LEGfSLA1'IVE ETHICS COMM.

ITTEE
STATE OF NEW YORK
BOX 7S. LEGISLATIVE OFFICE BUILDING. ALBANY. N EW YORK 12247 - IS I B) 432-783717 8 38
FACSIM ILE NUMBER IS 18) 11 26-9323

SENATORGEORGE. E. PATAKI
SENATEC ' IiAIRMAN
ASSEMBLYMAN THOM AS P. DiN APO LI
ASSEMBLY COCHAIRMAN
lAN E BARCOTT HAND DELI VERED
EXECUTIVE DI RECTOR

CONFIDENTIAL

March 9, 1993

Han. Joseph L. Bruno

Room 409
Legislative Office Building
Albany, New York 12247

Re: Advisory Opinion Request 93-03

Dear Senator Bruno:

Enclosed is the advisory opinion which you requested on January

14, 1993.

4l!bEO Pataki

Co-Chairs

GOVERNMENT
EXHIBIT

GA-9
 ADVISORY OPINION 93-03

QUESTION: A member of the legislature seeks advice concerning his proposed

private business relationship with an investment banking firm.

FACTS: A member of the legislature has been offered a part-time position with an
investment banking firm. The member states that compensation will be paid in the
form of a straight salary. He adds, liMy responsibilities, as currently envisioned ~
would be to assist in all areas of the firm's investment banking activities, advise
corporate clients on issues relating to marketing, finance and corporate structure,
participate in the engagement of asset management of relationships with institutional
investors and provide advice and counsel to senior members of the firm. 11

The member indicates that he will accept the position unless advised otherwise by
the Legislative Ethics Committee.

RELEVANT STATUTES: Public Officers Law § 73 and § 74.

DISCUSSION: Investment banking involves selling securities to investors. (See

Black's Law Dictionary 741 [5th ed. 1979].) The threshold question is whether the
acceptance by a member of the legislature of a compensated position involving all
areas of a firm's investment banking activities is in substantial conflict with his
official duties in the public interest. Public Officers Law § 74(2) provides the
general rule with respect to conflicts of interest:

"No member of the legislature ... should have any interest,

financial or otherwise ~ direct or indirect, or engage in
any business or transaction or professional activity or
incur any obligation of any nature, which is in substantial
conflict with the proper discharge of his duties in the
public interest."

This general rule is intended to guard against substantial conflicts of interest

between the member's outside activities and his official duties. It is not intended to
prohibit members of the legislature from having outside interests which result in
financial gain, but only to prohibit financial gains made at the expense of the public
trust. Thus, if a member's financial posture will be affected by an official action on
his part, the test to be applied is whether any financial gain he incurs by virtue of
his official action is no greater than that incurred by other members of his
business ~ profession, occupation or group.

Absent any special benefit to his prospective employer or the clients of his
prospective employer, the committee sees no substantial conflict of interest between
the member's proposed private business activity and his official duties as a state
legislator. We trust that the member will keep his role as a representative of the
private corporation separate and distinct from his role as a public official when
acting on behalf of the private corporation.
Public Officers Law § 73 provides specific guidance for members of the legislature
with regard to the conduct of private business transactions. Most notably t the
member is prohibited from making compensated appearances before state agencies
with regard to certain matters enumerated under § 73. Should the member's
responsibilities in his private employment come to involve transactions with or
before New York State agencies, the member should seek the further advice of this
committee.

CONCLUSION: A member of the legislature may accept a compensated position with

an investment banking firm. The member should seek further advice from this
committee if activities involving state agencies are contemplated.