interest; or
(C) a member of a board, commission, or similar body in regard to employment held when the member was appointed if the employment was publicly disclosed before appointment to the appointing authority, and to the County Council when confirmation is required. The appointing authority must forward a record of the disclosure to the Commission, which must keep a record of the disclosure on file.
(2) If expressly authorized by regulation, subparagraph (b)(1)(A) and paragraph (b)(2) do not prohibit a police officer from working outside employment for an organization solely because that organization is located in the County or in the district where the officer is assigned.
(d) Prohibition against unapproved employment. Unless the Commission permits it or subsections (a) and (b) do not apply, a person must not knowingly employ a public employee.
(e) Prohibition against contingent compensation. A public employee must not assist or represent a party for contingent compensation in a matter before or involving a County agency except in a judicial or quasi-judicial proceeding. However, a public employee may assist or represent a party for contingent compensation in any matter for which contingent fees are authorized by law.
(f) Chief Administrative Officer. A public employee must not engage in other employment while serving as the Chief Administrative Officer. (1990 L.M.C., ch. 21, § 1; 1994 L.M.C., ch. 25, §1; 1997 L.M.C., ch. 37, § 1; 2006 L.M.C., ch. 33, § 1; 2010 L.M.C., ch. 5, § 1; 2018 L.M.C., ch. 7, §1; 2019 L.M.C., ch. 23, §1; 2020 L.M.C., ch. 40, § 1; 2021 L.M.C., ch. 4, § 1.)
Editor’s note-The above section is cited in FOP, Montgomery County Lodge No. 35 v. Mehrling, 343 Md. 155, 680 A.2d 1052 (1996).
See County Attorney Opinion dated 3/28/06 regarding whether steering committee members affiliated with a non-profit may receive and respond to a solicitation issued by the County and the implications under the Ethics law if the member is considered a public employee. See County Attorney Opinion dated 7/8/02 describing the extent to which quasi-judicial officials may engage in political activities.
2020 L.M.C., ch. 40, § 2, states: Name. This Act must be known as the Public Accountability and County Transparency (PACT) Act.
(a) A former public employee must not work on or otherwise assist any party, other than a County agency, in a case, contract, or other specific matter if the employee significantly participated in the matter as a public employee.
(b) For one year after the effective date of termination from County employment, a former public employee must not enter into any employment understanding or arrangement (express, implied, or tacit) with any person or business if the public employee significantly participated during the previous 3 years:
(1) in regulating the person or business; or
(2) in any procurement or other contractual activity concerning a contract with the person or business (except a non-discretionary contract with a regulated public utility).
(c) Significant participation means making a decision, approval, disapproval, recommendation, rendering of advice, investigation, or similar action taken as an officer or employee. Significant participation ordinarily does not include program or legislative oversight, or budget preparation, review, or adoption.
(d) A person serving as County Executive or Councilmember must not engage in lobbying to influence a legislative action for which lobbying registration would be required under this Chapter for one calendar year after leaving office except to represent a municipal corporation, a county, or a State government entity. (1990 L.M.C., ch. 21, §1; 2003 L.M.C., ch. 5, § 1; 2016 L.M.C., ch. 2, § 1; 2018 L.M.C., ch. 7, §1.)
Editor's note—See County Attorney Opinion No. 95.002 dated 5/17/95 explaining that a member of the retirement plan who retires under the retirement incentive plan may participate in a County contract awarded under the procurement process.
2003 L.M.C., ch. 20, § 2, states: Timetable; transition.
(a) The first resolution adopted under Section 2-119(a), inserted by Section 1 of this Act, must take effect on July 1, 2004. Any corporation that seeks to be designated as the local management board must submit proposed articles of incorporation and bylaws to the County Executive and County Council for review and comment by May 1, 2004.
(b) By February 1, 2004, the Director of the Department of Health and Human Services must submit to the Executive and Council a local management board transition plan to address such issues as financial oversight during a transition; modification of service contracts to assure that services to children and families are not disrupted; and transition of affected employees.
(c) Notwithstanding any inconsistent provision of County Code Section 19A-13, a person employed by the Department of Health and Human Services before July 1, 2004, may be employed by a corporation after it is designated as the local management board, and if so employed may immediately work on any matter that the person significantly participated in as a Department employee.
2003 L.M.C., ch. 5, § 2, states: Applicability. Section 19A-13, as amended by Section 1 of this Act, applies to any public employee who leaves public employment after this Act takes effect [July 11, 2003].
(a) For purposes of this Section, the terms agency or County agency do not include agencies or County agencies that are subject to Section 11B-52.
(b) Unless authorized by law, or by the Ethics Commission under this Chapter, a person while engaged in a procurement matter with an agency or County agency must not employ or offer to employ a public employee if the duties of the public employee include significant participation in the procurement matter. (2022 L.M.C., ch. 33, §1.)
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