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HomeMy WebLinkAbout08-533 ConfidentialADVICE OF COUNSEL April 9, 2008 08 -533 This responds to your letter of March 2, 2008, by which you requested a confidential advisory from the Pennsylvania State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., would present any prohibitions or restrictions upon an A of a [political subdivision] [governmental body], who in her private capacity is an attorney with her own practice, with regard to voting on the extension of a contract between the [political subdivision] and a [type of business] for the provision of [type of services], where: (1) the A was named to the [type of list] of the [type of business]] while the A was employed with another law firm from [year] to [yearj; (2) the A represented the [type of business] in matters while the A was employed with the law firm; (3) the A has not represented the [type of business] since leaving the law firm in [year]; and (4) the A does not know whether she remains on the [type of list] for the [type of business]. Facts: As an A of Governmental Body B, which is the governing body of Political S ubdivision C, you request an advisory from the Pennsylvania State Ethics Commission based upon the following submitted facts. Pursuant to the Political Subdivision C D, Governmental Body B is comprised of [number] As. In [month, year], you took office as an elected A of Governmental Body B. In your private capacity, you are a practicing attorney with your own law firm located in Political Subdivision C. You previously were employed as an attorney with the law firm of [name of firm] ( "the Firm ") from [month, year] through [month, year]. While you were employed with the Firm, you were named to Business E's F list, as a result of which you represented Business E in an unspecified number of [types of matters]. You state that you have not represented or been asked to represent Business E in any matter since you left the Firm in [month, year]. You further state that you do not know whether your name remains on Business E's F list. Business E is currently under contract ( "the Contract ") to provide [type of services] to Political Subdivision C. Business E has offered to extend the Contract, under its current terms and conditions, for a one -year period beyond the Contract's current expiration date of [date]. You state that an item will be listed on the agenda for Confidential Advice, 08 -533 April 9, 2008 Page 2 Governmental Body B to consider an extension of the Contract. You note that a majority vote is required to pass an item on Governmental Body B's agenda. Based upon the above submitted facts, you ask whether the Ethics Act would require you to abstain from voting on the proposed Contract extension under any of the following circumstances: 1. If you would not be able to determine whether you remain on Business E's F list; 2. If you would remain on Business E's F list; or 3. If you would not remain on Business E's F list. 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 an A of Governmental Body B, you are a public official subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. (j) Voting conflict. - -Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. Confidential Advice, 08 -533 April 9, 2008 Page 3 65 Pa.C.S. §§ 1103(a), (j). The following terms are defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. 65 Pa.C.S. § 1102. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Examples of conduct that would be prohibited under Section 1103(a) of the Ethics Act would include the participation in an official capacity as to matters involving a business with which the public official /public employee is associated in his private capacity or private clients(s). Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010. A reasonable and legitimate anticipation of the development of a financial /business relationship would also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a voting conflict, Section 1103(j) of the Ethics Act requires the public official /public employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. In the event that the required abstention results in the inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under the Ethics Act, then voting is permissible Confidential Advice, 08 -533 April 9, 2008 Page 4 provided the disclosure requirements noted above are followed. See, Pavlovic, Opinion 02 -005. In applying Section 1103(a) of the Ethics Act to the submitted facts, you are advised that your law firm is a business with which you are associated. As a general rule, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest in matters before Governmental Body B that would financially impact you, your firm, or your /your firm's clients. See, Miller, supra; Kannebecker, supra. In Kannebecker, supra, the State Ethics Commission determined that a township supervisor, who in his private capacity was an attorney, would have a conflict of interest as to matters before the township involving ongoing clients or client(s) for whom he was on retainer, even if he would not represent such client(s) as to the matter pending before the township. The Commission determined that as a general rule, a conflict would not exist as to former client(s), but that under certain circumstances, a conflict could exist as to former client(s) depending upon factors such as the number of prior representations of the given client and the period of time over which such occurred. Having set forth the above general principles, you are advised as follows. If you would remain on Business E's F list, to the extent that there would be an ongoing client relationship between you and Business E, you would have a conflict of interest under Section 1103(a) of the Ethics Act in matters before Governmental Body B pertaining to Business E, including but not limited to the proposed Contract extension. Kannebecker, supra. If you would not be on Business E's F list and there would be no current client relationship between you and Business E, a conflict of interest generally would not exist as to matters pertaining to Business E solely on the basis of the former client relationship. Kannebecker, supra. However, a conflict could exist as to Business E depending upon factors such as the number of prior representations of Business E. Id. The limited submitted facts regarding your representation of Business E while you were employed with the Firm are insufficient to enable a conclusive determination as to whether you would have a conflict of interest as to Business E as a former client. Therefore, this Advice must be limited to providing the above general guidance. In each instance of a conflict of interest, you would be required to abstain fully from participation and in the instance of a voting conflict, to fully abstain and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. You are advised that if you would be unable to determine whether you remain on Business E's F list, it would appear that the prudent course of action would be to proceed as though you remain on such list. The ropriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Political Subdivision C D or the Rules of Professional Conduct. Conclusion: As an A of Governmental Body B, you are a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Based upon the submitted facts that: (1) in your private capacit y as an attorney, you were employed with the law firm of [name of firm] ( "the Firm ") from [month, year] through [month, year]; (2) while you were employed with the Firm, you were named to the F list of Business E; (3) during your employment with the Firm, you represented Business E in an unspecified number of [types of matters]; (4) you have not represented or been asked to represent Business E in any matter since you left the Firm; and (5) you do not know whether your name remains on Business E's F list, you are advised as follows. If you would remain on Business E's F list, to the extent that Confidential Advice, 08 -533 April 9, 2008 Page 5 there would be an ongoing client relationship between you and Business E, you would have a conflict of interest under Section 1103(a) of the Ethics Act in matters before Governmental Body B pertaining to Business E, including but not limited to the proposed extension of a contract between Political Subdivision C and Business E for the provision of [type of services]. If you would not be on Business E's F list and there would be no current client relationship between you and Business E, a conflict of interest generally would not exist as to matters pertaining to Business E solely on the basis of the former client relationship. However, a conflict could exist as to Business E depending upon factors such as the number of prior representations of Business E. The limited submitted facts regarding your representation of Business E while you were employed with the Firm are insufficient to enable a conclusive determination as to whether you would have a conflict of interest as to Business E as a former client. In each instance of a conflict of interest, you would be required to abstain fully from participation and in the instance of a voting conflict, to fully abstain and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. If you would be unable to determine whether you remain on Business E's F list, it would appear that the prudent course of action would be to proceed as though you remain on such list. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, 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