When federal officials sit on a New York public benefit corporation's board to monitor federal funds, must they file New York's annual financial disclosure under Public Officers Law § 73-a?

Plain-English summary

The New York State Ethics Commission noticed that several federal officials had been appointed as members or directors of New York State public benefit corporations and designated as "policy makers" by those corporations. Public Officers Law § 73-a normally requires "policy makers" on such corporations to file New York's annual financial disclosure statement. The example the Commission gave was the U.S. Secretary of Transportation, who served ex officio as a director of the Penn Station Redevelopment Corporation. The Secretary, like other federal members, was not acting in his personal capacity or representing New York; he was representing the federal government to monitor federal funds. Should he, and similarly placed federal officials, have to file New York's § 73-a disclosure?

The AG said no. Two intertwined reasons.

Federal supremacy. The AG cited M'Culloch v Maryland, 17 US 316 (1819), and Johnson v Maryland, 254 US 51 (1920), for limits on a state's authority over federal officials carrying out federal duties. The U.S. Secretary of Transportation is appointed by the President with the Senate's advice and consent (49 USCA § 102(b)). The AG concluded that New York could not add its financial disclosure requirement to the Secretary's service as a director of the Penn Station Redevelopment Corporation in his federal capacity.

Legislative intent. The AG also reasoned that the 1987 Ethics in Government Act was unlikely to have been intended to cover federal officials serving in their federal capacity to monitor federal funds. The opinion notes that § 73-a excludes members or directors of multi-state authorities, but does not decide whether the public benefit corporations in question qualify for that exclusion.

Federal disclosure. A footnote says the federal government has a similar financial disclosure filing requirement that probably applies to these officials, and copies of the reports are available on request under 5 USCA App 4 § 105(b)(1).

The AG also did not address whether New York public benefit corporations that have federal officials as members or directors might themselves qualify as "multi-state authorities" within § 73-a's exclusion. That question was left open because the supremacy holding was sufficient.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why is M'Culloch v Maryland relevant to a financial-disclosure question?

The AG cited M'Culloch for the principle that one state's sovereignty does not extend over federal means used to carry out powers conferred by the people of the United States. The opinion applied that principle to New York's proposed disclosure requirement for federal officials serving in their federal capacities.

Could New York require the public benefit corporation itself to disclose information about its federal members?

The opinion addresses whether the federal officials themselves must file statements under Public Officers Law § 73-a. It does not address a separate disclosure requirement for the corporation.

What's the federal disclosure under 5 USCA App 4?

The opinion says a federal financial-disclosure requirement probably applies to these officials and that copies of the reports are available on request under 5 USCA App 4 § 105(b)(1). It gives no further details about the forms.

Does the opinion decide whether the corporations are multi-state authorities?

No. The AG noted the statutory exclusion for members or directors of multi-state authorities, but expressly left open whether New York public benefit corporations with federal officials as members or directors could qualify for that exclusion.

Does the opinion resolve other state requirements imposed on federal officials?

No. It addresses New York's § 73-a financial disclosure requirement for federal officials serving as members or directors of state public benefit corporations in their federal capacities to monitor federal funds.

Background and statutory framework

The New York State Ethics in Government Act of 1987 was a response to a series of corruption revelations in New York City and State government in 1985 and 1986. Tristram J. Coffin, The New York State Ethics in Government Act of 1987: A Critical Evaluation, 22 Columbia J.L. & Soc. Probs. 269 (1989), traces the legislative motivation. Public Officers Law § 73-a, the annual financial-disclosure requirement, was a central piece of the Act.

Section 73-a covers State officers and employees. The definition of "state officer or employee" in § 73-a(1)(c)(iii) includes members or directors of public authorities (other than multi-state authorities) and public benefit corporations where at least one member is appointed by the Governor, who hold policy-making positions as determined annually by the appointing authority. The exclusion of multi-state authorities is explicit and was deliberate.

The AG relied on Johnson v Maryland and M'Culloch v Maryland to explain why New York could not impose its filing requirement on these officials under the stated facts.

Citations

• Public Officers Law § 73-a (New York financial disclosure requirement).
• Public Officers Law § 73-a(1)(c)(iii) (definition of "state officer or employee" including covered policy makers).
• Public Officers Law § 73-a(2)(a) (annual filing requirement).
• 5 USCA App 4 §§ 101 et seq. (federal Ethics in Government Act financial-disclosure regime).
• 5 USCA App 4 § 105(b)(1) (public availability of federal disclosure reports).
• 49 USCA § 102(b) (U.S. Secretary of Transportation appointment).
• Johnson v Maryland, 254 US 51 (1920) (State cannot impose qualification requirements on federal officials).
• Leslie Miller, Inc. v Arkansas, 352 US 187 (1956) (cited on state requirements for federal functions).
• United States v City of Pittsburgh, California, 661 F2d 783 (9th Cir 1981) (cited on state requirements for federal functions).
• M'Culloch v Maryland, 17 US 316 (1819) (foundational federal supremacy doctrine).

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/98-F1_pw.pdf

Original opinion text

PUBLIC OFFICERS LAW § 73-a; 5 USCA App 4 §§ 101, et seq.; 5 USCA App 4 § 105(b)(1); 49 USCA § 102(b). The State of New York may not impose its requirement of financial disclosure on federal officials serving as members or directors of New York State public benefit corporations in their federal capacities to monitor federal funds, even though these officials have been deemed "policy makers". January 21, 1998

Hon. Richard Rifkin
Executive Director
New York State Ethics Commission
39 Columbia Street
Albany, NY 12207-2717

Formal Opinion
No. 98-F1

Dear Mr. Rifkin:
You have requested an opinion as to whether federal officials should be required to file New York State financial disclosure statements under section 73-a of the Public Officers Law. Section 73-a requires the filing of financial disclosure statements by any member or director of a public benefit corporation, at least one of whose members is appointed by the Governor, who holds a policy-making position. You have explained that several federal officials have been appointed to serve as members or directors of New York State public benefit corporations and have been designated by those corporations as "policy makers". In our conversations, you have informed us that, in general, these federal officials serve in their federal capacities and represent the federal government in monitoring federal funds. These officials are not acting in their individual capacities or as representatives of the State of New York. However, because these federal officials serve as members and/or directors of New York State public benefit corporations and have been designated as "policy makers", you have asked whether they must comply with the financial disclosure requirement contained in Public Officers Law § 73-a. Public Officers Law § 73-a provides, in pertinent part, as follows: (a) Every . . . state officer or employee
. . . shall file an annual statement of financial disclosure containing the

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information and in the form set forth in subdivision three hereof. Public Officers Law § 73-a(2)(a). The term "state officer or employee" means: (iii) members or directors of public authorities, other than multi-state authorities, public benefit corporations and commissions at least one of whose members is appointed by the governor, and employees of such authorities, corporations and commissions who . . . hold policy-making positions, as determined annually by the appointing authority and set forth in a written instrument which shall be filed with the state ethics commission . . . . Id.,
§ 73-a(1)(c)(iii).
The Public Officers Law specifically requires members or directors of the covered public benefit corporations, who have been designated by their respective corporations as policy makers, to file annual financial disclosure statements. Therefore, it would appear that all such members or directors of public benefit corporations, regardless of their affiliation, would be included within the mandate of the Public Officers Law. However, because the members and directors at issue serve in their federal capacities, whether the State of New York can impose its mandates on the representatives of a separate sovereign government becomes an issue. Under the precepts of supremacy and federalism, a state cannot impose qualifications on federal officials in addition to those the federal government has deemed sufficient. Johnson v Maryland, 254 US 51 (1920). See also, Leslie Miller, Inc. v Arkansas, 352 US 187 (1956); United States v City of Pittsburgh, California, 661 F2d 783 (9th Cir 1981). In Johnson v Maryland, the Supreme Court of the United States held that: It seems to us that the immunity of the instruments of the United States from state control in the performance of their duties extends to a requirement that they desist from performance until they satisfy a state officer upon examination that they are competent for a necessary part of them and pay a fee for permission to go on. Such a requirement does not merely touch the

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Government servants remotely by a general rule of conduct; it lays hold of them in their specific attempt to obey orders and requires qualifications in addition to those that the Government has pronounced sufficient. It is the duty of the Department to employ persons competent for their work and that duty it must be presumed has been performed. Johnson v Maryland, 254 US at 57. The Court's holding in Johnson follows directly from its dictates in M'Culloch v Maryland, 17 US 316 (1819). In M'Culloch, the Court held that the people of a single state could not extend their sovereignty over the federal government. The sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission; but does it extend to those means which are employed by Congress to carry into execution powers conferred on that body by the people of the United States? We think it demonstrable, that it does not. Those powers are not given by the people of a single state. They are given by the people of the United States, to a government whose laws, made in pursuance of the constitution, are declared to be supreme. Consequently, the people of a single state cannot confer a sovereignty which will extend over them. M'Culloch v Maryland, 17 US at 429. Under the stated facts, the federal officials designated to serve as members or directors of New York State public benefit corporations are serving as officials of the federal government rather than in their personal capacities. For example, the United States Secretary of Transportation, who has been named as an ex officio director of the Penn Station Redevelopment Corporation, is appointed by the President, by and with the advice and consent of the Senate. 49 USCA § 102(b). Through the appointment process, the federal government has determined that whoever is appointed as the Secretary of Transportation is qualified to perform his or her duties. Therefore, under the above cases the State of New York cannot impose additional requirements upon the Secretary of Transportation, who is serving in his/her federal capacity as a director of the Penn Station Redevelopment Corporation. Accordingly, the State of New York may not impose its financial disclosure requirement on federal

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officials, serving as members and/or directors of New York State public benefit corporations, pursuant to their federal positions, to monitor federal funds.1 In any event, it is unlikely that the financial disclosure requirement of section 73-a was ever meant to encompass federal officials serving in their federal capacity to monitor federal funds. The requirement of financial disclosure, which is part of the New York State Ethics in Government Act of 1987, was instituted "in response to revelations of corruption in the New York City and State government that arose in 1985 and 1986, and the resulting public demand for increased scrutiny and accountability of public officials". Tristram J. Coffin, The New York State Ethics in Government Act of 1987: A Critical Evaluation, 22 Columbia J.L. & Soc. Probs. 269, 270 (1989). The requirement was designed to ensure that "New Yorkers [could] have
. . . confidence in the integrity of their public servants". Public Papers of Governor Cuomo, January 1, 1989. Therefore, federal officials serving as members or directors of New York State public benefit corporations in their federal capacities do not fall within the coverage of the Act as indicated by its legislative history, nor could they be covered by the Act without violating the principles of supremacy. Moreover, the Public Officers Law specifically excludes members or directors of multi-state authorities from the financial disclosure requirement.2 This is a further indication that New York never intended to impose its financial disclosure requirement on federal officials, representing the federal government as members and/or directors of New York State public benefit corporations. We conclude that the State of New York may not impose its requirement of financial disclosure on federal officials serving 1

We note that the federal government has a financial disclosure filing requirement that probably would apply to these officials which is similar to the filing required by Public Officers Law
§ 73-a. See, 5 USCA App 4 §§ 101, et seq. Copies of these reports are readily available upon request. 5 USCA App 4
§ 105(b)(1).
2

We do not address whether New York State public benefit corporations which designate federal officials as members or directors may be considered "multi-state authorities", thereby falling within the statutory exclusion of Public Officers Law
§ 73-a(1)(c)(iii).

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as members or directors of New York State public benefit corporations in their federal capacities to monitor federal funds, even though these officials have been deemed "policy makers". Accordingly, such federal officials are not required to file financial disclosure statements. Very truly yours,

DENNIS C. VACCO
Attorney General