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HomeMy WebLinkAbout09-005 JonesOPINION OF THE COMMISSION Dear Mr. Morford: I. ISSUE: Mark Morford, Esquire Latsha, Davis, Yohe & McKenna, P.C. 350 Eagleview Boulevard, Suite 100 Exton, PA 19341 Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Nicholas A. Colafella Mark Volk DATE DECIDED: 7/22/09 DATE MAILED: 8/4/09 09 -005 This responds to your letters of June 18, 2009, and June 26, 2009, by which you requested advice from the State Ethics Commission. Given the restrictions of the Charter School Law at 24 P.S. § 17- 1715- A(12), which prohibit an administrator for a charter school from receiving compensation from another charter school or from a company that provides management or other services to another charter school, whether Section 1103(a) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1103(a), would prohibit the Chief Executive Officer of a charter school from simultaneously serving for compensation as the part -time Interim Executive Director of the Pennsylvania Coalition of Charter Schools. II. FACTUAL BASIS FOR DETERMINATION: You seek an advisory regarding the prospective conduct of Mr. Lawrence Jones ( "Mr. Jones "). You have submitted facts, the material portion of which may be summarized as follows. Mr. Jones currently serves as Chief Executive Officer of the Richard Allen Preparatory Charter School ( "Charter School "). Mr. Jones is the administrative head of the Charter School. He is responsible for the overall operations of the Charter School under the direction of the Charter School's Board of Trustees. Morford, 09 -005 August 4, 2009 Page 2 Mr. Jones also serves as President of the Board of Trustees of the Pennsylvania Coalition of Charter Schools ( "Coalition "), which is an unpaid position. The Coalition would like to employ Mr. Jones as its Interim Executive Director on a part -time basis while Mr. Jones continues to serve as the Chief Executive Officer of the Charter School. If hired as the Interim Executive Director of the Coalition, Mr. Jones would resign from the Board of Trustees of the Coalition. While working part -time for the Coalition, Mr. Jones' hours and salary at the Charter School would be reduced. You state that Mr. Jones would carefully track his time to ensure that the Charter School would only pay for work performed for the Charter School. The Coalition is a Pennsylvania nonprofit corporation. Although the initial purpose of the Coalition when it was formed in 2001 was to provide support services to charter schools" (September 17, 2001, Articles of Incorporation, at paragraph 3), the Articles of Incorporation were amended in 2005 to delete the previous purpose and replace it with the following: The Coalition is an association of charter schools formed to advance their mutual interest and the cause of charter schools generally. The Coalition also acts as the public spokesman for charter schools and as a liaison for charters with the Pennsylvania Dept. of Education." February 28, 2005, Articles of Amendment, at Exhibit A. The Coalition currently has approximately 117 charter school members and approximately 45 associate members that are not charter schools. All of the activities of the Coalition are funded through membership dues and monies generated at the Coalition's annual conference, such as registration fees. The Coalition's primary activity is government relations. You state that the Coalition communicates with the Pennsylvania Department of Education on issues that are relevant to charter schools. The Coalition works with its members to obtain changes to laws impacting charter schools. The Coalition also serves as a point of contact for charter schools dealing with some of the larger districts in Pennsylvania. The Coalition actively promotes positive news stories regarding the charter school movement in Pennsylvania and comments on other stories involving charter schools. The Coalition receives legal advice about pending legislation and regulations that are of interest to charter schools. The Coalition provides its charter school members with information about the legal implications of existing and proposed legislation and regulations. The Coalition has also filed an amicus brief in litigation involving several charter schools and their authorizing district. The Coalition maintains a web site that has a "members only" section with a resource center and library. The library contains: (1) information about how to open a charter school; (2) standardized job descriptions; (3) standardized board meeting agendas; (4) a school startup timeline; (5) a list of due dates for governmental reports; and (6) a Code of Accountability for charter schools. Some of these items are available only to members, and access to these items is included as part of the annual membership fee paid by members. You state that the Coalition plans to expand the resource center by providing a list of qualified vendors to assist Coalition members with school development, school governance, replication of successful charter school models, strategic planning, student discipline, program development, grant writing, fund raising, school performance audits, special education, and the installation and maintenance of value added assessment systems. These services will be provided by independent contractors that will be vetted by the Coalition. The independent contractors will pay the Coalition a fee in order to be included as part of the Coalition's resource center. The individual schools that work with Morford, 09 -005 August 4, 2009 Page 3 the independent contractors will pay the independent contractors directly and will not pay the Coalition. The Coalition operates the only statewide charter school conference attended by almost all Pennsylvania charter schools and charter school planning groups. Continuing professional development credit is offered to all who attend. You state that the Coalition does not provide services directly to individual charter school members for an additional fee, although employees of members are charged a registration fee to attend the annual conference. Coalition employees respond to requests for information and guidance from charter schools, but this is done on an informal basis without any charge to the charter school requesting the information or guidance. Given the restrictions of the Charter School Law at 24 P.S. § 17- 1715- A(12), which prohibit an administrator for a charter school from receiving compensation from another charter school or from a company that provides management or other services to another charter school, you ask whether Section 1103(a) of the Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1103(a), would prohibit Mr. Jones as Chief Executive Officer of the Charter School from simultaneously serving for compensation as the part -time Interim Executive Director of the Coalition. It is administratively noted that Section 17- 1715 -A(12) of the Charter School Law provides as follows: § 17- 1715 -A. Charter school requirements Charter schools shall be required to comply with the following provisions: (12) A person who serves as an administrator for a charter school shall not receive compensation from another charter school or from a company that provides management or other services to another charter school. The term "administrator" shall include the chief executive officer of a charter school and all other employes of a charter school who by virtue of their positions exercise management or operational oversight responsibilities. A person who serves as an administrator for a charter school shall be a public official under 65 Pa.C.S. Ch. 11 (relating to ethics standards and financial disclosure). A violation of this clause shall constitute a violation of 65 Pa.C.S. § 1103(a) (relating to restricted activities) and the violator shall be subject to the penalties imposed under the jurisdiction of the State Ethics Commission. 24 P.S. § 17- 1715- A(12). You state that Mr. Jones does not believe that the Coalition provides "management or other services" to charter schools. It is Mr. Jones' view that the Coalition conducts activities for the benefit of all charter schools. You contend that this Commission has jurisdiction to issue an advisory to you in this matter because Section 17- 1715 -A(12) of the Charter School Law specifically makes a violation of its provisions a violation of Section 1103(a) of the Ethics Act and refers to the penalties imposed under jurisdiction of this Commission. Id. You believe that the aforesaid provision gives this Commission jurisdiction as the entity responsible for Morford, 09 -005 August 4, 2009 Page 4 imposing sanctions were someone to violate the provision. You further assert that if the Commission does not provide an opinion on this matter, then Mr. Jones will lack any definitive guidance as to whether his proposed actions would violate the Ethics Act. You argue that it was not the intent of the Legislature to leave public officials without definitive guidance given the consequences of such a violation. You have submitted the following additional information in support of your request: (1) the Bylaws of the Charter School; (2) Mr. Jones' job description as Chief Executive Officer of the Charter School; (3) the Charter for the Charter School; (4) the Articles of Incorporation of the Coalition, and certain amendments thereto; (5) the Bylaws of the Coalition with amendments as of March 17, 2006; (6) various tax information, including but not limited to the Coalition's Application for Recognition of Exemption from Federal income tax under Section 501(c)(6) of the Internal Revenue Code, and a September 18, 2006, Internal Revenue Service Notification of such exemption; and (7) information pertaining to the Coalition's membership and resource center /library. We note that the Coalition's Bylaws provide that the Coalition will perform various activities, including but not limited to the following: (1) support and assist its members in the development of their professional and managerial skill and in the advancement of charter schools; (2) represent the interests of its members and take action on behalf of or benefiting the members; (3) advocate and support quality charter public schools and their advancement; and (4) provide representation and presentations concerning matters of general interest to any requesting authority, including planning bodies, legislative bodies, and public media. Bylaws, Articles IV, VII. By letter dated June 29, 2009, you were notified of the date, time and location of the public meeting at which your request would be considered. III. 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, this 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 Chief Executive Officer of the Charter School, Mr. Jones is a public official /public employee subject to the Ethics Act (24 P.S. § 17- 1715- A(12); Eiben, Opinion 04 -002), and in particular, Section 1103(a) 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 Morford, 09 -005 August 4, 2009 Page 5 "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 the instant matter, we first determine that we have jurisdiction to issue an advisory Opinion in response to your inquiry. This determination is based upon the following: (1) this Commission has a duty to administer, interpret and enforce the Ethics Act and to issue advisories under the Ethics Act (65 Pa.C.S. §§ 1107(10)- (11)); and (2) Section 17- 1715 -A(12) of the Charter School Law makes a violation of its provisions a violation of Section 1103(a) of the Ethics Act subject to the penalties imposed under the jurisdiction of this Commission. Having determined that we have jurisdiction to address your inquiry, we note that Section 17- 1715 -A(12) of the Charter School Law, on its face, expressly prohibits a charter school administrator, including a chief executive officer of a charter school, from receiving compensation from another charter school or from a "company" that provides management or other "services" to another charter school. 24 P.S. § 17- 1715- A(12). In order to answer your question, we must determine whether the Coalition is a "company" that provides services to other charter school(s). The Charter School Law and the Statutory Construction Act do not define the terms "company" and "services." 24 P.S. § 17- 1703 -A; 1 Pa.C.S. § 1991. Additionally, there do not appear to be any applicable Pennsylvania judicial decisions defining the terms. We shall therefore consider the common and approved usage of these terms (see, 1 Pa.C.S. § 1903). BLACK'S LAW DICTIONARY defines the term "company" as follows: company. 1. A corporation — or less commonly, an association, partnership, or union — that carries on a commercial or industrial enterprise. 2. A corporation, partnership, association, joint -stock company, trust, fund, or organized group of persons, whether incorporated or not, and (in an official capacity) any receiver, trustee in bankruptcy, or Morford, 09 -005 August 4, 2009 Page 6 similar official, or liquidating agent, for any of the foregoing. BLACK'S LAW DICTIONARY at 298 (8 ed. 2004). The MERRIAM - WEBSTER ONLINE DICTIONARY provides various definitions of the term "company," of which the following is the most applicable: an association of persons for carrying on a commercial or industrial enterprise." MERRIAM - WEBSTER ONLINE DICTIONARY (2009). Two of the above definitions of the term "company" reference a corporation or association that carries on a commercial or industrial enterprise. The other definition, which is one of those contained in BLACK'S LAW DICTIONARY, is satisfied through mere status as a corporation or association. The MERRIAM - WEBSTER ONLINE DICTIONARY provides numerous definitions of the term "service," the most applicable of which are: the work performed by one that serves," "help, use, benefit," "a helpful act," and "useful labor that does not produce a tangible commodity." MERRIAM - WEBSTER ONLINE DICTIONARY (2009). In considering the above definitions, the Coalition is a corporation and an association of charter schools. We reject Mr. Jones' suggestion that the Coalition does not provide services to charter schools, but rather, conducts activities for the benefit of all charter schools. Based upon the submitted facts, the Coalition clearly provides services to its charter school members, which services are paid for by membership fees and monies such as registration fees generated at annual conferences. Through a straightforward application of the above definitions, we conclude that the Coalition is a company that provides services to charter schools, and that pursuant to Section 1103(a) of the Ethics Act, in conjunction with Section 17- 1715 -A(12) of the Charter School Law, Mr. Jones may not receive compensation for serving as a part -time Interim Executive Director of the Coalition while simultaneously serving as Chief Executive Officer of the Charter School. It would seem that any contrary interpretation of the aforesaid statutory language could lead to circumvention of the prohibition through the formation of service providers as membership organizations. Additionally, this Commission does not have authority to carve out exceptions that do not have a statutory basis. Confidential Opinion, 07 -001; McCain, Opinion 02 -009; Yatron. Opinion 02 -008; Rubenstein, Opinion 01 -007; Ziegler, Opinion 98 -001; Long, Opinions 97 -010 and 97- 010 -R; Richardson, Opinion 93 -006. It is for the General Assembly to weigh any relevant concerns and to promulgate legislation as it deems appropriate. The propriety of the proposed conduct has been addressed under Section 1103(a) of the Ethics Act in conjunction with Section 17- 1715 -A(12) of the Charter School Law, 24 P.S. § 17- 1715- A(12). The applicability of any other statute, code, ordinance, regulation or code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. IV. CONCLUSION: Pursuant to Section 1103(a) of the Public Official and Employee Ethics Act ("Ethics Act "), 65 Pa.C.S. § 1103(a), in conjunction with Section 17- 1715 -A(12) of the Charter School Law, 24 P.S. § 17- 1715- A(12), the Chief Executive Officer of a charter school may not receive compensation for serving as a part -time Interim Executive Director of the Pennsylvania Coalition of Charter Schools. Morford, 09 -005 August 4, 2009 Page 7 The propriety of the proposed conduct has been addressed under Section 1103(a) of the Ethics Act in conjunction with Section 17- 1715 -A(12) of the Charter School Law, 24 P.S. § 17- 1715- A(12). Pursuant to Section 1107(10) of the Ethics Act, the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair