Advisory Opinion No. 1993-9

Application Of The Code’s “Revolving Door” Provisions
To An Entity Employing The Former State Treasurer

Former State Treasurer Francisco L. Borges resigned from his public office, effective March 1, 1993, to become Managing Director of Public Finance at Financial Guarantee Insurance Corporation (FGIC), an insurer of state and municipal bonds.

Connecticut has rarely utilized such bond insurance, because the State’s own ratings are, in general, high enough to negate any potential benefit.  However, the State is currently considering a financing for the Unemployment Compensation Fund which might well benefit, in terms of credit rating, from such insurance.

Due to the size of the contemplated financing (approaching one billion dollars) it is anticipated that there will be only three potential bidders for the issue, one of which would be FGIC.  Although the bond insurer would be selected on a competitive bid basis, there is generally some negotiation regarding terms and conditions after the selection is made.

The current State Treasurer, Joseph M. Suggs, Jr., has asked the State Ethics Commission whether, considering former Treasurer Borges’ senior affiliation with the Corporation, FGIC may bid on the bond issue in question; and, if so, what steps should be taken to avoid a conflict, or the appearance of a conflict, of interest?

As the State Ethics Commission has previously held, the Code of Ethics’ Post-State Employment provisions, Conn. Gen. Stat. §§1-84a and b, are, in general, personal to the former State official or employee, and do not extend to his or her private employer.  State Ethics Commission Advisory Opinion No. 89-13, 50 Conn. L.J. No. 46, p. 1C (May 16, 1989).  As a consequence, FGIC may, with propriety, bid for and be awarded the work in question.  As mandated by the Code, however, Mr. Borges may not, for one year after separation from State service, represent his current employer regarding the bid, negotiations, or any other matter, before his former agency, i.e., the Office of the Treasurer.  Conn. Gen. Stat. §1-84b(b).  Additionally, in order to insure that one does not benefit from an activity otherwise prohibited by the Code, Mr. Borges may not receive any portion of the fee or other compensation obtained by his employer as a result of its representation before the Treasurer’s Office during the proscribed one year period.  State Ethics Commission Advisory Opinion No. 89-13, supra.

By order of the Commission,

Christopher T. Donohue
Chairperson