(a) Prohibitions. Unless permitted by a waiver, a public employee must not participate in: (1) any matter that affects, in a manner distinct from its effect on the public generally, any: (A) property in which the public employee holds an economic interest; (B) business in which the public employee has an economic interest; or (C) property or business in which a relative has an economic interest, if the public employee knows about the relative's interest; (2) any matter if the public employee knows or reasonably should know that any party to the matter is: (A) any business in which the public employee has an economic interest or is an officer, director, trustee, partner, or employee; (B) any business in which a relative has an economic interest, if the public employee knows about the interest; (C) any business with which the public employee has an active application, is negotiating, or has any arrangement for prospective employment; (D) any business that is considering an application from, negotiating with, or has an arrangement with a relative about prospective employment, if the public employee knows about the application, negotiations, or the arrangement; (E) any business or individual that is a party to an existing contract with the public employee or a relative, if the contract could reasonably result in a conflict between private interests and official duties; (F) any business that is engaged in a transaction with a County agency if: (i) another business owns a direct interest in the business; (ii) the public employee or a relative has a direct interest in the other business; and (iii) the public employee reasonably should know of both direct interests; (G) any business that is subject to regulation by the agency with which the public employee is affiliated if: (i) another business owns a direct interest in the business; (ii) the public employee or a relative has a direct interest in the other business; and (iii) the public employee reasonably should know of both direct interests; (H) any creditor or debtor of the public employee or a relative if the creditor or debtor can directly and substantially affect an economic interest of the public employee or relative; (I) any business or individual that in the previous 12 months employed the employee or an immediate family member of the employee; or (J) any business in which the employee or an immediate family member of the employee was an officer, director, trustee, or partner in the previous 12 months; or (3) any case, contract, or other specific matter affecting a party for whom, in the prior year, the public employee was required to register to engage in lobbying activity under this Chapter. (b) Exceptions. (1) If a disqualification under subsection (a) leaves less than a quorum capable of acting, or if the disqualified public employee is required by law to act or is the only person authorized to act, the disqualified public employee may participate or act if the public employee discloses the nature and circumstances of the conflict. (2) Subsection (a) does not apply to an administrative or ministerial duty that does not affect an agency's decision on a matter. (3) Paragraph (a)(1) does not apply to a public employee who is appointed to a regulatory or licensing body under a statutory provision that persons subject to the jurisdiction of the body may be represented in appointments to the body. (4) Subparagraph (a)(2)(A) does not apply to a public employee, if the County Executive or the County Council appoints the public employee to serve as an officer, director, or trustee of a business to represent the public interest. (5) Subparagraph (a)(2)(A) does not apply to a public employee who is an officer, director, or trustee of an organization, if the public employee discloses the relationship, is not compensated by the organization, and has no: (A) managerial responsibility or fiduciary duty to the organization; (B) authority to approve the organization's budget; (C) authority to select any officer or employee of the organization; or (D) authority to vote on matters as a member of the governing body of the organization. (6) If expressly authorized by regulation, subsection (a) does not apply to: (A) a police officer’s exercise of the officer’s police authority during approved outside employment; or (B) a police officer or fire/rescue employee who is exercising the employee’s official duties in an emergency affecting a business or property in which the employee or a relative of the employee has an economic interest. (c) Thresholds. In this section, interest or economic interest means: (1) any source of income, direct or indirect, if the employee: (A) received more than $1,000 from that source of income in any of the last 3 years; (B) is currently receiving more than $1,000 per year from that source of income: or (C) is entitled to receive at least $1,000 in any year in the future from that source of income; (2) a business in which the public employee or a relative owns more than 3 percent; (3) securities that represent ownership or can be converted into ownership of more than 3 percent of a business; or (4) any other economic interest worth more than $1,000. (d) Procurement disclosure. A public employee who participates in a procurement process with an individual or organization seeking to do business with the County that compensated the public employee for services performed more than 12 months before the participation began must disclose the prior relationship to the Procurement Director. The Procurement Director must include a statement of this disclosure in the procurement file. On behalf of the Executive and Legislative branches of the Montgomery County Government, the County Attorney requested that the Ethics Commission issue a class waiver under § 19A-8 (a) of the County Code from the prohibitions of § 19A-11(a)(1) and (2) to allow public employees who hold a limited economic interest in certain large publicly traded entities to participate in matters that involve those entities. For the reasons stated below, the Ethics Commission grants the requested class waiver. Section 19A-11(a)(1) prohibits a public employee from participating in a matter if the matter affects property or a business in which the employee has an economic interest worth $1,000 or more; § 19A-11(a)(2) prohibits a public employee from participation in a matter if a party to the matter is an entity in which the employee has an economic interest worth $1,000 or more. On December 1, 2020, the County Council, at the request of the Ethics Commission, introduced Bill 47-20, Ethics, Ethics Commission - Conflicts of Interest – Financial Disclosure –Amendments. Bill 47-20 proposed to carve out an exception to § 19A-11(a)(1) and (2) to permit a public employee, who holds a limited economic interest in certain large publicly traded entities, to participate in a matter that involves those entities. The proposed amendment to § 19A-11(b) reads as follows: (7) Subparagraph (a)(2) does not apply to an employee’s participation in a matter affecting a business with a principal place of business outside of the County where the employee’s economic interest is limited to ownership of publicly traded securities: (A) issued by a company that is part of the Standard & Poor’s 500 Index; and (B) the market value of the securities does not exceed $25,000. (8) Subparagraph (a)(1) does not apply to an employee’s economic interest that is limited to the ownership of publicly traded securities issued by a company with a principal place of business outside the County if the market value of the securities does not exceed $50,000. The Ethics Commission proposed this amendment due to the extreme unlikelihood that an action of the Montgomery County government would impact a large publicly traded entity to such an extent that the entity’s stock price would be materially impacted. At the insistence of the State Ethics Commission, the Council deleted this provision from Bill 47-20. The State Ethics Commission, however, suggested that the County Ethics Commission might accomplish the same outcome by issuing a class waiver. Pursuant to § 19A-8, the Ethics Commission, after receiving a written request, may grant a class of public employees a waiver from the prohibitions of the Ethics Law if the Commission finds that: (1) the best interests of the County would be served by granting the waiver; (2) the importance to the County of a class of employees performing their official duties outweighs the actual or potential harm of any conflict of interest; and (3) granting the waiver will not give a class of employees an unfair economic advantage over other public employees or members of the public. The proposed exemptions from the coverage of § 19A-11 in Bill 47-20 (described above) were modeled on exemptions in federal regulations from application of the federal conflict of interest law. See 18 U.S.C. Section 208 and 5 C.F.R. 2640.202. Given the national scope of federal action, the likelihood of federal action impacting public companies is immensely greater than action by a single Maryland county. Nonetheless, certain holdings of federal employees have been exempted from application of the federal conflict of interest law. As the County’s proposal is limited to the very largest public companies as represented in the Standard and Poor’s 500 Index, the proposal has an even narrower scope than what the federal regulation permits. Coverage by the County’s Ethics Law of circumstances that are inherently not problematic trivializes the Ethics Law and the application of that law. An employee with a few shares of a major corporation’s stock who is involved in a procurement involving that corporation’s products would reasonably conclude that there is no conflict of interest, because, in fact, there is no actual conflict. It would be the extremely unusual case that an employee could affect the value of the employee’s holding of the Company’s stock through action as a County employee. Nonetheless, the County’s Ethics Law imposes strict liability in this circumstance and makes the services of that employee unavailable to the County, unless a waiver is obtained from the Ethics Commission. Of course, the Ethics Commission could use “prosecutorial discretion” and decline to pursue a technical violation by an employee caused by the employee’s holding of a small amount of stock of a major corporation. But it is preferable to create a general rule through the issuance of a class waiver rather than rely on the ad hoc use of prosecutorial discretion where inconsequential technical violations have occurred. Granting this class waiver request is in the best interest of the County, because the importance of having County employees do their respective jobs without fear of inconsequential violations of the Ethics Law that might occur in the absence of the waiver outweighs any theoretical harm of such violations. Granting the waiver will not confer an economic advantage over other employees or members of the public. There simply is no economic advantage as the exempted holdings will not be materially affected by employee action; so, granting the waiver would not confer economic advantage on any person. For these reasons, the Commission grants a class waiver to establish the exemptions from the law that the Ethics Commission proposed to the Council in Bill 47-20. The Commission imposes the following condition on use of the waiver. In the event an employee wishes to assert entitlement to the waiver, when requested by the Ethics Commission, the employee must attest to the precise value and extent of the employee’s holdings in the securities for the time period(s) for which the waiver is claimed to apply.

(a) General restrictions. (1) A public employee must not engage in any other employment unless the employment is approved by the Commission. The Commission may impose conditions on its approval of other employment. (2) The Commission may adopt appropriate procedures to receive and decide other employment requests. (3) The appointing authority should give a copy of this Section to applicants for positions that are affected by this Section. The Supervisor of Elections should give a copy to candidates for elected offices that are affected by this Section. (4) A request for approval of other employment is confidential. Commission action on the request is also confidential. However, the Commission must disclose to the public each action approving an employment request, including: (A) the name of the employee; (B) the name of the employer; (C) the nature of the other employment; and (D) any conditions imposed by the Commission. (5) After giving the public employee notice and an opportunity to respond, the Commission may revoke any action approving an employment request if it finds that the public employee did not disclose a material fact in the request. (b) Specific restrictions. Unless the Commission grants a waiver under subsection 19A-8(b), a public employee must not: (1) be employed by, or own more than one percent of, any business that: (A) is regulated by the County agency with which the public employee is affiliated; or (B) negotiates or contracts with the County agency with which the public employee is affiliated; or (2) hold any employment relationship that could reasonably be expected to impair the impartiality and independence of judgment of the public employee. (c) Exceptions. (1) Subsections (a) and (b) do not apply to: (A) a public employee who is appointed to a regulatory or licensing body under a statutory provision that persons subject to the jurisdiction of the body may be represented in appointments to it; (B) a public employee whose government duties are ministerial, if the employment does not create a conflict of interest; or (C) a member of a board, commission, or similar body in regard to employment held when the member was appointed if the employment was publicly disclosed before appointment to the appointing authority, and to the County Council when confirmation is required. The appointing authority must forward a record of the disclosure to the Commission, which must keep a record of the disclosure on file. (2) If expressly authorized by regulation, subparagraph (b)(1)(A) and paragraph (b)(2) do not prohibit a police officer from working outside employment for an organization solely because that organization is located in the County or in the district where the officer is assigned. (d) Prohibition against unapproved employment. Unless the Commission permits it or subsections (a) and (b) do not apply, a person must not knowingly employ a public employee. (e) Prohibition against contingent compensation. A public employee must not assist or represent a party for contingent compensation in a matter before or involving a County agency except in a judicial or quasi-judicial proceeding. However, a public employee may assist or represent a party for contingent compensation in any matter for which contingent fees are authorized by law. (f) Chief Administrative Officer. A public employee must not engage in other employment while serving as the Chief Administrative Officer.

(a) A former public employee must not work on or otherwise assist any party, other than a County agency, in a case, contract, or other specific matter if the employee significantly participated in the matter as a public employee. (b) For one year after the effective date of termination from County employment, a former public employee must not enter into any employment understanding or arrangement (express, implied, or tacit) with any person or business if the public employee significantly participated during the previous 3 years: (1) in regulating the person or business; or (2) in any procurement or other contractual activity concerning a contract with the person or business (except a non-discretionary contract with a regulated public utility). (c) Significant participation means making a decision, approval, disapproval, recommendation, rendering of advice, investigation, or similar action taken as an officer or employee. Significant participation ordinarily does not include program or legislative oversight, or budget preparation, review, or adoption. (d) A person serving as County Executive or Councilmember must not engage in lobbying to influence a legislative action for which lobbying registration would be required under this Chapter for one calendar year after leaving office except to represent a municipal corporation, a county, or a State government entity. (a) The first resolution adopted under Section 2-119(a), inserted by Section 1 of this Act, must take effect on July 1, 2004. Any corporation that seeks to be designated as the local management board must submit proposed articles of incorporation and bylaws to the County Executive and County Council for review and comment by May 1, 2004. (b) By February 1, 2004, the Director of the Department of Health and Human Services must submit to the Executive and Council a local management board transition plan to address such issues as financial oversight during a transition; modification of service contracts to assure that services to children and families are not disrupted; and transition of affected employees. (c) Notwithstanding any inconsistent provision of County Code Section 19A-13, a person employed by the Department of Health and Human Services before July 1, 2004, may be employed by a corporation after it is designated as the local management board, and if so employed may immediately work on any matter that the person significantly participated in as a Department employee.

(a) For purposes of this Section, the terms agency or County agency do not include agencies or County agencies that are subject to Section 11B-52. (b) Unless authorized by law, or by the Ethics Commission under this Chapter, a person while engaged in a procurement matter with an agency or County agency must not employ or offer to employ a public employee if the duties of the public employee include significant participation in the procurement matter.

(a) Unless expressly authorized by regulation or as may be permitted under Section 19A-16, a public employee must not intentionally use the prestige of office for private gain or the gain of another. Performing usual and customary constituent services, without additional compensation, is not prohibited by this subsection. (b) Unless expressly authorized by the Chief Administrative Officer, a person must not use an official County or agency title or insignia in connection with any private enterprise. (c) A public employee must not use any County agency facility, property, or work time for personal use or for the use of another person, unless the use is: (1) generally available to the public; or (2) authorized by a County law, regulation, or administrative procedure. (d) (1) A public employee must not appoint, hire, or advocate the advancement of a relative to a position that is under the jurisdiction or control of the public employee. (2) A relative of a public employee must not be employed in a position if the public employee: (A) would exercise jurisdiction or control over the position; and (B) advocates the relative’s employment. (e) A public employee must not intimidate, threaten, coerce or discriminate against any person for the purpose of interfering with that person's freedom to engage in political activity. (f) A person must not influence or attempt to influence a public employee to violate this Chapter. (g) (1) A public employee must not with respect to a particular matter represent another person, or provide advice to another person that would qualify as an expert opinion in a court, if: (A) a County agency or the County is a party to the matter and the person being assisted has a position adverse to the County agency or the County; or (B) the County agency or the County has a direct and substantial interest in the matter that is adverse to the interests of the person being assisted. (2) This subsection does not apply to a public employee who renders assistance to: (A) another public employee if the matter involves a personnel action; (B) a member of the public employee’s immediate family if the public employee renders the assistance without compensation; or (C) a person for whom the public employee serves as a guardian, trustee or other personal fiduciary. (3) This subsection does not apply to: (A) a public employee while carrying out the employee’s official duties; or (B) a member of a board, committee or commission if: (i) the member is not compensated by the County; (ii) the matter does not relate to the responsibilities of the board, committee or commission; and (iii) the board, committee or commission solely performs an advisory function. (4) In this subsection "represent" means to act on behalf of another person, and includes acting as an agent or attorney for the other person.

(a) Except when authorized by law, a public employee or former public employee must not disclose confidential information relating to or maintained by a County agency that is not available to the public. A public employee or former public employee must not use confidential information for personal gain or the gain of another. Unless expressly prohibited by law, a public employee may disclose validly obtained confidential information to another public employee if the other public employee reasonably needs the information to carry out the employee’s official duties. (b) (1) A public employee decision-maker must not consider any communication made outside of the record regarding any matter that must be decided on the basis of a record after an application is filed or a proceeding is otherwise initiated. (2) Except as otherwise expressly authorized by law, any public employee decision maker, and any public employee who directly advises a decision maker, must not: (A) initiate or participate in any communication outside the record with any person regarding a matter that must be decided on the basis of a record; or (B) conduct an independent investigation of any fact related to a matter that must be decided on the basis of a record. (3) The recipient of any communication made outside the record, including advice rendered by officials or staff of another government agency, must promptly enter that communication in the record. If the communication was oral, the recipient must write down the substance of the communication and enter it into the record. The decision-making body may consider any communication made outside of the record if all parties are given a reasonable opportunity to respond. (4) This subsection does not restrict a communication that consists solely of: (A) advice rendered to a decision-maker by an attorney employed or retained by the decision-maker’s agency; (B) advice rendered to a decision-maker by appropriate officials or staff of the decision-maker’s agency; (C) a procedural question that does not involve the substance of facts in a record; and (D) discussions between members of a decision-making body.

(a) Except as permitted by Subsection (b) or by Commission regulation, a public employee must not solicit any gift to the employee or for another person from a restricted donor or another public employee. In addition, a public employee must not solicit a gift from any person to the employee or another person: (1) during official work hours, or at a County agency; (2) while wearing all or part of an official uniform of a County agency, or while otherwise identifiable as a public employee; or (3) with the intent of affecting or offering to affect any action by a County agency. (b) A public employee may solicit a gift: (1) from a public employee for a charitable drive that is approved by the County Executive or (for public employees of the legislative branch) the President of the Council, when the solicitation is part of the public employee’s official duties; (2) from any person to a charitable organization, as defined in the state law regulating public charities, or a municipality, if the public employee does not solicit gifts primarily from a restricted donor or from other employees who are supervised directly or indirectly by the public employee; (3) from any person, during official work hours, while identifiable as a public employee, or at a County agency, for the benefit of a County agency or a nonprofit organization formally cooperating on a program with a County agency if the solicitation is authorized by the County Executive or (for public employees of the legislative branch) the President of the Council in an order printed in the County Register that designates: (A) the public employee authorized to solicit the gift; (B) the purpose for which the gift is sought; (C) the manner in which the gift may be solicited; (D) the persons or class of persons from whom gifts may be solicited; and (E) the type of gifts that may be solicited; (4) while wearing all or part of a uniform of the corporation, to a nonprofit fire or rescue corporation of which the public employee is a member; or (5) from any person to a charitable organization, as defined in the state law regulating public charities, while identifiable as an elected official, if the employee lists in a supplement to each annual financial disclosure statement each organization to which the employee solicited a contribution during that year. (c) A public employee must not knowingly accept a direct or indirect gift from a restricted donor. (d) Subsection (c) does not apply to: (1) meals and beverages consumed in the presence of the restricted donor or sponsoring entity at a function attended by at least 20 persons or, if fewer than 20 persons attend, meals and beverages consumed in the presence of the restricted donor or sponsoring entity which do not exceed $50 in value from the same source in any calendar year; (2) ceremonial gifts or awards that have insignificant monetary value; (3) unsolicited gifts, except for cash or cash equivalents, that do not exceed $20 in cost; (4) reasonable expenses for food, travel, lodging, and scheduled entertainment of the public employee, given in return for the public employee's participation in a panel or speaking at a meeting; (5) a gift to an elected official, if the gift: (A) is a courtesy extended to the office; (B) consists of tickets or free admission for the elected official and one guest to attend a charitable, cultural, civic, labor trade, or political event attended by at least 20 participants, including meals and beverages served at the event; and (C) is provided by the person sponsoring the event. (6) any item that is solely informational or of an advertising nature, including a book, report, periodical, or pamphlet, if the resale value of the item is $20 or less; (7) gifts from a relative; (8) honoraria for speaking to or participating in a meeting if the offering of the honorarium is not related to the employee’s official position and is unsolicited; or (9) a specific gift or class of gifts which the Commission exempts from this Section after finding in writing that accepting the gift or class of gifts is not detrimental to the impartial conduct of the business of a County agency. (e) Subsection (c) does not apply to unsolicited gifts to a County agency. (f) A public employee who receives a gift that the public employee must not accept under this Section must report the gift to the Commission, if otherwise required to report it, and return the gift to the donor or transfer the gift to the County. If the unacceptable gift is a perishable item, the employee, instead of transferring the gift to the County, may transfer it to a charitable or educational organization that can make timely and effective use of the gift, so long as the employee is not an officer, director, trustee, partner, or employee of the receiving organization.

(a) A County quasi-judicial official must not: (1) solicit or accept from a person within the official’s jurisdiction a financial contribution for any political candidate, political organization or ballot question (other than a ballot question which directly affects the official’s agency); or (2) solicit from a person within the official’s jurisdiction an endorsement of or opposition to a political candidate. (b) In this Section: (1) County quasi-judicial official means: (A) a member or alternate member of the Animal Matters Hearing Board; (B) a member of the County Board of Appeals; (C) a member of the Board of Electrical Examiners: (D) a member of the Board of Registration; (E) a member or alternate member of the Commission on Landlord-Tenant Affairs; (F) a voting member of the Commission on Common Ownership Communities; (G) a member of the Ethics Commission; (H) a member of a case review board of the Human Rights Commission; (I) a member of the Merit System Protection Board; (J) a member of the Sign Review Board; (K) a member of the Historic Preservation Commission; (L) a member of the Contract Review Committee; (M) the Chief Administrative Officer; (N) a hearing examiner in the Office of Zoning and Administrative Hearings; (O) any Public Hearing Officer in the Office of the County Executive; and (P) a member of the Cable Compliance Commission. (2) Political organization means; (A) an “authorized candidate campaign committee” as defined in the state election law; (B) a “partisan organization” as defined in the state election law; (C) a “political committee” as defined in the state election law; (D) a “political action committee” as defined in the state election law; and (E) a “political party” as defined in the state election law. (3) Candidate has the same meaning as in the state election law. (4) Person within the official’s jurisdiction means an individual who: (A) is registered, or is required to register, as a lobbyist on a matter that is or could be considered by the official; (B) owns or operates a business that is regulated by the official; (C) does business with or has a matter pending before the official’s agency; or (D) has an identifiable economic interest, different from that of the general public, that the official may substantially affect in performing the official’s duties.