Application of Code of Ethics for Public Officials to Outside Activity of Connecticut Small Business Development Center Counselor

            Jeffrey Knickerbocker, Esq., has asked the Commission for an opinion regarding the application of the Code of Ethics for Public Officials, Conn. Gen. Stat. §1-79 et seq., to certain activities of his client, a former counselor for the Connecticut Small Business Development Center (“CSBDC”.) The facts are as follows:  Mr. Knickerbocker’s client was employed by the state as a counselor for the CSBDC.  While she was the regional director of a CSBDC branch, two individuals came to the office and received counseling on the development of their jewelry business.  That counseling likely included the disclosure of financial information to the CSBDC employee.   According to Mr. Knickerbocker, the state employee and one of the CSBDC “users” realized that they were acquainted with one another because the state employee had worked at one time with the CSBDC user’s father.  Almost two years after the two individuals first came to the CSBDC, their file was closed.  Hard copies of the files are destroyed every three years.  Approximately two years later, at a social gathering, the two former CSBDC users and the state employee renewed their acquaintance and began to discuss the possibility of working together on the jewelry business.  The former CSBDC users were actively seeking investors, and were providing information to anyone interested in so investing.  The state employee invested her own money in the business.  Approximately six months later, the state employee resigned from her position at the CSBDC and, very shortly thereafter, became the Chief Financial Officer of the jewelry business.  The business was not successful.  Later, Attorney Knickerbocker’s client returned for a time to the CSBDC.

            Under the Code of Ethics, neither a current state employee nor a former state employee may use confidential information gained in state service for her own financial gain.  Conn. Gen. Stat. §§1-84(c), 1-84b(a).  Also, a state employee may not accept outside employment that impairs her independence of judgment with respect to her state duties.  Conn. Gen. Stat. §1-84(b).  The former CSBDC director, Dennis Gruell, has indicated that the CSBDC also has a rule that its employees should not do business with any current or former CSBDC users, but is uncertain whether, with regard to former users, this rule had been expressly made clear to CSBDC staff at the time of this activity.

            Applying these rules to the specific facts that have been presented above—in particular, the fact that the file had been closed years before the state employee invested in the business and that there is no evidence that the state employee profited from her actions—it does not appear that the state employee’s conduct violated the Code of Ethics.  Nonetheless, this situation highlights the need for clear, explicit, written conflict-of-interest rules and explanations by state agencies, as well as the need for state employees to seek prior approval from both the State Ethics Commission (or its successor agency)

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and from the employee’s agency when outside employment or post-state employment is contemplated, especially when such employment involves one of the state agency’s current or former clients.

By order of the Commission,
Hugh C. Macgill