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HomeMy WebLinkAbout08-569 ConfidentialADVICE OF COUNSEL August 18, 2008 08 -569 This responds to your letter of July 15, 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 impose any prohibitions or restrictions upon an individual serving as the A for a Township if such individual, in his private capacity, would start a business relating to the determination of the B of Cs but would not accept employment opportunities from any location within the Township while serving in his current Township position. Facts: As the attorney for Individual D, you request a confidential advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. Individual D serves as the appointed A for Township E ("Township "). In the aforesaid position, Individual D's duties include [position duties]. The position no longer includes tasks related to the B of Cs, as the Township Board of Supervisors has deemed such tasks to be [type of function] to be performed by [type of department]. Individual D is considering starting a business in his private capacity, which business would primarily relate to the determination of the B of Cs. Individual D is contemplating that he would be hired by [types of clients] that want or are in need of an expert opinion as to the B of a C or F. Individual D would appear at C sites, investigate the circumstances of such Cs, and render opinions, including expert opinions in court proceedings. Individual D might review the findings of other Gs and render opinions as an expert witness. Individual D might also perform [types of inspections] and inspect and make [types of recommendations] as to H. Individual D does not anticipate any interactions between his contemplated business and the Township. You state that Individual D would not accept employment opportunities from any location within the Township while serving in his current Township position. You state that Individual D would accept employment opportunities or referrals within the Township upon the expiration of any mandatory waiting period after his retirement or severance from his current Township position. Based upon the above submitted facts, you ask whether Individual D's contemplated business activities would cause him to run afoul of the Ethics Act given his current position with the Township. Confidential Advice, 08 -569 August 18, 2008 Page 2 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 appointed A for the Township, Individual D would be considered a public official /public employee subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: §1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). 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. 65 Pa.C.S. §1102. "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. Confidential Advice, 08 -569 August 18, 2008 Page 3 It is noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interests does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position - -or confidential information obtained by loeing in that position - -for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, Metrick, Order 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the 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. If a business with which the public official /public employee or immediate family member is associated or a private customer /client would have a matter pending before the governmental body, the public official /public employee would generally have a conflict of interest as to such matter. Kannebecker, supra; Miller, supra. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official /public employee would be required to abstain fully from participation and in the instance of a voting conflict, to abstain and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. In applying the above provisions of the Ethics Act to the instant matter, you are advised that any business as to which Individual D is a director, officer, owner, or employee or in which he has a financial interest would be considered a business with which Individual D is associated. Subject to the statutory exceptions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, Individual D would have a conflict of interest in his public capacity in matters that would financially impact himself, any business(es) with which he is associated, or the customer(s)/client(s) of any business(es) with which he is associated. See, Kannebecker, supra; Miller, supra. In response to your specific inquiry, you are advised that Section 1103(a) of the Ethics Act would not prohibit Individual D, in his private capacity, from engaging in the proposed business activity as set forth above, but in his public capacity, Individual D would be required to comply with the restrictions of Section 1103(a) of the Ethics Act. Having addressed the restrictions of Section 1103(a) of the Ethics Act, you are further advised that following Individual D's retirement or severance from Township employment, Individual D would become a former public official /public employee subject to the post - employment restrictions of Section 1103(g) of the Ethics Act. 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). Confidential Advice, 08 -569 August 18, 2008 Page 4 The terms "represent," "person," "governmental body," 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." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "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 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, inter alia: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; and (3) lobbying. Popovich, Opinion 89 -005. 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 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 Confidential Advice, 08 -569 August 18, 2008 Page 5 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. Upon retirement or severance from his position as the A for the Township, the governmental body with which Individual D would be deemed to have been associated would be the Township in its entirety. Therefore, for the first year following his termination of service as the A for the Township, Section 1103(g) of the Ethics Act would apply to Individual D and would restrict his "representation' of "persons" before the Township. The ropriety 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 the appointed A for E Township ( "Township "), Individual D is a public official /public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Subject to the statutory exceptions to the definition of "conflict" or "conflict of interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, Individual D would have a conflict of interest in his public capacity in matters that would financially impact himself, any business(es) with which he would be associated, or the customer(s) /client(s) of any business(es) with which he would be associated. Based upon the submitted facts that: (1) Individual D is considering starting a business in his private capacity, which business would primarily relate to the determination of the B of Cs; (2) Individual D anticipates that in his private business he would be hired by [types of clients] that want or are in need of an expert opinion as to the B of a C or F; (3) ndividual D anticipates that in his private business he would appear at C sites, investigate the circumstances of such Cs, and render opinions, including expert opinions in court proceedings; (4) Individual D anticipates that in his private business he might review the findings of other Gs and render opinions as an expert witness, perform [types of inspections], and inspect and make [types of recommendations] as to H; (5) ndividual D does not anticipate any interactions between his contemplated business and the Township; and (6) Individual D would not accept employment opportunities from any location within the Township while serving in his current Township position, but would accept employment opportunities or referrals within the Township upon the expiration of any mandatory waiting period after his retirement or severance from his current Township position ou are advised as follows. Section 1103(a) of the Ethics Act would not prohibit Individual D, in his private capacity, from engaging in the aforesaid proposed business activity, but in his public capacity, Individual D would be required to comply with the restrictions of Section 1103(a) of the Ethics Act as set forth above. Upon Individual D's retirement or severance from Township employment, Individual D would become a former public official /public employee subject to the post - employment restrictions of Section 1103(g) of the Ethics Act. The governmental body with which Individual D would be deemed to have been associated would be the Township in its entirety. During the first year following termination of Individual D's service with the Township, the restrictions of Section 1103(g) of the Ethics Act outlined above must be followed. 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. Confidential Advice, 08 -569 August 18, 2008 Page 6 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