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HomeMy WebLinkAbout08-602 MinnichSharon P. Minnich 124 N. 30 Street Camp Hill, PA 17011 Dear Ms. Minnich: ADVICE OF COUNSEL December 12, 2008 08 -602 This responds to your letter of November 11, 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 present any restrictions upon employment of the Deputy Secretary for Financial Administration in the Governor's Office of the Budget ( "Office of the Budget ") following termination of service with the Commonwealth of Pennsylvania. Facts: You request an advisory from the Pennsylvania State Ethics Commission regarding the post- employment restrictions of the Ethics Act. You have submitted facts that may be fairly summarized as follows. Since April 2007, you have been employed with the Office of the Budget. From April 2007 to December 2007, you served as Special Advisor to the Budget Secretary. From December 2007 to the present, you have served as Deputy Secretary for Financial Administration. You have submitted a copy of a summary of your employment history with the Office of the Budget, which document is incorporated herein by reference. In your prior position as Special Advisor to the Budget Secretary, you reported to the Secretary of the Budget. You did not have sole authority to approve or fund projects. You managed several internal Commonwealth business process and IT initiatives. In your current position as Deputy Secretary for Financial Administration, you report to the Secretary of the Budget. You are the project manager for the "Finance Transformation" project ( "the Project "). The Project is a business process, organization, and technical redesign of comptroller operations, with specific focus on improvements in accounts payable processing and revenue. The Project is a joint effort with the Office of the Budget, the Pennsylvania Department of General Services, the Governor's Office of Administration, the Pennsylvania Treasury Department, and the Pennsylvania Department of Revenue. The implementation partner on the Project is a firm named "Deloitte Consulting." As project manager for the Project, you oversee overall Project team activities as they relate to the Project. You review and approve all final deliverables for payment Minnich, 08 -602 December 12, 2008 Page 2 related to technical and organization design and oversee the movement of staff from multiple locations into a single facility. In your positions with the Office of the Budget, you have engaged in procurement related activities with respect to the Project, the "Contractor Responsibility Program (CRP) Upgrade," and the "eTravel System Upgrade," including assisting in drafting Statements of Work and serving on evaluation committees to review and evaluate proposals. You state that you have not made any decisions regarding your potential career options. One option is to return to the private sector, which could include providing consulting services to governmental entities. Based upon the above submitted facts, you pose the following specific questions as to restrictions on your activities following termination of Commonwealth service: 1. In general, whether the Ethics Act would present any restrictions upon your employment following your termination of service as Deputy Secretary for Financial Administration; 2. Whether you would be permitted to have contact with state agencies, and specifically what restrictions would apply to you under the Ethics Act; and 3. Whether the Ethics Act would permit you 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 Deputy Secretary for Financial Administration with the Office of the Budget, you would be considered a "public official /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 service, you would become a former public official /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 Minnich, 08 -602 December 12, 2008 Page 3 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. 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 would not have actively participated in recruiting such business or corporation to Pennsylvania, and that you would not have actively participated 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. Unlike Section 1103(i), Section 1103(g) does not prohibit a former public official /public employee from accepting a position of employment. However, it does restrict 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 Minnich, 08 -602 December 12, 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 service would be the Office of the Budget in its entirety. Therefore, for the first year following termination of your service with the Office of the Budget, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before the Office of the Budget. Having set forth the restrictions of Section 1103(g) of the Ethics Act, it is noted that your first and second questions have already been addressed above. Minnich, 08 -602 December 12, 2008 Page 5 In response to your third question, you are advised as follows. Following termination of your Commonwealth service, Section 1103(i) of the Ethics Act would not prohibit you from advising a given business on the functions of government and other strategies subject to the conditions that you would not have actively participated in recruiting such business to Pennsylvania, and that you would not have actively participated 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 businesses on the functions of government and other strategies as long as in so doing, you would not engage in prohibited representation before the Office of the Budget 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 would be no use of the authority of your public position or confidential information received by being in your public position 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. Conclusion: As Deputy Secretary for Financial Administration in the Governor's Office of the Budget ( "Office of the Budget"), you would be considered a "public official /public employee' and an "executive -level State employee" subject to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Upon termination of Commonwealth service, you would become a former public official /public employee and a former executive -level State employee subject to the restrictions of Section 1103 ) and Section 1103(i) of the Ethics Act. The prohibitions of Section 1103(i) of the g Ethics Act set forth above would have to be followed. 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 would not have actively participated in recruiting such business or corporation to Pennsylvania, and that you would not have actively participated 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. The restrictions of Section 1103(g) of the Ethics Act as outlined above must be followed. The governmental body with which you would be deemed to have been associated upon termination of Commonwealth service would be the Office of the Budget in its entirety. For the first year following termination of your Commonwealth service, Section 1103(g) of the Ethics Act would apply and restrict `representation" of "persons" before the Office of the Budget. 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. Minnich, 08 -602 December 12, 2008 Page 6 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