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HomeMy WebLinkAbout08-528 KapoorVijay Kapoor 4522 Pine Street Philadelphia, PA 19143 ADVICE OF COUNSEL March 25, 2008 08 -528 Dear Mr. Kapoor: This responds to your correspondence received February 13, 2008, and February 25, 2008, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., would present any restrictions upon employment of the Director of the Office of Management and Productivity within the Governor's Office of Administration, following termination of Commonwealth employment. Facts: You request an advisory from the State Ethics Commission regarding the post- employment restrictions of the Ethics Act. You have submitted facts that may be fairly summarized as follows. You currently serve as the Director of the Office of Management and Productivity COMP ") within the Governor's Office of Administration ( "OA "). You have submitted a copy of a position description for your current position, which document is incorporated herein by reference. Although the position description lists the name of another individual, you state that the description of the job duties remains current. You further state that you have been informed that there are no job classification specifications for your position. You have also submitted a copy of an organizational chart for OA, which document is incorporated herein by reference. Executive Order No. 2003 -3 ( "the Executive Order"), signed by Governor Edward G. Rendell on April 30, 2003, established OMP as well as the Management and Productivity Improvement Council. You have submitted a copy of the Executive Order, which is incorporated herein by reference. It is administratively noted that per the Executive Order, the Director of OMP also serves as Secretary of the Management and Productivity Improvement Council. As the Director of OMP, you report directly to the Secretary of Administration. You state that OMP works with Commonwealth agencies on cost savings initiatives and collects information from such agencies as to any monetary savings. You further state that individuals in those Commonwealth agencies do not have a reporting relationship to OMP and that OMP cannot require such agencies to undertake projects. Kapoor, 08 -528 March 25, 2008 Page 2 You state that you will be leaving Commonwealth employment in the next few months to start a management consulting company ( "the Company ") of which you will have sole ownership. You further state that the Company will apply for minority business designation with the Pennsylvania Department of General Services. Finally, you note that you are an attorney licensed to practice law in the Commonwealth. Based upon the above submitted facts, you pose the following specific questions: 1. In general, whether the Ethics Act would impose any restrictions upon your employment following your termination of service as the Director of OMP; 2. Whether the Company would be permitted to have contact with OA and /or other Commonwealth agencies, and specifically what restrictions would apply to you under the Ethics Act; and 3. Whether the Company would be permitted to advise businesses on the functions of government and other strategies as long as you would not have direct contact with a "restricted agency or employee." Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. As the Director of OMP, you would be considered a "public employee" and an "executive -level State employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Consequently, upon termination of Commonwealth employment, you would become a "former public employee" and a "former executive -level State employee" subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act. Section 1103(i) restricts former executive -level State employees as follows: § 1103. Restricted activities (i) Former executive -level employee. - -No former executive -level State employee may for a period of two years from the time that he terminates employment with this Commonwealth be employed by, receive compensation from, assist or act in a representative capacity for a business or corporation that he actively participated in recruiting to this Commonwealth or that he actively participated in inducing to open a new plant, facility or branch in this Commonwealth or that he actively participated in inducing to expand an existent plant or facility within this Commonwealth, provided that the above prohibition shall be invoked only when the recruitment or inducement is accomplished by a grant or loan of money or a promise of a grant or loan of money from the Commonwealth to the business or corporation recruited or induced to expand. Kapoor, 08 -528 March 25, 2008 Page 3 65 Pa.C.S. § 1103(i). Section 1103(i) restricts the ability of a former executive -level State employee to accept employment or otherwise engage in business relationships following termination of State service, under certain narrow conditions. The restrictions of Section 1103(i) apply even where the business relationship is indirect, such as where the business in question is a client of a new employer, rather than the new employer itself. See, Confidential Opinion, 94 -011. However, Section 1103(i) would not restrict you from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a business or corporation subject to the conditions that you did not actively participate in recruiting such business or corporation to Pennsylvania, and that you did not actively participate in inducing such business or corporation to open or expand a plant, facility, or branch in Pennsylvania, through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania. Section 1103(g) of the Ethics Act restricts a former public official /public employee with regard to "representing" a "person" before the governmental body with which he has been associated." However, Section 1103(g) of the Ethics Act may not be applied to restrict an attorney's conduct insofar as it constitutes the practice of law, because the Pennsylvania Supreme Court has the exclusive authority to regulate an attorney's conduct in that regard. Shaulis v. Pennsylvania State Ethics Commission, 574 Pa. 680, 833 A.2d 123 (2003). Section 1103(g) of the Ethics Act provides as follows: § 1103. Restricted activities (g) Former official or employee. - -No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 Pa.C.S. § 1103(g) (Emphasis added). The terms "represent," "person," and "governmental body with which a public official or public employee is or has been associated" are specifically defined in the Ethics Act as follows: § 1102. Definitions "Represent." To act on behalf of any other person in any activity which includes, but is not limited to, the following: personal appearances, negotiations, lobbying and submitting bid or contract proposals which are signed by or contain the name of a former public official or public employee. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has Kapoor, 08 -528 March 25, 2008 Page 4 been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. 65 Pa. C. S. § 1102. The term "Person" is very broadly defined. It includes, inter alia, corporations and other businesses. It also includes the former public employee himself, Confidential Opinion, 93 -005, as well as a new governmental employer. Ledebur, Opinion 95 -007. The term "representation" is also broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (3) submission of bid or contract proposals which are signed by or contain the name of the former public official /public employee; (4) participating in any matters before the former governmental body as to acting on behalf of a person; and (5) lobbying. Popovich, Opinion 89 -005. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits the inclusion of the name of a former public official /public employee on invoices submitted by his new employer to the former governmental body, even if the invoices pertain to a contract that existed prior to termination of service with such governmental body. Shay, Opinion 91 -012. However, if such a pre- existing contract does not involve the unit where the former public employee worked, the name of the former public employee may appear on routine invoices if required by the regulations of the agency to which the billing is being submitted. Abrams/Webster, Opinion 95 -011. A former public official /public employee may assist in the preparation of any documents presented to his former governmental body. However, the former ublic official /public employee may not be identified on documents submitted to the former governmental body. The former public official /public employee may also counsel any person regarding that person's appearance before his former governmental body. Once again, however, the activity in this respect should not be revealed to the former governmental body. The Ethics Act would not prohibit or preclude making general informational inquiries to the former governmental body to secure information which is available to the general public, but this must not be done in an effort to indirectly influence the former governmental body or to otherwise make known to that body the representation of, or work for the new employer. Section 1103(g) only restricts the former public official /public employee with regard to representation before his former governmental body. The former public official /public employee is not restricted as to representation before other agencies or entities. However, the "governmental body with which a public official /public employee is or has been associated" is not limited to the particular subdivision of the agency or other governmental body where the public official /public employee had influence or control but extends to the entire body. See, Legislative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion 90 -006; Sharp, Opinion 90- 009 -R. The governmental body with which you would be deemed to have been associated upon termination of Commonwealth employment, hereinafter referred to collectively as your "former governmental body," would be OA in its entirety, including but not limited to OMP, as well as the Management and Productivity Improvement Council. Therefore, for the first year following termination of your Commonwealth employment, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons " -- including but not limited to the Company -- before your former Kapoor, 08 -528 March 25, 2008 Page 5 governmental body as identified above, to the extent such representation would not constitute the practice of law. Cf., Moore, Opinion 05 -008; Confidential Advice, 05 -583; Confidential Advice, 04 -524. Having set forth the restrictions of Sections 1103(g) and 1103(i) of the Ethics Act, your specific questions shall now be addressed. In addressing your specific questions, references below to "prohibited representation" do not encompass activities that would constitute the practice of law. It is noted that your first question has already been addressed above. In response to your second question, you are advised as follows. Section 1103(g) of the Ethics Act would not prohibit the Company from having contact with your former governmental body or other Commonwealth agencies /entities. However, during the first ear following termination of your Commonwealth employment, Section 1103(g) of the Ethics Act would prohibit you from engaging in activities that would constitute prohibited representation of the Company before your former governmental body. Section 1103(g) of the Ethics Act would only apply to restrict you from engaging in prohibited representation before your former governmental body and would not apply as to other Commonwealth agencies /entities. However, where such other agencies /entities would have involvement with your former governmental body, you would have to exercise caution to ensure that you would not engage in prohibited representation before your former governmental body. As to your third question, you are advised that following termination of your Commonwealth employment, Section 1103(i) of the Ethics Act would not prohibit you from advising a given business client of the Company on the functions of government and other strategies subject to the conditions that you did not actively participate in recruiting such business to Pennsylvania, and that you did not actively participate in inducing such business to open or expand a plant, facility, or branch in Pennsylvania, through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania to such business. Section 1103(g) of the Ethics Act would not prohibit you from advising business clients of the Company on the functions of government and other strategies as long as in so doing, you would not engage in prohibited representation before your former governmental body during the first year following termination of Commonwealth service. Based upon the facts that have been submitted, this Advice has addressed the applicability of Sections 1103(g) and 1103(i) only. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer or give to a public official /public employee and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Governor's Code of Conduct or the Rules of Professional Conduct. Conclusion: As the Director of the Office of Management and Productivity COMP ") within the Governor's Office of Administration ( "OA "), you would be considered a "public employee" and an "executive -level State employee" subject to the Public Official and Employee Ethics Act ( "Act "), 65 Pa.C.S. § 1101 et seq. Upon termination of Commonwealth employment, you would become a former public employee and a Kapoor, 08 -528 March 25, 2008 Page 6 former executive -level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act. Under Section 1103(i) of the Ethics Act, you would not be prohibited from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a business or corporation subject to the conditions that you did not actively participate in recruiting such business or corporation to Pennsylvania, and that you did not actively participate in inducing such business or corporation to open or expand a plant, facility, or branch in Pennsylvania through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania. For the first year following termination of your Commonwealth employment, the restrictions of Section 1103(g) of the Ethics Act would apply to you and would have to be followed except as to activities that would constitute the practice of law. The governmental body with which you would be deemed to have been associated upon termination of Commonwealth employment, hereinafter referred to collectively as your "former governmental body," would be OA in its entirety, including but not limited to OMP, as well as the Management and Productivity Improvement Council. The propriety of the proposed conduct has only been addressed under the Ethics Act. Further, should service be terminated, as outlined above, the Ethics Act would require that a Statement of Financial Interests be filed by no later than May 1 of the year after termination of service. Pursuant to Section 1107(11), an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 - 787 - 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Robin M. Hittie Chief Counsel