HomeMy WebLinkAbout09-506 ConfidentialADVICE OF COUNSEL
February 5, 2009
09 -506
This responds to your letter dated January 5, 2009, 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 prohibit a state legislator from serving on the board of a
[type of entity] established to serve as a [type of organization] for a private [type of
institution] pursuant to the [title of statute], when the [immediate family member] of the
state legislator holds the position of Position L with the [institution].
Facts: As A with the B of the Pennsylvania [Chamber of the General Assembly],
you have been authorized by State Legislator C to request a confidential advisory from
the Pennsylvania State Ethics Commission on his behalf.
You pose four questions. Your first two questions are based upon submitted
facts that may be fairly summarized as follows.
You state that it is contemplated that a [type of entity] (hereinafter "Entity D ") will
be established to function as a [type of organization] for Institution E in compliance with
[cite 1] and [cite 2] of Statute F. The G of Entity D has engaged an H to establish Entity
D under [cite 1 ] of Statute F.
You reference a government publication and web site as providing further
information regarding [cite 1 ] applications and the nature of a [type of organization].
Entity D will work with Institution E to help develop Institution E's [types of
programs] and offset the costs of certain activities that would otherwise be paid by
Institution E. The G will absorb the cost of establishing Entity D and will make an initial
contribution to fund Entity D. The G envisions that a majority of subsequent funding for
Entity D will come from Is.
The G has approached State Legislator C to serve on the board of Entity D once
it is created. You state that it is the intent of the G that the board of Entity D would
Confidential Advice, 09 -506
February 5, 2009
Page 2
further consist of [number] other members who are not associated with Institution E and
[number] members from Institution E's J or K.
You state that State Legislator C's [immediate family member] holds the position
of Position L with Institution E.
It is administratively noted that Institution E is a private institution.
Based upon the above facts, you pose the following two questions:
1. Whether the Ethics Act would permit State Legislator C to serve on the
board of Entity D; and
2. What salient issues and restrictions come to mind with respect to State
Legislator C's service on the board of Entity D.
Your third and fourth questions are based upon the following facts.
The Pennsylvania State Ethics Commission has appealed the October 3, 2008,
Opinion and Order of the Commonwealth Court of Pennsylvania holding that a non-
profit corporation or organization is not included in the definition of the term "business"
under Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102. See, Rendell v. Pennsylvania
State Ethics Commission, 961 A.2d 209 (Pa. Commw. 2008). The appeal is
presently pending before the Supreme Court of Pennsylvania.
Based upon the above facts, you pose the following questions:
3. Whether the State Ethics Commission is currently utilizing the
Commonwealth Court's interpretation of the definition of the term
"business" in the Ethics Act; and
4. If the Supreme Court would grant the State Ethics Commission's appeal
from the aforesaid Commonwealth Court Opinion and Order, whether the
State Ethics Commission thereafter would hold that a non - profit
corporation or organization is a "business" as that term is defined in the
Ethics Act.
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.
State Legislator C is a public official 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).
Confidential Advice, 09 -506
February 5, 2009
Page 3
The following terms related to Section 1103(a) 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.
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.
In applying the above provisions of the Ethics Act to the instant matter, Section
1103(a) of the Ethics Act generally does not prohibit public officials /public employees
from having outside activities or employment. However, the use of government staff,
time, equipment, facilities, or property for non - governmental purposes — including
business, personal, or political purposes —is generally prohibited and may form the
basis for a violation of Section 1103(a) of the Ethics Act. See, e.q., Confidential
Opinion, 05 -001; Heck, Order 1251, Holt, Order 1153 (business purposes); Moore,
Order 1317, Meduka rder 1277, Sullivan, Order 1245, Dovidio, Order 1202 (personal
purposes); Habay, Order 1313, Livingston, Order 1030, Rockefeller, Order 1004,
Freind, Order 800 (political purposes). The State Ethics Commission has long held that
government offices, facilities, equipment, and personnel are to be used for
governmental purposes and not for private, business or campaign /re- election activities.
See, Smythe, Order 1121; Rakowsky, Order 943; Eck, Order 787; Freind, supra; Ferlo,
opinion 97 -005.
As to state legislators specifically, to the extent the activities of a state legislator
relate to "legislative actions" (introducing, considering, debating, voting, enacting,
adopting, or approving legislation), they are constitutionally controlled and are exempt
from the purview of the Ethics Act and the State Ethics Commission. See, Corri an,
Opinion 87 -001. Thus, Section 1103(a) of the Ethics Act would not apply to tate
Legislator C when he is engaged in legislative actions.
Having established the above general principles, your four questions shall be
considered.
Confidential Advice, 09 -506
February 5, 2009
Page 4
In response to your first question, you are advised that Section 1103(a) of the
Ethics Act would not prohibit State Legislator C from serving on the board of Entity D.
Your second question is too imprecise to be answered in an advisory.
In response to your third question, you are advised that following the issuance of
the October 3, 2008, decision of Commonwealth Court in Rendell v. State Ethics
Commission, supra, there have been no State Ethics Commission rulings relevant to
your inquiry.
As Commission rulings become publicly available, they will be placed in the
Commission's "e- library" (a searchable database accessible through the Commission's
web site at www.ethics.state.pa.us) as well as in various libraries throughout the
Commonwealth.
As for your fourth question, you are advised that answers to questions regarding
the proper application of the definition of the term "business" as set forth in the Ethics
Act are dependent upon the outcome of the State Ethics Commission's aforesaid
appeal pending before the Supreme Court of Pennsylvania.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Conclusion: As a Pennsylvania state legislator, State Legislator C is 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) a [type of
entity] (hereinafter "Entity D ") will be established to function as a [type of organization]
for Institution E in compliance with [cite 1 ] and [cite 2] of Statute F; (2) the G of Entity D
has engaged an H to establish Entity D under [cite 1] of Statute F; (3) Entity D will work
with Institution E to help develop Institution E's 'types of programs] and offset the costs
of certain activities that would otherwise be paid by Institution E; (4) the G will absorb
the cost of establishing Entity D and will make an initial contribution to fund Entity D; 5
the G envisions that a majority of subsequent funding for Entity D will come from Is; 6
the G has approached State Legislator C to serve on the board of Entity D once it is
created; and (7) State Legislator C's [immediate family member] holds the position of
Position L with Institution E, you are advised that Section 1103(a) of the Ethics Act
would not prohibit State Legislator C from serving on the board of Entity D.
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
Confidential Advice, 09 -506
February 5, 2009
Page 5
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