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Friday, August 31, 2018
Profitable Non-Profit: For Years, State Employee Paid Twice to Supervise Himself
By News Release @ 8:03 PM :: 5476 Views :: Ethics, Hawaii State Government

State Ethics Commission issues an Advisory Opinion Concluding that the Conflicts of Interests Law and Fair Treatment Law Prohibit a State Employee’s Private Employment.

Hawaii State Ethics Commission, ADVISORY OPINION NO. 2018-3, June 21, 2018 -- Posted August 20, 2018 (excerpts)

I. Facts

A. Employee’s State Position

The Commission understands the facts to be as follows. The Employee’s employment with his State Division (“Division”) predated his employment with the Non-Profit. The Employee’s state duties include coordinating services for members of the public in a somewhat isolated geographical area of the State. The Employee is the only employee at the Division’s office in this area and performs all duties for the office. If he is away, he must close the Division office and state services are unavailable until he returns. He has regular state work hours from 7:45 a.m. to 4:30 p.m. and is a salaried employee.

At the Division, he meets with individuals and assists in arranging services for them. As part of that process, the Employee makes recommendations or referrals to private provider agencies that offer the needed services. The Employee has recommended that individuals seek services from his private employer, the Non-Profit.

If an individual needs immediate emergency assistance during state work hours, then the Employee’s state duties require him to respond. Calls for emergency assistance occurring outside of state office hours are handled through a Division hotline.

B. Private Employment with the Non-Profit

The Employee has been privately employed by the Non-Profit for a number of years. The Non-Profit has two contracts with the Division. The first contract is to provide emergency services. This includes fielding calls received from the Division’s hotline. The second contract relates to the Non-Profit’s provision of specialized services for individuals.

The Employee was employed by the Non-Profit in two capacities. First, he was an on-call emergency outreach employee on weekdays from 7:00 a.m. to 7:00 p.m., and on alternating weekends. During that time, he was required to respond, on behalf of the Non-Profit, to emergency calls within forty-five minutes of receiving a call. The NonProfit paid him an hourly rate for on-call services, and a higher rate if he responded to an emergency call.

On average, the Employee responded to one or two emergency calls a month. The amount of time required to respond to calls varied depending on the situation, but could take up to several hours. If, as an employee of the Non-Profit, he responded to a call during state work hours, he would take vacation leave for his time away. Because he is the only Division employee in his area, when fielding an emergency call, he closed the Division office. He informed the Commission that, if he received an emergency call during state business hours, he might reschedule state meetings to accommodate his private work.

Second, in addition to providing on-call services, the Employee’s duties for the Non-Profit also included providing specialized services to clients of the Non-Profit. The Employee stated that he was the only provider of these services in the area.

there does not appear to be direct, continuous, and vigilant state oversight over the Employee’s situation in this case. The Employee has a direct financial interest in making referrals to his private employer, the Non-Profit. Additionally, the Employee is the only Division employee in his area and has little direct contact with, or oversight by, his supervisor; indeed, he generally speaks with his supervisor via telephone no more than once a week, and he sees his direct supervisor in person less often than that.2 The Division does not currently have policies in place to monitor the Employee’s conflict of interest at this time. Finally, the Commission notes that, while not dispositive, the Division has not supported the Employee’s request to continue as an employee of the Non-Profit and has indicated that it has not received any notice from the Non-Profit that it is unable to satisfy its contractual obligations to the Division. These facts weigh against allowing the Employee’s private employment despite the unusual circumstances….  

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