Caution urged for executives seeking spots on nonprofit boards

Agencies should be careful about allowing employees to serve on the boards of nonprofit organizations that have an interest in their work, according to a recent opinion published by the Justice Department's Office of Legal Counsel.

Federal executives can serve as officers or directors at nonprofit organizations, a 19-page opinion released Jan. 11 stated. But agencies should take into account the appearance of an ethical violation before permitting employees to serve in a group that handles issues related to their government work.

"Government employees [have a] . . . duty to 'avoid any actions creating the appearance that they are violating the law … or ethical standards,' " the Justice office's opinion said.

"If an outside organization in which an employee is a director has been advocating its views directly to the federal government on a matter that the organization has identified as especially significant, there is a significantly heightened risk that the employee … will at least appear less than independent in his judgments," the legal counsel stated. "And that risk … calls for serious consideration by the employee's agency."

Federal law requires government employees to recuse themselves from work activities when a nonprofit on which they serve has a financial interest in the matter. But just because nonprofits spend money advocating a position does not necessarily mean they have a financial interest in an agency action, according to the opinion.

The case leading to the opinion originated in July 2004 when a senior executive at the Education Department was told by the Office of Government Ethics that election to the Senior Executives Association board of directors would result in a criminal conflict of interest due to his service on his department's Executive Resources Board.

An executive resources panel, among other things, makes recommendations on the senior executive pay system to the Office of Personnel Management. The SEA is a nonprofit professional association that advocates in the interest of career federal executives.

According to SEA President Carol Bonosaro, the association appealed the case in August 2004 and is pleased with the Office of Legal Counsel's decision.

"Employees who want to serve on boards like this should not have to worry about being charged under a criminal statute," Bonosaro said. "To us, [the opinion] essentially puts the matter to rest. It's up to the agencies, where individual decisions will be made by ethics officers."

Bonosaro said that since the opinion was released, a federal executive was approved by his agency's ethics officer to serve on the SEA board, which has 15 members serving staggered three-year terms.

The Office of Government Ethics' verbal opinion had made several members of the association hesitant about running for a board of director position because they didn't want to put themselves at risk, according to Bonosaro.

Had the 2004 opinion been permitted to stand, it could have eliminated some federal employees not only from consideration for the SEA board but for the boards of other organizations, such as the International Personnel Management Association or the American Society of Public Administration, according to Bonosaro.

Bonosaro said the decision was a long time in coming and added that the association's lawyers are working to issue a statement carefully laying out what the appearance standard means.

"Appearance is often in the eye of the beholder," Bonosaro said.

The Justice opinion also addresses a situation where National Oceanic and Atmospheric Administration employees were serving as councilors of the American Meteorological Society, a position equivalent to a member of a board of directors.

Despite the fact that the society spent money advocating positions on matters such as hurricane research, the opinion found that the organization did not have a financial interest in the matter and NOAA employees could serve with the group.

The American Meteorological Society did not return calls for comment and NOAA was not able to comment in time for publication of this article.