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HomeMy WebLinkAbout08-550 HoughThomas C. Hough 1050 Longview Road King of Prussia, PA 19406 ADVICE OF COUNSEL May 7, 2008 08 -550 Dear Mr. Hough: This responds to your letter of March 28, 2008, by which you requested an 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 impose any prohibitions or restrictions upon an elected township auditor, who, in a private capacity, owns a firm that provides to municipalities consulting services on recycling issues, with regard to resigning from his auditor position with the township to provide consulting services to a joint recycling consortium to be formed by the township and another municipality. Facts: As an elected Auditor for Upper Merion Township ( "Township "), you request an advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. You are currently serving the fourth year of your second six -year term as an elected Township Auditor. You receive no compensation from the Township for your service. The Township is a second class township. For over twenty-five years, the Township has selected a professional accounting firm to audit its financial affairs. The duties of the elected auditors include annual reorganization, setting the salary of the Township Supervisors, and providing comments on the annual financial report to the Township Board of Supervisors through the Director of Finance. In a private capacity, you are the owner of a firm named "Hough Associates" (hereinafter referred to as the Firm "). The Firm is a sole proprietorship that you formed in 1982 in Montgomery County, Pennsylvania. The Firm consists of you and two full - time employees, and it provides consulting services to fifty -three municipalities in Southeastern Pennsylvania. Lower Merion Township is one of your clients. You state that the Firm provides two types of services to its municipal clients. The first service consists of recycling data collection and recycling grant application preparation. You state that this work involves contacting haulers, recycling markets, and large commercial generators of recyclables to document the recycling tonnage generated in a municipality, for the purpose of supporting the tonnage claimed in such Hough, 08 -550 May 7, 2008 Page 2 municipality's recycling performance grant application. This service is typically provided on an annual fixed price basis. The Firm also provides to its municipal clients services relating to compliance with the Municipal Waste Planning, Recycling and Waste Reduction Act, 53 P.S. § 4000.101 et seq. You state that these services involve making recycling more sustainable through efficient use of equipment, people, and facilities. The specific services provided by the Firm include: recommending combinations of specialized drop - off facilities that make it easy for small businesses to comply with state law and local ordinances; setting up programs for curbside collection and composting of leaf and yard wastes; coordinating activities for the collection of special and household hazardous wastes with the county recycling coordinators; and setting up recycling monitoring and enforcement programs that handle initial complaints from residents through warnings and fines. The Firm provides these services on an hourly rate basis. You state that while you were providing recycling services for Lower Merion Township in February 2008, you determined that the performance of joint recycling activities between Lower Merion Township and the Township would create economic benefits for both municipalities. You state that both municipalities want to pursue joint recycling activities, and that they intend to approve a joint resolution to form the "Lower Merion — Upper Merion Recycling Compliance and Sustainability Consortium" (hereinafter referred to as the Joint Recycling Consortium "). You have submitted an unexecuted copy of the aforesaid joint resolution. You express your view that by working together in a joint recycling program coordinated by the Firm, both municipalities could save money, increase recycling sustainability, and share larger performance grants. You note that if the Joint Recycling Consortium would be formed, Lower Merion Township would be the lead municipality for preparing recycling grant applications. You express your belief that you could now best serve your community by resigning from your position as an elected Township Auditor so that you could provide consulting services to the Joint Recycling Consortium. You state that the Township has asked you to obtain an advisory from the State Ethics Commission that would allow you to provide recycling consulting services to the Joint Recycling Consortium. You note that for the past ten years, you have not had any business dealings with or received any compensation from the Township. Based upon the above submitted facts, you ask whether the Ethics Act would permit you to provide consulting services to the Joint Recycling Consortium if you would resign from your position as an elected Township Auditor. 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 elected Township Auditor, you would be considered a "public official" 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 public service, you would become a "former public official" subject to Section 1103(g) of the Ethics Act. Hough, 08 -550 May 7, 2008 Page 3 Section 1103(g) of the Ethics Act restricts the former public official /public employee with regard to "representing" a "person" before the governmental body with which he has been associated ": § 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 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 Hough, 08 -550 May 7, 2008 Page 4 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 public service would be the Township. Cf., Ward, Advice 02 -522. Therefore, for the first year following termination of service as an elected Township Auditor, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before the Township. Having established the above general principles, it is noted that there is no indication in the submitted facts as to whether: (1) the Joint Recycling Consortium would be a separate legal entity from the Township; (2) the Township would be a party to contract(s) involving the proposed consulting services; or (3) the proposed consulting services would involve interaction with the Township, the submission of documents to the Township, or other forms of representation before the Township. Therefore, based upon the limited submitted facts, this advisory must necessarily be limited to providing the following guidance. You are advised that the restrictions of Section 1103(g) would prohibit you from entering into a contract with the Township during the first year following your resignation from office as a Township Auditor. See, Shaub, Order 1242; Confidential Opinion, 97- 008; Confidential Opinion, 93 -005. You are further advised that during the first year following your resignation from office as a Township Auditor, Section 1103(g) of the Ethics Act would prohibit you from providing consulting services to the Joint Recycling Consortium for promised or actual compensation unless all of the following conditions would be met: (1) the Joint Recycling Consortium would be a separate legal entity from the Township; (2) the Township would not be a party to contract(s) involving the proposed consulting services; and (3) in performing such consulting services, you would not engage in prohibited representation before the Township. Hough, 08 -550 May 7, 2008 Page 5 Based upon the facts that have been submitted, this Advice has addressed the applicability of Section 1103(g) 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 Second Class Township Code. Conclusion: As an elected Auditor for Upper Merion Township ( "Township "), you would be considered a "public official" subject to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Upon resignation from office as a Township Auditor, you would become a "former public official" subject to Section 1103(g) of the Ethics Act. The governmental body with which you would be deemed to have been associated upon termination of public service would be the Township. During the first year following your resignation from office as a Township Auditor, the restrictions as to representation outlined above must be followed. Under the submitted facts that: (1) in a private capacity, you are the owner of a firm named "Hough Associates" (hereinafter referred to as the Firm "); (2) the Firm is a sole proprietorship that provides consulting services to fifty -three municipalities in Southeastern Pennsylvania; (3) Lower Merion Township is one of your clients; (4) Lower Merion Township and the Township want to pursue joint recycling activities; (5) Lower Merion Township and the Township intend to approve a joint resolution to form the "Lower Merion — Upper Merion Recycling Compliance and Sustainability Consortium" (hereinafter referred to as the Joint Recycling Consortium "); and (6) if the Joint Recycling Consortium would be formed, Lower Merion Township would be the lead municipality for preparing recycling grant applications, you are advised as follows. During the first year following your resignation from office as a Township Auditor, Section 1103(g) of the Ethics Act would prohibit you from providing consulting services to the Joint Recycling Consortium for promised or actual compensation unless all of the following conditions would be met: (1) the Joint Recycling Consortium would be a separate legal entity from the Township; (2) the Township would not be a party to contract(s) involving the proposed consulting services; and (3) in performing such consulting services, you would not engage in prohibited representation before the Township. Act. The propriety of the proposed conduct has only been addressed under the Ethics 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 Hough, 08 -550 May 7, 2008 Page 6 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