Advisory Opinion No. 2003-19

Application Of Conn. Gen. Stat. §1-84b(c) To The Commissioner Of The
Office Of Health Care Access

The Commissioner of the Office of Health Care Access (OHCA), Mary M. Heffernan, has asked the State Ethics Commission whether, under the Ethics Code’s post-state employment provisions, she may accept employment with a parent corporation or holding company of a hospital.

The pertinent post-state employment provision, Conn. Gen. Stat. §1-84b(c), restricts certain senior officials and employees in the enumerated agencies from accepting employment in the industry they regulate for one year after state service.  Pursuant to this subsection, OHCA is one of the listed agencies; and pursuant to Commission regulations, Commissioner Heffernan’s position is one of those designated for restriction.  See, Regulations of Conn. State Agencies §1-92-40a.

As a threshold matter, it has been suggested that a dimunition in the duties of the former Commission on Hospitals and Health Care effectively eliminates the rationale for including OHCA under §1-84b(c).  The State Ethics Commission does not dispute that the duties of this Agency have been altered, and in certain significant aspects diminished, since the enactment of §1-84b(c) in 1983.  However, the determination of whether OHCA should remain subject to the restriction at issue is solely within the purview of the General Assembly and is not a matter open to consideration by the Ethics Commission.  Furthermore, the Commission notes that, regardless of the statutory amendments to OHCA’s authority, the Agency still retains significant regulatory power over the State’s hospitals.  See, e.g., Conn. Gen. Stat. §19a-639:  which, in general, sets forth OCHA’s authority to grant or deny “certificates of need” to each health care institution or facility proposing a capital expenditure exceeding one million dollars or the acquisition of medical equipment requiring a capital expenditure in excess of four hundred thousand dollars.  §19a-639a at (a)

The essential issue to be decided in answering Commissioner Heffernan’s question is whether a parent or holding company of a hospital should be encompassed by the language “…any business subject to regulation…” by OHCA as that language is used in §1-84b(c).

In making her request, Commissioner Heffernan suggests that the statute should not extend to these entities, since OHCA’s authority is limited, pursuant to Conn. Gen. Stat. §19a-630a, to oversight of business entities licensed by the State to provide direct patient care services.  The Commission takes cognizance of this position as a legitimate potential interpretation of §1-84b(c); but, for the reasons discussed infra, declines to adopt this view.

In making its determination, the Commission looks first to the legislative history and purpose of the subsection in question:  the provision was proposed “…to decrease the likelihood that an official will tailor his conduct in office to enhance his opportunities for subsequent private employment in the same field.”  Report To The General Assembly By The Codes Of Ethics Study Committee at p. 20 (1983).  The Commission next takes administrative notice of the reality of business structure and organization in today’s corporate America:  i.e., that many of the banks, insurance companies, utilities, hospitals and other business entities subject to §1-84b(c) will be owned or held by one or more other business entities.  Given this legislative purpose and given this economic reality, allowing a public official to accept employment with a parent or holding company of a regulated entity, with a direct financial interest in that entity, would literally vitiate the §1-84b(c) restriction.  See, State Ethics Commission Advisory Opinion No. 95-2, 56 CLJ 42, p. 9C (4/18/95):  wherein the Commission held that the §1-84b(c) proscription extended to employment with an out-of-state entity owned by a business regulated in Connecticut.  In making its ruling, the Commission noted that the purpose of the restriction would be defeated by allowing such work.  See, also, Ethics Commission Advisory Opinion No. 99-31, 61 CLJ 29, p. 10C (1/18/00):  wherein the Commission held that OHCA Commissioner Gorman could not accept employment with a trade association made up of businesses regulated by his Agency.  In making this ruling, the Commission again looked to the purpose of the statutory provision, and held that allowing the employment would circumvent legislative intent.

In summary, consistent with the underlying purpose of §1-84b(c), the Commissioner of OHCA is prohibited, for one year after leaving her state position, from accepting employment with a parent company or holding company of a hospital subject to OHCA regulation.

By order of the Commission,

Rosemary Giuliano
Chairperson